98-32304. Control of Emissions of Air Pollution From New CI Marine Engines at or Above 37 kW

[Federal Register Volume 63, Number 238 (Friday, December 11, 1998)]
[Proposed Rules]
[Pages 68508-68594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32304]

[[Page 68507]]

_______________________________________________________________________

Part II

Environmental Protection Agency

_______________________________________________________________________

40 CFR Part 94

Control of Emissions of Air Pollution From New CI Marine Engines at or
Above 37 kW; Proposed Rule

Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /
Proposed Rules

[[Page 68508]]

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PART II

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 94

[AMS-FRL-6196-3]
RIN 2060-AI17

Control of Emissions of Air Pollution From New CI Marine Engines
at or Above 37 kW

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: In this action, EPA is proposing an emission control program
for new compression-ignition marine engines rated at or above 37
kilowatts. The affected engines are used for propulsion and auxiliary
purposes in a wide variety of marine applications. The standards
proposed for these engines would require substantial reductions in
oxides of nitrogen and particulate matter emissions to correspond with
the next round of emission standards for comparable land-based engines.
The proposed standards are expected to provide a significant reduction
in oxides of nitrogen and particulate matter emissions from this
source. When combined with other mobile source emission control
programs, the program described in this action will help provide long-
term improvements in air quality in many port cities and other coastal
areas. Overall, the proposed program would provide much-needed
assistance to states facing ozone and particulate air quality problems,
which can cause a range of adverse health effects for their citizens,
especially in terms of respiratory impairment and related illnesses.
The persons potentially affected by this action are those who
manufacture new compression-ignition marine engines or marine vessels
or other equipment using such engines. Additional requirements apply to
companies that rebuild or maintain these engines.

DATES: EPA will hold a hearing on the proposed rulemaking on January
19, 1999. EPA requests comments on the proposed rulemaking by February
26, 1999. More information about commenting on this action and on the
public hearing and meeting may be found under Public Participation in
SUPPLEMENTARY INFORMATION, below.

ADDRESSES: Materials relevant to this proposal, including the Draft
Regulatory Impact Analysis, are contained in Public Docket A-97-50.
Additional materials relevant to EPA's earlier proposal, which was
published in 1994 and supplemented in 1996 but not finalized, can be
found in Public Docket A-92-28 (Control of Air Pollution; Emission
Standards for New Gasoline Spark-Ignition and Diesel Compression-
Ignition Marine Engines). Both of these dockets are located at room M-
1500, Waterside Mall (ground floor), U.S. Environmental Protection
Agency, 401 M Street, S.W., Washington, DC 20460. The docket may be
inspected from 8:00 a.m. until 5:30 p.m., Monday through Friday. A
reasonable fee may be charged by EPA for copying docket materials.
Comments on this proposal should be sent to Public Docket A-97-50
at the above address. EPA requests that a copy of comments also be sent
to Jean Marie Revelt, U.S. EPA, Engine Programs and Compliance
Division, 2000 Traverwood Dr., Ann Arbor, MI 48105.
The public hearing will be held at the National Vehicle and Fuel
Emissions Laboratory, 2000 Traverwood Drive, Ann Arbor, Michigan. The
public hearing will begin at 10 a.m. and will continue until all
testimony has been presented. People who wish to testify will be
requested to register on the day of the hearing. Time limits may be
imposed for each speaker, depending on the number of people who request
to testify. A transcript of the hearing will be placed in the docket.
Arrangements for copies may also be made directly with the court
reporter, on the day of the hearing. The court reporter may charge a
fee for this service.
For further information on electronic availability of this
proposal, see SUPPLEMENTARY INFORMATION below.

FOR FURTHER INFORMATION CONTACT: Margaret Borushko, U.S. EPA, Engine
Programs and Compliance Division, (734) 214-4334;
Borushko.Margaret@epa.gov.

SUPPLEMENTARY INFORMATION:

Regulated entities

Persons or companies potentially regulated by this action are those
that manufacture or introduce into commerce new compression-ignition
marine engines and those that make vessels or other equipment using
such engines. Further requirements apply to companies that rebuild or
maintain marine engines. Regulated categories and entities include:

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Category Examples of regulated entities NAICS code SIC code
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Industry................................... Manufacturers of new marine diesel 333618 3519
engines.
Industry................................... Manufacturers of marine vessels.... 3366 3731
3732
Industry................................... Engine repair and maintenance...... 811310 7699
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This list is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. To determine whether particular activities may be regulated by
this action, the reader should carefully examine the proposed
regulations, especially the applicability criteria in Sec. 94.1.
Questions regarding the applicability of this action to a particular
entity may be directed to the person listed in FOR FURTHER INFORMATION
CONTACT.

Obtaining Electronic Copies of the Regulatory Documents

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

1. http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired
date or use Search feature)
2. http://www.epa.gov/OMSWWW/ (look in What's New or under the specific
rulemaking topic)

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

[[Page 68509]]

Table of Contents

I. Introduction
II. Background
A. Air Quality Problems Addressed in the Proposed Rule
1. Ozone
2. Particulate Matter
3. Carbon Monoxide
4. Contribution of Marine Diesel Engines to NOX, HC,
PM, and CO Levels
B. Legislative and Regulatory History
1. Statutory Authority
2. Regulatory History
3. MARPOL Annex VI
4. State Activities
5. European Commission Action
C. Industry Characterization
1. Marine Diesel Engine Manufacturers
2. Commercial Vessel Builders
3. Recreational Vessel Builders
III. Engines Covered
A. General Scope of Application
B. Propulsion and Auxiliary Engines
C. Exemptions
1. Recreational Engines
2. Modified New Land-Based Engines
3. Other Exemptions
IV. Engine Categories
V. Description of Proposed Standards and Related Provisions
A. Standards and Dates
1. Marine Tier 2 Emission Limits
2. Marine Tier 3 Emission Limits
3. Interim Emission Limits
4. Total Hydrocarbons
B. Crankcase Emissions
C. Smoke Requirements
D. Alternative Fuels
E. Test Procedures
1. Duty Cycles
2. In-Use Testing
3. Test Fuel
4. Adjustable Parameters
5. Definition of Rated Speed
F. Not-to-Exceed Requirements
G. Voluntary Low-Emitting Engine Program
H. Durability
1. Useful Life
2. Warranty Periods
3. Deterioration Factors
4. Allowable Maintenance Intervals
5. Rebuilt Engines
6. Replacement Engines
I. Certification
1. Engine Family Definition
2. Emission Data Engine Selection
J SEA, Recall, and Production Line Testing
K. Miscellaneous Compliance Issues
L. Averaging, Banking and Trading Program
M. Special Provisions
1. Post-Manufacture Marinizer Provisions
2. Vessel Builder Flexibilities
N. Application of Provisions to Marine Diesel Engines Less than
37 kW
VI. Category 3 Engine Provisions
A. Emission Limits
B. Category 1 and 2 Engines Aboard Vessels Engaged in Foreign
Trade
VII. Technological Feasibility
A. Category 1 Engines
1. Development of Implementation Schedule
2. Development of Numerical Standards
3. Technological Approaches
4. Conclusions Regarding Technological Feasibility
B. Category 2 Engines
1. Development of Implementation Schedule
2. Development of Numerical Standards
3. Technological Approaches
4. Conclusions Regarding Technological Feasibility
B. Category 2 Engines
1. Development of Implementation Schedule
2. Development of Numerical Standards
3. Technological Approaches
4. Conclusions Regarding Technological Feasibility
C. Category 3 Engines
1. Rationale for Relying on MARPOL Annex VI Requirements
2. Technological Approaches
3. Conclusions Regarding Technological Feasibility
VIII. Projected Impacts
A. Environmental impacts (including noise)
1. Category 1 Engines
2. Category 2 Engines
3. Category 3 Engines
4. Other impacts
B. Economic impacts
1. Methodology
2. Engine Technologies
3. Estimated Costs
4. Aggregate Costs to Society
5. Sensitivity Analysis
C. Cost-effectiveness
1. Tier 2
2. Tier 3
3. Comparison to Other Programs
IX. Public participation
A. Comments and the Public Docket
B. Public Hearing
X. Administrative requirements
A. Administrative Designation and Regulatory Analysis
B. Regulatory Flexibility
C. Paperwork Reduction Act
D. Unfunded Mandates Reform Act
E. National Technology Transfer and Advancement Act
F. Protection of Children
G. Enhancing Intergovernmental Partnerships
H. Consultation and Coordination with Indian Tribal Governments
XI. Statutory Authority

List of Tables

Table 1 Comparison of Numerical Emission Limits: EPA's Nonroad Tier
1 Levels and MARPOL Annex VI Levels
Table 2 Locomotive Standards (line-haul only)
Table 3 Proposed European Emission Limits for Recreational Marine
Diesel Engines
Table 4 Engine Category Definitions
Table 5 Category 1 Engine Groups
Table 6 Proposed Tier 2 Marine Diesel Emission Limits and
Implementation Dates
Table 7 Land-Based Nonroad Tier 2 Emission Limits and
Implementation Dates
Table 8 Proposed Tier 3 Marine Diesel HC+NOX Emission
Limits and Implementation Dates
Table 9 Land-Based Nonroad Tier 3 Emission Limits and
Implementation Dates
Table 10 Voluntary Emission Standards
Table 11 Proposed Useful Life and Warranty Periods
Table 12 Category 1 Emissions Inventory
Table 13 Category 2 Emissions Inventory
Table 14 Category 3 Baseline and Projected Emissions Inventory
under Varying Implementation of MARPOL Annex VI controls
Table 15 Emission Inventory Impacts of the Proposed Rule
Table 16 Projected Incremental Costs by Power Rating
Table 17 Cost-Effectiveness of the Proposed Marine Tier 2 Standards
for HC and NOx
Table 18 Aggregate Cost-Effectiveness for the Proposed Marine Tier
2 Standards for HC and NOx
Table 19 Cost-Effectiveness of the Proposed Marine Tier 3 Standards
for HC and NOx
Table 20 Aggregate Cost-Effectiveness for the Proposed Marine Tier
3 Standards for HC and NOx

I. Introduction

Air pollution is a serious threat to the health and well-being of
millions of Americans, and imposes a large burden on the U.S. economy.
As discussed below, ground-level ozone and PM have been linked to
potentially serious respiratory health problems and environmental
degradation. Over the past two decades, emission control programs
established at the state and federal levels have significantly reduced
emissions from individual sources, and many of these sources now
pollute at only a fraction of their precontrol rates. These programs
have concentrated on reducing ground-level ozone levels, with a focus
on its main precursors, oxides of nitrogen (NOX) and
volatile organic compounds (VOCs).¹ In addition, steps have
been taken to reduce airborne particulate matter (PM), which is also a
major air quality concern in many regions.
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\1\ VOCs consist mostly of hydrocarbons (HC), including
nonmethane hydrocarbons (NMHC).
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However, continued industrial growth and expansion of motor vehicle
usage threaten to reverse these past achievements. Today, many states
are finding it increasingly difficult to meet the current ozone and
particulate matter National Ambient Air Quality Standards (NAAQS) by
the deadlines established in the Clean Air Act (the
``Act'').² In addition, even those states that are
approaching or have reached attainment of the current ozone and PM
NAAQS are likely to see these gains lost if current trends persist.
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\2\ See 42 U.S.C. 7401, et seq.
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National mobile source emission control programs have been
successful in reducing NOX, HC, and PM emissions

[[Page 68510]]

from new regulated engines. These programs have resulted in reductions
of more than 90 percent on a per-vehicle basis for new gasoline-fueled
passenger cars. Emissions from light-duty trucks have also been reduced
to very low levels. The more recent diesel engine programs, as
supplemented by new, more stringent requirements for highway and
nonroad diesel engines, will significantly reduce emissions from that
category as well. As a result of these programs, emission reductions on
a per-vehicle or per-engine basis have greatly offset emission
increases due to the rising mobile source population and usage rates.
Until now, EPA's effort to control emissions from marine sources
has been limited to outboard and personal watercraft engines and marine
diesel engines rated under 37 kW. EPA's analysis of national
NOX and PM levels suggests that marine diesel engines are a
considerable source of these pollutants. The inventory contribution of
marine diesel engines is presented under Background (Section II.A.4.),
and is described in greater detail in the Draft Regulatory Impact
Analysis. Consequently, emission controls for these engines may yield
important reductions in national NOX and PM inventories. At
the same time, designing an emission control program for marine diesel
engines at or above 37 kW poses certain challenges. The tremendous
range of engine sizes in this category, from small generators used on
board fishing or recreational vessels to large propulsion engines used
on board ocean-going vessels, suggests a need to set different
requirements for different groups of engines. In addition,
technological challenges inherent to nonroad diesel-cycle engine design
must be addressed.\3\ Traditional NOX control approaches
tend to increase PM emissions, and vice versa. However, methods to
achieve simultaneous NOX and PM control are being developed
for land-based diesel engines, and EPA believes similar solutions can
be applied to marine diesel engines due to similarities among the
engines. A more complete discussion of technology issues is presented
under Technological Feasibility (Section VII). Finally, the large
number of ship and boat builders and their relative inexperience with
emission control requirements suggest a need for a flexible
implementation process. A more detailed discussion of the
characteristics of this industry is included under Industry
Characterization (Section II.C.).
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\3\ References to diesel-cycle engines, also referred to as
``diesel engines'' in this document, are intended to cover a
particular kind of engine technology, i.e., compression ignition
combustion. Compression-ignition engines are typically operated on
diesel fuel, although other fuels, such as compressed natural gas,
may also be used. This contrasts with otto-cycle engines (also
called spark-ignition or SI engines), which typically operate on
gasoline. The requirements set out in this notice are intended to
apply to all combustion-ignition engines.
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In this document, EPA is proposing to extend the federal emission
control program to the marine segment of the nonroad industry by
proposing an emission control program for all new marine diesel engines
rated over 37 kW.\4\ The program described in this action follows EPA's
Supplemental Advance Notice of Proposed Rulemaking (Supplemental
ANPRM), published on May 22, 1998 (63 FR 28309), and the comments
received on that notice and other new information provide the framework
for its provisions.
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\4\ This proposal is based on metric units. To convert to
English units, one kilowatt equals 1.341 horsepower.
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II. Background

A. Air Quality Problems Addressed in the Proposed Rule

The emission standards proposed in this document will provide
important reductions of ground-level ozone and particulate matter (PM)
nationally, as well as carbon monoxide (CO) control. This section
summarizes the air quality rationale for these new emission standards
and their anticipated impact on marine diesel engines.
1. Ozone
Ground-level ozone is formed by complex photochemical reactions
involving HC and NOX in the presence of sunlight.\5\
According to a growing body of research, ground-level ozone can have
harmful physical effects on humans. It severely irritates the mucous
membranes of the nose and throat, which can lead to coughing and even
choking. It also impairs normal functioning of the lungs, and chronic
exposure may cause permanent lung damage. The risk of suffering these
effects is particularly high for children and for people with
compromised respiratory systems. Ground-level ozone has also been shown
to injure plants and building materials.
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\5\ Ground-level ozone should not be confused with stratospheric
ozone, a protective layer of the upper atmosphere that filters the
sun's harmful ultraviolet rays.
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Diesel engines contribute to ground-level ozone levels primarily
through their NOX emissions, which are a much higher portion
of total NOX+HC emissions than for most gasoline engines.
This is of significant concern not only because of ozone impacts but
also because NOX has important independent effects on human
health and general environmental conditions. NOX includes
several gaseous compounds that are lung irritants and can increase
susceptibility to respiratory illness and pulmonary infection.
NOX also contributes to the secondary formation of PM
(nitrates), acid deposition, and the overgrowth of algae in coastal
estuaries. Additional information on these environmental and health
effects may be found in EPA staff papers and air quality criteria
documents for ozone and nitrogen oxides. ^6, ^7,
^8, ⁹
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\6\ U.S. EPA, ``Review of National Ambient Air Quality Standards
for Ozone, Assessment of Scientific and Technical Information,''
OAQPS Staff Paper, EPA-452/R-96-007, 1996 (Air docket A-95-58).
\7\ U.S. EPA, ``Air Quality Criteria for Ozone and Related
Photochemical Oxidants,'' EPA/600/P-93/004aF, 1996 (Air Docket A-95-
58).
\8\ U.S. EPA, ``Review of National Ambient Air Quality Standards
for Nitrogen Dioxide, Assessment of Scientific and Technical
Information,'' OAQPS Staff Paper,'' EPA-452/R-95-005, 1995 (Air
Docket A-93-06).
\9\ U.S. EPA, ``Air Quality Criteria for Oxides of Nitrogen,''
EPA/600/8-91/049aF, 1993 (Air Docket A-93-06).
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Acceptable levels of ground-level ozone have been set by EPA
pursuant to the Act. States are divided into areas for air quality
planning purposes, and these areas are categorized as to whether they
meet the current National Ambient Air Quality Standard for ozone by the
deadlines established in the Act.\10\ As of October, 1997 there are 59
areas designated as in ``nonattainment'' for ozone.
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\10\ See 42 U.S.C. 7401, et seq.
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The state and local governmental organizations charged with
designing and implementing emission control programs to bring these
areas into attainment have mounted significant efforts in recent years
to reduce ozone concentrations. Their state implementation plans,
combined with federal mobile source emission control programs, have
yielded encouraging signs of success. The main precursors of ozone,
NOX and VOCs (including HC), have been reduced in many
areas, and average ozone levels are beginning to decrease. However,
this progress is in jeopardy. EPA projects that emission increases that
accompany economic expansion will eventually outpace per-

[[Page 68511]]

source reductions in ozone precursors. Increases in the number of
sources, as well as increased use of existing sources, mean that even
full implementation of current emission control programs will fall
short of what will be needed to achieve and maintain ozone attainment.
By the middle of the next decade, the Agency expects that, without
additional controls, the downward trends in overall ground-level ozone
will be reversed. Consequently, it is important to develop new
strategies that improve, or at least maintain, the progress in ozone
reductions that have been achieved to date.
2. Particulate Matter
Particulate matter, like ozone, has been linked to a range of
serious respiratory health problems. Particulate matter is a collection
of small particles emitted by diesel engines. Many different organic
pollutants are adsorbed on these particles. The size and chemical
composition of particulate matter are the main reasons for concern
about the effects of PM on human health. Their small size increases the
likelihood that the particles will reach and lodge in the deepest and
most sensitive areas of human lungs. This can lead to severe lung
problems and increases susceptibility to respiratory infection, such as
pneumonia, aggravation of acute and chronic bronchitis, and asthma. It
can also lead to decreased lung function (particularly in children and
individuals with asthma) and alterations in lung tissue and structure
and in respiratory tract defense mechanisms. Additional information on
these effects may be found in an EPA staff paper and an air quality
criteria document for particulate matter.^11, ¹²
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\11\ U.S. EPA, ``Review of National Ambient Air Quality
Standards for Particulate Matter, Assessment of Scientific and
Technical Information,'' OAQPS Staff Paper, EPA-452/R-96-013, 196
(Air Docket A-95-54).
\12\ U.S. EPA, ``Air Quality Criteria for Particulate Matter,''
EPA/60/P-95/001aF, 1996 (Air Docket A-95-54).
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Acceptable levels of PM have also been set by EPA. Currently, there
are 80 PM-10 nonattainment areas across the U.S. (PM-10 refers to
particles smaller than 10 microns in diameter.) As is the case with
NOX, levels of PM caused by stationary and mobile sources
are expected to rise in the future, not only because of the increase in
number of sources and activity levels of these sources, but also
because elevated NOX levels can lead to increased PM levels.
This is because NOX from diesel engines and other sources is
transformed in the atmosphere into fine secondary nitrate particles.
Secondary nitrate PM, consisting mostly of ammonium nitrate, accounts
for a substantial fraction of the airborne particulate in some areas of
the country. EPA believes that mobile sources contribute substantially
to the fraction of ambient PM that is generally considered
controllable.\13\ Consequently, EPA has been developing new mobile
source strategies to control PM emissions.
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\13\ The largest fraction of ambient PM is attributed to
``miscellaneous'' and ``natural'' sources, including wind erosion,
wildfires, and fugitive dust, which are difficult or impossible to
control.
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3. Carbon Monoxide
Along with NOX, HC, and PM, carbon monoxide (CO) is
another mobile source pollutant that is addressed by the program
proposed in this document. CO has long been known to have substantial
adverse effects on human health and welfare, including toxic effects on
blood and tissues, and effects on organ functions. CO has been linked
to fetal brain damage, reduced visual perception, cognitive functions
and aerobic capacity, and increased risk of heart problems for people
with heart disease. There are currently approximately 20 serious or
moderate CO nonattainment areas in the United States.
4. Contribution of Marine Diesel Engines to NOX, HC, PM and
CO Levels
EPA's inventory analysis suggests that marine diesel engines are a
significant source of NOX and PM emissions. This inventory
analysis, presented in more detail in the Draft Regulatory Impact
Analysis prepared for this action, suggests that marine diesel engines
currently contribute approximately one million tons of NOX
per year, representing 8.1 percent of mobile source NOX and
4.8 percent of total NOX emissions. Marine diesel engines
also contribute approximately 42,000 tons of PM per year, representing
4.4 percent of the directly emitted PM from mobile sources and 1.0
percent of total directly emitted PM emissions.\14\ In addition to
directly emitted PM, EPA estimates that, as a national average, marine
diesel engines contribute approximately 40,000 tons of PM in the form
of secondary nitrate particles, based on the estimated one million tons
of NOX emitted by these engines. In addition, emissions from
marine diesel engines tend to be concentrated in specific areas of the
country (ports, coastal areas, and rivers), and so local levels of
these pollutants can be much higher. Consequently an emission control
program that addresses NOX and PM emissions from marine
diesel engines can be an important tool toward the goal of reducing the
health and environmental hazards associated with these and other
pollutants.
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\14\ Excluding erosion or fugitive dust.
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The contribution of marine diesel engines to national HC and CO
levels is much less than for NOX and PM. EPA estimates that
marine diesel engines contribute less than two-tenths of one percent of
the national levels of these pollutants. Nevertheless, the program
being proposed in this rule includes limits for HC and CO emissions.
These limits will provide a small, positive, air quality benefit.

B. Legislative and Regulatory History

1. Statutory Authority
Section 213(a)(1) of the Clean Air Act directed the Agency to study
emissions from nonroad engines and vehicles to determine, among other
things, whether these emissions ``cause, or significantly contribute
to, air pollution that may reasonably be anticipated to endanger public
health or welfare.'' Section 213(a)(2) further required EPA to
determine whether the emissions of CO, VOC, and NOX found in
the above study significantly contribute to ozone or CO emissions in
more than one nonattainment area. With an affirmative determination of
significance, section 213(a)(3) requires the Agency to establish
emission standards regulating CO, VOC, and NOX emissions
from new nonroad engines and vehicles. EPA may also promulgate emission
standards under section 213(a)(4) regulating any other emissions from
nonroad engines that EPA finds contribute significantly to air
pollution.
The Nonroad Engine and Vehicle Emission Study required by section
213(a)(1) was completed in November 1991. ¹⁵ On June 17,
1994, EPA made an affirmative determination under section 213(a)(2)
that nonroad emissions are significant contributors to ozone or CO in
more than one nonattainment area. ¹⁶ In the same document,
EPA set a first phase of emission standards (``Tier 1 standards'') for
land-based nonroad diesel engines rated at or above 37 kW.
¹⁷ These requirements were recently augmented by a new
rulemaking that sets more stringent Tier 2 emission levels for new
land-based nonroad diesel engines at or above 37 kW as well as Tier 1
standards for nonroad diesel engines less than 37 kW. ¹⁸ EPA
has also initiated additional rulemakings to set

[[Page 68512]]

emission standards for other subgroups of nonroad engines, including
spark-ignition (SI, typically gasoline) engines less than 19 kW,
¹⁹ spark-ignition (SI, typically gasoline) marine engines
(outboards and personal watercraft), ²⁰ and locomotives.
²¹ This action takes another step toward the comprehensive
nonroad engine emission control strategy envisioned in the Act by
proposing an emission control program for marine diesel engines at or
above 37 kW.
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\15\ This study is available in docket A-92-28.
\16\ See 59 FR 31306, June 17, 1994.
\17\ Ibid.
\18\ See 63 FR 56967, October 23, 1998.
\19\ See 60 FR 34582 (July 3, 1995) for the final rule
establishing Tier 1 standards and 62 FR 14740 (March 27, 1997) for
the ANPRM discussing Tier 2 standards.
\20\ See 61 FR 52087 (October 4, 1996) for the final rule. EPA
did not set numerical emission standards for sterndrive and inboard
gasoline marine engines in this rule.
\21\ See 62 FR 6365 (February 11, 1997); the final rule was
signed December 17, 1997 and is available electronically (see
Section VI below).
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2. Regulatory History
Numerical emission standards for marine diesel engines were
originally proposed in 1994, as part of a proposed rule for control of
emissions from both spark-ignition and compression-ignition marine
engines. ²² At that time, EPA had a limited understanding of
the marine diesel industry and, relying on the similarities between
land-based nonroad and marine diesel engines, proposed to apply the
same emission levels as those in the then just-finalized land-based
nonroad rule. The nonroad Tier 1 standards are set out in Table 1. EPA
proposed that these standards for marine diesel engines take effect
January 1, 1999 for engines less than 560 kW, and January 1, 2000, for
engines 560 KW and above. Although no upper limit on engine size was
proposed for application of these standards to marine diesel engines,
EPA requested comment on whether an upper limit should be established
above which the emission control program being developed concurrently
under the auspices of the International Maritime Organization (IMO)
should apply. The IMO is the Secretariat for the International
Convention on the Prevention of Pollution from Ships (that convention
is also referred to as MARPOL 73/78). Annex VI to that Convention,
adopted on September 27, 1997 (but not yet in force) contains, among
other provisions, requirements to limit NOX emissions from
marine diesel engines, but sets no limits for other engine pollutants
(i.e., HC, CO, PM). ²³ A more detailed discussion of the
MARPOL 73/78 Annex VI NOX requirements is included in
Section II.B.3. below. Table 1 also contains the Annex VI
NOX limits, which would apply to new engines greater than
130 kW installed on vessels constructed on or after January 1, 2000, or
which undergo a major conversion after that date.
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\22\ See 59 FR 55929 (November 9, 1994).
\23\ Other provisions of Annex VI include requirements for
ozone-depleting substances, sulfur content of fuel, incineration,
VOCs from refueling, and fuel quality. The United States has signed
Annex VI, but the Annex has not yet been forwarded to the Senate for
its advice and consent.

Table 1.--Comparison of Numerical Emission Limits: EPA's Nonroad Tier 1 Levels and MARPOL Annex VI Levels
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Agency Engine speed HC (g/kW-hr) CO (g/kW-hr) NOX (g/kW-hr) PM (g/kW-hr)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EPA (Proposed).......................... All........................................................... 1.3 11.4 9.2................................... 0.54
MARPOL Annex VI (n =engine speed, rpm).. =130 rpm...................................................... None None 17.0.................................. None
130 rpmn2000 rpm........................ None None 45*n(^{-0.2)............................ None
n 2000............................................ None None 9.8................................... None
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In response to the 1994 NPRM, several commenters requested that EPA
harmonize domestic emission standards for marine diesel engines to the
levels being then considered at the IMO, in effect, applying the draft
Annex VI limits domestically. Because the draft Annex VI standards
(which are the same as those finalized in 1997) were not as stringent
as the proposed domestic standards, this was a significant issue. On
February 7, 1996, EPA published a Supplemental NPRM to address this and
other concerns in more detail. ²⁴ Specifically, EPA
identified and requested comment on three alternative harmonization
approaches: (1) Adopt the draft Annex VI NOX emission
standard instead of the standard proposed in the NPRM; (2) retain the
average NOX emission standard of 9.2 g/kW-hr proposed by EPA
and also adopt the MARPOL Annex VI NOX limit as a cap that
no engine could exceed; or (3) determine an appropriate engine speed or
engine power output cutoff point such that engines of high horsepower
and low and medium speeds would be subject to the draft Annex VI
NOX emission limits and engines of low horsepower and high
speed would be subject to the 9.2 g/kW-hr average standard proposed by
EPA with the 9.8 g/kW-hr Annex VI level as a cap that no engine could
exceed. EPA also sought comment on harmonizing the numerical emission
limits for other pollutants. Options considered were to drop, retain,
or alter the proposed standards for HC, CO, PM, and smoke.
---------------------------------------------------------------------------

\24\ See 61 FR 4600 (February 7, 1996).
---------------------------------------------------------------------------

While the development of the national marine rule and the
negotiations at the International Maritime Organization continued, EPA
began a new action for land-based nonroad diesel engines as part of a
new Agency initiative to reduce national NOX and PM
emissions from mobile sources. This action, subsequently finalized
September 27, 1998, sets more stringent standards for land-based
nonroad engines, known as Tier 2 standards (see Section V.A., below).
²⁵ These Tier 2 standards will come into effect as early as
2001 for some engine categories. The rule also includes more stringent
Tier 3 standards, which will go into effect subject to a review to be
conducted in 2001. That review will be conducted through the normal
public rulemaking process. Finally, marine diesel engines less than 37
kW were included with their land-based counterparts in this diesel
land-based nonroad rule, with standards to come into effect as early as
1999 for Tier 1 and 2004 for Tier 2.
---------------------------------------------------------------------------

\25\ See 62 FR 50152 (September 24, 1997).
---------------------------------------------------------------------------

Also during this time, EPA finalized a rule setting emission
standards for new locomotive engines. ²⁶ The locomotive
program consists of three separate sets of standards, with
applicability of the standards dependent on the date a locomotive is
first manufactured. The first set of standards (Tier 0) applies to
locomotives and locomotive engines originally manufactured from 1973
through 2001.

[[Page 68513]]

The Tier 0 standards will be phased in over a two-year period beginning
in 2000, and will apply at the time of each remanufacture (as well as
at the time of original manufacture for locomotives originally
manufactured in 2000 and 2001). The next set of standards (Tier 1)
apply to locomotives and locomotive engines originally manufactured
from 2002 through 2004. Such locomotives and locomotive engines will be
required to meet the Tier 1 standards at the time of original
manufacture and at each subsequent remanufacture. The final set of
standards (Tier 2) apply to locomotives and locomotive engines
originally manufactured in 2005 and later. Such locomotives and
locomotive engines will be required to meet the Tier 2 locomotive
standards at the time of original manufacture and at each subsequent
remanufacture. The numerical standards are contained in Table 2.
---------------------------------------------------------------------------

\26\ See 62 FR 6365 (February 11, 1997); the final rule was
signed December 17, 1997 and is available electronically (see
Section VI below).

Table 2.--Locomotive Standards
[Line-haul only]
----------------------------------------------------------------------------------------------------------------
Tier HC (g/kW-hr) CO (g/kW-hr) NOX (g/kW-hr) PM (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
Tier 0.......................................... 1.3 6.7 12.7 0.80
Tier 1.......................................... 0.7 2.9 9.9 0.6
Tier 2.......................................... 0.4 2.0 7.4 0.27
----------------------------------------------------------------------------------------------------------------

The land-based nonroad diesel engine and locomotive rules led EPA
to reconsider its approach to the control of emissions from marine
diesel engines at or above 37 kW. Because of the similarities among
land-based nonroad, locomotive, and marine diesel engines, EPA began to
consider an alternative program for marine diesel engines based on the
technologies that will be used to meet the land-based requirements. As
a result, EPA did not take final action on marine diesel engines when
it finalized the original marine rule. ²⁷ Instead, EPA
published an Advance Notice of Proposed Rulemaking advising interested
parties of the change in approach for marine diesel engine emission
controls and asking for comment on various aspects of the program under
consideration. The program proposed in this action follows from the
approach described in the ANPRM, the comments submitted by interested
parties, and information gathered by EPA in the meantime.
---------------------------------------------------------------------------

\27\ See 61 FR 52087 (October 4, 1996).
---------------------------------------------------------------------------

3. MARPOL Annex VI
In response to growing international concern about air pollution
and in recognition of the highly international nature of maritime
transportation, the parties to the International Maritime Organization
called upon the organization, in 1990, to develop a program to reduce
emissions from marine vessels. The IMO's Marine Environmental
Protection Committee (MEPC) was instructed to design a program, to
become a new Annex VI to the International Convention for the
Prevention of Pollution from Ships (MARPOL 73/78), that would achieve a
30 percent reduction in NOX and a 50 percent reduction in
SOX emissions when fully phased in. Requirements for ozone-
depleting substances, VOCs from cargo compartments on oil tankers,
shipboard incinerators, and fuel oil quality rounded out the scope of
the program. From the beginning, the engine-specific provisions of
proposed Annex VI covered only NOX emissions. No
restrictions on PM, HC, or CO emissions were considered. Reductions in
SOX emissions were to be pursued through limiting the sulfur
content of fuel.
After several years of negotiation, a final version of Annex VI was
adopted by the Member States of the IMO at a diplomatic conference on
September 26, 1997. However, pursuant to Article 6 of the Annex, it
will not go into force until fifteen States, the combined merchant
fleets of which constitute not less than 50 percent of the gross
tonnage of the world's merchant shipping, have ratified it. The Annex
in its entirety will acquire the force of law in the United States only
after the Senate (by a vote of two-thirds) concurs in the treaty and
the United States deposits its instrument of ratification.
Nevertheless, it is expected that ship owners will begin installing
compliant engines on relevant ships to comply with the dates set forth
in the Annex. Specifically, the NOX provisions contained in
Regulation 13 provide that each diesel engine with a power output of
more than 130 kW installed on a ship constructed on or after January 1,
2000, or that undergoes a major conversion on or after January 1, 2000,
must meet the NOX emission limits described in Table 1,
above. This specification of an effective date in Regulation 13 means
that, once the Annex goes into effect, Member States will be able to
require compliance by any ship constructed on or after January 1, 2000
or by any engine that undergoes a major conversion on or after that
date. In other words, once the Annex goes into effect, it will be
enforceable back to the dates specified in Regulation 13.
Two other features of Annex VI NOX requirements are
noteworthy. First, while the requirements set out in Regulation 13 are
expected to extend to all vessels used in the marine environment, a
special provision has been included in paragraph 1(b)(ii) to allow
Member States to set different standards for engines installed on ships
used domestically. EPA intends in this action to take advantage of this
provision by setting more stringent national requirements. Second,
Regulation 13 is augmented with a separate document, called the
NOX Technical Code, which sets out some compliance
requirements and test procedures. Through reference in the Annex, the
provisions of this Code are made mandatory on Parties to the Annex. A
more detailed discussion of the NOX curve and the
NOX Technical Code are included in the Draft Regulatory
Impact Analysis.
4. State Activities
Section 209 of the Act allows EPA to authorize California to
regulate emissions from new motor vehicles and new motor vehicle
engines, as well as nonroad engines with the exception of new engines
used in locomotives and new engines used in farm and construction
equipment rated under 130 kW.²⁸ So far, the California Air
Resources Board (California ARB) has adopted requirements for three
groups of nonroad engines: (1) Diesel-and otto-cycle small off-road
engines rated under 19 kW; (2) new land-based nonroad diesel engines
rated over 130 kW; and (3) land-based nonroad recreational engines,
including all-terrain vehicles, snowmobiles, off-road motorcycles, go-
carts, and other similar vehicles. New

[[Page 68514]]

requirements that apply to new nonroad SI engines rated over 19 kW were
completed by CARB in October 1998. California ARB has also approved a
voluntary registration and control program for existing portable
equipment, and is currently considering an emission program for
recreational gasoline marine engines that may be more stringent than
the program finalized by EPA in 1996.
---------------------------------------------------------------------------

\28\ The Clean Air Act limits the role states may play in
regulating emissions from new motor vehicles and nonroad engines.
California is permitted to establish emission standards for new
motor vehicles and most nonroad engines; other states may adopt
California's programs (sections 209 and 177 of the Act).
---------------------------------------------------------------------------

EPA has been in consultation with California state officials and
various interest groups to pursue operational measures that would
reduce marine engine emissions without setting emission standards.
Under investigation are defined traffic lanes, restrictions on engine
operation while in port, and other measures that could be tailored to
the situation at each port.
5. European Commission Action
The European Commission has proposed emission limits for
recreational marine engines, including diesel engines. These
requirements would apply to all new engines sold in member countries.
The numerical emission limits, shown in Table 3, consist of the Annex
VI NOX limit for small marine diesel engines and the rough
equivalent of Tier 1 nonroad emission levels for HC and CO. The PM
limits, however, are more stringent than Tier 1 nonroad levels,
reflecting Europe's greater concern for the visual impacts of diesel
emissions. Emission testing is to be conducted using the ISO D2 duty
cycle for constant-speed engines and the ISO E5 duty cycle for all
other engines. At the current time, the EU has not initiated a separate
action for commercial marine diesel engines.

Table 3.--Proposed European Emission Limits for Recreational Marine
Diesel Engines
------------------------------------------------------------------------
Emission
Pollutant limit (g/kW-
hr)
------------------------------------------------------------------------
NOX....................................................... 9.8
PM........................................................ 0.14
HC........................................................ *1.5
CO........................................................ 5.0
------------------------------------------------------------------------
*Increases slightly with increasing engine power rating.

C. Industry Characterization

The two groups of companies most likely to be affected by the
proposed emission control program are engine manufacturers and vessel
manufacturers. This section contains a brief discussion of these
entities. A more complete discussion is included in the Draft
Regulatory Impact Assessment, which can be found in its entirety in EPA
Air Docket A-97-50.
1. Marine Diesel Engine Manufacturers
As discussed in Section IV, the proposed emission control program
applies to three categories of marine diesel engines. This discussion
reflects those categories.
Category 1 and Category 2 marine diesel engines are often derived
from land-based engines. Their production is often referred to as
marinization, meaning the land-based engine is modified for use in the
marine environment. Marinization can be a very complex process or may
be relatively simple. Depending on the degree of change to the base
engine, marinization can significantly affect the emission
characteristics of an engine. Some of the more complex changes
associated with marinization are performed by large engine
manufacturers. For these companies, marinization may involve a
significant redesign of their land-based product. A less intensive type
of marinization is performed by post-manufacturer marinizers. These
companies purchase a complete or semi-complete land-based engine from
an engine manufacturer and finish or modify it using specially designed
parts. The most basic type of marinization is performed by companies
that purchase a completed engine from an engine manufacturer and modify
it to make it compatible for installation on a marine vessel, without
changing the underlying design characteristics or engine calibration.
These companies are referred to in this rulemaking as engine dressers.
In contrast to the other marinization processes, these changes do not
typically affect the emission characteristics of the engine.
Category 3 engines have no land-based mobile source equivalents.
These engines are typically designed exclusively for marine purposes.
They are often designed for unique applications or unique vessels.
(a) Category 1 Engine Manufacturers. Total annual production of
Category 1 marine diesel engines in the U.S. is about 15,000 units per
year. Of these, commercial propulsion and auxiliary marine engines make
up about 30 percent and 10 percent, respectively, of the total
production. The remaining engines are used for propulsion in
recreational vessels. While the recreational engines are produced in
greater quantities, commercial propulsion and auxiliary engines
contribute more to air pollution on account of their much greater use.
Commercial applications for these engines are widely varied. Most
of these boats are relatively small and operate near the home port.
Primary examples of such vessels include fishing boats, crew boats,
tour boats, and small tugboats and ferries. Recreational vessels are
usually either yachts or are used for recreational fishing. These
recreational vessels may in some cases be used for commercial purposes.
Engine manufacturers produce the large majority of marine diesel
engines, with the remaining engines being produced by post-manufacture
marinizers. About a dozen engine manufacturers offer Category 1
engines, though Caterpillar, Cummins, and Detroit Diesel together sell
about 80 percent of all marine diesel engines. Fifteen or more
companies are either post-manufacture marinizers or engine dressers.
Most of these are small businesses with very low sales volumes.
Due to the wide range of companies and their operations, engine
maintenance and rebuild practices are far from uniform. Some are
serviced regularly by authorized distributors, others are maintained by
local for-hire mechanics. Some companies that operate vessels choose to
reduce expenses by keeping a staff of mechanics to conduct preventive
and routine engine maintenance and, in some cases, complete engine
rebuilds. Depending on the size of an operator's fleet, which may run
from one to several dozen vessels, and on the strength of the company,
there may or may not be an adequate ongoing investment in maintaining
engines to maximize long-term engine performance.
(b) Category 2 Engine Manufacturers. Large tugboats and fishing
boats are the principal applications for Category 2 marine engines.
These high-powered engines are used for carrying greater loads, a
greater degree of off-shore use and, in many cases, more intensive
operations. It is common for companies to own and operate small fleets
of these vessels. In addition, multiple Category 2 engines are commonly
used for auxiliary power on an ocean-going vessel.
Category 2 engines are derived from or use the same technology as
locomotive engines. Not surprisingly, Category 2 engines are produced
by the same companies that make locomotive engines, and the segment is
characterized by a very small number of manufacturers. General Motors
Electromotive Division (EMD) sells the greatest number of Category 2
engines, with additional sales from Caterpillar and a few other
companies (mostly from foreign manufacturers).

[[Page 68515]]

Post-manufacture marinizers play a role in producing Category 2
marine engines. For example, three authorized EMD distributors take on
the responsibility of marinizing engines, overseeing sales
distribution, and managing installation and service as needed. Unlike
post-manufacture marinizers for Category 1 engines, these companies
have sufficient volumes and diversified operations to the point that
they are not small businesses.
With prices approaching $1 million for a new engine, there is a
strong motivation to maintain and remanufacture engines in the field.
Preventive maintenance programs are common, often including extensive
ongoing diagnostics for oil quality, fuel consumption, and other engine
performance parameters. Engines are often completely remanufactured
every five years. Procedures have improved to the point that engine
durability on remanufactured engines is no different than on new
engines. Since engine remanufacturing costs only 20 to 30 percent as
much as buying a new engine, even twenty- or thirty-year-old engines
are frequently overhauled to provide dependable power.
(c) Category 3 Engine Manufacturers. Category 3 marine diesel
engines are the largest mobile source engines addressed by EPA. They
are similar in size to land-based power plant generators, and are used
primarily for propulsion of ocean-going vessels. There are currently no
U.S. manufacturers of Category 3 marine engines. The Agency, however,
has identified 22 foreign manufacturers of these engines, a large
fraction of which are located in Germany and Japan. In addition, of the
Category 3 engine manufacturers identified, only 12 produce engines of
their own design. The remainder of the manufacturers produce engines
under licensing agreements with other companies that control engine
design.
2. Commercial Vessel Builders
The industry characterization for the commercial marine vessel
industry was developed by ICF, Incorporated under contract with EPA. A
summary of their findings can be found in the Chapter 2 of the Draft
RIA. The full report is available from EPA Air Docket A-97-50. The
report makes a distinction between two broad groups of commercial
vessels, ``ships'' and ``boats,'' based on a vessel's basic dimensions,
mission, and area of operation.
(a) Commercial Ships. This category is comprised of large merchant
vessels, usually exceeding 120 meters (400 feet) in length, that engage
in waterborne trade or passenger transport. These ships tend to operate
in Great Lakes, coastwise, inter-coastal, noncontiguous, or
transoceanic routes. Principal commercial ship types are dry cargo
ships, tankers, bulk carriers and passenger ships. Passenger ships
include cruise ships and larger ferries. The large majority of
commercial ships are foreign-built. There are currently 18 major
shipbuilding facilities in the United States, most of which focus on
military construction.
(b) Commercial Boats. This category is comprised of smaller service
and industrial vessels that provide service to commercial ships,
industrial vessels, or barges or that perform specialized marine
functions. Commercial boats are found mainly in inland or coastal
waters. Principal commercial boat types are tugboats, towboats,
offshore supply boats, fishing and fisheries vessels, passenger boats,
and industrial boats. Passenger boats include crewboats, excursion
boats, and smaller ferries. The vast majority of boats used in the
United States are also built in the United States. In contrast to the
highly concentrated shipbuilding industry, there are several hundred
yards that build many different types of boats.
3. Recreational Vessel Builders
While not as numerous as commercial boat builders, there is still a
considerable number of recreational boat builders. EPA identified
approximately 75 boat builders, not including those that build
sailboats. Most of these companies also produce vessels that use
gasoline engines. In fact, diesel engines represent a small portion of
the overall product offerings for these companies. A small number of
recreational boat builders concentrate on diesel engine products. Most
companies, however, sell as few as one per month or even one per year.
The analysis shows that recreational boat building is concentrated in
coastal states with the largest presence in the state of Florida.
Recreational boat building relies more on serial production than
does commercial boat building. Users have little, if any, choice in the
mechanical features of the vessel and the engine specifically. This is
in part due to the way in which these boats are built. Recreational
boats are typically made of fiberglass to minimize vessel weight and to
facilitate planing. Fiberglass construction has the disadvantage of not
offering much flexibility for installing a different engine than that
which the vessel was designed to take. Also, planing requires a precise
match between the engine and its location in the vessel. Engines are
usually purchased from factory authorized distribution centers. The
boat builder provides the specifications to the distributor, which
helps match an engine for a particular application.

III. Engines Covered

A. General Scope of Application

The scope of application of the proposed emission control program
is broadly set by Sec. 213(a)(3) of the CAA, which instructs EPA to
promulgate regulations containing standards applicable to emissions
from those classes or categories of new nonroad engines and new nonroad
vehicles that are found to cause or contribute to ozone or carbon
monoxide concentrations in more than one nonattainment area. Generally
speaking, then, the proposed rule is intended to cover all new marine
diesel engines and new marine vessels that use those engines.
For the purpose of interpreting this scope of application for both
engines and vessels, EPA is proposing to generally extend the
definition of ``new'' contained in 40 CFR 89.2 to marine diesel engines
at or above 37 kW. Under that definition, an engine is considered new
until its legal or equitable title has been transferred and the engine
has been placed into service. Because the definition of new in 40 CFR
89.2 applies to both engines and equipment, its extension to the marine
sector would extend as well to vessels which, starting with the
implementation dates of the proposed emission limits, would be
considered new until their equitable or legal title has been
transferred to an ultimate purchaser.
EPA seeks comment on whether to augment this definition of ``new''
by following the approach used in the recently finalized locomotive
rule. That rule expands the definition of ``new'' to also include ``a
locomotives or locomotive engine which has been remanufactured, but has
not been placed back into service.'' \29\ This approach was designed to
respond to the very long useful lives of locomotives. Because
locomotive engines remain in service for as long as 40 or 50 years,
with periodic rebuilds, it was deemed advisable to require
remanufactured locomotives to meet a special set of emission standards,
depending on the date of their original manufacture. Because marine
diesel engines are also kept in service for very long periods of time,
such an approach would also lead to additional emission

[[Page 68516]]

benefits through the application of emission standards on engines that
have been put into service but that have subsequently been
remanufactured. In fact, this approach may be technologically easier to
apply to marine diesel engines than locomotives because of their
greater cooling potential. In addition, while not identical, the MARPOL
Annex VI provisions contain a similar requirement, which requires
engines to meet the NOX emission limits when the engine
undergoes a major conversion after January 1, 2000.
---------------------------------------------------------------------------

\29\ See 40 CFR 92.2.
---------------------------------------------------------------------------

At the same time, important obstacles may prevent application of
this approach to marine diesel engines. Setting emission limits for
remanufactured existing engines may be very disruptive to a large
number of small businesses. Also, unlike the railroad industry,
companies operating Category 2 marine diesel engines do not rely on a
small number of engine remanufacturers to work on their engines. In
fact, many of these operators employ their own mechanics to do all
maintenance and remanufacturing work. There is accordingly little
uniformity in remanufacturing practices across the industry. EPA would
need to conduct a major outreach effort to educate the industry about
the implications of such a requirement on their business. EPA seeks
comment on the feasibility and potential costs and benefits of
remanufacturing provisions for existing marine diesel engines. EPA also
seeks comment on its authority to establish such programs for each
marine engine category, including comment regarding whether marine
engines are ever remanufactured to ``as new'' condition, like
locomotive engines.
For the purpose of further clarifying the definition of ``new,'' 40
CFR 89.2 specifies that a nonroad engine, vehicle, or equipment is
placed into service when it is used for its functional purposes. For
the purpose of applying this criteria to marine diesel engine and new
vessels, EPA is proposing that a marine diesel engine is used for its
functional purpose when it is installed on a marine vessel. This
clarification is needed because some marine diesel engines are made by
modifying a highway or nonroad engine that has already been installed
on a vehicle or other equipment. In other words, the engine has been
transferred to an ultimate purchaser after it is used for its
functional purpose as a land-based nonroad engine (for example, on a
truck or a backhoe) and is therefore no longer new, but it is later
removed for marinization and installation on a marine vessel. While the
40 CFR part 89 requirements for land-based nonroad diesel engines do
not contain such a requirement, EPA believes it is reasonable to treat
these engines as new marine engines when they are installed on a
vessel. While the practice of marinizing used highway or nonroad
engines may be infrequent, it could become more common if these engines
are not subject to the standards in this proposal.
New marine engines are either made in the United States or imported
here. It should be noted that not all engines produced in the United
States will be subject to the proposed emission limits. Consistent with
other mobile source emission control programs, engines intended for
sale abroad would be exempt from the requirements.
Engines imported for use in the United States would be covered by
the proposed program whether they are imported as loose engines or
already installed on a vessel constructed elsewhere. All imported
engines would be required to have a certificate of conformity issued by
EPA before they could be entered into commerce in the United States,
subject to limited exemptions. In addition, EPA proposes to apply the
approach contained in its other on-highway and nonroad engine programs,
according to which any engine or vessel that is imported into the
United States that does not have a currently valid, unexpired
certificate of conformity and that was built after the effective date
of the applicable standards, would be considered to be new at the time
it is imported into the United States and would have to comply with the
relevant emission limits in effect at that time. Thus, for example, a
marine vessel manufactured in a foreign country in 2004 that is
imported into the United States in 2007 would be considered to be new,
and its engine would have to comply with the proposed emission limits
that would be in effect for MY2007. This provision is important to
prevent manufacturers from avoiding the emission requirements by
building vessels abroad, transferring their title, and then importing
them as used vessels.
Finally, while engines that are intended for export will not be
subject to the requirements of the proposed emission control program,
marine engines that are exported but that are subsequently re-imported
into the United States are intended to be covered. This would be the
case when a foreign company purchases marine engines manufactured in
the United States for installation on a vessel that will be
subsequently exported to the United States. It would also be the case
when a foreign company purchases marine engines manufactured in the
United States for dressing and subsequent re-exportation to the United
States. Engines that are intended for export but that will be re-
imported into the United States are intended to be subject to the
proposed rule at the time of manufacture, unless the vessel
manufacturer, engine dresser, or marinizer intends to re-certify the
engines as complying with the proposed emission limits before they
enter the United States. Consequently, foreign purchasers who do not
wish to recertify the engines will need to make sure they purchase
complying engines for those marine vessels or engines they intend to
subsequently offer for sale in the United States. Engines intended for
export and sale in a foreign country should be easily distinguishable
from complying engines because complying engines are required to be
labeled as such. Any person who introduces into commerce in the United
States a noncomplying engine that is intended for export and use in a
foreign country would be subject to civil penalties.
To determine when an engine or vessel will be considered
``imported'' for the purposes of determining compliance with the
proposed emission control program, EPA proposes to follow the approach
contained in the Harmonized Tariff Schedule of the United States
(HTSUS). According to HTSUS, vessels used in international trade or
commerce or vessels brought into the territory of the United States by
nonresidents for their own use in pleasure cruising are admitted
without formal customs consumption entry or payment of
duty.³⁰ This approach is consistent with the Treasury
Department's ruling, which concluded that vessels coming into the
United States temporarily as carriers of passengers or merchandise are
not subject to customs entry or duty, but if brought into the United
States permanently they are to be considered and treated as imported
merchandise.
---------------------------------------------------------------------------

\30\ HTSUS (1994), Additional U.S. Note 1. In particular, cruise
ships, ferry boats, cargo ships, barges and ``similar vessels for
the transportation of persons or goods'' are duty free. HTSUS (1994)
8901.
---------------------------------------------------------------------------

Practically, the above discussion means that engines installed on
vessels flagged in another country that come into the United States
temporarily will not be subject to the proposed emission limits. This
approach is consistent with typical international practices, whereby
countries do not generally impose restrictions on the flag vessels of
other countries. In recognition of this practice, the numerous Member
States of the IMO

[[Page 68517]]

recently concluded an international agreement stipulating limits for
the emission of nitrogen oxides applicable to ships engaged in
international voyages. The above discussion also means that engines
installed on vessels that are brought into the United States
permanently would be subject to the proposed emission control program.
EPA seeks comment on this implication and seeks information concerning
the frequency with which this situation would occur.

B. Propulsion and Auxiliary Engines

The proposed scope of application is intended to cover all new
marine diesel engines at or above 37 kW. This universe of engines
includes both propulsion and auxiliary marine diesel engines.
Consistent with the definitions in 40 CFR 89, a propulsion engine is
intended to be one that moves a vessel through the water or assists in
guiding the direction of the vessel (for example, bow thrusters).
Auxiliary engines are intended to be all other marine engines.
In the final land-based nonroad rule, EPA determined that a
portable auxiliary engine that is used onboard a marine vessel would
not be considered to be a marine engine.³¹ Instead, a
portable auxiliary engine is considered to be a land-based auxiliary
engine and is subject to the requirements of 40 CFR 89. To distinguish
a marine auxiliary engine installed on a marine vessel from a land-
based portable auxiliary engine used on a marine vessel, EPA specified
in that rulemaking that an auxiliary engine is installed on a marine
vessel if its fuel, cooling, or exhaust system are an integral part of
the vessel or require special mounting hardware. All other auxiliary
engines are considered to be portable and therefore land-based.
---------------------------------------------------------------------------

\31\ See 63 FR 56967, October 23, 1998.
---------------------------------------------------------------------------

It has become clearer that the differences between marine auxiliary
engines and their land-based counterparts may be so small as to suggest
that these engines should not be treated differently at all. An
alternative approach is to consider all auxiliary engines to be the
same and subject them to the land-based nonroad diesel emission
requirements and implementation dates (40 CFR Part 89). These two
groups of engines are often technologically similar, if not identical,
and are dressed for their applications in the same way. The main
advantage of this alternative approach is that engine manufacturers
would not have to certify these engines twice, once for land-based
applications and once for marine applications. A consequence of
treating these auxiliary engines as land-based nonroad diesel engines
is that there would be some adjustments in emission limits,
implementation date, and other provisions. EPA seeks comment on whether
the land-based and marine distinctions are necessary for auxiliary
engines and on whether EPA should adopt the alternative approach
described above.

C. Exemptions

1. Recreational Engines
Marine diesel engines used in recreational and commercial
applications are different in several respects. Commercial vessels are
designed primarily to efficiently move cargo, either in their own hold
or by pushing or pulling other vessels. Consequently, they are
typically displacement vessels, which means the vessel is pushed
through the water. Optimal operations are more a function of hull
characteristics, which are designed to reduce drag, than engine size,
and these vessels can be powered by engines with power ratings
analogous to land-based applications. Commercial vessels are also often
heavily used, and their engines are designed to operate for as many as
2,000 to 5,000 hours a year at the higher engine loads needed to push
the vessel and its cargo through the water. In addition, these vessels
are often designed for specific purposes, and many characteristics,
including the choice of engine, are set by the purchaser.
Recreational vessels, in contrast, are designed primarily for
speed. To reach high speeds, it is necessary to reduce the surface
contact between the vessel and the water, and consequently these
vessels typically operate in a planing mode. Planing, in turn, imposes
two requirements on vessel design. First, the vessel needs to have a
very high power, but lightweight engine to achieve the speeds necessary
to push the vessel onto the surface of the water. Consequently,
recreational engine manufacturers have focused on achieving higher
power output with lighter engines (this is also referred to as high
power density). The tradeoff is less durability, and recreational
engines are warranted for fewer hours of operation than commercial
marine engines. The shorter warranty period is not a great concern,
however, since recreational vessels, and therefore their engines, are
typically used for fewer hours per year than commercial engines, and
spend much less time operating at higher engine loads.
Second, the vessel needs to be as light as possible, with vertical
and horizontal centers of gravity precisely located to allow the hull
of the vessel to be lifted onto the surface of the water. Consequently,
recreational vessel manufacturers have focused on designing very
lightweight hulls. They are typically made out of fiberglass, using
precisely designed molds. The tradeoff is a reduced ability to
accommodate any changes to the standard design. In other words,
purchasers are not given much choice as to the design of the vessel
and, more particularly, the engine that will be used to power it.
Recreational vessels are typically designed around a specific engine or
group of engines, and engines that are heavier or that are physically
larger cannot be used without jeopardizing the vessel's planing
abilities.
EPA has learned that many recreational engines already use the
types of technologies that will be necessary to reach the proposed
standards. These technologies are typically used to increase the power
density of recreational engines. EPA is concerned that redirecting the
impact of these technologies toward emission reduction may reduce
engine power density. This, in turn, means that recreational vessel
builders may have to resort to larger, heavier engines to achieve the
same engine power. They may also have to redesign their hulls, and
fiberglass molds, to accommodate larger, heavier engines. This can be a
costly requirement, since most vessel manufacturers destroy their
master hulls once the fiberglass molds are produced.
To allow more time to evaluate the potential impact of the proposed
emission limits on the recreational vessel industry, EPA is not
proposing to include recreational propulsion marine diesel engines in
the proposed emission control program. Instead, EPA intends to consider
requirements for those engines in a separate rulemaking. The Notice of
Proposed Rulemaking for that recreational marine diesel rule is
expected to be signed by November 23, 1999, and the Final Rule is
expected to be signed in October, 2000.
EPA considered various methods to distinguish commercial and
recreational marine diesel engines for the purpose of this exemption,
including relying on physical differences between recreational and
commercial engines or their warranty periods. These methods were found
to be unsatisfactory. Relying on physical differences between
recreational and commercial engines would be difficult, especially
since these engines are likely to become more similar as Tier 2
technologies are applied to commercial engines. Relying

[[Page 68518]]

on warranty periods would be difficult because not all engine
manufacturers have the same product ratings with the same warranty
periods. Imposing such requirements would unnecessarily impose a degree
of uniformity across the industry that may hinder engine design or
marketing strategies.
Consequently, EPA is proposing to take a more flexible approach and
is proposing to define a recreational marine engine as a marine
propulsion engine intended by the engine manufacturer to be installed
on a recreational vessel. In other words, a recreational engine would
be defined by the engine manufacturer. EPA is also proposing that
installation of a new recreational engine on a new nonrecreational
vessel would be prohibited, and that all recreational engines be
clearly labeled with language that specifies the engine is intended for
use only on recreational vessels. Specifically, EPA is proposing the
following label language:
THIS RECREATIONAL ENGINE DOES NOT COMPLY WITH FEDERAL MARINE
ENGINE EMISSION REQUIREMENTS FOR NONRECREATIONAL VESSELS.
INSTALLATION OF THIS ENGINE IN ANY NONRECREATIONAL VESSEL IS A
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
Thus, EPA intends that recreational engines can be used only in
recreational vessels. It should be noted that the converse of this
provision is not true, and that EPA does not intend to prohibit the use
of a certified engine on a recreational vessel. In fact, EPA encourages
recreational vessel manufacturers to use certified engines due to the
beneficial impact it would have on the environment. It should also be
noted that this prohibition does not prevent someone from installing an
old marine engine in an old vessel.
EPA seeks comment on using a labeling requirement to distinguish
recreational engines from commercial engines for the purpose of the
exemption, and on whether this approach will be sufficient for
preventing the installation of noncertified recreational engines on
commercial vessels. EPA also seeks comment on whether a power or
displacement cutoff should be also specified, above which engines could
no longer be designated as recreational. For example, a power cutoff of
560 kW may be appropriate because larger engines are installed on
custom-built recreational vessels that are not subject to the same
design constraints as smaller serially-built fiberglass vessels.
For the purpose of the exemption, EPA is proposing to adopt the
definition of recreational vessel as that term is defined in 46 U.S.C.
2101. According to that definition, a recreational vessel is a vessel
(A) being manufactured or operated primarily for pleasure; or (B)
leased, rented or chartered to another for the latter's pleasure. EPA
further proposes that, for the purposes of part (B) of this definition,
the vessel cannot be leased, rented, or chartered for more than six
passengers. EPA is proposing that vessels for hire that can carry more
than six passengers, whether or not they ever actually do, be deemed
nonrecreational vessels. This is consistent with the definition of
recreational vessel for certain Coast Guard safety requirements (See 33
CFR 183.3, 33 CFR 175.3). At the same time, EPA is concerned that
including vessels used for hire in the definition of recreational
vessel may be inappropriate, since vessels used for hire may be used
far more extensively than recreational vessels owned by individuals
solely for their own pleasure. Therefore, EPA seeks comment on whether
the definition of recreational engine should be extended to vessels for
hire.
In addition, to avoid any ambiguities inherent in the term
``pleasure,'' vessels used solely for competition or used at any time
in any other way to generate income or revenue in any way not
associated with the hiring out of the vessel to other people for their
pleasure will not be considered recreational. In other words, if a boat
is used for both recreational and commercial purposes, it will be
considered a commercial vessel. Thus, for example, a vessel that is
used for several weeks a year for lobster fishing and at other times of
the year used for recreational purposes will not be considered to be a
recreational vessel for the purpose of the proposed program.
2. Modified New Land-Based Engines
A small segment of the marine diesel engine market consists of
companies that take a new, land-based engine and modify it for
installation on a marine vessel. However, unlike post-manufacture
marinizers (described in Section V.L.1., below), some of the companies
that modify an engine for installation on a marine vessel do not change
it in ways that may affect emissions. Instead, the modifications may
consist of adding mounting hardware and a generator or propeller gears.
It can also involve installing a new marine cooling system that meets
original manufacturer specifications and duplicates the cooling
characteristics of the land-based engine, but with a different cooling
medium (i.e., water). In many ways, these manufacturers are similar to
nonroad equipment manufacturers that purchase certified nonroad engines
to make auxiliary engines. This simplified approach of producing an
engine can more accurately be described as dressing an engine for a
particular application. Because the modified land-based engines are
subsequently used on a marine vessel, however, these modified engines
would be considered marine diesel engines, which would then fall under
the requirements proposed in this document.
To clarify the responsibilities of engine dressers under this rule,
EPA is proposing to exempt them from the requirement to certify engines
to the proposed standards, provided the following conditions are met.
(i) The engine being dressed, (the ``base'' engine) must be a
highway, land-based nonroad, or locomotive engine, certified pursuant
to 40 CFR 86, 40 CFR 89, or 40 CFR 92, respectively, or a marine diesel
engine certified pursuant to this part.
(ii) The base engine's emissions, for all pollutants, must be at
least as good as the otherwise applicable marine diesel emission
limits. In other words, starting in 2004, a dressed nonroad Tier 1
engine will not qualify for this exemption, since the more stringent
standards for marine diesel engines go into effect at that time.
(iii) The dressing process must not involve any modifications that
can change engine emissions.
(iv) All components added to the engine, including cooling systems,
must follow base engine manufacturer specifications.
(v) The original emissions-related label must remain clearly
visible on the engine.
(vi) The engine dresser must notify purchasers that the marine
engine is a dressed highway, nonroad, or locomotive engine and is
exempt from the requirements of 40 CFR 94.
(vii) The engine dresser must report annually to EPA the models
that are exempt pursuant to this provision and such other information
as EPA deems necessary to ensure appropriate use of the exemption.
EPA is proposing to consider any engine dresser that does not meet
these conditions to be an engine manufacturer, and the engine to be a
new marine diesel engine, and require their engines to be certified to
comply with the provisions of this proposed rule.
It should be noted that an engine dresser that violates the above
criteria could be liable under anti-tampering

[[Page 68519]]

provisions for any change made to the land-based engine that affects
emissions. The dresser could also be subject to a compliance action,
for selling new marine engines that are not certified to the required
emission standards. In addition, the base engine manufacturer could be
subject to a compliance action if the engine is found to be out of
compliance.
EPA seeks comments on three aspects of this proposed exemption.
First, EPA seeks comment on whether highway engines should be included
in the set of base engines that can be modified by an engine dresser
for marine application without needing further certification. EPA made
a previous decision not to allow certified highway engines to be used
in nonroad applications without recertifying. This decision was in
response to claims that highway engines may not be able to meet
applicable emission requirements on the steady-state test cycles
applicable to nonroad engines. EPA is nevertheless proposing to allow
engine dressers to modify certified highway engines without
recertifying them as marine engines, because EPA believes that engine
dressers would be unfairly penalized by the constraint that was
originally intended for manufacturers selling two versions of their own
engines. EPA requests comment on whether it is appropriate to include
highway base engines in this exemption.
Second, EPA seeks comment on how to ensure that exempted dressed
engines comply with the not-to-exceed requirements described in Section
V.F. of this proposal. The base engines certified under 40 CFR 86, 40
CFR 89, or 40 CFR 92 are not subject to these provisions at the present
time. Engines that are not subject to the off-cycle emission program
may not have test data demonstrating compliance with this requirement.
Finally, EPA seeks comment on whether land-based engines that are
credit users (those which have an FEL higher than the standard) should
be allowed to benefit from the exemption. According to the above
proposed criteria, the base engine's emissions must be at least as good
as the otherwise applicable marine diesel emission limits. However, it
may be the case that the base engine is a credit user, and that in fact
its emissions are not as good as the otherwise applicable marine diesel
emission limits, even though it is certified to the same or more
stringent emission limits. This is of concern because engine dressers
often prepare engines for marine vessels that are used in a particular
area of the country. This means that high-emitting dressed engines may
be concentrated in just a few port areas. In addition, it is unlikely
that enough credit generators will be dressed for marine purposes that
will offset the higher emitting credit users. The obvious solution to
this problem is to specify that land-based nonroad or locomotive
engines whose certification relied on the use of credits cannot benefit
from this exemption. However, it is not clear that engine dressers will
be able to identify these engines, or to modify their production
practices if they happen to rely heavily on them for their own
production. EPA seeks comment on this, as well as on any other
solutions that will ensure that engines dressed for marine applications
do not exceed the marine diesel emission limits.
3. Other Exemptions
EPA is proposing to extend other basic nonroad exemptions to marine
diesel engines. These include the testing exemption, the manufacturer-
owned exemption, the precertification exemption, the display exemption,
the national security exemption, and the export exemption described in
40 CFR 89 Subpart J. In addition, EPA seeks comment on an additional
exemption for racing and on the scope of the national security
exemption. It should be remembered that these exemptions are not
necessarily automatic, and that the engine or vessel manufacturer, or
ultimate engine owner, may need to apply for them. As part of its
approval, EPA may require exempted engines to be labeled.
With regard to the national security exemption, EPA is proposing to
apply the approach used in the Agency's existing land-based nonroad and
gasoline marine programs (40 CFR 89.908 and 40 CFR 91.1008). According
to this exemption, only marine engines used in vessels that exhibit
substantial features ordinarily associated with military combat, such
as armor and/or permanently affixed weaponry, and which will be owned
and/or used by an agency of the federal government with responsibility
for national defense, will be considered exempt from the proposed
emission control program. No request for an exemption would be
necessary for these engines. Thus, according to this approach, engines
used on vessels such as aircraft carriers, destroyers, and submarines
would automatically be exempt from the proposed program. EPA believes
extending the nonroad national security exemption to diesel marine
engines is appropriate because the vessels on which these engines are
used are designed for specific national security missions, and the
exemption will ensure that emission controls do not compromise the
ability of these vessels to achieve their military missions. However,
it is EPA's understanding that the Department of Defense, and the Navy
in particular, adopt emission control technology to the extent it is
practical and feasible.
It is EPA's understanding that other public vessels, such as some
vessels operated by the Coast Guard or Maritime Administration or
vessels used for general cargo purposes by the Navy or other armed
service branches, may not have features ordinarily associated with
military combat. Such vessels would not qualify for the automatic
exemption under the proposed national security exemption. EPA seeks
comment on the nature and uses of vessels in such fleets and on the
appropriate delineation of the national security exemption. EPA does
not believe that application of the emission control technology that
will be used to achieve the diesel marine Tier 2 emission limits will
hinder the design and use of these vessels. Nevertheless, there may be
situations in which an exemption from the emission controls may be
necessary. To address this possibility, manufacturers can request a
special national security exemption. A manufacturer requesting such an
exemption would be required to explain why the exemption is required,
and the request would need to be endorsed by an agency of the federal
government charged with responsibilities for national defense. EPA
requests comment on applying the land-based nonroad and gasoline marine
military exemption approach to diesel marine engines or whether these
engines are sufficiently different in application from land-based
military equipment as to require a different approach. If another
approach is more appropriate, EPA requests comment on what that
approach should be.
With regard to racing engines, EPA is proposing to allow an
exemption for marine diesel engines that are installed on vessels used
solely in competition. To limit the application of this requirement to
professional racing, EPA is also proposing that the racing exemption
may not be given to any vessel that is used for recreational purposes.
In other words, high-powered recreational vessels that are not used
solely in competition will not be eligible for the racing exemption.
The proposed approach is different from the approach used by EPA for SI
marine engines (40 CFR Part 91) and land-based nonroad diesel engines
(40 CFR Part 89). In those regulations, EPA defined ``used solely

[[Page 68520]]

for competition'' based on physical features of the vessel. However,
EPA does not believe that marine diesel vessels used solely for
competition will necessarily have physical features that are not found
on other high performance marine vessels. Thus, in this rulemaking, EPA
is proposing to interpret ``used solely for competition'' literally,
such that the exemption would apply only to engines that are, in fact,
used solely for competition. The Agency requests comment regarding
whether it should also use this literal approach for SI marine engines
or land-based nonroad engines.

IV. Engine Categories

The engines that are the subject of this action are very diverse in
terms of physical size, emission technology, control hardware, and
costs associated with reducing emissions. These differences make it
difficult to design one set of emission requirements for all marine
diesel engines. For example, numerical emission limits that may be
reasonable and feasible for a 37 kW engine used on an 5.5-meter (18-
foot) boat may not be reasonable or feasible for a 1,500 kW engine
installed on a tug or a 20,000 kW engine installed on an ocean-going
container ship. Similarly, numerical emission limits appropriate for
very large engines may be not be appropriately stringent for smaller
engines, requiring little or no emission reduction.
Consequently, it is necessary to divide marine diesel engines into
categories for the purposes of applying emission limits and duty
cycles. In developing these categories, EPA had two criteria. First,
the categories should allow EPA to take advantage of existing control
programs that apply to the base engines from which marine engines are
derived. Second, the categories should minimize category straddlers. In
choosing how to distinguish between groups of marine diesel engines,
EPA considered using rated power, rated speed, total displacement, and
several other factors. However, after reviewing the engine parameters
of the range of diesel engine models currently being produced, EPA
concluded that per-cylinder displacement was the best way to
distinguish engine groupings. Per-cylinder displacement is an engine
characteristic that is not easily changed and is constant for a given
engine model or series of engine models. More specifically, EPA is
considering the following categorization scheme, which is summarized in
Table 4. EPA requests comment on this categorization scheme.

Table 4.--Engine Category Definitions
----------------------------------------------------------------------------------------------------------------
Category Displacement per cylinder Basic engine type
----------------------------------------------------------------------------------------------------------------
1................................. Disp. < 5="" liters="" (and="" power="" land-based="" nonroad="" diesel.=""> 37 kW).
2................................. 5 disp. < 20="" locomotive.="" liters.="" 3.................................="" disp.=""> 20 liters Unique, ``Cathedral.''
----------------------------------------------------------------------------------------------------------------

EPA proposes to define Category 1 engines as those marine diesel
engines that are rated above 37 kW, but have a per-cylinder
displacement of less than 5 liters. This definition is intended to
break out the class of marine engines that are serially produced and
generally derived from land-based nonroad configurations or use the
same emission control technologies. These engines are typically used as
propulsion engines on recreational vessels as well as small commercial
vessels (fishing vessels, tugboats, towboats, dredgers, etc.) They are
also used as auxiliary engines on vessels of all sizes and
applications.
EPA proposes to define Category 2 engines as those marine diesel
engines with per-cylinder displacement at or above 5 liters and up to
20 liters. This category is intended to include engines that are of
similar size and configurations as locomotive engines and use the same
or similar emission control technologies. These engines are widely used
as propulsion engines in harbor and coastal vessels, and can be used as
auxiliary engines on ocean-going vessels and larger tugs.
EPA proposes to define Category 3 engines as those marine diesel
engines with a displacement at or above 20 liters per cylinder. These
are very large high-power engines that are used almost exclusively for
propulsion on vessels engaged in Great Lakes or trans-oceanic trade.
EPA is further proposing to divide Category 1 engines into several
subgroups. These subgroups are similar to the land-based nonroad diesel
engine subgroups, with one significant change: EPA is proposing to base
the marine subgroups on engine displacement rather than engine power.
EPA believes this is a more appropriate scheme for two reasons. First,
manufacturers sometimes offer different engine models that are the same
except for the number of cylinders. These engines may fall into
different power groupings by virtue of the added power from adding
cylinders. Second, marine engines are often available in a wider range
of power than their land-based counterparts. While it may be possible
to define wider power bands for marine diesel engine subgroups, it may
not be possible to do so without creating phase-in disadvantages for
particular companies, especially in comparison to their land-based
phase-in schedule. A displacement scheme should minimize these
inequities. Consequently, EPA is proposing a displacement approach to
defining engine groups, as described in Table 5.

Table 5.--Category 1 Engine Groups
------------------------------------------------------------------------
Approximate corresponding power band
from land-based nonroad rulemaking
Displacement (liters/cylinder) -----------------------------------------
kW hp
------------------------------------------------------------------------
Displ.<0.9....................>kW<75>hp<1 00="">displ.<1.2......>kW<130>hp< 175="">displ.<1.5......>kW<225>hp< 300="">displ.<2........>kW<450>hp< 600="">displ.<2.5......>kW<560>hp< 750="" [[page="" 68521]]="">displ.<5.0......>560 hp750
------------------------------------------------------------------------

In selecting the displacement values corresponding with the nonroad
power ranges, EPA examined the engine displacement and power
characteristics of a wide range of existing engines. The listed
displacement values were selected to provide the greatest degree of
consistency with the established land-based nonroad engine power
groups. The wide range in power ratings for engines with a given per-
cylinder displacement, however, led to a high degree of overlap in the
attempted correlation between displacement and power rating. As a
result, some nonroad engine models that were spread across different
power groupings are brought together under a single displacement
grouping. This has the potential to move an engine model into a group
with somewhat more or less stringent requirements, but in almost all
cases there was sufficient overlap to avoid moving a family of engines
into an entirely new grouping. The observed overlap highlights the
benefit of relying on displacement for a simplified approach. This
should give manufacturers opportunity to more sensibly plan an R&D
effort to a family of engines that must meet a single set of
requirements with a common implementation date.
The most important aspect of defining sub-groups relates to which
engines are treated like nonroad diesel engines rated above 560 kW.
Emission limits and implementation dates for smaller marine engines are
relatively uniform; however, the biggest group of Category 1 engines
are subject to less stringent emission limits (for Tier 3) and have
more lead time, which makes it especially important to properly
separate engines. Investigation of engine models led to three key
observations. First, of the engines lines with per-cylinder
displacement between 2.5 and 5.0 liter, all had configurations with
available power ratings above 560 kW; several of these were much
greater than 560 kW. Second, except for one instance, all engines with
displacements less than 2.5 liter had configurations with available
power ratings below 560 kW; this means that the manufacturers of these
engines would have to meet the more aggressive requirements for some of
those engines. The only exception is the DDC 149 series engines, which
is being replaced with a new engine model. Third, the common practice
of bolting two marine engines together would often place the combined
engine artificially into the less stringent regime. For example, with
respect to emissions and performance, two six-cylinder 300 kW engines
bolted together would operate the same as each individual engine. Yet,
by doubling the power at the crankshaft, the engine would be subject to
less challenging requirements.
The net effect of changing to a displacement-based grouping is hard
to quantify. Somewhat greater emission reductions would likely result
for the reasons described above, though it is difficult to identify the
relative sales volumes of engines that would fall above and below the
threshold under both scenarios. The effect on costs is expected to be
small. As described above, no engines would be subject to the more
stringent standards that would not have a subset of the engine line
already subject to those same standards under a power-based grouping
arrangement. As a result, there should be no increase in R&D expenses.
Variable costs would be incurred for a greater number of engines, but
the costs analysis in the Draft RIA makes clear that variable costs
play a relatively small role in the overall cost impact of emission
requirements. The Draft RIA lists various engine models with their
displacement groups. EPA requests comment on this approach to defining
Category 1 engine groups. Also, EPA requests comment on whether it
would be appropriate to pursue redefinition of the nonroad diesel
emission standards into these displacement-based groupings as part of a
separate, future rulemaking.

V. Description of Proposed Standards and Related Provisions

In developing this proposal, EPA has developed a comprehensive
program to reduce emissions from marine diesel engines. This section
describes the proposed emission limits for Category 1 and Category 2
engines. It also sets out provisions that will ensure that engines
comply with the emission limits across all engine speed and load
combinations, as well as throughout their useful life. Proposed
requirements related to test procedures and fuel specifications are
also discussed, as well as several certification and compliance
provisions. Standards and related provisions for Category 3 engines are
described in Section VI, below.

A. Standards and Dates

1. Marine Tier 2 Emission Limits
The Agency's general goal in designing emission control
requirements for Category 1 and Category 2 marine diesel engines is to
develop a long-term program that will achieve significant emission
reductions. In developing such a program, the Agency is guided by
Sec. 213(a)(3) of the CAA, which instructs EPA to set standards for
nonroad engines that ``achieve the greatest degree of emission
reduction achievable through application of technology the
Administrator deems will be available for the engines or vehicles to
which such standards apply, giving appropriate consideration to the
cost of applying such technology within the period of time available to
manufacturers and to noise, energy, and safety factors associated with
the application of such technology.'' The Act also instructs EPA to
first consider standards equivalent in stringency to standards for
comparable motor vehicles or engines (if any) regulated under Sec. 202,
taking into consideration technological feasibility, costs, and other
factors.
The relevant engines regulated under Sec. 202 are on-highway truck
engines, both light-duty and heavy-duty. The most recent NOX
emission limits set by EPA for these engines range from approximately
2.5 g/kW-hr for heavy-duty trucks to less than 2.0 g/kW-hr for light-
duty trucks. After consideration, EPA determined that it is not
appropriate to extend the on-highway limits to diesel marine engines
for three reasons. First, these emission limits reflect a history of
emission control that is not shared by marine diesel engines, which are
currently uncontrolled, and it is not clear that marine diesel engines
can achieve such stringent emission

[[Page 68522]]

limits. In comparison, EPA estimates the baseline emission rates of
marine diesel engines to be approximately 10.5 g/kW-hr for the smaller
marine diesel engines. Second, the duty cycle demands for marine
engines are considerably different than those for on-highway trucks,
which must be reflected in any choice of emission limits for marine
engines. Finally, engines used in marine applications cover a much
broader power range. As described elsewhere in this preamble, the
marine engines covered by this rule vary in size from 37 kW to in
excess of 90,000 kW--much larger than any on-highway engines, which
vary from approximately 50 kW to 500 kW. It may not be possible for the
larger marine diesel engines to achieve the limits that were set for a
smaller universe of on-highway engines.
Instead of basing the proposed emission limits on on-highway
engines, EPA believes it is more appropriate to consider the standards
for land-based nonroad diesel engines already promulgated pursuant to
Sec. 213. This approach is favorable because the vast majority of
marine diesel engines are derived from or use the same technologies as
land-based engines. As described in the Draft Regulatory Impact
Assessment, manufacturers of marine diesel engines typically start with
a partially- or fully-completed land-based nonroad diesel engine or, in
some cases, a highway diesel engine, and adapt it for use in the marine
environment (this process is typically called ``marinization'').
EPA initially considered extending the land-based nonroad diesel
Tier 1 emission limits, as described in the NPRM for new gasoline
spark-ignition and diesel compression-ignition engines.\32\ These
limits are contained in Table 1, above. However, after further
consideration, EPA has concluded that those emission limits do not meet
the Sec. 213 criteria. Available data suggests that marine diesel
engines already perform at or near the NOX emission limits
(9.2 g/kW-hr). This is not surprising, given that the Tier 1 levels
required the application of very simple emission control technology,
primarily timing retard and better cooling. In addition, engine
manufacturers have been exploring better engine cooling for quite some
time in an effort to boost engine power.
---------------------------------------------------------------------------

\32\ See, 59 FR 55929, November 9, 1994.
---------------------------------------------------------------------------

Tier 2 nonroad technologies have been applied to marine diesel
engines with good results. As described in the Draft Regulatory Impact
Analysis, engine manufacturers participating in several California
demonstration programs experimented with applying Tier 2 technologies,
including electronic controls, better turbocharging, and raw-water
aftercooling, to various commercially used engines. These programs have
shown that NOX emissions can be reduced by 40 to 60 percent.
These results suggest that application of the land-based nonroad Tier 1
emission limits will not achieve the greatest degree of emission
reduction achievable, taking into account technological feasibility,
costs and other factors, as required by the Clean Air Act. Therefore,
EPA is not proposing to extend the land-based nonroad Tier 1 emission
limits to marine diesel engines.
At the same time, EPA is concerned about directly applying the
land-based nonroad Tier 2 emission limits to marine diesel engines, for
at least three reasons. First, the results obtained in the
demonstration projects may be better than could be expected over a more
general application of these Tier 2 technologies. Specifically, the
demonstration projects were carefully controlled programs, and the
engines were specially adapted for the participating vessels. These
engines may have seen better maintenance or fewer extremes in use than
typical marine diesel engines.
Second, manufacturers have indicated that there may be some
hardware problems that would have to be worked out before land-based
nonroad Tier 2 technologies can be applied to marine diesel engines.
For example, achieving Tier 2 emission limits will require a higher use
of raw-water aftercooling, which may present some problems for
commercial marine engines. As currently designed, these systems can
require more frequent maintenance, and may pose some reliability
problems. In addition, it is not clear whether split-housing
turbochargers can be used extensively with raw-water aftercooling,
since the temperature differences between the interior and exterior of
the turbocharger can cause material failure.
Finally, and perhaps most importantly, the demonstration projects
gathered emissions data primarily for NOX. It is not clear
what effect application of these technologies had on PM emissions. This
is an important concern because of the NOX/PM tradeoff (as
NOX emissions are decreased, PM emissions tend to rise due
to the change in combustion temperatures).
To address these concerns while still encouraging the use of land-
based nonroad technologies on marine diesel engines, EPA is proposing a
two-step approach for Category 1 and 2 marine diesel emission limits.
Reflecting the above-described concerns, this approach assumes less
than optimal transfer of land-based nonroad technologies to marine
engines in the short run. In the long run, however, this approach
assumes engine manufacturers will develop ways to fully optimize the
transfer of land-based nonroad Tier 2 and Tier 3 emission control
technologies to marine diesel engines. This two step approach will also
give engine manufacturers more time to resolve mechanical barriers that
prevent marine engines from more completely exploiting the water
cooling potential of the environment in which they operate (water).
Specifically, as described in the technological feasibility section
below and the Draft Regulatory Impact Assessment, greater use of raw
water and separate system aftercooling will permit marine engines to
greatly reduce NOX emissions. Taken as a whole, the proposed
emission limits are expected to yield the greatest degree of emission
reduction achievable through the application of technology that is
expected to be readily available during the time frame covered by the
proposal taking into account technological feasibility, costs and other
factors, as required by the Clean Air Act.
Table 6 contains the proposed emission limits for marine diesel
Category 1 and Category 2 engines. In the first step, which EPA is
calling Tier 2 due to the similarity to land-based Tier 2 emission
limits, EPA proposes a 7.2 g/kW-hr NOX+HC limit, to apply to
both categories of engines. Again, this limit is intended to result in
short-term NOX reductions while not requiring manufacturers
to completely resolve the transfer of land-based Tier 2 technologies to
marine engines. These marine Tier 2 emission limits are proposed to
apply beginning in 2004 for engines up to 5 liters per cylinder and
2006 for engines up to 20 liters per cylinder. The staggered dates
reflect the added complexities of applying these limits to larger
engines. The MARPOL Annex VI NOX limits are also provided in
this table for comparison.

[[Page 68523]]

Table 6.--Proposed Tier 2 Marine Diesel Emission Limits and Implementation Dates
----------------------------------------------------------------------------------------------------------------
Implementation
Subcategory HC+NOX g/kW-hr PM g/kW-hr CO g/kW-hr date
----------------------------------------------------------------------------------------------------------------
Power 37 kW 0.5 disp < 0.9.="" 0.9=""> disp < 1.2......="" 7.2...........................="" 0.30="" 5.0="" 2004="" 1.2=""> disp < 1.5......="" 7.2...........................="" 0.20="" 3.5="" 2004="" 1.5=""> disp < 2.0......="" 7.2...........................="" 0.20="" 3.5="" 2004="" 2.0=""> disp < 2.5......="" 7.2...........................="" 0.20="" 3.5="" 2004="" 2.5=""> disp < 5.0......="" 7.2...........................="" 0.20="" 3.5="" 2006="" 5.0=""> disp < 20.0.....="" 7.2...........................="" 0.27="" 2.0="" 2006="" ----------------------------------------------------------------------------------------------------------------="" marpol="" annex="" vi,="" for="" comparison="" purposes="">X only)
----------------------------------------------------------------------------------------------------------------
n 2000 rpm.......... 9.8........................... None None 1/1/2000
130 rpmn<2000 rpm....="">^{(-0.2).................... None ....^{.......... 1/1/2000
n <130 rpm......................="" 17.0..........................="" none="" none="" 1/1/2000="" ----------------------------------------------------------------------------------------------------------------="" it="" is="" expected="" that="" marine="" diesel="" engines="" can="" achieve="" this="" emission="" limit="" through="" the="" application="" of="" electronic="" controls="" and="" better="" cooling,="" perhaps="" supplemented="" by="" some="" degree="" of="" timing="" retard.="" epa="" is="" also="" proposing="" emission="" controls="" for="" pm="" and="" co,="" that="" are="" equal="" to="" the="" land-based="" nonroad="" and="" locomotive="" limits="" for="" these="" pollutants,="" depending="" on="" the="" size="" of="" the="" engine.="" epa="" does="" not="" believe="" it="" is="" necessary="" to="" relax="" these="" limits="" relative="" to="" the="" land-based="" programs.="" due="" to="" the="">X/PM tradeoff, the higher NOX
emission limit should ensure the feasibility of achieving the PM limits
as well. Diesel engines inherently have low CO emissions, and the
proposed limits are intended to serve as a cap.
EPA is proposing new requirements designed to ensure that the
standards are met during real world operation as well as under
laboratory tests (see Section V.F. ``Not-to-Exceed Requirements'').
According to these requirements, marine engines may not exceed the
applicable emission limits by more than 25 percent while the engine is
operated in any load/speed combination contained in a specified not-to-
exceed (NTE) zone. EPA believes that the technology listed above that
will be used to meet the proposed standards will be sufficient to meet
the combined emission limits and NTE requirements. While the NTE
transient operation requirements have an effect on PM emissions, this
is not expected to pose any design difficulties. Marine operations
typically have only limited transience and the NTE requirements are
designed so that a short transience can be averaged into a minimum
operating period.
EPA believes the proposed marine diesel emission limits set out in
Table 6 strike the appropriate balance, taking into consideration the
recently finalized Tier 2 emission limits that apply to the land-based
nonroad engines from which many if not most diesel marine engines are
derived and the special characteristics of marine diesel engines that
may make achievement of those limits difficult. EPA requests comments
on these proposed marine diesel Tier 2 limits. Specifically, it may be
the case that the barriers to applying land-based technologies to
marine diesel engines, including recreational engines, are smaller than
expected, and that the land-based nonroad emission control program is,
in fact, technologically feasible. In that case, extension of the land-
based programs would be the appropriate approach according to the
criteria set out in the Clean Air Act. The land-based Tier 2 emission
limits are contained in Table 7. EPA also seeks comment on whether the
superior cooling potential of marine diesel engines would permit even
lower emission standards for NOX and PM at an acceptable
cost.

Table 7.--Land-Based Nonroad Tier 2 Emission Limits and Implementation Dates
----------------------------------------------------------------------------------------------------------------
Implementation
Subcategory HC+NOX g/kW-hr PM g/kW-hr CO g/kW-hr date
----------------------------------------------------------------------------------------------------------------
Power 37 kW 0.5 disp < 0.9.="" 0.9=""> disp < 1.2......="" 6.6...........................="" 0.3="" 5.0="" 2003="" 1.2=""> disp < 1.5......="" 6.6...........................="" 0.2="" 3.5="" 2003="" 1.5=""> disp < 2.0......="" 6.4...........................="" 0.2="" 3.5="" 2001="" 2.0=""> disp < 2.5......="" 6.4...........................="" 0.2="" 3.5="" 2002="" 2.5=""> disp < 5.0......="" 6.4...........................="" 0.2="" 3.5="" 2006="" 5.0=""> disp < 20.0.....="" 0.4,="" 7.4......................="" 0.27="" 2.0="" 2005="" ----------------------------------------------------------------------------------------------------------------="" 2.="" marine="" tier="" 3="" emission="" limits="" in="" the="" long="" run,="" it="" is="" anticipated="" that="" greater="" experience="" with="" emission="" controls="" and="" the="" transfer="" of="" land-based="" technologies="" to="" marine="" engines="" will="" make="" more="" stringent="" emission="" limits="" feasible.="" for="" this="" second="" step,="" which="" epa="" is="" calling="" tier="" 3="" due="" to="" the="" similarity="" to="" land-="" based="" tier="" 3="" emission="" limits,="" epa="" proposes="" a="" 3.0="" g/kw-hr="">X+HC limit, to apply to marine diesel engines up to 2.5 l/
cyl beginning in 2008. EPA believes this emission limit should be
achievable within the time available through more aggressive engine
cooling and use of electronic engine controls. At the same time, and
similar to the Tier 2 limits, there are uncertainties regarding the
transferability of land-based Tier 3 technologies to these marine
diesel engines. Because more complete information on the technologies
that will be used to achieve these limits for land-based engines will
not be available for several years, EPA intends to reconsider these
marine Tier 3 limits as part of a feasibility review, to take place in
2003. At that time, EPA will examine the extent to which the proposed
Tier 3 standards are technologically feasible and otherwise appropriate
under the

[[Page 68524]]

Clean Air Act. The marine diesel Tier 3 NOX+HC limits are
set out in Table 8.

Table 8.--Proposed Tier 3 Marine Diesel HC+NOX Emission Limits and
Implementation Dates*
------------------------------------------------------------------------
HC+NOX g/ Implementation
Subcategory kW-hr date
------------------------------------------------------------------------
Power 37 kW 0.5 disp
< 0.9.......................................="" 4.0="" 2008="" 0.9=""> disp < 1.2...................="" 4.0="" 2008="" 1.2=""> disp < 1.5...................="" 4.0="" 2008="" 1.5=""> disp < 2.0...................="" 4.0="" 2008="" 2.0=""> disp < 2.5...................="" 4.0="" 2008="" 2.5=""> disp < 5.0...................="" 5.0="" 2010="" 5.0=""> disp < 20.0..................="" 5.0="" 2010="" ------------------------------------------------------------------------="" *="" note:="" these="" limits="" are="" subject="" to="" a="" 2003="" feasibility="" review.="" epa="" also="" seeks="" comment="" on="" whether="" the="" marine="" diesel="" tier="" 3="" limits="" should="" follow="" the="" land-based="" nonroad="" limits,="" set="" out="" in="" table="" 9.="" as="" discussed="" under="" the="" tier="" 2="" limits,="" above,="" it="" could="" be="" the="" case="" that="" transferring="" land-based="" nonroad="" tier="" 3="" technologies="" will="" be="" easier="" than="" anticipated.="" this,="" in="" combination="" with="" the="" superior="" cooling="" potential="" of="" marine="" engines,="" may="" make="" achievement="" of="" the="" land-based="" tier="" 3="" standards="" feasible.="" if="" adopted,="" these="" land-based="" limits="" would="" be="" subject="" to="" review="" in="" the="" 2003="" feasibility="" study.="" table="" 9.--land-based="" nonroad="" tier="" 3="" emission="" limits="" and="" implementation="" dates*="" ------------------------------------------------------------------------="">X g/ Implementation
Subcategory kW-hr date
------------------------------------------------------------------------
Power 37 kW 0.5 disp
< 0.9.......................................="" 4.7="" 2008="" 0.9=""> disp < 1.2...................="" 4.0="" 2007="" 1.2=""> disp < 1.5...................="" 4.0="" 2006="" 1.5=""> disp < 2.0...................="" 4.0="" 2006="" 2.0=""> disp < 2.5...................="" 4.0="" 2006="" ------------------------------------------------------------------------="" *note:="" these="" limits="" are="" subject="" to="" a="" 2003="" feasibility="" review.="" as="" noted="" in="" table="" 8,="" epa="" is="" also="" proposing="" tier="" 3="" emission="" limits="" for="" category="" 1="" marine="" diesel="" engines="" at="" or="" above="" 2.5="" l/cyl.="" and="" category="" 2="" marine="" diesel="" engines.="" tier="" 3="" emission="" controls="" are="" necessary="" for="" these="" engines="" because="" of="" the="" importance="" of="" their="" emissions="" to="" local="" ozone="" inventories.="" marine="" diesel="" engines="" at="" or="" above="" 2.5="" l/cyl="" are="" an="" important="" part="" of="" the="" emission="" inventory="" of="" many="" cities="" with="" commercial="">³³ While the population of
engines in these areas may be smaller than land-based nonroad equipment
or locomotives, it is also the case that their use is much more
concentrated, being limited to port areas. In addition, many cities
with commercial ports are in nonattainment areas, and the second phase
emission limits will be an important tool to help them reduce local
ozone levels.
---------------------------------------------------------------------------

\33\ Category 1 and 2 marine diesel engines make up
approximately 6 percent of the NOX emission inventory for
San Diego, 5 percent for San Francisco and 2 percent for Los
Angeles-South Coast, Baltimore, and Chicago. See Commercial Marine
Vessel Contributions to Emission Inventories, Final Report,
Submitted by Booz-Allen & Hamilton, Inc., October 7, 1991.
---------------------------------------------------------------------------

EPA did not set Tier 3 emission limits for land-based nonroad
engines at or above 560 kW or for locomotives, due to the limited
cooling potential of those engines. These engines are typically
installed in relatively restrictive spaces, and are unable to take full
advantage of air-to-air cooling systems. However, EPA believes that
marine diesel engines at or above 2.5 l/cyl should be able to meet more
stringent Tier 3 emission limits because they can take advantage of the
medium in which they operate, water, to achieve better engine cooling
and additional NOX reductions. At the same time, the ability
of these larger engines to take full advantage of raw water
aftercooling or separate system aftercooling is complicated by the same
constraints that must be overcome for the smaller engines. To
accommodate concerns about overcoming this constraint, as well as
uncertainty over the transferability of more efficient cooling
technology from the smaller to the larger marine diesel engines, EPA
intends to review the Tier 3 emission limits for engines at or above
2.5 liters per cylinder as part of the 2003 Feasibility Review. EPA
seeks comment on the proposed Tier 3 limits for these engines,
concerning both their stringency and implementation dates.
Finally, EPA will also examine the need to set more stringent PM
limits as part of the 2003 Feasibility Review. Consideration of more
stringent PM standards will be a function of, but not depend
exclusively on, the ease with which engines are expected to reach the
NOX+HC limits, the extent to which the higher sulfur content
of marine diesel fuel can be accommodated, whether the land-based
nonroad diesel engine PM limits are revised as part of that category's
2001 feasibility review, and the cost of such limits.
Before making a final decision in the 2003 review, EPA intends to
issue a proposal and offer an opportunity for public comment on whether
the Tier 3 standards continue to be consistent with the requirements of
the Act and continue to be technologically feasible for implementation
according to the proposed schedule. Any Tier 3 PM standards would also
be proposed in such a notice. Following the close of the comment
period, EPA intends to issue a final Agency decision.
If by 2003 EPA finds the emission standards are not feasible
according to the proposed schedule, or are otherwise not appropriate
under the Act, EPA will propose changes to the program, possibly
including adjustments to the levels of the standards. The adjusted
standards may be more or less stringent than those already established,
including the possibility of a new emission standard for particulate
matter. The standards finalized in the rulemaking initiated by this
proposal would stay in effect unless revised by the subsequent
rulemaking procedure.
3. Interim Emission Limits
As noted above, EPA considered but rejected proposing land-based
nonroad Tier 1 emission limits to marine diesel engines. Such emission
limits would not be cost-effective because marine diesel engines often
already meet the Tier 1 emission limits, and a Tier 1 program would
simply impose a certification burden for minimal emission benefits.
At the same time, however, EPA is concerned about leaving these
engines uncontrolled until the implementation dates of the marine Tier
2 standards (2004 for engines up to 2.5 l/cyl and 2006 for engines
between 2.5 and 20 l/cyl). As noted above, these engines can be a
considerable source of NOX and PM emissions in port and
coastal areas, many of which are in nonattainment zones.
This problem may be alleviated, however, by the MARPOL Annex VI
emission control program. Regulation 13 of Annex VI to the
International Convention on the Prevention of Pollution from Ships
calls for engines installed on ships constructed on or after January 1,
2000, to meet emission limits similar in stringency to the land-based
nonroad Tier 1 limits. Although the Annex VI emission limits are not
enforceable until the Annex goes into effect (12 months after it is
ratified by 15 countries representing at least 50 percent of the gross
tonnage of the world's merchant shipping), it is expected that ship
owners will begin to comply with these emission limits in 2000 to avoid
future enforcement actions. According to Regulation 13(1)(b)(ii), the
Annex requirements will apply even to ships operated in domestic waters
unless a country takes action to the contrary. It is expected that the
MARPOL Annex VI program will act as a cap on NOX emissions,
since engine manufacturers will have to make

[[Page 68525]]

compliant engines available for installation on ships beginning January
1, 2000. At the same time, however, there is some concern about
compliance with these limits because they will not be enforceable until
the Annex goes into effect. In addition, the international inspection
program, when it goes into effect, will cover only engines installed on
ships at or above 400 gross tons.³⁴
---------------------------------------------------------------------------

\34\ See Regulation 5, Surveys and Inspections, of the Annex.
---------------------------------------------------------------------------

EPA seeks comment on whether it is appropriate to rely on the
MARPOL Annex VI program as an interim cap on NOX emissions,
with no formal emission limits or certification program set by EPA.
Also, EPA seeks comment on how to verify that engine manufacturers are,
in fact, complying with the MARPOL Annex VI program prior to the
implementation date of Annex VI.
4. Total Hydrocarbons
EPA proposes to use total hydrocarbons (HC) rather than nonmethane
hydrocarbons in its emission standards for marine diesel engines. This
is consistent with locomotive standards but inconsistent with land-
based nonroad standards. Methane was considered to be removed from the
regulated pollutants since it is significantly less reactive than other
hydrocarbons in the formation of ozone. However, for diesel engines,
methane only makes up about two percent of the total hydrocarbons. In
addition, HC generally makes up less than five percent of the combined
HC+NOX from a marine diesel engine. The combination of these
two factors renders the methane fraction of the exhaust insignificant
when compared to the significant digits in the proposed
HC+NOX standard.
The advantage of using total hydrocarbons rather than nonmethane
hydrocarbons in the proposed standard is that it simplifies the
emission measurement. To determine NMHC, both HC and methane must be
measured. Methane is generally measured by speciating total
hydrocarbons using a gas chromatograph, which can be time consuming and
costly. In addition, by using total hydrocarbons for the standard for
all marine diesel engines, the standards are consistent for Category 1
and Category 2.

B. Crankcase Emissions

EPA is proposing to require that all marine diesel engines either
have closed crankcases (where blowby gases are routed into the engine
intake air stream), or route all blowby gases into the engine exhaust
stream for inclusion in all exhaust emission measurements.
Manufacturers would be allowed flexibility for routed blowby gases in
in-use configurations, provided that the blowby gases could be readily
routed into the exhaust for any in-use test. This approach is similar
to the approach used by EPA for locomotives. The purpose of this
proposed requirement is to provide manufacturers the incentive to
reduce crankcase emissions to the maximum extent possible, or to
eliminate them all together.

C. Smoke Requirements

EPA is not proposing smoke requirements for marine diesel engines.
Marine diesel engine manufacturers have stated that many marine diesel
engines, even though currently unregulated, are manufactured with smoke
limiting controls at the request of the engine purchasers. Users seek
low smoke emissions both because they dislike the residue smoke
emissions leave on decks and because they can be subject to penalties
in ports that have smoke emission requirements. In many cases, marine
engine exhaust gases are mixed with water prior to being released. This
practice reduces the significance of smoke emissions since smoke
becomes significantly less visible. Moreover, the Agency believes that
the PM standards being proposed here will have the effect of limiting
smoke emissions as well. EPA requests comment on these views and,
specifically, on whether there is a need at this time for additional
control of smoke emissions from Category 1 marine engines, and if so,
what the appropriate limits should be.
If a smoke limit is desirable, EPA also requests comment on what
the test procedure should be. There is currently no test procedure that
can be used to measure compliance with a smoke limit. Most propulsion
marine engines operate over a torque curve governed by the propellor.
Consequently, a vessel with an engine operating at a given speed will
have a narrow range of torque levels. Some large propulsion marine
engines have variable-pitch propellers, in which case the engine
operates much like constant-speed engines. It should be noted, however,
that ISO is working on a proposal for marine diesel engine smoke test
procedures. A copy of a recent draft is being placed in the docket for
this rulemaking. As this procedure is finalized by ISO, and emission
data become available, EPA may review the issue of smoke requirements
for all marine diesel engines. EPA requests comment on this overall
approach to smoke emissions from marine diesel engines, as well as
comment on the draft ISO procedures.

D. Alternative Fuels

EPA has determined that the proposed standards should apply to
marine diesel engines, without regard to the type of fuel that they
use. This is consistent with nonroad diesel engine regulations of 40
CFR part 89. It is also generally consistent with the locomotive
regulations; however, the locomotive regulations apply even more
broadly because they also include spark-ignited engines. EPA recognizes
that few, if any, alternative-fueled marine engines are currently being
manufactured, but believes that it is appropriate to make clear to
manufacturers what standards will apply to such engines should they be
produced.
The broad applicability of the proposed standards raises two
potential issues. The first issue is related to the form of the HC
standards. In its regulation of highway vehicles and engines (59 FR
48472, September 21, 1994), the Agency determined that it is not
appropriate to apply total hydrocarbon standards to engines fueled with
natural gas (which is comprised primarily of methane), but rather that
nonmethane hydrocarbon (NMHC) standards should be used. Thus, EPA is
setting NMHC+NOX standards for compression-ignition natural
gas-fueled marine engines. These NMHC+NOX standards are
numerically equivalent to the HC+NOX standards proposed for
diesel engines. Similarly, EPA has determined that alcohol-fueled
engines should be subject to HC-equivalent (HCE) standards instead of
HC standards (54 FR 14426, April 11, 1989). HC-equivalent emissions are
calculated from the oxygenated organic components and non-oxygenated
organic components of the exhaust, summed together based on the amount
of organic carbon present in the exhaust. (The reader is referred to
the April 11, 1989 final rule for more information regarding the
determination of HC-equivalence.) EPA is proposing these approaches
because it has previously determined that these approaches will result
in the most equivalent stringency for all fuel types.
The second issue raised by the regulation is related to the need
for slightly different test procedures for alternative-fueled engines.
This issue is being resolved in this rulemaking by referencing the test
procedures found in 40 CFR Parts 89 and 92, both of which include
flexibility for testing alternative-fueled engines. EPA requests
comment

[[Page 68526]]

on whether more specific regulation is needed for marine engines.

E. Test Procedures

For this marine regulation, EPA is proposing to use previously
established test procedures for diesel nonroad engines. Specifically,
EPA is proposing that Category 1 marine engines be tested using the
land-based nonroad test procedures of 40 CFR Part 89, and that Category
2 marine engines be tested using the locomotive test procedures of 40
CFR Part 92. There are two reasons for using this approach. First, most
manufacturers of marine compression-ignition engines also manufacture
land-based engines and will be equipped to test engines using these
test procedures. Second, marine compression-ignition engines are
fundamentally similar to their land-based counterparts, and it is
therefore appropriate to measure their emissions in the same way. At
the same time, some changes are necessary, EPA is proposing the
modifications to these test procedures described below.
1. Duty cycles
The duty cycle used to measure emissions is intended to simulate
operation in the field. Testing an engine for emissions consists of
exercising it over a prescribed duty cycle of speeds and loads,
typically using an engine dynamometer. The nature of the duty cycle
used for determining compliance with emission standards during the
certification process is critical in evaluating the likely emissions
performance of engines designed to those standards.
To address operational differences between engines, EPA is
proposing different duty cycles for different types of compression-
ignition marine propulsion engines. EPA is proposing that propulsion
engines that operate on a fixed-pitch propeller curve be certified
using the International Standards Organization (ISO) E3 duty cycle.
This is a four-mode steady-state cycle developed to represent in-use
operation of marine diesel engines on vessels 24 meters in length and
larger. The four modes lie on an average propeller curve based on the
vessels surveyed in the development of this duty cycle. Another duty
cycle, ISO E5, was developed to represent in-use operation of smaller
marine diesel engines; this cycle is similar to the E3 except that an
idle mode is added and the cycle is more heavily weighted towards lower
power modes. The E3 is designed for engines used to propel vessels
greater than 24 meters in length while the E5 is designed for engines
used to propel vessels less than 24 meters in length. The
attractiveness of the E3 duty cycle is that, according to EPA's
inventory analysis, the majority of HC+NOX emissions from
marine diesel engines are generated by engines on vessels more than 24
meters in length. By choosing a single cycle to represent all
propeller-curve marine diesel engines, EPA hopes to reduce
certification burdens for marine engines that are used in vessels both
over and under 24 meters in length.
EPA is proposing that fixed-speed marine propulsion engines with
variable-pitch propellers be certified on the ISO E2 duty cycle. This
duty cycle is also a four-mode steady-state cycle. It uses the same
power and weighting factors as the E3 cycle, but the engine is operated
in each mode at rated speed.
EPA is also proposing that variable-speed marine propulsion engines
with variable-pitch propellers be certified on the ISO E2 duty cycle.
These engines are designed to operate near their power curve to
maximize fuel efficiency. In general, these engines will operate at a
constant speed except when maneuvering in port. Because of the expense
of the system, variable-speed engines are rarely used with variable-
pitch propellers. ISO does not have a test duty cycle specifically
designed for these engines. However, because most of their operation is
at constant speed, EPA is proposing that these engines certify using
the E2 duty cycle. EPA proposes that the speed setting for testing
should coincide with the speed setting at which the engine would spend
most of its time in use.
For auxiliary engines, EPA is proposing that constant-speed
auxiliary engines be certified to the ISO D2 duty cycle and that
variable-speed auxiliary engines be certified to the ISO C1 duty cycle.
These duty cycles are consistent with the requirements for land-based
nonroad diesel engines. More detail on the proposed duty cycles is
contained in the Draft Regulatory Impact Analysis (Draft RIA)
associated with this proposal. EPA requests comment on the
appropriateness of the proposed duty cycles.
Under the provisions of the land-based nonroad rule, engine
manufacturers have the option to petition for their marine engines to
be included in land-based engine families. EPA is not proposing this
flexibility for propulsion marine engines because the ``not-to-exceed''
provisions described below require the use of the marine duty cycles.
For larger marine engines, conventional emission testing on a
dynamometer becomes more difficult because of the size of the engine.
Often engine mock ups are used for the development of these engines
where a single block is used for many years and only the power assembly
is changed out. EPA proposes that for Category 2 engines, certification
tests may be performed on these engine mock ups provided that their
configuration is the same as that of the production engines. In
addition, for larger Category 2 marine engines, EPA requests comment on
whether or not single-cylinder tests should be allowed for
certification testing. Assuming that each cylinder in an engine is
equivalent, a single-cylinder test should give the same brake-specific
emission results as a full engine test.
2. In-Use Testing
As with its other federal mobile source programs, EPA retains the
authority to perform in-use testing on marine engines to ensure
compliance in use. This testing may include taking in use marine diesel
engines out of the vessel and testing them in a laboratory, as well as
field testing of in use engines in the vessel, in a marine environment.
EPA's proposal specifies the equipment and related procedures for use
in laboratory based testing. EPA is not at this time, however,
specifying similar provisions for field testing. EPA expects that the
capabilities of field testing equipment will increase over time, and it
is better to allow this to occur without attempting to pick testing
technologies at this time, or interfere with this development process.
Field testing data will be used by EPA in two ways. First, it may
be used as a screening tool, with follow up laboratory testing where
appropriate. Second, it may be used directly as a basis for compliance
determinations, when the field testing itself provides reliable
information from which conclusions can be drawn regarding what
laboratory based emissions levels would be. The probative value of
field test data is expected to increase over time, as the capabilities
of field testing equipment are developed. The flexibility in testing
that these approaches provide will allow EPA to most efficiently
conduct in use testing, and will also address those situations where it
is physically or otherwise impossible to remove an engine from a marine
vessel for testing in a laboratory.
For compression-ignition marine engines that expel exhaust gases
under water or mix their exhaust with water, EPA proposes to require
that the engines be equipped with an exhaust sample port where a probe
can be inserted for in-use exhaust emission testing. It is important
that the location of this port

[[Page 68527]]

allow a well mixed and representative sample of the exhaust. The
purpose of this proposed provision is to simplify in-use testing. EPA
requests comment on the proposed in-use testing provisions.
3. Test Fuel
Section 206(h) of the Clean Air Act requires EPA to ensure that the
test procedure, including the test fuel, adequately represent in-use
operation. To facilitate the testing process, EPA specifies a test fuel
that is intended to be representative of in-use fuels. Engines would
have to meet the standard on any fuel that meets the proposed test fuel
specifications, with one modification as described later. This section
describes the test fuel EPA is proposing for Category 1 and Category 2
engines. This test fuel is to be used for all testing associated with
the regulations proposed in this document, to include certification,
production line and in-use testing, as well as any NTE testing.
EPA is proposing that the recently finalized test fuel
specifications for nonroad diesel engines be applied, with a
modification to the sulfur specification as described later, to both
Category 1 and 2 marine diesel engines. EPA believes that largely
adopting the nonroad fuel will simplify development and certification
burdens for marine engines that are developed from land-based
counterparts. The proposed test fuel for marine diesel engine testing
has a sulfur specification range of 0.03 to 0.80 weight-percent (wt%),
which covers the range of sulfur levels observed for most in-use fuels.
Manufacturers are generally responsible for ensuring compliance with
the emission standards using any fuel within this range. Thus, they
will be able to harmonize their marine test fuel with U.S. highway
(<0.05 wt%),="" nonroad="" (0.03="" to="" 0.40="" wt%),="" locomotive="" (0.2="" to="" 0.4="" wt%)="" and="" european="" testing="" (0.1="" to="" 0.2="" wt%).="" the="" full="" range="" of="" proposed="" test="" fuel="" specifications="" are="" presented="" in="" chapter="" 3="" of="" the="" draft="" ria.="" epa="" is="" proposing="" a="" higher="" upper="" limit="" for="" the="" marine="" diesel="" engine="" sulfur="" specification="" (0.8="" wt%)="" than="" was="" recently="" finalized="" for="" land-="" based="" nonroad="" engines="" (0.4="" wt%)="" because="" there="" is="" some="" information="" available="" that="" suggests="" that="" marine="" fuels="" may="" have="" higher="" sulfur="" contents="" than="" land-based="" diesel="">³⁵ Using ASTM
specification D 2069 as a guide, EPA considered choosing an upper limit
of 1.5 wt% sulfur. Although 1.5 wt% may be appropriate based on the
ASTM specification, EPA is proposing that this upper limit on sulfur
content be 0.8 wt% because PM can not accurately be measured using the
proposed testing procedures using fuels with a sulfur content higher
than 0.8 wt%.³⁶ EPA requests comment on whether it is
appropriate to limit the test fuel specification in this way due to
this testing constraint.
---------------------------------------------------------------------------

\35\ ``Final Report: 1996 American Petroleum Institute/National
Petroleum Refiners Association Survey of Refining Operations and
Product Quality'' suggests that actual marine diesel fuels may have
sulfur contents somewhat higher than general nonroad diesel fuels.
ASTM specification D 2069 includes a specification for general
purpose marine distillate fuel with a maximum sulfur content of 1.5
wt%.
\36\ ``Exhaust Gas Emission Measurements: A Contribution to a
Realistic Approach,'' D. Bastenhof, dieselMAC, May, 1995.
---------------------------------------------------------------------------

The proposed PM standards were largely determined to be feasible
based on the feasibility of the corresponding standards for land-based
nonroad and locomotive applications, which have a 0.4 wt% sulfur upper
limit for the test fuel. Since PM emissions are somewhat fuel sulfur-
dependent, EPA does not believe that it is appropriate to require
compliance with the PM standards using fuel with a sulfur content above
0.4 wt%. It is for this reason that EPA is proposing to allow a
correction of PM emissions for tests that are run using fuel with a
sulfur content greater than 0.4 wt%. Thus, the measured PM emissions
for any test performed using fuel with a sulfur content of greater than
0.4 wt% would be corrected to the level that would have been measured
if the fuel had a sulfur content of 0.4 wt%. The proposed correction
method is that used for land-based nonroad engine testing. EPA requests
comment on whether this correction method is accurate and appropriate
for this application.
It is EPA's intent that engines be designed for the whole range of
in-use fuels and that any testing conducted by EPA would use test fuels
typical of in-use fuels. Unfortunately, the test procedure currently
limits the Agency from reaching this objective for marine diesel
engines if in-use fuels do in fact have sulfur levels as high as the
current ASTM specifications allow. EPA requests comment on whether
currently available marine fuel has a sulfur content significantly
higher than land-based nonroad fuel. EPA will be investigating marine
fuel further and is requesting information on the specifications that
are used in use. It is EPA's intent to develop test procedures that
will allow for the accurate measurement of PM emission over the entire
range of in-use fuel characteristics. If successful, the Agency would
intend to broaden the range of certification fuel to reflect the full
range of in-use fuels. Any efforts to do so would consider the impacts
on the appropriateness and feasibility of the PM standards and would
likely be undertaken in the planned 2003 technology review for the Tier
3 standards.
EPA requests comment on all aspects of its proposed test fuel
provisions. EPA is also interested in obtaining more information on the
specifications of marine fuel used in Category 2 marine engines.
Essentially, this proposal assumes that Category 2 marine engines are
operating on a distillate fuel. The Agency requests comments on this
approach and on how often residual fuels or residual fuel blends are
burned in Category 2 engines.
4. Adjustable Parameters
Marine diesel engines are often designed with adjustable
components, to allow the engine to be adjusted for maximum efficiency
when used in a particular application. This practice simplifies marine
diesel engine production, since the same basic engine can be used in
many applications. While EPA recognizes the need for this practice, EPA
is also concerned that the engine meet the proposed emission limits
throughout the range of adjustment. Therefore, and consistent with the
locomotive rule, the Agency is proposing that manufacturers specify in
their applications for certification the range of adjustment for these
components across which the engine is certified to comply with the
applicable emission standards, and demonstrate compliance across that
range.
Practically, this requirement means that a manufacturer would
specify a range of fuel injection timing, for example, over which the
engine would comply with the emission standards. This range could be
designed to account for differences in fuel quality. Operators would
then be prohibited by the anti-tampering provisions from adjusting
engines outside of this range.
Ideally, to ensure that engines are always operated within the
specified range of adjustment, marine diesel engine manufacturers
should be required to design their engines to prevent adjustments
outside the specified range. However, EPA recognizes that it may be
necessary to adjust injection timing or other adjustable parameters
outside the originally specified control range during engine
remanufacture to accommodate engine wear. There are at least two
alternative solutions to this problem. First, engine manufacturers
could be

[[Page 68528]]

required to set a range of adjustments that would accommodate changes
necessary at the time the engine will be remanufactured. Alternatively,
compliance with the range of adjustments could be ensured through anti-
tampering provisions, with the requirement that the new range of
adjustments be specified at the time of remanufacture. EPA seeks
comments on these and other approaches to ensure that engines with
adjustable parameters meet the proposed emission requirements.
5. Definition of Rated Speed
The definition of rated speed, where speed is the angular velocity
of an engine's crankshaft (usually expressed in revolutions per minute,
or rpm) is an important aspect of the test cycles and ``not-to-exceed''
(NTE) zones proposed in this document. In the past, EPA has expected
engine manufacturers to declare reasonable rated speeds for their
engines; however, EPA is concerned that some manufacturers may have
declared rated speeds that are not really representative of the
operating characteristics of a particular engine in order to influence
the parameters under which their engines could be certified. Under
EPA's highway transient duty cycle, manufacturers would likely receive
a NOX emission benefit if they declared a rated speed that
was higher than the actual rated speed of the engine. Under EPA's
nonroad and proposed marine steady-state duty cycles, manufacturers
would likely receive a NOX emission benefit if they declared
a lower rated speed. In addition, a low declared rated speed would
shrink a marine engine's NTE zone.
Currently, U.S. highway and nonroad diesel engine regulations
specify two slightly different ways to determine rated speed. EPA's
highway heavy-duty diesel regulation defines rated speed as the
manufacturer's specified rated speed, as defined at 40 CFR 86.082-2, or
calculated speed, whichever yields the higher speed. The calculated
speed in the highway rule is determined by averaging the minimum and
maximum speeds at which 98% of maximum power is generated. This
calculation can yield unreasonable speeds in some high-torque-rise
engines. EPA's nonroad rule defines rated speed as the maximum full-
load governed speed for governed engines and the speed of maximum
horsepower for ungoverned engines. The International Standards
Organization (ISO-8178) defines a diesel engine's rated speed as the
speed at which, according to the statement of the engine manufacturer,
rated power is delivered. This is similar to the International Maritime
Organization's definition; the crankshaft revolutions per minute at
which the rated power occurs as specified on the nameplate and in the
Technical File of the marine diesel engine.
To determine a single rated speed definition that encompasses the
complete range of engine operation, EPA analyzed the maximum-power
versus speed curves from eleven highway and nonroad engines. These
engines were all similar to marine engines and they may be used in
marine applications. EPA observed that most mechanically governed
engines had distinct governor droops at speeds slightly higher than the
speed at maximum power. High-torque-rise engines, however, had gradual
decreases in power beyond the maximum-power speed, followed by a steep
rate of governor droop. Furthermore, some electronically governed
engines had multiple rates of power decrease between the maximum-power
speed and the onset of governor droop. See Figure 1 for an illustration
of four different maximum-power versus speed curves.
Based on this analysis, EPA proposes that the rated speed of any
engine shall be defined at the single point on an engine's maximum-
power versus speed curve that lies farthest away from the zero-power,
zero-speed point on a normalized maximum-power versus speed plot. In
other words, consider straight lines drawn between the origin (speed =
0, load = 0) and each point on an engine's maximum-power versus speed
curve (see Figure 1). Note that the maximum-power versus speed curve is
normalized so that 100% power and 100% speed are set at the maximum
power and maximum-power speed point. Under this proposal, rated speed
would be defined at that point where the magnitude (length) of this
line reaches its maximum value. The magnitude of this line, called
Rated__Speedfactor in this rule, is calculated by using the
following equation:
[GRAPHIC] [TIFF OMITTED] TP11DE98.000

Rated speed shall be the speed value of the data point that returns
the maximum value of Rated__Speedfactor.
EPA proposes the following procedure to determine rated speed:
1. Generate maximum-power versus speed data points by using the
appropriate method defined in 40 CFR 86.1332-90. EPA recognizes that 40
CFR 86.1332-90 does not address the issue of electronic engines that
vary injection timing, rate shaping, exhaust gas recirculation, and
variable-nozzle turbocharging with respect to their operating
conditions. These engines' maximum-power versus speed curves can vary
as a function of the method in which the curves are determined (i.e.,
transient curve generation versus steady-state curve generation). EPA
proposes that the engine operation generating the maximum
Rated__Speedfactor shall be the operation under which rated
speed is determined. EPA seeks comment on this proposal.
2. Compare power values to determine the point where power is a
maximum.
3. Normalize power values with respect to maximum power.
4. Normalize speed with respect to the speed at which maximum power
is generated.
5. Calculate the Rated__Speedfactor for each normalized
data point.
6. Compare all Rated__Speedfactor values to determine
the maximum value of Rated--Speedfactor.
7. The speed at which maximum Rated__Speedfactor occurs
shall be the rated speed for certification and NTE zone testing.
Examples of results from this calculation are illustrated by
circles superimposed on four maximum-power versus speed curves in
Figure 1. EPA seeks comment on this proposal.

[[Page 68529]]

[GRAPHIC] [TIFF OMITTED] TP11DE98.001

F. Not-to-Exceed Requirements

EPA's goal is to achieve control of emissions over the broad range
of in-use speed and load combinations that can occur on a vessel so
that real-world emission control is achieved, rather than just
controlling emissions under certain laboratory conditions. An important
tool for achieving this goal is an in-use program with an objective
standard and an easily implemented test procedure. Historically, EPA's
approach has been to set a numerical standard on a specified test
procedure and rely on the prohibition of defeat devices to ensure in-
use control over a broad range of operation not included in the test
procedure.
No single test procedure can cover all real world applications,
operations, or conditions. Yet to ensure that emission standards are
providing the intended benefits in use, the Agency must have a
reasonable expectation that emissions under real world conditions
reflect those measured on the test procedure. The defeat device
prohibition is designed to ensure that emissions controls are employed
during real world operation and not just under laboratory or test
procedure conditions. However, the defeat device prohibition is not a
quantified standard and does not have an associated test procedure, so
it does not have the clear objectivity and ready enforceability of a
numerical standard and test procedure. As a result, the current focus
on a standardized test procedure makes it harder to ensure that engines
will operate with the same level of control in the real world as in the
test cell.
Because the E3 duty cycle uses only four modes on an average
propeller curve to characterize marine diesel engine operation, EPA is
concerned that an engine designed to the duty cycle would not
necessarily perform the same way over the range of speed and load
combinations seen on a vessel. The E3 duty cycle is based on an average
propeller curve, but a propulsion marine engine may never be fitted
with an ``average propeller.'' For instance, a light vessel with a
planing hull may operate at lower torques than average while the same
engine operated on a heavy vessel with a deep displacement hull may
operate at higher torques than average. This can largely be a function
of how well the propeller is matched to the engine and vessel. A
planing hull vessel can operate at high torques at low speed prior to
planning. In addition, the E3 duty cycle only includes steady-state
operation while some transience is seen in use.
To ensure that propulsion emissions are controlled from marine
diesel engines over the full range of speed and load combinations seen
on vessels, EPA proposes to establish a zone under the engine's power
curve where the engine may not exceed a specified emissions limit, for
any of the regulated pollutants, under any operation that could
reasonably be expected to be seen in the real world. In addition, EPA
proposes that the whole range of real ambient conditions be included in
this ``not-to-exceed'' (NTE) zone testing. The NTE zone, limit, and
ambient conditions are described below.
EPA believes that there are significant advantages to taking this
sort of approach. The test procedure is very flexible so it can
represent any and all in-use conditions (ambient and operation).
Therefore, the NTE approach takes all of the benefits of a numerical
standard and test procedure and expands it to cover a broad range of
conditions. Also, laboratory testing makes it harder to perform in-use
testing since either the engines would have to be removed from the
vessel or care would have to be taken that laboratory-type conditions
can be achieved on the vessel. With the NTE approach, in-use testing
and compliance become much easier since emissions may be sampled during
normal vessel use. Because this approach is objective, it makes
enforcement easier and provides more certainty to the industry of what
is expected in use versus over a fixed laboratory test procedure.
Even with the NTE requirements, EPA believes that it is still
important to retain standards based on the steady-state duty cycles.
This is the standard that EPA expects the certified marine diesel
engines to meet on average in use. The NTE testing is more focused on
maximum emissions for segments of operation and should not require
additional technology beyond what is used to meet the proposed
standards. EPA believes that basing the emissions standards on a
distinct cycle and using the NTE zone to ensure in-use control creates
a comprehensive program. In addition, the steady-state duty cycles

[[Page 68530]]

give a basis for calculating credits for use in the averaging, banking,
and trading program.
The proposed NTE zone for marine diesel engines that would certify
using the E3 duty cycle is illustrated in Figure 1 and is defined by
the power curve of the engine up to rated speed. This zone is based on
the range of conditions that a marine diesel propulsion engine could
typically see in use. EPA is proposing a similar approach for engines
certified using the constant-speed E2 duty cycle. In this case, the
``not-to-exceed'' zone is at the speed for which the engine is designed
to operate for loads ranging from 25 to 100 percent of maximum load at
that speed. More detail on the development of the boundaries and
conditions associated with the proposed NTE zones may be found in
Chapter 3 of the Draft RIA. EPA requests comment on the NTE zones.
[GRAPHIC] [TIFF OMITTED] TP11DE98.002

EPA proposes the limit on emissions within the NTE zones to be 1.25
times the standard (or FEL if ABT is used) for all of the regulated
pollutants (HC, NOX, CO, PM). The standard itself is
intended to represent the average emissions under steady-state
conditions. Since it is an average, some points can be higher, some
lower, and the manufacturer will design to maximize performance and
still meet the engine standard. The NTE limit is on top of this. It is
designed to make sure that no part of the engine operation and that no
application goes too far from the average level of control. Data
presented in Chapter 3 of the Draft RIA shows that the proposed limit
of 1.25 times the standard is feasible for marine diesel engines, yet
challenging because of variations in emissions at high versus low
speeds and loads for some engines. The proposed limit is consistent
with the enforcement policy currently in place for the highway heavy-
duty diesel program.³⁷ However, the proposed marine NTE
zones are much smaller than for highway heavy-duty diesel engines due
to the smaller range of operation typically seen in use.
---------------------------------------------------------------------------

\37\ ``Heavy-duty Diesel Engines Controlled by Onboard
Computers: Guidance on Reporting and Evaluating Auxiliary Emission
Control Devices and the Defeat Device Prohibition of the Clean Air
Act,'' U.S. EPA, October 15, 1998.
---------------------------------------------------------------------------

Although transient operation would be included in the NTE testing,
only operation that would reasonably be expected to be seen in use
would be included. Therefore, engine testing may include transient
speed and load operation. Examples of this type of transience would be
bringing a vessel to plane or changing speeds. Because the majority of
marine operation is fairly steady, EPA believes that the NTE testing
should allow for short emissions spikes under transience. Engine
testing may not include transient operation that cannot be replicated
by similar engines as installed on actual vessels in use, since those
are operations that the engine is not designed for and is not expected
to see in-use. Therefore, there would be no in-use emission impact from
such operations. To ensure that a short transience does not unfairly
give high results, EPA proposes that the emissions sampling must be at
least over a 30 second time period. This 30 second sampling period
should be long enough to allow an emissions spike to be averaged out
while still retaining a short enough period to look at a specific type
of operation. EPA proposes that an acceleration associated with
bringing a vessel to plane be eligible for inclusion in any NTE type
testing regardless of whether it falls within the NTE zone shown in
Figure 1.
The NTE standards are proposed to apply under any ambient air
conditions. Within the following air temperature and humidity ranges,
no corrections will be allowed to account for the effects

[[Page 68531]]

of temperature or humidity on emissions: 13-35 deg.C for ambient air
temperature and 7.1-10.7 grams water per kilogram of dry air for
humidity. Ambient water temperature must be in the range of 5-32 deg.C
during NTE testing. In addition, the engines must comply with the
standards for the full range of test fuel specifications.
The defeat device provisions established for highway and nonroad
engines are proposed to apply to marine diesel engines in addition to
the NTE requirements. A design in which an engine met the standard at
the steady-state test points but was intentionally designed to approach
the NTE limit everywhere else would be considered to be defeating the
standard. Electronic controls that recognize when the engine is being
tested for emissions and adjust the emissions from the engine would be
another example of a defeat device, regardless of the emissions
performance of the engine.
EPA is aware that marine diesel engines may not be able to meet the
emissions limit under all conditions. Specifically, there are times
when emissions control must be compromised for startability or safety.
EPA is not proposing that engine starting be included in the NTE
testing. In addition, EPA manufacturers would have the option of
petitioning the Administrator to allow emissions to increase under
engine protection strategies such as when an engine overheats.
EPA proposes to allow manufacturers to petition to adjust the size
and shape of the NTE zone for certain engines if they can certify to
the Agency that the engine will not see operation outside of the
revised NTE zone in use. This way, manufacturers could avoid having to
test their engines under operation that they would never see in use.
However, manufacturers would still be responsible for all operation of
an engine on a vessel that would reasonably be expected to be seen in-
use and would be responsible for ensuring that their specified
operation is indicative of real-world operation. In addition, if a
manufacturer designs an engine for operation at speeds and loads
outside of the proposed NTE zone (i.e., variable-speed engines used
with variable-pitch propellers), the manufacturer would be responsible
for notifying EPA so that their NTE zone can be modified appropriately
to include this operation.
EPA is interested in refining the NTE concept for marine diesel
engines prior to the final rule where appropriate. One concern may
exist for mechanically controlled engines that are only capable of a
fixed injection timing. It may be difficult for these engines to
achieve a flat emissions profile, especially at low speeds and loads
where brake-specific emissions are often higher. One potential option
for addressing this problem would be to split the NTE zone into two
subzones with a relaxed cap at lower speeds and loads. EPA requests
comment on this option and on any other technical options and
improvements to the off-cycle provisions as proposed.
The Engine Manufacturers Association has presented an off-cycle
concept to EPA in response to concerns and concepts raised by the
Agency. This concept is in a briefing format and may be found in the
docket.³⁸ In the EMA concept, the NTE zone emissions limit
is based on the emissions at individual steady-state test modes with
limits on the interpolated values between the modes rather than a flat
cap. In the highway policy, EPA uses a concept similar to this but it
is in addition to a flat emissions limit. The NTE zone described by EMA
is smaller than the proposed zone, and the emissions limit is higher on
average. EPA requests comment on this approach and on whether or not it
is needed in addition to the proposed approach as in the on-highway
program.
---------------------------------------------------------------------------

\38\ Engine Manufacturers Association, ``EMA Alternative
Proposal for Controlling `Off-Cycle' Emissions from Marine
Engines,'' September 25, 1998.
---------------------------------------------------------------------------

EPA is not proposing an NTE limit, at this time, for engines
certified using the D2 or C1 test duty cycles. EPA does not yet have
enough data on the operating characteristics of auxiliary engines to
determine NTE zones and associated limits for these engines. However,
EPA is gathering data and intents to evaluate the NTE concept for
auxiliary engines. This effort will likely be combined with the efforts
begun to evaluate off-cycle emission for land-based nonroad engines.
EPA requests comment on appropriate NTE zones and limits for auxiliary
engines.

G. Voluntary Low-Emitting Engine Program

Officials representing certain cities, states, or regions in the
U.S. have expressed interest in developing incentive programs to
encourage the use of engine technologies that go beyond federal
emission standards. Some of these technologies have already undergone
significant development. In the final rule for land-based nonroad
diesel engines, EPA included a program of voluntary standards for low-
emitting engines, referring to these as ``Blue Sky Series'' engines (63
FR 56967, October 23, 1998). EPA is proposing similar voluntary
standards as part of this rulemaking. The program, if successful, will
lead to the introduction and more widespread use of these low-emission
technologies.
Ongoing research has led to much improved prospects for a variety
of low-emitting diesel engine technologies. Technology developments to
meet upcoming emission requirements for highway diesel engines are
expected to substantially reduce emissions without relying on exhaust
aftertreatment. Much of this technology development forms the basis for
setting the emission limits described in this proposal, but EPA
believes that manufacturers may be prepared to more aggressively
transfer some of these advanced technologies to marine engines. The
motivation to exceed emission requirements could either be to gain
early experience with certain technologies as a strategy to ensure
long-term control of quality, or as a response to external incentives.
In addition, alternative fuels and exhaust aftertreatment options
continue to expand as companies further develop technologies for
reaching very low emission levels. For example, some particulate traps
are now designed for regeneration without an active control system,
sometimes using fuel-based catalyst materials to reduce regeneration
temperature requirements. Selective catalytic reduction, long used very
effectively in stationary source applications, is now in several
demonstration marine vessels. Plasma and thermoelectric techniques are
also under consideration for large particulate and NOX
reductions. EPA is very interested in seeing a demonstration of the
emission-control potential for these engines in marine applications,
especially related to the capability of maintaining low emission levels
over extended in-use operation.
As with the land-based rule, EPA proposes that Tier 3 emission
levels, where applicable, are the appropriate level for defining Blue
Sky Series engines. For PM emissions, a calculated level corresponding
to a 40 percent reduction beyond Tier 2 levels is proposed as a
qualifying level for Blue Sky Series engines (see Table 10). While the
Blue Sky Series emission limits are voluntary, a manufacturer choosing
to certify an engine under this program would be required to meet all
the provisions established to demonstrate compliance with these limits,
including allowable maintenance, warranty, useful life, rebuild, and
deterioration factor provisions.

[[Page 68532]]

Table 10.--Voluntary Emission Standards (g/kW-hr)
------------------------------------------------------------------------
Rated Brake Power (kW) HC+NOX PM
------------------------------------------------------------------------
power 37 kW displ.<0.9................ 4.0="" 0.24="">displ.<1.2.......................... 4.0="" 0.18="">displ.<2.5.......................... 4.0="" 0.12="">displ.<5.0.......................... 5.0="" 0.12="">displ.<20........................... 5.0="" 0.16="" ------------------------------------------------------------------------="" the="" blue="" sky="" series="" program="" would="" begin="" immediately="" upon="" promulgation="" and="" would="" continue="" through="" the="" 2007="" model="" year.="" epa="" would="" evaluate="" the="" program="" to="" determine="" if="" it="" should="" be="" continued="" for="" 2008="" and="" later="" engines,="" and="" if="" so,="" whether="" any="" changes="" are="" needed.="" this="" evaluation="" will="" be="" considered="" as="" part="" of="" the="" 2003="" feasibility="" review.="" creating="" a="" program="" of="" voluntary="" standards="" for="" low-emitting="" engines,="" including="" testing="" and="" durability="" provisions="" to="" help="" ensure="" adequate="" in-="" use="" performance,="" will="" be="" a="" major="" step="" forward="" in="" advancing="" innovative="" emission="" control="" technologies,="" because="" epa="" certification="" will="" provide="" protection="" against="" false="" claims="" of="" environmentally="" beneficial="" products.="" for="" the="" program="" to="" be="" most="" effective,="" however,="" incentives="" for="" the="" production="" of="" these="" engines="" must="" be="" created="" as="" well.="" the="" agency="" is="" concerned="" that="" such="" incentive="" programs="" not="" lead="" to="" a="" net="" detriment="" to="" the="" environment="" through="" the="" double-counting="" of="" benefits.="" epa="" has="" therefore="" concluded="" that="" manufacturers="" choosing="" to="" sell="" an="" engine="" with="" the="" blue="" sky="" series="" designation="" should="" not="" generate="" averaging,="" banking,="" and="" trading="" credits="" for="" demonstrating="" compliance="" with="" epa="" programs.="" other="" groups="" would="" then="" be="" free="" to="" design="" credit="" programs="" without="" concern="" for="" any="" double-counting="" or="" other="" unintended="" effect="" of="" overlapping="" programs.="" epa="" solicits="" comment="" on="" the="" blue="" sky="" series="" approach="" for="" marine="" diesel="" engines="" generally="" and="" on="" its="" interaction="" with="" the="" abt="" program.="" in="" addition="" to="" credit-based="" programs,="" the="" agency="" sees="" substantial="" potential="" for="" users="" and="" state="" and="" local="" governments="" to="" establish="" incentive="" programs.="" for="" example,="" state="" or="" local="" governments="" or="" individual="" ports="" may="" be="" able="" to="" add="" incentives="" for="" introducing="" low-="" emitting="" engine="" technologies="" in="" harbor="" and="" other="" coastal="" vessels.="" the="" agency="" solicits="" ideas="" that="" could="" encourage="" the="" creation="" of="" these="" incentive="" programs="" by="" users="" and="" state="" and="" local="" governments.="" epa="" also="" solicits="" comment="" on="" additional="" measures="" that="" could="" be="" taken="" at="" a="" federal="" level="" to="" encourage="" development="" and="" introduction="" of="" these="" engines.="" h.="" durability="" to="" achieve="" the="" full="" benefit="" of="" the="" emissions="" standards,="" manufacturers="" must="" design="" and="" build="" engines="" with="" durable="" emission="" controls.="" this="" means="" that="" manufacturers="" are="" responsible="" for="" the="" emission="" results="" for="" the="" engines="" they="" produce="" throughout="" their="" useful="">³⁹ It is also necessary to encourage the proper
maintenance and repair of engines throughout their lifetime. The goal
is for engines to maintain good emission performance throughout their
in-use operation. Therefore, EPA believes it is necessary to adopt
measures to address concerns about possible in-use emission performance
degradation. The proposed durability provisions, described below, are
intended to help ensure that engines are still meeting applicable
standards in use. The specific areas of the durability program focused
on here are useful life, warranty periods, deterioration factors,
allowable maintenance intervals, and rebuilding requirements. Most of
these provisions are carried over from the land-based or locomotive
programs. EPA seeks comments on all aspects of this durability program.
---------------------------------------------------------------------------

\39\ This is different from the approach used in MARPOL Annex
VI, according to which manufacturers must ensure their engines meet
the emission limits at the time of certification but ship owners
become responsible for their continued compliance with the limits.
Under that program, compliance is verified during flag-state and
port-state inspections.
---------------------------------------------------------------------------

1. Useful Life
Useful life is the period during which the marine engine is
required to meet the emission standards. For Category 1 engines, EPA is
proposing a useful life of 10 years or 10,000 hours of operation. This
proposal is slightly different from the 10 years or 8,000 hours of
operation finalized for land-based nonroad engines, to reflect the
different usage pattern for marine engines. Specifically, the 10,000-
hour requirement is based on an expected five-year period until the
first time the engine is rebuilt, and an expected usage rate of 2,000
hours per year. EPA requests comment on this proposed useful life for
Category 1 engines.
For Category 2 engines, EPA is proposing a useful life of 10 years
or 20,000 hours of operation. This proposal differs from the 10 years
or 7.5 MW-hours per horsepower useful life recently finalized for
locomotive engines to reflect the hours of operation instead of MW-per-
horsepower requirement for locomotive engines. This is because marine
engine operation is typically monitored using hour meters rather than
MW-hour meters. In this case, the 20,000-hour requirement for marine
engines is calculated based on an operating rate of 4,000 hours of use
per year, with five years between rebuilds. This hour value is less
than would be obtained from 7.5 MW-hrs per horsepower and an average
duty cycle for a locomotive. Using these values would result in a
useful life value of about 30,000 hours. This is nevertheless
appropriate, since locomotives typically receive significantly more
maintenance in use, and are operated for longer periods between
rebuilds. EPA requests comment on the proposed useful life for Category
2 engines.

Table 11.--Proposed Useful Life and Warranty Periods
----------------------------------------------------------------------------------------------------------------
Useful life Warranty period
Category ---------------------------------------------------------------
Hours Years Hours Years
----------------------------------------------------------------------------------------------------------------
Category 1...................................... 10,000 10 5,000 5
Category 2...................................... 20,000 10 10,000 5
----------------------------------------------------------------------------------------------------------------

The above approach of basing useful life on time to first rebuild
was chosen because it is difficult to justify holding the engine
manufacturer responsible for an engine's emissions after the engine is
rebuilt. The original engine manufacturer has little, if any, control
over the rebuild process, and the rebuilding process often includes
changes to the engine that may have an effect on emissions. At the same
time, however, these engines are often kept in service much longer than
the proposed useful life. Median values for service lives are 15 years
for Category 1

[[Page 68533]]

propulsion engines and 23 years for Category 2 engines. These longer
service lives mean that the engine may be exempt from in-use testing
for more than half its service life. EPA therefore believes it is
important to be able to conduct recall testing on these engines
throughout the established useful life period. Also, EPA requests
comment on whether useful life should be based on the average time to
first rebuild, or whether EPA should attempt to regulate emissions
beyond the anticipated point of first rebuild, either through an
extended useful life specification or some other means.
2. Warranty Periods
Tied to the useful life is the minimum warranty period imposed
under the Clean Air Act. The proposed warranty periods for marine
diesel engines are based on the ratio of useful life and warranty
periods established for land-based nonroad engines. Specifically, EPA
is proposing a warranty period of 5,000 hours or 5 years for Category 1
engines, and 10,000 hours or 5 years for Category 2 engines. EPA
requests comment on this approach, or whether the locomotive approach
based on one-third of the engine's useful life should be used.
EPA is also proposing defect reporting requirements. Consistent
with the provisions that apply to highway and land-based nonroad
engines, these provisions require Category 1 engine manufacturers to
report to EPA whenever a manufacturer identifies a specific emission-
related defect in 25 or more engines. However, EPA is proposing to
specify a lower threshold of 10 engines for Category 2 marine engines,
which is the same limit as applies to locomotives.
3. Deterioration Factors
To further ensure that the proposed emission limits are met in use,
EPA proposes to require the application of a deterioration factor (DF)
to Category 1 and Category 2 marine diesel engines in evaluating
emission control performance during the certification and production-
line testing process. The emissions from new engines are adjusted using
the DF to account for potential deterioration in emissions over the
life of the engine due to aging of emission control technologies or
devices. The resulting emission level is intended to represent the
expected emissions at the end of the useful life period. Specifically,
EPA believes that the ability of new emission control technologies,
such as aftertreatment, sophisticated fuel delivery controls, and some
cooling systems, to reduce emissions declines as these systems age. The
DF is applied to the certification emission test data to represent
emissions at the end of the useful life of the engine. Currently, DFs
are required for highway heavy-duty engines, nonroad land-based
engines, and locomotive engines. EPA is proposing to extend this
approach to marine diesel engines as well. EPA requests comment on all
aspects of the proposed DF provisions, described below.
EPA is proposing that marine diesel engine DFs be determined by the
engine manufacturers in accordance with good engineering practices.
Consistent with the land-based nonroad and locomotive programs, EPA is
not proposing a specified procedure. The DFs, however, would be subject
to EPA approval, and must be consistent with in-use test data.
Additionally, the DF should be calculated for the worst-case engine
calibration offered within the engine family.⁴⁰
---------------------------------------------------------------------------

\40\ The worst case would be the engine calibration expected to
generate the highest level of emmission deterioration over the
useful life, using good engineering judgment.
---------------------------------------------------------------------------

It is not EPA's intent to require a great deal of data gathering on
engines that use established technology for which the manufacturers
have the experience to develop appropriate DFs. New DF testing may not
be needed where sufficient data already exists. However, EPA is
proposing to apply the DF requirement to all engines so that EPA can be
sure that reasonable methods are being used to ascertain the capability
of engines to meet standards throughout their useful lives.
Consistent with the land-based engine programs, EPA proposes to
allow marine diesel engine manufacturers the flexibility of using
carryover and carryacross of durability emission data from a single
engine that has been certified to the same or more stringent standard
for which all of the data applicable for certification has been
submitted. In addition, EPA seeks comment on whether this flexibility
should be extended to allow deterioration data from highway or nonroad
engines to be used for similar marine diesel engines. EPA is concerned
that DFs calculated for land-based engines may not be the same as for
marine engines, due to their different operating environments and duty
cycles.
Finally, EPA is proposing that DFs be calculated as an additive
value (i.e., the arithmetic difference between emission level at full
useful life and the emission level at the test point) for engines
without exhaust aftertreatment devices. In contrast, DFs should be
calculated as a multiplicative value (i.e., the ratio of the emission
level at full useful life to the emission level at the test point) for
engines using exhaust aftertreatment devices. This is consistent with
the DF requirements applicable to other diesel engines, based on
observed patterns of emission deterioration.
4. Allowable Maintenance Intervals
In the highway, land-based, and locomotive rules, EPA requires
manufacturers to furnish the ultimate purchaser of each new nonroad
engine with written instructions for the maintenance needed to ensure
proper functioning of the emission control system. Generally,
manufacturers require the owners to perform this maintenance as a
condition of their emission warranties. If such required maintenance is
more than the engine owner is likely to perform due to cost or
inconvenience, then in-use emissions deterioration can result.
Consequently, in both the nonroad and highway rules, EPA imposes limits
on the frequency of maintenance that can be required of the engine
owners for emission-related components; these limits also apply to the
engine manufacturer during engine certification and durability testing.
Further, the performance of maintenance would be considered during any
in-use recall testing conducted by the Agency.
Consistent with the land-based nonroad rule, EPA is proposing
minimum allowable maintenance intervals for Category 1 and Category 2
marine diesel engines, to ensure that their emission control
technologies are practical in use. The proposed minimum intervals are
very similar to those required for nonroad and highway diesel engines
(40 CFR 89.109; 40 CFR 86.094-25). Alternatively, EPA could adopt the
locomotive approach of not precisely defining minimum intervals for
adjustment, cleaning, repair, or replacement of various components but,
instead, merely requiring engine manufacturers to specify these minimum
maintenance intervals at the time of certification, subject to EPA
approval. EPA is not, however, proposing the locomotive approach in
which locomotive owners who fail to properly maintain a locomotive will
be subject to civil penalties for tampering. EPA requests comment on
these approaches for allowable maintenance intervals and the
appropriateness of extending the land-based intervals to marine diesel
engines.

[[Page 68534]]

5. Rebuilt Engines
It is common for marine diesel engines to be rebuilt several times
during the course of their lifetimes. Similar to land-based nonroad
engines, EPA has two concerns regarding the rebuilding of marine diesel
engines. First, EPA is concerned that during engine rebuilding, there
may not be an incentive to check and repair emission controls that do
not affect engine performance. Second, EPA is concerned that there may
be an incentive to rebuild engines to an older configuration due to
real or perceived performance penalties associated with technologies
that would be used to meet the standards proposed in this notice. Such
practices would likely result in increased emissions.
To address these concerns, EPA is proposing to extend the land-
based nonroad rebuild requirements to marine diesel engines.
Specifically, EPA proposes that the parties involved in the process of
rebuilding or remanufacturing engines must follow specific provisions
to avoid tampering with the engine and emission controls. Like the
nonroad requirements, the applicability of these provisions is based on
the build date of the engine. The rebuild requirements would apply to
any engine built on or after the date that new standards apply to that
engine's specific category or group, regardless of the emission levels
that the individual engine is designed to achieve. The proposed
provisions for rebuilding are as follows:
(1) EPA proposes that, during engine rebuilding, parties involved
must have a reasonable technical basis for knowing that the rebuilt
engine is equivalent, from an emissions standpoint, to a certified
configuration (i.e., tolerances, calibrations, and specifications).
(2) When an engine is being rebuilt and remains installed or is
reinstalled in the same vessel, it must be rebuilt to a configuration
of the same or later model year as the original engine. When an engine
is being replaced, the replacement engine must be an engine of (or
rebuilt to) a configuration of the same or later model year as the
original engine.
(3) At the time of rebuild, emission-related codes or signals from
on-board monitoring systems may not be erased or reset without
diagnosing and responding appropriately to the diagnostic codes.
Diagnostic systems must be free of all such codes when the rebuilt
engines are returned to service. Further, such signals may not be
rendered inoperative during the rebuilding process.
(4) When conducting an in-frame rebuild or the installation of a
rebuilt engine, all emission-related components not otherwise addressed
by the above provisions must be checked and cleaned, repaired, or
replaced where necessary, following manufacturer recommended practices.
Under this proposal, any person or entity engaged in the process,
in whole or part, of rebuilding engines who fails to comply with the
above provisions may be liable for tampering. Parties would be
responsible for the activities over which they have control, so there
may be more than one responsible party for a single engine in cases
where different parties perform different tasks during the engine
rebuilding process (e.g., engine rebuild, full engine assembly,
installation). EPA is not proposing any certification or in-use
emissions requirements for the rebuilder or engine owner. EPA requests
comment on the appropriateness of applying this rebuild program to
marine diesel engines.
EPA is proposing to adopt modest record keeping requirements that
EPA believes are in line with customary business practices. The records
would be kept by persons involved in the process of marine diesel
engine rebuilding or remanufacturing and would include the hours of use
accumulated on the engine at time of rebuild and a list of the work
performed on the engine and related emission control systems, including
a list of replacement parts used, engine parameter adjustments, design
element changes, and work performed as described in item (4) of the
rebuild provisions above. EPA proposes that such records be kept for
two years after the engine is rebuilt.
Under this proposal, parties would be required to keep the
information for two years but would be allowed to use whatever format
or system they choose, provided that the information can be readily
understood by an EPA enforcement officer. EPA proposes that parties
would not be required to keep information that they do not have access
to as part of normal business practice. In cases where it is customary
practice to keep records for engine families rather than specific
engines, where the engines within that family are being rebuilt or
remanufactured to an identical configuration, such record keeping
practices are proposed to be satisfactory. Rebuilders would be able to
use records such as build lists, parts lists, and engineering
parameters that they keep of the engine families being rebuilt rather
than on individual engines, provided that each engine is rebuilt in the
same way to those specifications. EPA requests comments on the
appropriateness of the proposed record keeping requirements, including
whether the records should be kept for a longer period of time, such as
for five years.
6. Replacement Engines
As noted elsewhere in this discussion, an important constraint on
the ability to replace a marine diesel engine concerns the ability to
remove the engine from the vessel. In many cases, the vessel is built
around the engine and removal is difficult if not impossible.
Nevertheless, there may be situations in which a marine diesel can or
must be removed from a vessel, to be replaced with a different engine.
Under these requirements, whenever a compliant engine is removed from a
vessel, the replacement engine must meet the emission requirements that
were in effect at the time the vessel was built. For example, any
engine installed on a vessel built in 2008 must comply with the
requirements proposed in this action, regardless of whether it is
installed in 2008 or any year thereafter. The intent of this
requirement is to ensure that vessel owners cannot evade the proposed
emission requirements by installing a noncomplying engine on their
vessel after the vessel is placed into service. These provisions also
allow, in some cases, engine manufacturers to produce new replacement
engines of an older model that do not comply with the otherwise
applicable standards, provided that the new engines meet the emission
standards that applied to the engines being replaced. However,
manufacturers would only be allowed to produce such engines in cases
where it was necessary for reasons such as space constraints.
Consistent with replacement engine provisions in other programs, some
additional constraints ensure that companies do not circumvent the
regulations (see 40 CFR 89, Subpart J). EPA seeks comment on the
necessity of such a provision.

I. Certification

As discussed previously, EPA expects technology to be shared
between land-based engines and marine engines. EPA expects some engine
manufacturers to produce engines of the same basic design for sale in
both areas. Specifically, Category 1 marine engines are expected to
share the technology developed for land-based nonroad engines, and
Category 2 engines are expected to share technology developed for
locomotive engines. To account for this product overlap, EPA is
proposing

[[Page 68535]]

to base certification data and administration requirements for Category
1 on the existing program for land-based nonroad engines, and for
Category 2 marine engines on the existing program for locomotive
engines.⁴¹, ⁴² Specific certification provisions
are discussed more fully in the following sections.
---------------------------------------------------------------------------

\41\ See 40 CFR 89 Supart B for the provison of the land-based
nonroad engine program.
\42\ See 40 CFR 92 Supart C for the provison of the locomotive
program.
---------------------------------------------------------------------------

1. Engine Family Definition
EPA is proposing that engine grouping for the purpose of
certification be accomplished through the application of an ``engine
family'' definition. Engines expected to have similar emission
characteristics throughout the useful life are proposed to be
classified in the same engine family. Separate engine family
classification is also required for each marine engine category (i.e.,
Categories 1, 2, and 3 will be in separate engine families).
EPA is proposing specific parameters to define engine family for
each category of marine engine. To provide for administrative
flexibility in the proposal, the Administrator will have the authority
to separate engines normally grouped together or to combine engines
normally grouped separately based upon a manufacturer's request
substantiated with an evaluation of emission characteristics over the
engine's useful life.
For Category 1, EPA is proposing to use the engine family
definition for land-based nonroad engines with the addition of the fuel
system type and fuel injection control used (mechanical versus
electrical).⁴³ For Category 2, EPA is proposing to use the
engine family definition for locomotive engines.⁴⁴
---------------------------------------------------------------------------

\43\ See 40 CFR 89.116 for the engine family definition used for
land-based nonroad engines.
\44\ See 40 CFR 92.204 for the engine family definition for
locomotives.
---------------------------------------------------------------------------

These definitions are proposed to provide consistency between land-
based and marine engines of the same basic type. The fuel system type
and control type were added to the land-based nonroad engine family
definition to reduce the variability of emissions within an engine
family. This change will aid manufacturers in selecting the ``worst-
case'' engine for emission testing. It will lessen the chance of
noncompliance in use by ensuring that the highest emitting engine is
tested during certification.
The engine family definition is fundamental to the certification
process and to a large degree determines the amount of testing required
for certification. As proposed, manufacturers would be required to
estimate the rate of deterioration for each engine family (see the
discussion of deterioration factors in Section V.G.3. for further
details). Compliance with the emission standard will also be
demonstrated for each engine family based upon required testing and the
application of the deterioration factor. Separate certificates of
conformity would be required for each engine family.
2. Emission Data Engine Selection
EPA is proposing that manufacturers select the highest emitting
engine (i.e., ``worst-case'' engine) in a family for certification
testing. In making that determination, the manufacturer shall use good
engineering judgement (considering, for example, all engine
configurations and power ratings within the engine family and the range
of installation options allowed). By requiring the worst-case engine to
be tested, EPA is assured that all engines within the engine family are
complying with emission standards for the least cost in test engines
run. If manufacturers feel that the engine family is grouped too
broadly or that the worst-case emission data engine would underestimate
the emission credits available under the ABT provisions, they may
request the separation of the dissimilar calibrations (based on an
evaluation of emission characteristics over the engine's useful life)
into separate engine families.

J. SEA, Production Line Testing

One of the challenges of serial engine production is ensuring that
each engine produced has the same emission characteristics as the
original certification engine. The more traditional approach used for
ensuring that the engines are produced as designed is called Selective
Enforcement Auditing (SEA). In the SEA program, EPA audits the
emissions of new production engines by requiring manufacturers to test
engines pulled off the production line on short notice. This spot
checking approach relies largely on a deterrence strategy.
Manufacturers prefer to design their engines and production processes
and take other steps necessary to make sure their engines are produced
as designed in order to avoid the penalties associated with failing SEA
tests.
However, EPA does not believe that an SEA-type approach is
practical for the marine diesel engine industry, primarily because of
the low production volumes. The small production volumes mean that on
any given day that EPA would choose to do an SEA there may be no marine
engines being produced, or there may not be enough to provide a
representative sample of production.
Therefore, to ensure compliance of production engines, EPA is
proposing an alternative approach, called Production Line Testing
(PLT). The general object of a PLT program is the same as an SEA-based
program, which is to enable manufacturers and EPA to determine, with
reasonable certainty, whether certification designs have been
translated into production engines that meet applicable standards (or
FELs) at the time of production, before excess emissions are generated
in use. The main difference between the two approaches is that PLT is
performed on a regular basis during the year by the engine manufacturer
according to criteria set by the Agency, while SEA is performed through
periodic unannounced spot checks by EPA.
Under the proposed marine diesel engine PLT, a manufacturer would
select engines from its production line for confirmatory testing. In
general, one percent of a manufacturer's total projected annual U.S.
marine diesel engine sales (propulsion and auxiliary) for each category
would be required to be tested each year. EPA believes that a one
percent sampling rate is appropriate for the marine diesel engine
industry because of its low production volumes, and that a higher
sampling rate would be unduly burdensome for this industry. EPA is not
proposing a minimum number of tests for Category 1 engines and is
proposing that if a manufacturer sells fewer than 100 units in the
United States in a given year, it would not be required to do any PLT
testing for its Category 1 engines that year. EPA requests comment on
whether it would be more appropriate, in light of its proposed one
percent sampling rate, to adopt a production trigger for Category 1 PLT
testing of 50 engines per year, rather than 100 engines per year as
proposed. EPA also requests comment on an approach whereby a
manufacturer's cumulative production over time would be used to
determine when PLT testing would be required for these Category 1
manufacturers. Under such an approach a test would be required under
the PLT program when a manufacturer's cumulative Category 1 production
over more than one model year reached 100 units. For Category 2
engines, EPA is proposing a minimum of one PLT test per year. Thus, for
manufacturers with sales of less than

[[Page 68536]]

100 Category 2 engines a year, one test would be required. For purposes
of calculating the number of tests required, EPA is proposing that
Category 1 and Category 2 annual engine sales be considered separately.
EPA proposes that the choice of the engines to be tested pursuant
to this program will be left to the manufacturer, but should be a
random sample that is representative of annual production. EPA reserves
the right to reject any engines selected by the manufacturers if it
determines that such engines are not representative of actual
production. Engines selected should cover the broadest range of
production possible, and from year to year should be varied to cover
all engine families if possible. Tests should also be distributed
evenly throughout the model year, to the extent possible.
EPA proposes that emission testing of the PLT engines be conducted
in accordance with the applicable federal testing procedures, and
compliance with the proposed NTE provisions must be demonstrated as
part of PLT testing. The results would be reported to EPA in periodic
reports that would summarize emissions results, test procedures, and
events such as the date, time, and location of each test. These reports
will allow EPA to monitor continually the PLT data. If no testing is
performed during the period, no report would be required. EPA is
proposing that reports be submitted each quarter. EPA requests comment
on whether quarterly reporting is too frequent, given the low
production volumes of these engines, and whether a semester or
trimester approach is more appropriate.
Under this testing scheme, if an engine fails a production line
test, the manufacturer would test two additional engines out of either
the next two days' production or the next fifteen engines produced in
that engine family in accordance with the applicable federal testing
procedures. EPA is proposing the dual approach to testing additional
engines to account for variations in production volumes. If production
volumes are high, then EPA believes that the two-day provision will
allow for the orderly selection of additional test engines. Likewise,
if production volumes are low, then the provision allowing the engines
to be selected from the next fifteen produced will allow for orderly
selection. When the average of the three test results, for any
pollutant, are greater than the applicable standard or FEL for any
pollutant, the manufacturer fails the PLT for that engine family. Such
failures must be reported to EPA within two working days of the
determination of a failure. It should be noted that, as proposed,
compliance with the standards would be required of every covered
engine. Thus, every engine that failed a PLT test would be considered
in noncompliance with the standards and must be brought into
compliance. EPA's proposal to use the average of three tests to
determine compliance with the PLT program is intended only as a tool to
decide when it is appropriate to suspend or revoke the certificate of
conformity for that engine family, and is not meant to imply that not
all engines have to comply with the standards.
In the proposed PLT program, the Administrator could suspend or
revoke the manufacturer's certificate of conformity in whole or in part
fifteen days after an EPA noncompliance determination for an engine
family that fails the PLT, or if the engine manufacturer's submittal
reveals that the PLT tests were not performed in accordance with the
applicable testing procedure. During the fifteen day period following a
determination of noncompliance, EPA would coordinate with the
manufacturer to facilitate the approval of the required production line
remedy in order to eliminate the need to halt production, to the
greatest extent possible. The manufacturer must then address (i.e.,
bring into compliance, remove from service, etc.) the engines produced
prior to the suspension or revocation of the certificate of conformity.
EPA could reinstate the certificate of conformity subsequent to a
suspension, or reissue one subsequent to a revocation, after the
manufacturer demonstrates (through its PLT program) that improvements,
modifications, or replacement have brought the engine family into
compliance. The proposed regulations include hearing provisions that
provide a mechanism to resolve disputes between EPA and manufacturers
regarding a suspension or revocation decision based on noncompliance
with the PLT. It is important to point out that the Agency would retain
the legal authority to inspect and test engines should problems arise
in the PLT program. It is also important to note that the definition of
``failure'' of the PLT is limited to the PLT program, and does not
define failure or noncompliance for other purposes. It is based in part
on the severity of the result of a failure (suspension or revocation of
a certificate) and is not meant to limit in any way the overall
obligation of the manufacturer to produce engines that meet the
standard.
EPA recognizes the need to develop a PLT scheme that does not
impose an unreasonable burden on the manufacturers. Therefore,
consistent with the requirement that testing be required on one percent
of total marine diesel engine production for each category, EPA is
proposing that no PLT be required for manufacturers whose Category 1
marine diesel engines sales are less than 100 per year. This is because
companies with such low sales are unlikely to have in-house testing
facilities, and requiring such companies to send an engine to an
independent test facility for PLT purposes may be too burdensome. EPA
seeks comment on whether to extend this exemption to companies with
fewer than 500 employees across all operations. It should be noted that
companies that are exempt from the PLT program are not exempt from the
other certification and compliance provisions described in this
proposal. Engines exempt from the PLT program will still be required to
meet the emission limits as produced and in use, and EPA reserves the
right to conduct an SEA on any diesel engine manufacturer. In addition,
EPA is not proposing to extend this flexibility provision to the
Category 2 marine diesel engine PLT program, since those engines are
typically produced in very small volumes.
Finally, while EPA believes that it has developed a PLT program
that takes into account the circumstances of this industry, it also
understands that alternative plans may be developed that better account
for the individual needs of a manufacturer. Thus, provisions are
proposed to allow a manufacturer to submit an alternative plan for a
PLT program, subject to approval of the Administrator. A manufacturer's
petition to use an alternative plan should address the need for the
alternative, and should include justifications for the number and
representativeness of engines tested, as well as having specific
provisions regarding what constitutes a PLT failure for an engine
family.
The Agency requests comment on all aspects of this proposed PLT
program. Specifically, EPA requests comment on whether it should select
the individual engines to be tested, or whether this should be done by
the manufacturer, subject to EPA approval.

K. Miscellaneous Compliance Issues

EPA is proposing to extend the general compliance provisions for
land-based nonroad engines to Category 1 and Category 2 marine diesel
engines. These include the tampering, defeat device, imported engines
and vessels, and general prohibition provisions. EPA seeks comment on
extending these provisions to marine diesel engines, and

[[Page 68537]]

on any modifications that should be made to these provisions to
accommodate special features of these engines.

L. Averaging, Banking, and Trading Program

Along with the proposed standards, EPA is proposing a marine
averaging, banking, and trading (ABT) program. An ABT program allows
the Agency to propose and finalize a more stringent set of marine
diesel engine emission standards than might otherwise be appropriate
under section 213 of the Clean Air Act. ABT reduces the cost and
improves the technological feasibility of achieving the standards,
helping to ensure the attainment of the proposed standards earlier than
would otherwise be possible. Manufacturers gain flexibility in product
planning and the opportunity for a more cost-effective introduction of
product lines meeting a new standard. ABT also creates an incentive for
the early introduction of new technology, which allows certain engine
families to act as trail blazers for new technology. This can help
provide valuable information to manufacturers on the technology before
manufacturers need apply the technology throughout their product line.
This early introduction of clean technology improves the feasibility of
achieving the standards and can provide valuable information for use in
other regulatory programs that may benefit from similar technologies.
EPA views the effect of the ABT program itself as environmentally
neutral because the use of credits by some engines is offset by the
generation of credits by other engines. However, when coupled with the
new standards, the ABT program would be environmentally beneficial
because it would allow the new standards to be implemented earlier than
would otherwise be appropriate under that Act. In addition, to the
extent that any credits are not used, then there is an additional
environmental benefit.
The voluntary ABT program allows the certification of one or more
engine families within a given manufacturer's product line at emission
levels above the applicable emission standards, provided that the
increased emissions are offset by one or more families certified below
the emission standards. The average of all emissions for a particular
manufacturer's production (weighted by sales-weighted average power,
production volume and useful life) must be at or below the level of the
applicable emission standards. In addition to the averaging program
just described, the proposed ABT program contains a banking and trading
provision, which allows a manufacturer to generate emission credits and
bank them for future use in its own averaging program or sell them to
another entity. Compliance is determined on a total mass emissions
basis to account for differences in production volume, power and useful
life among engine families.
The ABT program EPA is proposing for marine diesel engines over 37
kW is based on the corresponding ABT programs recently adopted for
land-based nonroad engines (63 FR 56967, October 23, 1998) and
locomotives (63 FR 18978, April 16, 1998), which roughly correspond to
the proposed Categories 1 and 2, respectively. When a manufacturer
chooses to participate in the ABT program, it would be required to
certify each participating engine family to a family emission limit
(FEL) determined by the manufacturer during certification testing. A
separate FEL would need to be determined for each pollutant the
manufacturer is including in the ABT program. EPA is proposing that the
ABT program be limited to HC+NOX and PM emissions. Thus,
only two different FELs could be generated for a given engine family.
Consistent with the recently finalized land-based nonroad engine
program, marine engine credits are proposed to be calculated based on
the difference between the applicable standard(s) and FEL(s). However,
credit calculation for marine engines is somewhat different than that
for land-based nonroad engines, in that a load factor is inserted in
the equation. This term is necessary because, contrary to land-based
nonroad case, not all marine engines are expected to operate at the
same load. EPA seeks comment on the credit calculation equation, which
is as follows:

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

Where:

Std = the applicable cycle-weighted marine engine
THC+NOX and/or PM emission standard in grams per kilowatt-
hour.
(ii) FEL = the family emission limit for the engine family in
grams per kilowatt-hour. (The FEL may not exceed the limit established
in Sec. 94.304(m) for each pollutant.)
UL = the useful life in hours.
Production = the number of engines participating in the
averaging, banking, and trading program within the given engine family
during the calendar year (or the number of engines in the subset of the
engine family for which credits are being calculated). Quarterly
production projections are used for initial certification. Actual
applicable production/sales volumes are used for end-of-year compliance
determination.
AvgPR = average power rating of all of the configurations
within an engine family, calculated on a sales-weighted basis, in
kilowatts.
LF = the load factor, dependent on whether the engine is
intended for propulsion or auxiliary applications, as follows:

A. 0.69 for propulsion engines
B. 0.51 for auxiliary engines.

Consistent with EPA's recently finalized land-based nonroad diesel
engine rule, and because of the inherent trade-off between
NOX and PM emissions in diesel engines, EPA is proposing to
adopt for marine diesel engines the provision in the land-based nonroad
ABT program prohibiting the generation of credits for one pollutant and
the simultaneous use of credits for the other pollutant within the same
engine family. In other words, a manufacturer would not be allowed to
simultaneously generate HC+NOX credits and use PM credits on
the same engine family, and vice versa. EPA requests comment on whether
an engine should be allowed to generate credits on one pollutant while
using credits on another, and whether allowing such an additional
flexibility would necessitate a reconsideration of the stringency of
the emission limits.
EPA is proposing FEL upper limits in the same manner as those in
the comparable land-based ABT programs to ensure that the emissions
from any given family certified under this ABT program not be
significantly higher than the applicable emission standards. In
general, these FEL upper limits correspond to the existing previous
tier of standards for the various classes. In other words, the FEL
upper limits are generally the Tier 1 standards for engines certifying
according to the ABT provisions relative to the Tier 2 standards, and
the Tier 2 standards for engines certifying according to the ABT
provisions relative to the Tier 3 standards. Since EPA is not including
any Tier 1 standards for marine engines in this proposal, it is
proposing to use the land-based Tier 1 standards as FEL upper limits
for the proposed Tier 2 marine engine standards. When the ABT
provisions for land-based nonroad engines were recently revised there
were no Tier 1 standards in place for some land-based categories and
pollutants. These cases correspond to some Category 1 marine engines.
In

[[Page 68538]]

those cases EPA chose FEL upper limits based on typical in-use emission
levels of precontrol engines, or existing California Air Resources
Board emission standards. For a more complete discussion of the
rationale for the Tier 2 FEL upper limits for Category 1 engines the
reader is directed to the recent final rule concerning land-based
nonroad engine emission standards. As an alternative to using the Tier
1 land-based emission standards as FEL upper limits under the proposed
Tier 2 standards, EPA is requesting comment on whether it should
consider using the MARPOL Annex VI NOX standard as the
appropriate NOX FEL upper limit. Under this approach EPA
would continue to use the land-based Tier 1 PM standard as the Tier 2
FEL upper limit. As part of this approach EPA would have to accommodate
the fact that the MARPOL Annex VI standard is for NOX only
and the proposed Tier 2 standards are HC+NOX. EPA requests
comment under this approach as to how best to deal with this
inconsistency.
Consistent with the land-based ABT programs from which this
proposed program is derived, EPA is proposing that ABT credits
generated under this program have an infinite life, with no discounting
applied. Also consistent with the recently finalized land-based nonroad
diesel rule, EPA is proposing that credits generated on land-based
engines not be allowed to be used for demonstrating compliance for
marine diesel engines. EPA is concerned that manufacturers who produce
engines used in both marine and land-based applications could
effectively trade out of the marine portion of the program, thereby
potentially obtaining a competitive advantage over small marinizers who
sell only marine engines. For similar reasons, EPA is proposing that
credit exchanges not be permitted between Categories 1 and 2 engines.
EPA seeks comment on the need for these restrictions and on the degree
to which imposing them may create barriers to low-cost emission
reductions.
EPA is also proposing that credits generated relative to the Tier 2
standards not be allowed to be used toward Tier 3 compliance for either
Category 1 or Category 2 engines based on concerns about the
possibility of using such credits to ``trade out'' of compliance with
the Tier 3 standards.
EPA is proposing that the ABT program begin with the implementation
of the Tier 2 standards, with no option for the early generation of
credits. While the Agency believes that, on a total sales average
basis, the Tier 2 standards as proposed will result in significant
emission reductions from uncontrolled levels, it is aware of some
engine configurations whose emissions are currently at or near the
levels of the Tier 2 standards. EPA is concerned that the emissions
from such engine families could be reduced below the proposed Tier 2
standards without much effort and that easy credits could be generated
if early banking were allowed. Such credits could then be used to
significantly delay implementation of the Tier 2 standards for other
engine families. EPA requests comment on whether it should consider an
early credit banking option and what types of restrictions it should
place on such early credits in order to address this concern.
Commenters are requested to consider, among other options, restrictions
such as early credits being calculated relative to levels more
stringent than the Tier 2 standards, discounting of early credits
(possibly only if above a set threshold level), and limited credit life
for early credits.
In the recent rule cited above which set emission standards for
land-based nonroad diesel engines, EPA also set emission standards for
marine diesel engines below 37 kW. These engines were also included in
the land-based ABT program in that rule, with some restrictions. EPA is
not proposing any changes to the way under 37 kW marine diesel engines
are treated in this ABT program. EPA is not proposing to integrate the
ABT program in that rule for under 37 kW marine engines with this
proposed program. Thus, EPA is proposing that no trading be allowed for
engines above and below 37 kW. EPA requests comment on whether it
should allow trading between engine families above and below 37 kW.
Comments in favor of removing this proposed restriction should address
that fact that the stringency of the standards for marine diesel
engines below 37 kW was determined in the absence of this ABT
flexibility. Comments should address whether allowing trading between
engine families above and below 37 kW would appropriately require EPA
to reexamine the stringency of the standards for engines under 37 kW.
EPA is proposing not to allow the exchange of credits between
Category 1 marine engine families and land-based nonroad engine
families. This restriction is proposed for the same reason that EPA is
proposing to restrict credit exchanges between engine families above
and below 37 kW (i.e., that the stringency of the land-based standards
was determined in the absence of the availability of credit exchange
between marine and land-based engines). In addition, there are
differences in the way that marine and land-based credits are
calculated that are implicit in the calculation and that make the
credits somewhat incompatible. The first is that the difference in test
duty cycles means there is an implicit difference in load factor
between the two. The second is that there are provisions in this
proposal for varying useful lives, which are not included in the land-
based nonroad regulations. In addition, as discussed above, the actual
credit calculation equations for the two programs are different. EPA
requests comment on whether it should allow credit exchanges between
marine and land-based nonroad engine families and, if so, whether
credits traded from one program would need to be adjusted to account
for the different credit calculation equations. EPA also seeks comment
on whether it would be necessary to reconsider the stringency of the
land-based nonroad emission limits were such cross-program trading
allowed.⁴⁵
---------------------------------------------------------------------------

\45\ It may be necessary to reconsider the stringency of the
land-based nonroad engine emission standards because those limits
were set based on an ABT program that is confined to land-based
engines. Extending the universe of credits to include those
generated by marine engines could increase the credits available to
the land-based program, thus reducing the overall stringency of that
program.
---------------------------------------------------------------------------

EPA is also proposing to prohibit all trading between Category 2
engines and locomotive engines because locomotive credits are
calculated based on expected remaining service life (which could be
many useful life periods, due to the inclusion of the remanufacturing
provisions for locomotives), whereas Category 2 marine engine credits
are only calculated on a single useful life basis.
As discussed in the section on the recreational engine exemption
earlier in this preamble, EPA is proposing to allow the use of
certified engines in recreational applications. This allowance raises
an issue with respect to credit generation in the ABT program. Engines
used in recreational applications tend to have significantly lower
usage rates than engines used in commercial applications. EPA is
concerned that if an engine is certified as a credit generating
configuration then it could, if used in a recreational application,
generate credits on paper that will not have corresponding actual
emission reductions in use. EPA requests comment on the likely
frequency of certified engines being used in recreational applications.
EPA also requests comment on whether it should take steps to prevent
such

[[Page 68539]]

``false'' credits from being generated, such as by not allowing
certified engines used in recreational applications from participating
in the ABT program, or by prorating ABT credits according to expected
usage rates.
Participation in the proposed marine diesel ABT program would be
voluntary. For those manufacturers that choose to utilize the program,
compliance for participating engine families would be evaluated in two
ways. First, compliance of individual engine families with their FELs
would be determined and enforced in the same manner as compliance with
the emission standards in the absence of an averaging, banking and
trading program. Each engine family must certify to the FEL (or FELs,
as applicable), and the FEL would be treated as the emission limit for
certification, production-line and in-use testing (as well as for any
other testing done for other enforcement purposes) for each engine in
the family. Second, the final number of credits available to the
manufacturer at the end of a model year after considering the
manufacturer's use of credits from averaging, banking and trading must
be greater than or equal to zero.
When credits are generated and traded in the same model year, EPA
proposes to make both buyers and sellers of credits potentially liable
for any credit shortfalls, except in cases where fraud is involved.
This provision is consistent with other mobile source ABT programs. The
marine diesel engine certificates of both parties involved in the
violating trading transaction could be voided ab initio (i.e. back to
date of issue) if the engine family or families exceed emission
standards as a result of a credit shortfall. Where cases involve a
manufacturer being defrauded into purchasing non-existent credits, that
manufacturer would only be expected to make up the credit shortfall
that resulted from the lack of real credits.
The integrity of the proposed marine diesel averaging, banking and
trading program depends on accurate recordkeeping and reporting by
manufacturers, and effective tracking and auditing by EPA. Failure of a
manufacturer to maintain the required records would result in the
certificates for the affected engine family or families being voided
retroactively. Violations of reporting requirements could result in a
manufacturer being subject to civil penalties as authorized by sections
213 and 205 of the Clean Air Act. EPA proposes to allow positive
reporting errors (i.e., those errors that result in an underestimation
of the manufacturer's positive credit balance) to be corrected provided
that the errors are identified within 180 days of EPA's receipt of the
manufacturer's annual report.
EPA requests comment on all aspects of the proposed ABT program.
Specifically, the Agency requests comment on the various restrictions
(averaging sets, etc.) proposed for the program and the lack of an
early credit banking program, and the time limit for correcting
reporting errors.

M. Special Provisions

In general, EPA sets engine emission standards that take full
effect at a set point in time, concurrently precluding the installation
of engines not certified to the new standards in vehicles or equipment.
The rigidity of this approach is lessened to some extent through
averaging, banking, and trading programs, which allow engine
manufacturers to produce engines that exceed the emission limits as
long as the added emissions can be offset by engines that emit below
the required levels. While this approach generally works well,
additional flexibility provisions to help relieve compliance burdens
may be needed in special cases. Consequently, EPA is proposing the
following set of flexibility provisions. EPA seeks comment on all
aspects of these flexibility provisions.
1. Post Manufacturer Marinizers Provisions
Category 1 and Category 2 marine diesel engines are produced using
one of three basic manufacturing methods. In the first, least common,
method, marine engines are designed and built exclusively for marine
applications. This is typically the case for very large Category 3
engines as well as some smaller engines that are produced for special
niche markets. In the second, more common, method, an engine
manufacturer produces a marine diesel engine using a land-based nonroad
or highway engine that was built by that same manufacturer. In the
third method, an unrelated company, referred to as a ``post-manufacture
marinizer'' produces a marine diesel engine by purchasing a completed
or partially completed land-based nonroad or highway engine from an
engine manufacturer and modifying it for use in the marine environment
according to that manufacturer's own processes. Post-manufacturer
marinizers (PMM) tend to be small companies, and their output is often
designed for niche markets. PMMs often have only limited resources for
engine certification, and several have indicated to EPA that burdensome
certification requirements would put them out of business.
To address the concerns of these companies, EPA is proposing
several provisions that are intended to streamline the certification
process for PMMs.
(a) Application of Flexibility Provisions. The following
flexibility provisions will be available only to PMMs. EPA has
previously defined the term ``post-manufacture marinizer'' in 40 CFR
89.2 as ``a person who produces a marine diesel engine by substantially
modifying a certified or uncertified complete or partially complete
engine; and is not controlled by the manufacturer of the base engine or
by an entity that also controls the manufacturer of the base engine.''
That definition goes on to clarify that ``substantially modify means
changing an engine in a way that could change engine emission
characteristics.''
EPA has become aware that the above definition may be too narrow.
It implies that only those persons who substantially modify an engine
will be considered PMM; those who do not modify the engine in ways that
would change the engine's emission characteristics (i.e, the
modifications are not ``substantial'') would not trigger the PMM
designation. This was not meant to be the case. EPA intended that a
person who modifies in any way an engine certified to a previous tier
or who modifies in any way an uncertified engine would be considered a
PMM and would have to recertify the engine to the marine emission
limits in place at the time the engine is marinized. Therefore, EPA is
proposing to revise the definition of PMM, to clarify that a PMM is a
person who substantially modifies a land-based engine previously
certified to the same or more stringent emission limits as the
currently applicable marine emission limits, or a person who modifies
in any way an uncertified engine or an engine certified to a previous
tier of emission limits.
This modification of the PMM definition will not affect the engine
dresser exemption described in Section III.B.2 above, since one of
those criteria is a requirement that the dressed engine be certified to
emission limits at least as stringent as those applicable to marine
diesel engines a the time the engine is dressed.
Finally, EPA intends that a vessel manufacturer that substantially
modifies a certified engine or that modifies an uncertified engine or
an engine certified to a previous tier of emission limits would be
considered a PMM and would have to comply with the certification and
compliance provisions proposed in this document. This clarification is
necessary because it is not uncommon

[[Page 68540]]

for vessel manufacturers to modify marine engines. This is often done
to increase the power of an engine, to respond to the needs of a
particular user. By considering such vessel manufacturers as PMM, EPA
will ensure that the engine modifications do not also increase the
emissions of an otherwise certified engine.
(b) Broader Engine Families. EPA is proposing to allow PMMs to use
a broader engine family definition. Under this provision a PMM may
include any engines that have similar emission deterioration
characteristics in one engine family. Thus, a PMM could conceivably
group all marine engines into one marine engine family. The only
restriction is that the engines are all in the same category. Separate
engine families will be required for each category of marine engines.
Note that all other provisions of the proposal shall apply to this
broad engine family including, but not limited to, selection and
testing of an emission data engine, application of a deterioration
factor (DF), and compliance with the standards.
(c) Carryover Provisions. This proposal makes provision for
carryover of engine data, which allows engine manufacturers to use data
generated in a previous model year's certification to certify for the
current year. This provision will also apply to the broader PMM engine
families, with the constraint that new data will need to be generated
if any model in the broad family is modified in any way that will make
it the highest emitter in the family.
(d) Streamlined Certification for Subsequent Years. EPA is
proposing a streamlined certification process for PMMs. This process
would be applicable beginning with the year after the relevant
implementation dates and continuing until engine design changes cause a
different engine model to be the highest emitter in the broad PMM
family. Recertification would be required at that point. Under this
streamlined certification process, the manufacturer would submit its
annual certification application stating that there have been no
changes in the design or production of the engine models that make up
the engine family. If there have been changes, the PMM could still
avoid a complete certification submission with test data by
demonstrating that there is no change in the identity of the highest
emitter or its emissions. EPA requests comment on such a streamlined
certification program for PMM.
(e) NTE Flexibility. As noted above, EPA is including an off-cycle
emission requirement whereby engine manufacturers would be required to
demonstrate that marine diesel engine emissions do not exceed a
specified cap at any point in a specified zone of operation (see
Section V.E.2., above). EPA expects that demonstrating compliance with
the NTE will call for additional R&D and testing to measure and control
emissions under any speed and load combination that can occur on a
vessel. These costs are included in EPA's analysis of economic impacts,
but EPA believes that the costs would be disproportionately difficult
for a PMM to bear. EPA therefore requests comment on alternative
approaches to address in-use emissions for these small manufacturers to
ensure in-use performance while minimizing the testing burden for PMMs.
(f) Additional Compliance Time. Because of the nature of their
business, marinizing partially or fully completed engines manufactured
by another company, the ability of PMM to certify their engines as
complying with the proposed emission limits may be affected by
circumstances that are beyond their control. Consequently, there may be
situations in which, despite its best efforts, a PMM cannot meet the
implementation dates, even with the flexibility provisions described
above. Such a situation may occur if an engine supplier without a major
business interest in a PMM were to change or drop an engine model very
late in the implementation process, or was not able to supply the PMM
with an engine in sufficient time for the PMM to recertify the engine.
Based on this concern, EPA is proposing to allow a one-year delay in
the implementation dates for PMMs. EPA requests comment on the
necessity of such a provision, whether its application should be
limited only to small companies, and on whether the one-year delay
should be automatic or subject to approval by EPA.
(g) Special Hardship Provision. As a relief mechanism of last
resort, EPA is also proposing to extend to PMM the hardship relief
provisions contained in the recently finalized land-based nonroad rule
(40 CFR 89.102(f)). Under this provision, PMM can petition EPA for
additional time to demonstrate compliance with the emission limits.
Under this hardship relief provision, appeals must be made in writing,
be submitted before the earliest date of noncompliance, be limited to
firms that fit the small business criteria established by the Small
Business Administration (fewer than 500 employees), include evidence
that failure to comply was not the fault of the PMM (such as a supply
contract broken by the engine supplier, and include evidence that the
inability to sell the subject engines will have a major impact on the
company's solvency. The Agency would work with the applicant to ensure
that all other remedies available under the flexibility provisions are
exhausted before granting additional relief, and would limit the period
of relief to no more than one year. Furthermore, the Agency proposes
that applications for hardship relief only be accepted during the first
year after the effective date of an applicable new emission standard.
To avoid the creation of a self-fulfilling prophesy, by which the very
existence of this provision prompts engine manufacturers to delay
engine developments, EPA expects that this provision will be used only
rarely. Each granting of relief would be treated as a separate
agreement, with no prior guarantee of success, and with the inclusion
of measures, agreed to in writing by the PMM, for recovering the lost
environmental benefit. Comment is requested on all aspects of this
proposal.
2. Vessel Builder Flexibilities
As part of the land-based nonroad rule, EPA proposed a set of
flexibility provisions for equipment manufacturers. These provisions
were intended to give equipment manufacturers more time to comply with
the requirement that they use only certified engines beginning with the
implementation dates the engine standards. The additional time was
necessary because the engine compartment on land-based nonroad
equipment is relatively restricted, and changes to the physical
characteristics of a nonroad engine could require extensive equipment
redesign. However, equipment manufacturers may be unable to obtain a
certified Tier 2 or Tier 3 engine before the implementation dates for
those engines. The flexibility provisions were designed to give extra
time for product redesign to equipment manufacturers that need it
without postponing the emission benefits of the entire program.
While recognizing the importance of such a transition program for
land-based nonroad equipment manufacturers, EPA is not proposing a
similar proposal for marine vessels. There are three reasons for this.
First, EPA has learned that the commercial vessel production process is
actually a very flexible process. Commercial marine vessels are
generally designed for a specific purchaser, to meet specific
operational requirements. This means that a vessel purchaser will
typically tell a

[[Page 68541]]

manufacturer what kind of load the vessel is intended to carry, and
what kind of engine to use. The vessel manufacturer then designs the
vessel, or adapts an existing design, based on these requirements. EPA
believes that this kind of design process can easily accommodate any
changes to an engine that may occur as a result of the proposed
program, regarding its physical dimensions or weight. Second,
commercial marine vessels are not serially produced in the same way as
land-based nonroad equipment. Sales volume by manufacturer is much
smaller in the commercial marine industry. Therefore, marine vessel
manufacturers do not need extra time to accommodate engine changes
across a wide range of equipment offerings. Third, it typically takes a
significant amount of time to design and build a commercial marine
vessel. EPA believes that any design changes required as a result of
engine changes can be accommodated in the normal vessel construction
period. Nevertheless, there may be special situations in which vessel
manufacturers may have difficulties producing vessels that use
compliant engines. EPA seeks comment on any such circumstances, and the
types of flexibility provisions that would be needed to address those
concerns.

N. Application of Provisions to Marine Diesel Engines Less Than 37 kW

Marine diesel engines less than 37 kW were included in the
rulemaking for nonroad diesel engines and are subject to the emission
control program contained in 40 CFR Part 89. That program has two tiers
of emission limits, phased in from 1999 to 2000 for Tier 1 and 2004 to
2005 for Tier 2. In general, marine diesel engines less than 37 kW are
subject to the same certification and compliance program as land-based
nonroad diesel engines. Exceptions to this general approach include the
duty cycle (E3, but with a C1 option), ABT program restrictions (land-
based credits cannot be used to offset marine diesel emissions), and
implementation flexibility provisions that would allow post-manufacture
marinizers to phase in compliance with Tier 1 emission limits according
to the schedule extended to nonroad equipment manufacturers.
EPA is aware that some companies manufacture marine diesel engines
above and below the 37 kW threshold. Most of these companies are small
businesses with limited ability to devote staff to managing compliance
with emission control requirements. One possible administrative change
that may lessen this burden would be to move the provisions for marine
diesel engines rated below 37 kW currently contained in 40 CFR Part 89
to 40 CFR Part 94. Transferring the provisions for marine diesel
engines rated below 37 kW in this way would ensure that engine
manufacturers, vessel manufacturers, and the general public need
consult only one area of the Code of Federal Regulations to identify
the emission control programs applicable to all marine diesel engines.
An important goal of any such change should be to avoid changing
the level of stringency of the requirements for marine diesel engines
less than 37 kW. EPA therefore does not intend to change the level or
timing of emission limits or other provisions that may affect the
emissions from these engines.
EPA is, however, seeking comment on the extent to which the
administrative portions of the certification and compliance
requirements for marine diesel engines less than 37 kW should be
harmonized with those proposed in this document. Commenters are
encouraged to specify which provisions should be harmonized for these
engines and to explain why this would be helpful. EPA believes that
such harmonization would be appropriate for several reasons. First,
harmonization of these provisions will ensure that engine manufacturers
have only one set of administrative requirements to follow instead of
two, thus simplifying the certification and approval process for both
the manufacturers and EPA. Second, harmonization would formally extend
the special compliance flexibility provisions of this proposal to post-
manufacture marinizers that modify smaller diesel engines, including
the more relaxed definition of engine family and streamlined
certification renewals. Third, this would clarify the requirements for
engine dressers.

VI. Category 3 Engine Provisions

A. Emission Limits

Category 3 engines are very large marine diesel engines, typically
used for propulsion purposes on ocean-going vessels. Although these
engines can achieve power ratings in excess of 75,000 kW, they are
diesel engines and, with certain limitations, can benefit from the
emission control technologies that are used on other diesel engines.
Perhaps the most important of these limitations is the fuel on which
they are operated, called residual fuel. This fuel is the by-product of
distilling crude oil to produce lighter petroleum products such as
gasoline, DM-grade diesel fuel (used in on-highway, land-based nonroad
and smaller diesel marine engines), and kerosene. It possesses a high
viscosity and density, which affects ignition quality, and it typically
has high ash, sulfur and nitrogen content in comparison to marine
distillate fuels. Furthermore, residual fuel parameters are highly
variable because its content is not regulated. It is this high
variability that makes it difficult to apply timing retard as a control
strategy. Ship engineers will generally optimize engine timing to
achieve peak pressures for each fuel blend and would not likely have
the expertise or incentive to optimize for emissions. Residual fuel can
increase engine NOX emissions from 20-50% and PM from 750%
to 1250% when compared to distillate fuel.⁴⁶
---------------------------------------------------------------------------

\46\ D. Bastenhof. Exhaust Gas Emission Measurements: A
Contribution to a Realistic Approach, 1995 (Air Docket A-97-50).
---------------------------------------------------------------------------

In determining the appropriate emission limits for Category 3
engines, EPA considered the application of existing diesel emission
technologies. These engines are, for the most part, already employing
Tier 1 and Tier 2 technologies, including turbocharging, injection
improvements, electronics, and more efficient cooling. Application of
these technologies has already been extremely optimized, with engines
being supercharged as well as turbocharged, and with two-stage seawater
aftercooling to reduce engine temperatures. The application of these
technologies results in very high fuel efficiency and optimal engine
operation.
Because of the extensive use of Tier 2 technologies on Category 3
engines, the opportunities for emission reductions are not as extensive
as they are for smaller engines. The most likely set of next-generation
technologies that could potentially be applied to these engines include
EGR, SCR, and water injection. However, as discussed in the Draft
Regulatory Impact Assessment, these technologies are still under
development for marine diesel engines of this size and thus the Agency
does not believe it is appropriate to set emission limits that would
require their use at this time. In addition, their application to
Category 3 engines is complicated by the quality of the fuel used in
these engines.
EPA believes it is appropriate to consider an emission limit that
would rely largely on the use of injection rate shaping, with some
retarded timing. By optimizing a variable fuel injection rate, a small
amount of fuel can be delivered early to initiate combustion. Once
combustion begins, the rest of the fuel

[[Page 68542]]

can be injected. Through this strategy, the peak temperature in the
cylinder can be reduced by reducing the amount of fuel that is mixed
with air prior to the start of combustion. This premixed fuel results
in a large thermal spike when it burns when compared to diffusion
burning. By reducing the peak temperatures, it is more difficult for
NOX to form.
EPA analysis indicates that the appropriate emission limits for
Category 3 engines, that would require injection rate shaping but not
extensive timing retard, are the limits that were recently adopted in
MARPOL Annex VI. These NOX limits also take into account the
special fuel used by these engines. Those limits are contained in Table
1, above. EPA also believes that these emission limits would be the
appropriate standards under the Clean Air Act, under the current
circumstances. With respect to emission reductions, while MARPOL Annex
VI targeted a 30% NOX emission decrease, EPA analysis
indicated that a 17% NOX decrease could be expected.
However, implementation of these NOX limits will prevent
further increases in NOX resulting from further developments
in Category 3 engine design. Because of Category 3 engines'
characteristic design and operation for minimum BSFC (see the Draft
RIA), further improvements in materials and engine design will only
increase specific NOX emissions in the absence of these
limits.
Because the MARPOL Annex VI NOX limits would likely be
implemented independently of any Clean Air Act requirement, assuming
ratification by the United States of Annex VI, EPA believes it would be
unnecessary and redundant to adopt the same program under the Clean Air
Act. Therefore, EPA is not proposing to adopt emission limits for
Category 3 engines as part of this rule. Instead, EPA expects U.S.
vessel owners to begin installing engines certified to the MARPOL Annex
VI limits beginning with the effective date set in Annex VI (January 1,
2000), following the procedures otherwise applicable to that Annex. EPA
requests comment on this approach, as well as the rationale behind its
adoption. EPA seeks comment on how to ensure that U.S. vessel owners
begin installing Category 3 engines beginning with ships constructed on
or after January 1, 2000. EPA also seeks comment as to whether EPA
should be required to examine implementation of the Annex domestically
as part of the 2003 Feasibility Review, described in Section V.A.3.,
above.
EPA seeks comment on the proposed approach to Category 3 engines.
EPA also seeks comment on whether EPA should consider a longer terms
strategy as well and, if so, what those long-term NOX
emission limits should be. Finally EPA seeks comment on the need to
adopt a PM limit for these engines. MARPOL Annex VI does not set a PM
limit, presumably because of the fuel variability issue and the lack of
an appropriate PM test method for residual fuels (see the Draft RIA).
EPA seeks comment on the desirability to go beyond the Annex VI
requirement by setting a PM standard for Category 3 engines and, if so,
what that PM limit should be and how it shall be tested.
Category 3 engines can switch between fuels, and, as stated above,
residual fuel can increase NOX emissions by 20%-50% and PM
emissions by 1000% (250%) compared to marine distillate
fuel. Foreign vessels with Category 3 engines currently account for 45%
of the NOX emissions from Category 3 engines (see the Draft
Regulatory Impact Assessment). One mechanism to reduce NOX
emissions from these engines would be restricting the use of residual
fuel in or near port regions, perhaps utilizing remote CO2,
SOX, and PM sensing technologies to non-intrusively
discriminate the fuel burned by a ship. If such a technology can be
demonstrated, enforcement could become as straightforward as
determining automobile speed on a highway. EPA seeks comment on whether
ports and states could effectively employ such a strategy, for example
as a condition on use of ports. Comments provided on this question will
assist EPA in assessing the extent to which such a locally-imposed
emission control strategy would be practical. These comments, in turn,
will also help EPA determine whether it would be useful to issue
guidance on how to establish such programs, both for California's South
Coast ports and ports located in other areas of the country.

B. Category 1 and 2 Engines Aboard Vessels Engaged in Foreign Trade

EPA proposes an additional provision for Category 1 and 2 engines
that are installed on U.S.-flagged vessels engaged in foreign trade
that meet the criteria described below. This provision will allow these
engines to be certified to the MARPOL Annex VI NOX curve
instead of the EPA proposed limits provided certain conditions are met.
This provision would go into effect at the same time as the
implementation of the proposed domestic emission requirements for these
engines. In other words, waivers would not be needed until 2004 for
engines with a per cylinder displacement below 2.5 liters and until
2006 for engines with a per cylinder displacement at or above 2.5
liters but below 20 liters. Prior to these dates, it is assumed that
engines installed on these vessels will be compliant with the MARPOL
NOX limits.
This special provision is intended to address the different
circumstances in which these engines will be used, rather than any
differences in their operation. Specifically, Category 1 and Category 2
engines installed on foreign trade vessels are typically used for
auxiliary purposes. These engines are often essential for the smooth
functioning of the vessel, since they are used to generate electricity
for navigational equipment (radar, gyrocompass, and
telecommunications), maneuvering equipment (steering gear, bow
thrusters), and crew services (lighting in the engine room, cooking in
the galley). If these engines were to fail, a ship would be stranded
and would most likely require a tow into port. Repairing engines to EPA
requirements may be difficult in a foreign port because of availability
of replacement parts. This may cause a ship owner to incur significant
downtime costs to have the replacement part or a new engine delivered
to a foreign port. Alternatively the ship owner may have to buy a
noncomplying engine while overseas, only to replace it when the vessel
returns to the United States. Allowing Category 1 and Category 2
engines to meet the MARPOL Annex VI limits instead of the EPA's
requirements will reduce if not eliminate any difficulties associated
with the maintenance and repair of these engines while at sea, since
vessels worldwide are expected to comply with those limits beginning in
2000.
EPA believes that this special provision for Category 1 and
Category 2 engines will have minimal impact on U.S. air quality if it
is limited to those vessels that engage in foreign trade. EPA proposes
to define a U.S.-flagged vessel engaged in foreign trade as one that
has solely a registry endorsement pursuant to Coast Guard regulations
at 46 CFR 67.17. Vessels with multiple endorsements (e.g., foreign and
coastwise) will need to demonstrate to the Administrator's satisfaction
that the vessel will spend less than 25% of its operating time within
320 nautical kilometers (200 nautical miles) of U.S. territory. This
determination would need to be made during the ship's construction,
based on the business plans of the ship owner. EPA does not believe
application for this determination will be burdensome

[[Page 68543]]

because the vessel owner will have built the ship with a specific trade
in mind.
To ensure that only the appropriate vessels use this provision, EPA
proposes that Category 1 and 2 engines be labeled to indicate that they
have been certified only to the MARPOL Annex VI NOCX curve
limits, and that they are not intended for use on domestic vessels. In
addition, EPA proposes that any vessel owner who seeks this exemption
obtain a waiver from EPA. Such a waiver would be issued upon
satisfactory demonstration that the vessel will be used for foreign
trade. EPA proposes that a vessel will be considered to be used for
foreign trade if it spends less than 25 percent of its operating time
within 200 nautical miles of the United States, and it does not operate
solely between the United States, Canada, Mexico, Bermuda, or the
Bahamas. Without this additional limit, EPA is concerned that ships
whose engines do, in fact, have a significant impact on U.S. air
quality would be exempt from the proposed domestic program. Also,
because they operate in closer proximity to the United States these
vessels are unlikely to experience problems with maintaining engines
certified to EPA standards.
EPA seeks comment on whether this special provision for Category 1
and Category 2 engines installed on U.S.-flagged foreign trade vessels
is necessary. EPA also requests comment on how best to define the group
of vessels that should benefit from the provision while ensuring that
those vessels operating in the United States meet the emission
requirements proposed in this document. EPA requests comment on whether
ships that operate solely between the United States, Mexico, the
Bahamas, and Canada should be able to benefit from this provision.

VI. Technological Feasibility

The emissions standards proposed in this action would apply to a
large variety of marine diesel engine sizes and applications. Section
213(a)(3) of the Clean Air Act calls for EPA to establish standards
that provide for the ``greatest degree of emission reduction achievable
through the application of technology which the Administrator
determines will be available for the engines or vehicles to which such
standards apply, giving appropriate consideration to the cost of
applying such technology within the period of time available to
manufacturers and to noise, energy, and safety factors associated with
the application of such technology.''
This section describes EPA's understanding of the range of
technologies that will be available to manufacturers to comply with the
proposed standards for Category 1 and 2 marine diesel engines and the
technological approach anticipated for Category 3 marine engines. EPA
believes that the technology discussed below will be sufficient for
both the proposed standards and the NTE requirements. The costs
associated with these technologies will be discussed in Section VII.
EPA has concluded, as described in the Draft RIA, that the proposed
standards will have no significant negative effect on noise, energy, or
safety. The technological feasibility of the proposed standards is
discussed below for each category.

A. Category 1 Engines

EPA believes that the emission reduction strategies that are
expected to be used on land-based nonroad diesel engines to meet the
nonroad Tier 2 and Tier 3 standards can also be applied to Category 1
marine diesel engines. This is because marine diesel engines are
generally derivatives of land-based nonroad and highway engines. Marine
engine manufacturers and marinizers make modifications to the engine to
make it ready for use in a vessel. These modifications can range from
basic engine mounting and cooling changes to a restructuring of the
power assembly and fuel management system. The Draft RIA discusses this
process in more detail.
1. Development of Implementation Schedule
For Category 1 engines with specific displacements below 2.5 liters
per cylinder, the proposed implementation dates for Tier 2 essentially
represent a four year lead time beyond the scheduled implementation
date of the MARPOL Annex VI NOX standard. Another four years
of lead time is proposed for Tier 3. Having a single implementation
date for several subcategories has an advantage for marine engines
because it removes concerns associated with engine families that fall
into several subcategories. This is important since marine engines may
not fall into the same categories as their land-based nonroad
counterparts. In some cases, using the same staggered approach for
marine as for land-based nonroad engines could require the marine
version to be certified before the land-based version of an engine.
However, it is EPA's intent that marine engine designs have the benefit
of being able to make use of the emission controls developed for land-
based nonroad engines.
The proposed implementation schedule allows up to a three-year
delay in standards for Category 1 marine engines relative to the
implementation dates of the land-based nonroad standards. This should
make this proposed regulatory scheme more cost-effective by allowing
time for the carryover of technology from land-based nonroad to marine
engines.
For engines with specific displacements greater than or equal to
2.5 liters per cylinder, EPA proposes an additional two years of lead
time. This additional lead time would make the implementation date for
the proposed marine Tier 2 standards consistent with the land-based
nonroad Tier 2 implementation date for these engines. Therefore, the
marine engines would be able to use technology developed for land-based
applications. In addition, there are currently no Tier 3 standards for
land-based nonroad engines of this size; therefore, the extra lead time
may be necessary for the larger Category 1 marine engines to achieve
Tier 3 levels. EPA requests comment on the proposed implementation
dates.
2. Development of Numerical Standards
Marine diesel engines are typically derived from or use the same
technology as land-based nonroad diesel engines and should therefore be
able to effectively use the same emission control strategies. In fact,
marine engines can make use of the water they operate in as a cooling
medium, which can help them reduce charge air intake temperatures more
easily than land-based nonroad engines. By cooling the intake charge,
formation of NOX emissions can be reduced. Also, as
discussed in Chapter 3 of the Draft RIA, data on five marine engines
show that emissions measured on the proposed ISO E3 marine duty cycle
are roughly equivalent to those measured on the land-based nonroad ISO
C1 duty cycle. Finally, several demonstration marine diesel engines
have been in service for a couple years in California with emission
levels that are very close to meeting the standards proposed in this
document. These demonstration engines are all using established
technology that EPA anticipates will be used to comply with this
proposed rule. The Draft RIA provides more detail on the emissions
levels achieved and the technology applied to these engines.
Because of the lead time needed to transfer land-based technology
to the marine environment, EPA believes that it is reasonable to
propose near-term standards that are somewhat less stringent compared
to land-based nonroad in the Tier 2 time frame. EPA

[[Page 68544]]

believes that more stringent Tier 3 standards are feasible in the long
term especially given the technology being developed for land-based
nonroad engines and the long lead time. Proposing a slightly less
stringent numerical NOX emissions limit for Tier 2 marine
than for Tier 2 land-based nonroad engines should allow marine engine
manufacturers the flexibility to focus on Tier 3 technology and still
reduce emissions in the interim without spending excessive resources on
Tier 2.
3. Technological Approaches
EPA anticipates that the proposed standards for marine engines will
be met primarily with technology that will be applied to land-based
nonroad engines to meet the proposed Tier 2 and Tier 3 emission
standards. Much of this technology already has been established in
highway applications and is already being used in limited land-based
nonroad and marine applications. EPA's analysis of this technology is
described in detail in Chapter 3 of the Draft RIA for this proposed
rule and is summarized below.
By proposing multiple levels of standards that extend well into the
next decade, EPA is providing engine manufacturers with substantial
lead time for developing, testing, and implementing emission control
technologies. This lead time and the coordination of standards with
those for land-based nonroad engines allows time for a comprehensive
program to integrate the most effective emission control approaches
into the manufacturers' overall design goals related to durability,
reliability, and fuel consumption.
Engine manufacturers have already shown some initiative in
producing limited numbers of low NOX marine diesel engines.
More than 80 of these engines have been placed into service in
California through demonstration programs. The Draft RIA discusses, in
detail, these engines and their emission results. Through the
demonstration programs, EPA has been able to gain some insight into
what technologies can be used to meet the proposed emission standards.
Highway engines have been the leaders in developing new emission
control technology for diesel engines. Because of the similar engine
designs in land-based nonroad and marine diesel engines, it is clear
that much of the technological development that has led to lower
emitting highway engines can be transferred or adapted for use on land-
based nonroad and marine engines. Much of the improvement in emissions
from these engines comes from ``internal'' engine changes such as
variation in fuel injection variables (injection timing, injection
pressure, spray pattern, rate shaping), modified piston bowl geometry
for better air-fuel mixing, and improvements intended to reduce oil
consumption. Introduction and ongoing improvement of electronic
controls have played a vital role in facilitating many of these
improvements.
Other technological developments that are expected to be used on
nonroad engines will require a greater degree of development before
they can be applied to marine diesel engines. Turbocharging is widely
used now in marine applications, especially in larger engines, because
it improves power and efficiency by compressing the intake air.
Turbocharging may also be used to decrease particulate emissions in the
exhaust. Today, marine engine manufacturers generally have to rematch
the turbocharger to the engine characteristics of the marine version of
a nonroad engine and often will add water jacketing around the turbo
housing to keep surface temperatures low. Once the Tier 2 nonroad
engines are available to the marine industry, matching the
turbochargers for the engines will be an important step in achieving
low emissions.
Aftercooling is a well established technology that can be used to
reduce NOX by reducing the temperature of the charge air
after it has been heated during compression. Reducing the charge air
temperature directly reduces the peak cylinder temperature during
combustion, which is the primary cause of NOX formation.
Air-to-water and water-to-water aftercoolers are well established for
land-based applications. For engines in marine vessels, there are two
different types of aftercooling used: jacket-water and raw-water
aftercooling. With jacket-water aftercooling, the coolant to the
aftercooler is cooled through a heat exchanger by ambient water. This
cooling circuit may be either the same circuit used to cool the engine
or a separate circuit. By moving to a separate circuit, marine engine
manufacturers would be able to achieve further reductions in the intake
charge temperature. This separate circuit could result in even lower
temperatures by using raw water as the coolant. This means that ambient
water is pumped directly to the aftercooler. Raw-water aftercooling is
currently being used widely in recreational applications. Because of
the access that marine engines have to a large ambient water cooling
medium, EPA anticipates that marine engine manufacturers will largely
achieve the reductions in NOX emissions for this proposal
through the use of aftercooling.
To meet the proposed standards, Category 1 marine diesel engine
manufacturers are expected to use many of the strategies discussed
above. Electronic controls offer great potential for improved control
of engine parameters for better performance and lower emissions. Unit
pumps or injectors would allow higher-pressure fuel injection with rate
shaping to carefully time the delivery of the whole volume of injected
fuel into the cylinder. Marine engine manufacturers should be able to
take advantage of modifications to the routing of the intake air and
the shape of the combustion chamber of nonroad engines for improved
mixing of the fuel-air charge. Separate circuit jacket- and raw-water
aftercooling will likely gain widespread use in turbocharged engines to
increase performance and lower NOX.
To meet the proposed Tier 3 standards, EPA believes that two
technologies would be especially useful. Common rail injection systems
provide greater overall control of the fuel injection strategy by
maintaining a constant supply of high-pressure fuel at the injectors.
Also, exhaust gas recirculation is anticipated to be applied to land-
based nonroad diesel engines, which will provide valuable experience in
applying this control strategy to marine engines. These technologies
are not anticipated to be developed for land-based nonroad engines with
specific displacements greater than or equal to 2.5 liters per
cylinder. However, EPA believes that the concepts can be adapted from
smaller land-based nonroad and highway engines. To account for
difficulties of adapting common rail fuel injection and EGR to these
larger engines, EPA is proposing a higher marine Tier 3
HC+NOX standard than for engines with specific displacements
less than 2.5 liters per cylinder. A more detailed treatment of the
feasibility of these engines meeting the proposed standards is included
in the Draft RIA.
4. Conclusions Regarding Technological Feasibility
The standards in this proposal are the most challenging that can be
set in this time frame. Category 1 marine diesel engine manufacturers
will need to use the available lead time to develop the necessary
emission control strategies, including transfer of technology from
land-based nonroad diesel engines. This development effort will require
not only achieving the targeted emission levels, but also ensuring that
each engine will meet all performance and emission

[[Page 68545]]

requirements over its useful life. The proposed standards clearly
represent significant reductions compared with baseline emission
levels.
Emission control technology for diesel engines is in a period of
rapid development in response to the range of emission standards in
place and anticipated for highway and land-based nonroad engines in the
years ahead. This development effort will automatically transfer to
some extent to marine engines, since marine engines are often
derivatives of highway and land-based nonroad engines. Regardless, this
development effort will need to expand to marine diesel engines as a
result of this proposal. Because the technology development for highway
and land-based nonroad engines will to a large extent constitute basic
research of diesel engine combustion, the results should be applicable
to marine engines.
Based on information currently available, EPA believes that it is
feasible for Category 1 marine diesel engine manufacturers to meet the
proposed standards using combinations of technological approaches
discussed above and in the Draft RIA. To the extent that the
technologies described above may not yield the full degree of emission
reduction anticipated, manufacturers could still rely on a modest
degree of fuel injection timing retard as a strategy for complying with
the proposed emission standards. As described under Economic Impacts
below, injection timing retard may be associated with some decrease in
fuel efficiency.
In addition, EPA believes that the flexibilities incorporated into
this proposal will permit marinizers and vessel builders to respond to
engine changes in an orderly way. For these industries, EPA expects
that meeting these requirements will pose a significant challenge, but
one that is feasible taking into consideration the availability and
cost of technology, time, noise, energy, and safety.

B. Category 2 Engines

EPA believes that the emission reduction strategies that are
expected to be used on locomotive diesel engines to meet the recently
finalized standards can also be applied to Category 2 marine diesel
engines. This is because the majority of Category 2 marine diesel
engines are derivatives of locomotive engines. Similar to Category 1,
marine engine manufacturers and marinizers then make modifications to
the engine to make it ready for use in a vessel.
1. Development of Implementation Schedule
EPA is proposing a similar approach as proposed for Category 1
engines. Because of the marinization process, marine engine
manufacturers will likely need some time to respond to changes in
locomotive engine designs associated with their standards. This is why
EPA is proposing that there be a one year delay between the
implementation of the locomotive Tier 2 and the marine Tier 2
standards. EPA believes that a four year additional lead time is
sufficient for Category 2 marine engine manufacturers to achieve the
additional reductions associated with the proposed Tier 3 standards. In
any case, the Tier 3 standards are proposed to be subject to a
feasibility review in 2003.
2. Development of Numerical Standards
EPA proposes the marine Tier 2 emissions standards for Category 2
marine diesel engines to be the same level as the locomotive line-haul
Tier 2 emissions standards. The Draft RIA compares baseline marine
emissions on the E2 and E3 cycles to baseline locomotive emissions on
the line-haul cycle and shows that the baseline emissions for marine
are about the same or slightly lower than for locomotives. Thus, EPA
believes that no change in the standards is required due to the duty
cycle. Although locomotives are required to meet standards for a line-
haul and a switch duty cycle, the line-haul standard was chosen for
this comparison because it is more similar to the proposed marine duty
cycles than the switch cycle.
EPA believes that further reductions are possible from Category 2
marine engines than are required for locomotive engines. This is why
EPA is proposing Tier 3 standards for Category 2 marine engines.
Technologically, marine engines do not have nearly the cooling
constraints that locomotive engines have and they do not need to be
designed for operation at high altitudes. In addition, under the lead
time associated with the proposed Tier 3 standards, EPA believes that
further emission control technology can be applied to these engines.
3. Technical Approach
Most of the emission control strategies anticipated to be used on
locomotive engine to meet the locomotive Tier 2 standards are similar
to those expected to be used on nonroad engines to meet the land-based
nonroad Tier 2 standards. These technologies include combustion chamber
modifications, better oil control, improvements in fuel injector design
(i.e., rate shaping, higher pressures, nozzle geometry), electronic
engine management controls, and separate circuit aftercooling. In
addition, the older two-stroke engine designs are already being
replaced by four-stroke engine designs. EPA believes that these
technological improvements can be directly applied to Category 2 marine
diesel engines. Most likely, the marine engine manufacturers will need
to rematch the turbochargers and cooling circuits to respond to the new
locomotive engine designs.
EPA believes that marine engines have two advantages over
locomotive engines for reducing NOX. Marine engines have
access to ambient water, which gives them the ability to achieve very
low charge air temperatures with an aftercooler. Locomotives, on the
other hand, have extreme packaging constraints, which minimize their
ability to cool the charge air. Locomotive engines must also be
designed to meet their standards at high altitudes while Category 2
marine diesel engine operate at or near sea level. Because marine
engines do not operate at high altitude, they have less of a concern
for design tradeoffs between maintaining low NOX and low
smoke levels.
Similar to Category 1, EPA believes that the key technologies
needed for Category 2 marine engines to meet the proposed marine Tier 3
emissions standards are common rail fuel injection and exhaust gas
recirculation. These technologies are not anticipated to be developed
for locomotive engines for Tier 2. However, EPA believes that the
concepts can be adapted from land-based nonroad and highway engines. As
an alternative strategy, manufacturers may choose to rely on injection
timing retard as a way of trimming NOX emissions. However,
this may be associated with a fuel efficiency penalty. To account for
difficulties of adapting common rail fuel injection and EGR to these
larger engines, EPA is proposing the same marine Tier 3
HC+NOX standard proposed for Category 1 engines with
specific displacements greater than 2.5 liters per cylinder. This
proposed standard is somewhat relaxed compared to the land-based
nonroad Tier 3 standards.
4. Conclusions Regarding Technological Feasibility
Based on information currently available, EPA believes that it is
feasible for Category 2 marine diesel engine manufacturers to meet the
proposed standards using combinations of technological approaches
discussed above and in the Draft RIA. In addition,

[[Page 68546]]

EPA believes that the implementation schedule and the flexibilities
incorporated into this proposal will permit marinizers and vessel
builders to respond to engine changes in an orderly way. For these
industries, EPA expects that meeting these requirements will pose a
significant challenge, but one that is feasible taking into
consideration technology, time, noise, energy, and safety.

C. Category 3 Engines

EPA is not proposing national standards for Category 3 marine
engines. However, emissions reductions are expected to be gained
through the international NOX requirements adopted in MARPOL
Annex VI.
1. Rationale for Relying on MARPOL Annex VI Requirements
Because of the competitive nature of international maritime
transport, ship owners and ship builders have been working for years on
techniques to improve diesel engine fuel efficiency. These research
efforts have been very successful, and the thermal efficiencies of new
Category 3 marine diesel engines are very high, approaching 45 to 50
percent. System efficiencies (i.e., the thermal efficiency for the ship
as a whole) can be as high as 85 percent, for example, because of the
use of engine heat to generate steam power. The competitive nature of
the shipping industry continues to provide incentives for gaining
further reductions in fuel consumption since fuel is the largest
variable cost associated with shipping.
Category 3 engines have two characteristics that require
discussion. First, the same strategies that have been used over time to
achieve these high thermal efficiencies have generally resulted in an
increase in NOX emissions. Reducing NOX with the
technology used today basically means calibrating the engines with a
focus on emissions as well as fuel consumption. For instance, timing
could be retarded to reduce NOX by reducing peak cylinder
temperatures associated with the burning of fuel that is premixed with
air prior to the start of combustion. Any resulting adverse impact on
fuel consumption could be minimized through fuel injection strategies
and charge air charging and cooling strategies. Consequently, EPA does
not expect any significant increase in fuel consumption rates. Added
emission control could be achieved using EGR, water in fuel emulsion,
or SCR. The benefits and drawbacks of these technologies are discussed
below.
Second, Category 3 engines operate on bunker fuel. This fuel is
also called residual fuel because it is the fuel left in a refinery
after the lighter ends have been distilled. Although some distillate
may be blended into this residual fuel, the resulting bunker fuel is
considerably different than the fuel burned by any other diesel
engines. For instance, the viscosity is so high, that the fuel must be
melted before it can flow to the engine. The warmed fuel also needs to
be passed through centrifuges to remove water, sludge, and other
contaminants. Sulfur levels in this fuel may be as high as 5 percent by
weight. Specifications even exist for the amount of cat bottoms (worn
metal and catalyst from a hydro-cracker) in the fuel. The special
characteristics and handling needs of bunker fuel make the application
of new emission control technologies challenging.
Because of the special fuels used by these engines and their
international use, EPA is not proposing to set national emission limits
for Category 3 engines beyond the MARPOL Annex VI requirements based on
the types of technologies that are already used for fuel efficiency
reasons on these engines today. EPA believes that this approach is
reasonable given the Clean Air Act requirements that direct EPA to
promulgate regulations that achieve the greatest degree of emission
reduction achievable through the application of available technology
giving appropriate consideration to cost, lead time, noise, energy, and
safety concerns. Applicable technology for Category 3 engines is
discussed below. EPA believes that the proposed limits will not only
prevent future increases in NOX associated with historical
design improvements, but actually reduce NOX from new
engines by about 17 percent as discussed in the Draft RIA.
EPA's main focus across all of its diesel engine emission control
programs is to reduce NOX and PM emissions. HC and CO limits
are of less importance because the contribution of diesel engines to
the inventory of these pollutants is relatively low. With regard to
Category 3 engines, high PM emissions are largely a result of the fuel
used in these engines, as opposed to the technical characteristics of
these engines. As discussed in the Draft RIA, the use of residual fuel
or residual fuel blends in these engines can lead to PM emissions that
are an order of magnitude higher than when distillate fuel is used. In
addition, current established PM test methods show unacceptable
variability when sulfur levels exceed 0.8 weight percent sulfur, and no
PM test has been developed for these engines that corrects that
variability. For these reasons, EPA is not proposing a PM standard for
Category 3 engines. Similarly, EPA is not proposing HC or CO standards
for these engines, but requests comment on whether adding such
additional standards on top of the MARPOL Annex VI NOX
standard is necessary, and if so at what levels.
2. Technological Approaches
A number of technical designs and engine modifications are capable
of reducing NOX emissions from compression-ignition engines
and have the potential to be technologically feasible for Category 3
marine engines. These technologies include retarded injection timing,
engine fine tuning, exhaust gas recirculation, water emulsified fuel,
and selective catalytic reduction. Benefits and challenges associated
with these technologies are discussed below and were derived from CARB
Mail-Out #91-42 and information gathered by the NOX working
group of the Bulk Chemical Handling Subcommittee of the IMO.
A feasible and simple means of reducing NOX from diesel
engines is by retarding injection timing. This method lowers the peak
combustion temperature and pressure in the cylinder, resulting in 10-30
percent lower NOX. However, the disadvantages include higher
specific fuel consumption, lower power, harder startability, and higher
levels of HC, CO, PM, and smoke. In addition, injection timing
generally has to be tailored to fuel quality for Category 3 engines
operating on residual fuel. To recover the lost fuel economy and
performance or to reduce the amount of injection timing retard,
additional technologies that improve fuel atomization have been
employed on other mobile source engines. Fuel atomization can be
improved by increasing fuel pump pressure and advance strategies, and
through nozzle geometry. Another fuel injection technique for reducing
NOX is rate shaping. By injecting a small amount of fuel to
begin combustion before injecting the majority of the fuel, high
temperatures associated with the burning of premixed fuel can be
reduced.
Engine fine tuning includes modification of essential engine
components and could result in a 20-40 percent reduction in
NOX emissions. More specifically, engine fine tuning could
include modifications in the injection system, charge air system, and
combustion chamber design. Such changes on new highway engines have
already achieved more than 50 percent NOX reductions.
Exhaust gas recirculation (EGR) involves recirculating some of the

[[Page 68547]]

exhaust gas back into the intake manifold. This lowers the combustion
temperature and therefore can lower NOX emissions by as much
as 20-50 percent. For marine engines, the applicability of EGR is
complicated by the quality of the fuel. Sulfur and soot from combustion
gases can cause increased wear of piston rings, valves, and other
components. Therefore, EGR is more likely to be useful for engines
running on cleaner distillate fuels.
Water emulsification of the fuel is another technique that lowers
maximum combustion temperature, reducing NOX 20-50 percent
without an increase in fuel consumption. There are at least two ways to
accomplish the emulsification during combustion: in the combustion
chamber or in the fuel tank. Combining water and fuel for the first
time in the chamber requires significant changes to the cylinder head
to add an injector. Combining water with fuel in the tank may introduce
combustion problems due to unstable emulsion. Also, this technique
requires a significantly redesigned fuel handling system to overcome
the potential risk of corrosion and to maintain power output. In any
event, extra liquid storage availability is necessary to retain similar
range.
Selective catalytic reduction (SCR) is one of the most effective,
but also most complex and expensive, means of reducing NOX
from large diesel engines. Emission reductions in excess of 90 percent
can be achieved using SCR. In SCR systems, a reducing agent, such as
ammonia, is injected into the exhaust and both are channeled through a
catalyst where NOX emissions are reduced. These systems are
being successfully used for large stationary source applications, which
operate under constant, high-load conditions.
A number of disadvantages are apparent for the use of current
technology SCR systems on ships. The SCR system is effective only over
a narrow range of exhaust temperatures. The effectiveness of the system
is decreased at reduced temperatures exhibited during engine operation
at partial loads. Most of the engine operation near port cities is
likely to be at these partial loads. This sort of a system would
require an additional tank to store ammonium (or urea to form ammonia).
Also, excess ammonia in the exhaust can occur during transient
operation, where control of optimum ammonia injection is difficult.
However, Category 3 marine engines generally operate under steady-state
conditions.
3. Conclusions Regarding Technological Feasibility
Given the available emissions control technology for Category 3
engines and the fuel quality issues, EPA believes that the MARPOL Annex
VI standards for NOX are appropriate and sufficient for
Category 3 marine diesel engines. EPA's main concern is that the range
of adjustable parameters be set so that the engine will meet the
proposed standards in this range. EPA proposes to use, and seeks
comment on, the MARPOL Annex VI provisions designed to prevent
tampering with the engine settings in such a way as will increase
emissions. EPA believes that it may be appropriate to investigate PM
standards and more stringent NOX standards for Category 3
engines in the context of the MARPOL Convention in the future.

VIII. Projected Impacts

A. Environmental Impacts

In Chapter 5 of the Draft Regulatory Impact Analysis, EPA provides
a detailed explanation of the methodology used to determine the
environmental benefits from marine diesel engines associated with this
proposal. EPA requests comment on all aspects of the emissions
inventory analysis. The following discussion gives a general overview
of the methodology and the results.
1. Category 1 Engines
For the purposes of the inventory analysis, Category 1 was divided
into recreational, commercial, and auxiliary marine diesel engines.
Although no standards are proposed in this document for recreational
engines, uncontrolled emissions from these engines are included in the
inventory analysis. Annual emissions were then calculated using engine
populations, load factors, annual hours of use, rated power, emission
factors, turnover, and growth rates. The sources for and the values of
these factors are provided in the Draft RIA. It should be noted that
EPA has received some indication that the annual use for recreational
engines may be lower than assumed in the inventory analysis and
calculations (Table 5-2 of the Draft Regulatory Impact Analysis). EPA
seeks comment on annual usage rates for recreational, as well as
commercial and auxiliary, engines.
Table 12 presents the projected emissions inventory from Category 1
marine engines with and without the proposed standards. Table 12 also
presents the anticipated effects of the MARPOL Annex VI standards on
the Category 1 NOX inventory. The proposed CO standard is
intended as a cap, so no benefits are claimed here.
Table 12 presents the projected emissions inventory from Category 1
marine engines with and without the proposed standards. Table 12 also
presents the anticipated effects of the MARPOL Annex VI standards on
the Category 1 NOX inventory. The proposed CO standard is
intended as a cap, so no benefits are claimed here.

Table 12.--Category 1 Emissions Inventory
[Thousand short tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
HC NOX PM CO
-------------------------------------------------------------------------------------------------------
Year MARPOL
Base Control Base Annex VI Control Base Control Base
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000............................................ 12.1 12.1 465 464 464 14.9 14.9 73
2005............................................ 12.8 12.5 492 484 470 15.8 15.2 78
2010............................................ 13.6 12.1 521 507 420 16.8 14.1 82
2020............................................ 15.3 12.0 586 565 303 18.9 13.0 92
2030............................................ 17.3 13.4 663 640 310 21.4 13.0 105
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Category 2 Engines
Baseline emissions inventories for Category 2 marine engines were
developed for the EPA under contract with Carnegie Mellon
University.⁴⁷ For the purposes of this analysis, emissions
are included from all Category 2 engines

[[Page 68548]]

operated in the Great Lakes, inland waterways, and coastal waters up to
320 kilometers (200 miles) offshore. Emissions from U.S. flagged
vessels were determined using ship registry data, fuel consumption,
rated power, operation assumptions, and fuel specific emission factors.
Emissions from foreign flagged vessels were developed based on cargo
movements and waterways data, vessel speeds, average dead weight
tonnage per ship, and assumed cargo capacity factors.
---------------------------------------------------------------------------

\47\ Corbett, J., Fischbeck, P., ``Commercial Marine Emissions
Inventory and Analysis for United States Continental and Inland
Waterways,'' Carnegie Mellon University, Order No. 8A-0516-NATX,
September 1998.
---------------------------------------------------------------------------

To model the benefits of the proposed standards, EPA applied an
engine replacement schedule and new engine standards to the baseline
inventory. In this case, no emission reductions are expected beyond the
already low levels of HC. Table 13 shows the projected emissions for
Category 2 vessels with and without the proposed standards. The
anticipated NOX impacts for the application of MARPOL Annex
VI standards to U.S. flagged vessels are also included.

Table 13.--Category 2 Emissions Inventory
[Thousand short tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
HC NOX PM CO
-------------------------------------------------------------------------------------------------------
Year MARPOL
Base Base Annex VI Control Base Control Base Control
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000............................................ 11.1 267 265 265 6.1 6.1 34.1 34.1
2010............................................ 12.3 295 275 255 6.8 6.6 37.7 36.3
2020............................................ 13.6 325 387 206 7.5 6.9 41.7 37.0
2030............................................ 15.0 360 309 167 8.3 7.3 46.0 38.3
2040............................................ 16.5 397 339 162 9.1 7.9 50.8 41.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Category 3 Engines
The emissions inventory for Category 3 was calculated using the
same methodology as for Category 2. EPA believes that some
NOX benefits may be achieved by adopting the MARPOL Annex VI
NOX standard for engines used in U.S. flagged vessels. Table
14 presents projected emissions from Category 3 engines operated in
U.S. waters. Note that the reductions here present both the impacts, in
the U.S., of U.S. flagged vessels meeting the MARPOL Annex VI
NOX standard and the potential impacts if foreign flagged
vessels were to meet the MARPOL Annex VI standard.

Table 14.--Category 3 Baseline and Projected Emissions Inventory under Varying Implementation of MARPOL Annex VI controls
[Thousand short tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOX HC PM CO
-----------------------------------------------------------------------------------------------------------------
Year Annex VI applied
base to U.S.-flag Annex VI applied base base base
vessels only to all vessels
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000.................................. 273 272 271 8.1 21.2 25.0
2010.................................. 301 290 279 9.0 23.4 27.6
2020.................................. 333 310 289 9.9 25.8 30.5
2030.................................. 368 338 309 10.9 28.6 33.7
2040.................................. 406 372 338 12.1 31.5 37.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. Total Impacts
Table 15 contains the baseline annual emissions from marine diesel
engines as a whole as well as projections of the annual emissions with
the MARPOL Annex VI requirements and proposed standards in place.
According to this analysis, the proposed emission limits would result
in reductions, beyond the MARPOL Annex VI limits, of 10 percent HC, 28
percent NOX, 12 percent PM, and 3 percent CO from marine
diesel engines in 2020. Nationally, these reductions represents
reductions of 1.3 percent NOX and 0.1 percent PM. Obviously,
the percent reduction would be much higher for port areas. This is
especially true for San Diego, Beaumont-Port Arthur, San Francisco and
similar ports where marine diesel engines account for a large fraction
of the NOX emissions.⁴⁸
---------------------------------------------------------------------------

\48\ Marine diesel engines make up about approximately 17% of
the NOX on a summer day for San Diego, 15% for Beaumont-
Port Arthur, and 12% for San Francisco. See, Commercial Marine
Vessel Contributions to Emission Inventories, Final Report,
Submitted by Booz-Allen & Hamilton, Inc., October 7, 1991.

[[Page 68549]]

Table 15.--Emission Inventory Impacts of the Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000 2010 2020 2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
HC 10^{3 short tons...................... Baseline................................... 31.3 34.8 38.7 43.2
Controlled................................. 31.3 33.3 35.4 39.3
Reduction.................................. 0% 4% 9% 9%
NOX 10^{3 short tons..................... Baseline................................... 1,005 1,117 1,244 1,390
IMO........................................ 1,001 1,072 1,162 1,287
Controlled................................. 1,001 965 819 815
Reduction.................................. 0% 10% 28% 34%
PM 10^{3 short tons...................... Baseline................................... 42.3 46.9 52.2 58.2
Controlled................................. 42.3 44.1 45.7 50.2
Reduction.................................. 0% 6% 12% 14%
CO 10^{3 short tons...................... Baseline................................... 133 147 165 184
Controlled................................. 133 146 160 177
Reduction.................................. 0% 1% 3% 4%
--------------------------------------------------------------------------------------------------------------------------------------------------------

In addition to the effect of the proposed standards on direct PM
emissions noted above, the proposed standards are expected to reduce
the concentrations of secondary PM. Secondary PM is formed when
NOX reacts with ammonia in the atmosphere to yield ammonium
nitrate particulate. As described in Chapter 5 of the Draft RIA, each
100 tons of NOX reduction results in about a 4-ton reduction
in secondary PM. This conversion rate varies from region to region, and
is greatest in the West. EPA estimates that the 425,000 tons per year
total NOX reduction projected for marine engines in 2020
would result in about a 17,000 tons per year reduction in secondary PM.
This secondary PM reduction is more than double the direct PM
reductions for 2020 projected for this proposed rule.
EPA also believes the proposed regulations will tend to reduce
noise. One important source of noise in diesel combustion is the sound
associated with the combustion event itself. When a premixed charge of
fuel and air ignites, the very rapid combustion leads to a sharp
increase in pressure, which is easily heard and recognized as the
characteristic sound of a diesel engine. The conditions that lead to
high noise levels also cause high levels of NOX formation.
Fuel injection changes and other NOX control strategies
therefore typically reduce engine noise, sometimes dramatically.
EPA does not anticipate any negative impacts on energy or safety as
a result of this proposed rule. The impact of the proposed standards on
energy is measured by the effect on fuel consumption from complying
engines. Although it is not expected to be a primary compliance
strategy, marine engine manufacturers could retard engine timing to
comply with emission limits. This could lead to an increase in fuel
consumption in the absence of other changes to the engines. Most of the
technology changes anticipated in response to the proposed standards,
however, have the potential to reduce fuel consumption as well as
emissions. Therefore, on balance, no increase in energy consumption is
expected. As far as safety is concerned, EPA believes that marine
engine manufacturers will use only proven technology that is currently
used in other engines such as nonroad land-based diesel applications,
locomotives, and diesel trucks.

B. Economic Impacts

EPA expects that in almost all cases, manufacturers will produce a
complying marine engine by adapting an engine that has been designed
and certified to meet highway or nonroad emission standards. This
analysis considers the cost of these upgrades to the base engines as
part of the impact of new marine emission standards; variable costs are
applied directly, with an additional fixed cost added to apply the
technologies to marine engines. The analysis arrives at the full cost
impact by considering changes to turbocharging and aftercooling
applicable to marine engines. Full details of EPA's cost analysis can
be found in Chapter 4 of the Draft RIA.
1. Methodology
In assessing the economic impact of setting emission standards, EPA
has made a best estimate of the combination of technologies that an
engine manufacturer might use to meet the new standards at an
acceptable cost. In some cases, however, it is difficult to make a
distinction between technologies needed to reduce emissions for
compliance with emission standards and those technologies that offer
other benefits for improved fuel economy, power density, and other
aspects of engine performance. EPA believes that without new emission
standards, manufacturers would continue research on and eventually
deploy many technological upgrades to improve engine performance or
more cost-effectively control emissions. Modifications to fuel
injection systems and the introduction of electronic controls are
expected to continue, regardless of any change in emission standards,
to improve engine performance. This is especially true for marine
engines, which generally benefit from the transfer of highway and land-
based engine technology improvements. Some further development with a
focus on NOX, HC, and PM emissions will nevertheless play an
important role in achieving emission reduction targets.
Because several technology upgrades have benefits that go beyond
reducing emissions, a difficulty in assessing the impact of new
emission standards is establishing the appropriate technology baseline
from which to make projections. Ideally, the analysis would establish
the mix of technologies that manufacturers would have introduced absent
the changes in emission standards, then make a projection for any
additional changes in hardware or calibration required to comply with
those standards. This is especially important for marine engines, since
technology improvements are often carried over from counterpart land-
based engines. The costs of those projected technology and calibration
changes would then most accurately quantify the impact of setting new
emission standards. While it is difficult to take into account the
effect of ongoing technology development, EPA is concerned that
assessing the full cost of the anticipated technologies as an impact of
the new emission standards would inappropriately exclude from
consideration the observed benefits for engine performance, fuel
consumption,

[[Page 68550]]

and durability.⁴⁹ Short of having sufficient data to predict
the future with a reasonable degree of confidence, EPA faces the need
to devise an alternate approach to quantifying the true impact of the
new emission standards. EPA requests comment on the most appropriate
way of accounting for these non-emission benefits.
---------------------------------------------------------------------------

\49\ While EPA does not anticipate widespread, marked
improvements in fuel consumption, small improvements on some engines
may occur.
---------------------------------------------------------------------------

A variety of technological improvements are projected for complying
with the new emission standards. Selecting these technology packages
requires extensive engineering analysis and judgment. The fact that
manufacturers will be applying extensive effort to improve diesel
engine technologies across programs ensures that these technologies
will develop significantly before reaching production. This ongoing
research and development will lead to reduced costs in three ways.
First, research will lead to enhanced effectiveness for individual
technologies, allowing manufacturers to use simpler packages of
emission control technologies than would otherwise be predicted given
the current state of development. Similarly, the continuing effort to
improve the emission control technologies will include innovations that
allow lower-cost production. Finally, manufacturers will focus research
efforts on any potential drawbacks, such as increased fuel consumption
or maintenance costs, attempting to minimize or overcome any negative
effects.
Estimated cost increases are presented as incremental changes in
purchase price. The incremental change in purchase price for new
engines and equipment is comprised of variable costs (for hardware and
assembly time) and fixed costs (for research and development,
retooling, and certification). Total operating costs, including
maintenance and fuel consumption, are considered as well. Cost
estimates based on these projected technology packages represent an
expected incremental cost of engines as they begin to comply with new
emission standards. Costs in subsequent years are projected to decrease
due to several factors, as described below. Separate projected costs
were derived for engines used in five different ranges of rated power;
costs were developed for engines near the middle of the listed ranges.
All costs are presented in 1998 dollars.
While the following analysis projects a relatively uniform emission
control strategy for designing the different categories of engines,
this should not suggest that EPA expects a single combination of
technologies will be used by all manufacturers. In fact, depending on
basic engine emission characteristics, EPA expects that control
technology packages will gradually be fine-tuned to different
applications. Furthermore, EPA expects manufacturers to use averaging,
banking, and trading programs as a means to deploy varying degrees of
emission control technologies on different engines. EPA nevertheless
believes that the projections presented here provide a cost estimate
representative of the different approaches manufacturers may ultimately
take.
2. Engine Technologies
The land-based engines that serve as the base engines for marine
diesel applications will be changing as a result of new emission
standards adopted for nonroad and locomotive engines. Most new land-
based nonroad and locomotive engines rated over 37 kW will be subject
to two new tiers of standards spanning the next ten years. These
engines will be designed, manufactured, and certified to have reduced
emissions. The technological challenge for developing compliant marine
engines is therefore to make the necessary engine modifications for
marine applications without substantially increasing emission levels,
while ensuring that these emission levels are maintained over the range
of potential marine operation.
Manufacturers of Category 1 engines are expected to comply with the
proposed Tier 2 emission limits by conducting basic engine
modifications, upgrading fuel systems, adding some degree of electronic
controls, or improving aftercooling systems. Manufacturers of Category
2 engines are expected to redesign combustion chambers, improve high-
pressure electronic fuel injection systems, and upgrade or add
turbocharging and aftercooling. For Tier 3 emission limits, all
manufacturers are expected to rely on some form of electronically
controlled common rail fuel system with separate-circuit aftercooling
and exhaust gas recirculation.
Except for the aftercooling changes, hardware improvements for
nonroad and locomotive engines should be transferrable to marine
engines, in many cases with some degree of adaptation. The analysis
includes a substantial amount of development time to make adjustments
for turbocharger matching, reprogramming electronic control software,
optimizing for emission performance over the not-to-exceed zone, and
other changes that may be needed to prepare an engine for marine
applications. Also, because manufacturers will in many cases be
producing a new engine design outside of the normal product development
cycle, extensive development costs are included to design a marine
version of a base engine, taking into account not only direct expenses
for controlling emissions, but also considering some need for re-
optimizing performance. Finally, since marine engines rely on seawater,
not the ambient air, for rejecting heat from the engine and
aftercooler, the cost of adding these systems are considered
separately.
3. Estimated Costs
The projected costs of these new technologies for meeting the new
emission limits are itemized in the Draft RIA and summarized in Table
16. Anticipated incremental cost impacts of the Tier 2 emission limits
for the first years of production range from $2,600 to $54,000 per
engine, in general with proportionally higher projected costs for
larger engines. Estimated costs for Tier 3 emission limits, which are
calculated incremental to the Tier 2 projections, are similar, with
first-year costs ranging from $5,300 to $45,000. Long-term impacts on
engine costs are expected to be much lower, dropping to levels between
$1,100 and $11,000 for Tier 3 engines. Most of this cost reduction is
accounted for by the fact that development time and other fixed costs
dominate the cost analysis, but disappear after the projected five-year
amortization period.
The cost analysis also includes an estimated burden resulting from
the need to do additional maintenance work during periodic rebuilds.
Complying engines will be equipped with technologies that will require
replacement of hardware that is either more expensive than from earlier
models, or that is only used because of emission standards. Using
typical rebuild schedules, the analysis projects incremental costs for
multiple rebuilds, resulting in net-present-value costs that range from
$700 to $12,000. In addition to rebuild cost impacts, Table 16 includes
an estimated cost burden for conducting production line testing of 1
percent of total industry-wide production.
Ship and boat builders are not expected to face any increase in
costs as a result of the new emission standards. Commercial vessels are
built to accommodate a wide range of engines. Customers are therefore
able to order a vessel by choosing from a broad selection of engine
models. Because

[[Page 68551]]

there is a degree of customizing in the construction of commercial
vessels, EPA does not expect that future production will be sensitive
to the anticipated changes in engine design resulting from the new
emission standards. EPA requests comment on the extent to which
commercial vessel construction may be affected by new emission
standards.

Table 16.--Projected Incremental Costs by Power Rating (kW)
----------------------------------------------------------------------------------------------------------------
Incremental
Incremental operating cost
Power rating (kW) Tier engine cost* per engine
(npv)
----------------------------------------------------------------------------------------------------------------
37-225..................................... Tier 2............................. $2,577 $737
Tier 3 (years 1-5)................. 5,303 829
Tier 3 (year 6 and later).......... 1,112 829
225-560.................................... Tier 2............................. 4,249 1,128
Tier 3 (years 1-5)................. 6,210 1,119
Tier 3 (year 6 and later).......... 1,829 1,119
560-1000................................... Tier 2............................. 25,319 207
Tier 3 (years 1-5)................. 25,507 2,647
Tier 3 (year 6 and later).......... 5,601 2,647
1000-2000.................................. Tier 2............................. 22,725 635
Tier 3 (years 1-5)................. 26,537 4,519
Tier 3 (year 6 and later).......... 10,659 4,519
2000-5000.................................. Tier 2............................. 54,103 12,430
Tier 3 (years 1-5)................. 44,583 2,874
Tier 3 (year 6 and later).......... 3,169 2,874
----------------------------------------------------------------------------------------------------------------
^{*Tier 3 costs are calculated incremental to Tier 2 estimates.

Characterizing these estimated costs in the context of their
fraction of the total purchase price and life-cycle operating costs is
helpful in gauging the economic impact of the new standards. Although
the incremental cost projections in Table 16 increase dramatically with
increasing power rating, they in fact represent a comparable price
change relative to the total price of the engine. The estimated first-
year cost increases are all at most 3 percent of estimated vessel
prices, with even lower long-term effects, as described above.
Since vessel owners also decide between replacing and rebuilding
existing engines, the cost impact relative to engine price is also
relevant. EPA estimates that Tier 3 cost impacts will approach 10 or 15
percent of total engine prices. Once fixed costs are amortized, the
cost impact drops to a range between 1 and 5 percent of total engine
prices. EPA requests comment on the likelihood that these costs will
affect normal rates of turnover to new engines.
4. Aggregate Costs to Society
The above analysis presents unit cost estimates for each power
category. These costs represent the total set of costs borne by engine
manufacturers to comply with emission standards. With current data for
engine and vessel sales for each category and projections for the
future, these costs can be translated into projected direct costs to
the nation for the new emission standards in any year. Aggregate costs
are estimated at about $19 million in the first year the new standards
apply, increasing to a peak of about $57 million in 2008 as increasing
numbers of engines become subject to the new standards. The following
years show a drop in aggregate costs as the per-unit cost of compliance
decreases, resulting in aggregate costs of about $14 million in 2015,
followed by slowly growing costs due to increasing sales over time.
5. Sensitivity Analysis
There has been some concern expressed that the technologies used to
meet emission requirements for land-based engines will be less
effective at controlling emissions from marine engines. Some of the
reasons suggested for needing a more aggressive approach include the
change in duty cycle, the effects of ``marinizing'' an engine, and the
need to comply with emission limits across not-to-exceed zones.
Manufacturers could rely on injection timing retard as a technology
option for achieving an additional measure of NOX control.
Also, manufacturers may choose, for example, to avoid the high R&D
costs of implementing a new technology for an engine family with low
sales volume by relying on timing retard as a lower-cost alternative.
In addition, manufacturers using EGR may need to add exhaust gases
during medium-and high-load operation to the point that there would be
an increase in fuel consumption that cannot be offset by improvements
such as better control of fuel injection. EPA therefore conducted a
sensitivity analysis to show the costs associated with a fuel penalty
resulting from relying on retarded timing or EGR.
Because the requirement to control emissions throughout an engine's
operating range poses the greatest challenge at low speeds and loads,
EPA calculated the costs of increasing fuel consumption by one percent
at modes 2 and 3 and by three percent at mode 4 (lightest load
operation). Using the weightings for the composite duty cycle,
increased life-cycle fuel consumption from this net 1.0 percent fuel
penalty can be calculated and then discounted to the present at a 7
percent rate. The resulting estimated net-present-value cost increase
ranges from $400 for a 100 kW engine to $19,000 for a 3000 kW engine.
Considering the established effectiveness of timing retard as a
strategy to control NOX emissions, this may be considered a
viable approach, either as a substitute or a supplemental technology.

C. Cost-effectiveness

EPA has estimated the cost-effectiveness (i.e., the cost per ton of
emission reduction) of the proposed marine standards for the same
nominal power ratings of marine engines and vessels highlighted earlier
in this section. This analysis has been performed only for Category 1
and Category 2 marine engines, since the proposed regulation would not
apply to Category 3 engines. Chapter 6 of the Draft RIA contains a more
detailed discussion of the cost-effectiveness analysis.

[[Page 68552]]

As described in the Draft RIA, neither costs nor emission benefits
were attributed to the not-to-exceed provisions included in this
proposal. The calculated cost-effectiveness of the proposed emission
limits presented here therefore includes all the anticipated effects on
costs and emission reductions.
1. Tier 2
For determining the cost-effectiveness of the Tier 2 portion of
this proposal, only benefits beyond those achieved by the MARPOL Annex
VI standard are considered. EPA believes this is a conservative
estimate because EPA attributed all of the costs of the technology
associated with the Tier 2 levels to this action and did not attribute
any of these costs to the MARPOL Annex VI standard. For the sake of
this analysis, EPA assumed that all of the increased costs were
incurred to achieve HC+NOX benefits. NOX
reductions represent approximately 98 percent of the total
HC+NOX emission reductions expected from the proposed
standards. Table 17 presents the cost-effectiveness of the Tier 2
standards.

Table 17.--Cost-Effectiveness of the Proposed Marine Tier 2 Standards for HC and NOX
----------------------------------------------------------------------------------------------------------------
Cost-
Discounted effectiveness
Nominal power (kW) NPV of total NPV benefits cost- without non-
lifetime costs (short tons) effectiveness emission
benefits
----------------------------------------------------------------------------------------------------------------
100............................................ $1,938 4.3 $449 $738
400............................................ 3,016 26 116 201
750............................................ 22,713 80 283 317
1500........................................... 20,386 267 76 86
3000........................................... 47,754 829 58 76
----------------------------------------------------------------------------------------------------------------

Weighting the projected cost and emission benefit numbers presented
above by the populations of the individual power categories, EPA
calculated the cost-effectiveness of the proposed HC+NOX
standards for Category 1 and 2 both separately and combined. Table 18
contains the resulting aggregate cost-effectiveness results for the
proposed Tier 2 standards.

Table 18.--Aggregate Cost-Effectiveness for the Proposed Marine Tier 2
Standards for HC and NOX
------------------------------------------------------------------------
NPV of NPV
total benefits Discounted
lifetime (short cost-
costs tons) effectiveness
------------------------------------------------------------------------
Category 1......................... $3,669 24 $156
Category 2......................... 47,754 829 58
Combined........................... 4,617 41 113
------------------------------------------------------------------------

While the cost estimates described under the Economic Impacts do
not take into account the observed value of performance improvements in
the field, these non-emission benefits should be taken into account in
the calculation of cost-effectiveness. EPA believes that an equal
weighting of emission and non-emission benefits is justified for those
technologies which clearly have substantial non-emission benefits,
namely electronic controls, fuel injection changes, turbocharging, and
engine modifications. For some or all of these technologies, a greater
value for the non-emission benefits could likely be justified. This has
the effect of halving the cost for those technologies in the cost-
effectiveness calculation. The cost-effectiveness values in this
document are based on this calculation methodology. Cost-effectiveness
values are shown without adjustment for non-emission benefits in Tables
17 and 19 for comparison purposes. EPA requests comment on this
approach.
2. Tier 3
As described above in the preceding section, the projected costs of
complying with the proposed standards will vary by the rated power and
model year (i.e., year 1 versus year 6). Therefore, the cost-
effectiveness will also vary from model year to model year. For
comparison purposes, the discounted costs, emission reductions, and
cost-effectiveness of the marine Tier 3 HC+NOX standards are
shown in Table 19 for the same model years discussed in the preceding
section. The cost-effectiveness of the proposed Tier 3 standards has
been calculated incrementally to the costs and benefits associated with
the proposed Tier 2 standards. This analysis was performed similarly to
the Tier 2 analysis. According to this analysis, the cost-effectiveness
of the proposed Tier 3 program is roughly equivalent to that of the
proposed Tier 2 program. Table 19 presents the cost-effectiveness
results for the five nominal power ratings.

Table 19.--Cost-Effectiveness of the Proposed Marine Tier 3 Standards for HC and NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cost-
Discounted effectiveness
Nominal power (kW) Model year grouping NPV of total NPV benefits cost- without non-
lifetime costs (short tons) effectiveness emission
benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
100......................................... 1 to 5................................... $4,831 4.2 $1,155 $1,407
6+....................................... 1,166 279 451
400......................................... 1 to 5................................... 5,804 30 196 236
6+....................................... 1,726 58 99
750......................................... 1 to 5................................... 23,834 77 308 351
6+....................................... 4,831 62 103
1500........................................ 1 to 5................................... 24,279 136 178 216
6+....................................... 8,402 62 112

[[Page 68553]]

3000........................................ 1 to 5................................... 36,652 290 127 163
6+....................................... 4,553 16 20
--------------------------------------------------------------------------------------------------------------------------------------------------------

As with Tier 2, EPA calculated the cost-effectiveness of the
proposed Tier 3 HC+NOX standards for Category 1 and 2 both
separately and combined by weighting the projected cost and emission
benefits by the populations of the individual power categories. Table
20 contains the resulting aggregate cost-effectiveness results for the
proposed Tier 3 standards.

Table 20.--Aggregate Cost-Effectiveness for the Proposed Marine Tier 3 Standards for HC and NOX
----------------------------------------------------------------------------------------------------------------
Discounted
Model year grouping NPV of total NPV benefits cost-
lifetime costs (short tons) effectiveness
----------------------------------------------------------------------------------------------------------------
Category 1...................... 1 to 5........................ $6,503 20 $327
6+............................ 1,709 87
Category 2...................... 1 to 5........................ 36,652 290 127
6+............................ 4,553 16
Combined........................ 1 to 5........................ 7,151 26 278
6+............................ 1,799 70
----------------------------------------------------------------------------------------------------------------

3. Comparison to Other Programs
In an effort to evaluate the cost-effectiveness of the
HC+NOX controls for marine engines, EPA has summarized the
cost-effectiveness results for five other recent EPA mobile source
rulemakings that required reductions in NOX (or
NMHC+NOX) emissions. The heavy-duty vehicle portion of the
Clean Fuel Fleet Vehicle Program yielded a cost-effectiveness of
approximately $1,500 per ton of NOX. The most recent
NMHC+NOX standards for highway heavy-duty diesel engines
yielded a cost-effectiveness of $100-$600 per ton of
NMHC+NOX. The newly adopted standards for locomotive engines
yielded a cost-effectiveness of $160-$250 per ton of NOX.
Finally, the recent standards for nonroad engines reported a cost-
effectiveness of $410-$600 per ton. The cost-effectiveness of the new
HC+NOX standards for marine diesel engines presented above
is more favorable than the cost-effectiveness than any of the other
recent programs.
EPA has also summarized the cost-effectiveness results for three
other recent EPA mobile source rulemakings that required reductions in
PM emissions. The cost-effectiveness of the most recent urban bus
engine PM standard was estimated to be $10,000-$16,000 per ton, and the
cost-effectiveness of the urban bus retrofit/rebuild program was
estimated to be approximately $25,000 per ton. The nonroad FRM reported
a cost-effectiveness for PM, using the same conservative method used
here for marine, of $2,300 per ton. The PM cost-effectiveness of the
new emission standards presented above is more favorable than that of
either of the urban bus programs and is comparable to the nonroad rule.
For comparison to other PM control strategies, EPA has also
analyzed the PM cost-effectiveness of the new standards if any of the
costs were attributed to PM. EPA conservatively made these calculations
as if half of the increased costs were attributable to PM control. This
approach effectively double-counts these costs, since the full cost of
the program is assessed in the calculation of cost-effectiveness for
NOX+HC. This aggregate discounted lifetime cost-
effectiveness represents the highest figure that could be expected for
cost-effectiveness of the new standards and was calculated to provide
an indication of the upper bound of PM cost-effectiveness values. The
resulting fleet-wide discounted lifetime cost-effectiveness of the
proposed PM standards is approximately $600-$2,600 per ton. This cost-
effectiveness is much better than for the urban bus PM standard and the
urban bus retrofit/rebuild program and is comparable to the nonroad
Tier 2 standards.
In addition to the benefits of reducing ozone within and
transported into urban ozone nonattainment areas, the NOX
reductions from the new standards are expected to have beneficial
impacts with respect to crop damage, secondary particulate formation,
acid deposition, eutrophication, visibility, and forests, as described
earlier. Because of the difficulty of quantifying the monetary value of
these societal benefits, the cost-effectiveness values presented do not
assign any numerical value to these additional benefits. However, based
on an analysis of existing studies that have estimated the value of
such benefits in the past, the Agency believes that the actual monetary
value of the multiple environmental and public health benefits produced
by large NOX reductions similar to those projected under
this final rule will likely be greater than the estimated compliance
costs.

IX. Public Participation

A. Comments and the Public Docket

Publication of this document opens a formal comment period for this
proposal. EPA will accept comments for the period indicated under DATES
above. The Agency encourages all parties that have an interest in the
program described in this document to offer comment on all aspects of
this rulemaking. Throughout this proposal are requests for specific
comment on various topics.
EPA attempted to incorporate all the comments received in response
to the ANPRM, though not all comments are addressed directly in this
document. Anyone who has submitted comments on the ANPRM, or any of
EPA's previous publications related to marine

[[Page 68554]]

diesel engines, and feels that those comments have not been adequately
addressed is encouraged to resubmit comments as appropriate.
The most useful comments are those supported by appropriate and
detailed rationales, data, and analyses. The Agency also encourages
commenters that disagree with the proposed program to suggest and
analyze alternate approaches to meeting the air quality goals of this
proposed program. All comments, with the exception of proprietary
information, should be directed to the EPA Air Docket Section, Docket
No. A-97-50 before the date specified above.
Commenters wishing to submit proprietary information for
consideration should clearly separate such information from other
comments by (1) labeling proprietary information ``Confidential
Business Information'' and (2) sending proprietary information directly
to the contact person listed (see FOR FURTHER INFORMATION CONTACT) and
not to the public docket. This will help ensure that proprietary
information is not inadvertently placed in the docket. If a commenter
wants EPA to use a submission of confidential information as part of
the basis for the final rule, then a nonconfidential version of the
document that summarizes the key data or information should be sent to
the docket.
Information covered by a claim of confidentiality will be disclosed
by EPA only to the extent allowed and in accordance with the procedures
set forth in 40 CFR part 2. If no claim of confidentiality accompanies
the submission when it is received by EPA, it will be made available to
the public without further notice to the commenter.

B. Public Hearing

The Agency will hold a public hearing as noted under DATES above.
Any person desiring to present testimony at the public hearing is asked
to notify the contact person listed above at least five business days
prior to the date of the hearing. This notification should include an
estimate of the time required for the presentation of the testimony and
any need for audio/visual equipment. EPA suggests that sufficient
copies of the statement or material to be presented be available to the
audience. In addition, it is helpful if the contact person receives a
copy of the testimony or material prior to the hearing.
The hearing will be conducted informally, and technical rules of
evidence will not apply. A sign-up sheet will be available at the
hearing for scheduling the order of testimony. A written transcript of
the hearing will be prepared. The official record of the hearing will
be kept open for 30 days after the hearing to allow submittal of
supplementary information.

X. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

Under Executive Order 12866, the Agency must determine whether this
regulatory action is ``significant'' and therefore subject to Office of
Management and Budget (OMB) review and the requirements of the
Executive Order (58 FR 51735, Oct. 4, 1993). The order defines
``significant regulatory action'' as any regulatory action that is
likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or,
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, EPA has determined
that this proposal is a ``significant regulatory action.'' If
implemented as proposed, EPA's estimates show total societal costs for
most years between $15 million and $20 million, with peak costs
reaching about $57 million in 2008. This action was submitted to the
Office of Management and Budget for review and a Draft RIA has been
prepared and is available in the docket associated with this
rulemaking. Any written comments from OMB and any EPA response to OMB
comments are in the public docket for this proposal.

B. Regulatory Flexibility

The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment requirements, 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 not-for-profit enterprises, and small governmental jurisdictions.
For the reasons set out below, this proposed rule would not have a
significant impact on a substantial number of small entities.
EPA has identified five types of entities that may be affected by
the proposed rule: engine manufacturers, engine dressers, post-
manufacture marinizers, commercial vessel builders, and commercial boat
builders. A sixth group of entities, recreational vessel builders, is
not considered in this analysis because, as described in Section
III.B.1, above, EPA is proposing to exempt these engines from the
proposed emission control program.
Using the Small Business Administration definition of small for
this industry sector (fewer than 500 employees), one group of entities,
marine engine manufacturers, presents no small business impacts
concerns because all of the manufacturers are large.
There are numerous entities with fewer than 500 employees that
manufacture commercial vessels and commercial boats.⁵⁰
However, the proposed emission control program is expected to impose
very little additional cost on these entities. This is because,
according to discussions with several of these vessel and boat builders
as well as with one of their trade associations, the production of
commercial vessels is flexible enough to accommodate physical changes
to the engine without vessel redesign.
---------------------------------------------------------------------------

\50\ Commercial vessels are larger merchant vessels, typically
exceeding 400 feet in length and generally used in waterborne trade
and/or passenger transport. Commercial boats are smaller service,
industrial, and fishing vessels generally used in inland and coastal
waters. A more in-depth description of these industry sectors in
contained in ``Industry Characterization: Commercial Marine Vessel
Manufacturers'' prepared by ICF Incorporated for US Environmental
Protection Agency, Contract No. 68-C5-0010, Work Assignment 211,
September 1998 (Docket No. A-97-50).
---------------------------------------------------------------------------

As described in Section III.C.2 above, engine dressers are
companies that adapt a land-based diesel engine for use in the marine
environment by adding mounting hardware, a marine cooling system, a
generator, or propeller gears, but without changing the engine in ways
that may affect emissions (see Section III.B.2, above). These companies
are typically small, regional companies, with few employees and
relatively small annual sales in terms of both dollars and units.
Because these companies are proposed to be exempt from the
certification and compliance programs set out in today's action, EPA
believes that they will incur very minor costs as a result of the
proposed program. Their only compliance burden consists of an annual
report that must be submitted to

[[Page 68555]]

EPA to demonstrate that they meet the criteria for the engine dresser
exemption described in Section III.B.2. This reporting requirement is
expected to impose very little additional cost on these companies.
The group of small entities likely to be affected by the proposed
rule are post-manufacture marinizers (PMM). Unlike engine dressers, PMM
modify a land-based engine for use in the marine environment by
changing it in ways that may affect emissions. This includes, but is
not limited to, changes to the fuel or cooling systems. The following
discussion of the impacts on small post-manufacture marinizers is
derived from an impact assessment prepared for this rulemaking by ICF
Incorporated and discussions with small PMM.⁵¹
---------------------------------------------------------------------------

\51\ Characterization and Small Business Impact Assessment for
Small and Large Marine Compression Ignition Engine Manufacturers/
Marinizers, prepared by ICF Incorporated for U.S. Environmental
Protection Agency, Contract Number 68-C5-0010, Work Assignment
Number 211, September 1998 (Air Docket A-97-50).
---------------------------------------------------------------------------

Through conversations with engine manufacturers and vessel
builders, EPA initially identified twelve small post-manufacture
marinizers. Four of these were subsequently eliminated from the
Agency's PMM impact analysis (two were eliminated because there were
subsidiary companies of other companies on the list; two others were
eliminated because they do not produce Category 1 marine engines). The
eight remaining companies were used to develop a model small company,
for purposes of exploring the impact of this rulemaking. Using this
model small company as a guide, it was estimated that average
compliance costs would range from 1.3 percent to 3.9 percent, depending
on the compliance cost scenario used.⁵² EPA thus concludes
that, provided the compliance burdens of these companies can be
reduced, an impact of approximately 1.3 percent can be anticipated. As
discussed above, this proposal contains many flexibility provisions for
small post-manufacture marinizers, including an expanded definition of
engine family, which is expected to reduce the number of certification
tests these companies will be required to do; a streamlined
certification process, beginning the year after the implementation of
the emissions limits provided the emissions of their highest emitting
engine has not changed; an extra year for compliance; and special
hardship provisions.
---------------------------------------------------------------------------

\52\ Three cost scenarios were explored: $100,000, $200,000, and
$300,000 per engine family.
---------------------------------------------------------------------------

Because the number of companies examined is so small, EPA also
performed an analysis using company-specific data instead of the model
company. According to this data, in the least costly compliance
scenario, four small PMM may be affected by more than 3 percent of
sales, 2 companies by 1-3 percent of sales, and 2 companies less than 1
percent of sales,. Of the four companies originally projected to be
affected by more than 3 percent of sales, two were eliminated because
they are, in fact, engine dressers; hence, the original estimate of 3
percent is an overstatement of costs for these companies. As discussed
above, engine dressers would only be subject to a reporting
requirement, which is expected to impose very little additional cost.
Consequently, it is expected that two small companies may be affected
by more than 3 percent of annual sales. However, it may be possible for
these companies to reduce the impacts of this rule further. For
example, these companies could marinize a cleaner engine, thus reducing
the design and development costs associated with bringing a previous
tier engine to the proposed emission limits. Alternatively, they may be
able to work more closely with the base engine manufacturer to reduce
the need for extensive redesign of their marinization process.
Subsequent to completion of the ICF impact assessment, EPA
identified several other small PMM (see the Draft Regulatory Assessment
for a complete list of small PMM). However, analysis of their financial
data does not change the above conclusion that most small PMM could
avoid high compliance costs by applying the proposed small PMM
flexibility provisions. Therefore, EPA believes it is appropriate to
certify this rulemaking as not having a significant economic impact on
a substantial number of small companies.
Therefore, I certify that this action will not have a significant
economic impact on a substantial number of small entities.
The Agency continues to be interested in the potential impacts of
the proposed rule on small entities and welcomes additional comments
during the rulemaking process on issues related to such impacts. The
Agency is continuing its efforts to notify other small business engine
and equipment manufacturers of this rule and inform them of their
opportunities for providing feedback to the Agency.

C. Paperwork Reduction Act

The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An
Information Collection Request has been prepared by EPA, and a copy may
be obtained from Sandy Farmer, OPPE Regulatory Information Division;
U.S. Environmental Protection Agency (2137); 401 M St., S.W.;
Washington, DC 20460 or by calling (202) 260-2740.
The information being collected is to be used by EPA to ensure that
new marine diesel engines comply with applicable emissions standards
through certification requirements and various subsequent compliance
provisions.
The annual public reporting and recordkeeping burden for this
collection of information is estimated to average 589 hours per
response, with collection required annually. The estimated number of
respondents is 32. Burden means the total time, effort, or financial
resources expended by persons to generate, maintain, retain, disclose,
or provide information to or for a federal agency. This includes the
time needed to review instructions; develop, acquire, install, and
utilize technology and systems for the purposes of collecting,
validating, and verifying information, processing and maintaining
information, and disclosing and providing information; adjusting the
existing ways to comply with any previously applicable instructions and
requirements; train personnel to be able to respond to a collection of
information; search data sources; complete and review the collection of
information; and transmit or otherwise disclose the information.
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are displayed in 40 CFR Part 9 and 48 CFR Chapter 15.
Comments are requested on the Agency's need for this information,
the accuracy of the provided burden estimates, and any suggested
methods for minimizing respondent burden, including through the use of
automated collection techniques. Send comments on the ICR to the
Director, OPPE Regulatory Information Division; U.S. Environmental
Protection Agency (2137); 401 M St., S.W.; Washington, DC 20460; and to
the Office of Information and Regulatory Affairs, Office of Management
and Budget, 725 17th St., N.W., Washington, DC 20503, marked
``Attention: Desk Officer for EPA.'' Include the ICR number in any
correspondence. Since OMB is required to make a decision concerning the
ICR between 30 and 60 days after December 11, 1998, a comment to OMB is
best ensured of having its full effect if OMB

[[Page 68556]]

receives it by January 11, 1999. The final rule will respond to any OMB
or public comments on the information collection requirements contained
in this proposal.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA),
P.L.104-4, establishes requirements for federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``federal mandates'' that
may result in expenditures to state, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective, or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
Administrator publishes with the final rule an explanation of why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
EPA has determined that 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. The rule does not impose any enforceable duties
on State, local, or tribal governments, i.e., they manufacture no
engines and are therefore not required to comply with the requirements
of this rule. For the same reason, EPA has determined that this rule
also contains no regulatory requirements that might significantly or
uniquely affect small governments. EPA projects that annual economic
effects will be far less than $100 million. Thus, this proposed rule is
not subject to the requirements of sections 202 and 205 of the UMRA.

E. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, Sec. 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 bodies. NTTAA directs EPA to
provide Congress, through OMB, explanations when the Agency decides not
to use available and applicable voluntary consensus standards.
This proposed rule involves technical standards. As described in
Section V.E. above, ISO standards are a potentially applicable
voluntary consensus standard. The Agency has decided, however, not to
propose ISO procedures in this rulemaking. The Agency has determined
that these procedures would be impractical because they rely too
heavily on reference testing conditions. Because the test procedures in
these regulations need to represent in-use operation typical of
operation in the field, they must be based on a range of ambient
conditions. EPA has determined that the ISO procedures are not broadly
usable in their current form, and therefore cannot be adopted by
reference. EPA has instead chosen to rely on the procedures outlined in
40 CFR Part 89, Subparts D and E. EPA is hopeful that future ISO test
procedures will be developed that are usable for the broad range of
testing needed, and that such procedures could then be adopted by
reference. EPA also expects that any development of revised test
procedures will be done in accordance with ISO procedures and in a
balanced manner and thus include the opportunity for involvement of a
range of interested parties (potentially including parties such as
industry, EPA, state governments, and environmental groups) so that the
resulting procedures can represent these different interests.

F. Protection of Children

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

G. Enhancing the Intergovernmental Partnership under Executive Order
12875

Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and that creates a mandate upon a State, local
or tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments, or EPA consults with those governments. If EPA complies by
consulting, Executive Order 12875 requires EPA to provide to the Office
of Management and Budget a description of the extent of EPA's prior
consultation with representatives of affected State, local and tribal
governments, the nature of their concerns, copies of any written
communications from the governments, and a statement supporting the
need to issue the regulation. In addition, Executive Order 12875
requires EPA to develop an effective process permitting elected
officials and other representatives of State, local and tribal
governments ``to provide meaningful and timely input in the development
of regulatory proposals containing significant unfunded mandates.''
This rule would not create a mandate on State, local or tribal
governments. The rule would not impose any enforceable duties on these
entities, because they do not manufacture any engines that are subject
to this rule. This rule would be implemented at the federal level and
impose compliance obligations only on private industry. Accordingly,
the requirements of section 1(a) of Executive Order 12875 do not apply
to this rule.

[[Page 68557]]

H. Consultation and Coordination with Indian Tribal Governments

Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments, or EPA consults with those
governments. If EPA complies by consulting, Executive Order 13084
requires EPA to provide to the Office of Management and Budget, in a
separately identified section of the preamble to the rule, a
description of the extent of EPA's prior consultation with
representatives of affected tribal governments, a summary of the nature
of their concerns, and a statement supporting the need to issue the
regulation. In addition, Executive Order 13084 requires EPA to develop
an effective process permitting elected officials and other
representatives of Indian tribal governments ``to provide meaningful
and timely input in the development of regulatory policies on matters
that significantly or uniquely affect their communities.''
This rule would not significantly or uniquely affect the
communities of Indian tribal governments. As noted above, this rule
would be implemented at the federal level and impose compliance
obligations only on private industry. Accordingly, the requirements of
section 3(b) of Executive Order 13084 do not apply to this rule.

XI. Statutory Authority

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

List of Subjects in 40 CFR Part 94

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

Dated: November 24, 1998.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, title 40, chapter I, of
the Code of Federal Regulations is proposed to be amended by adding
part 94 as set forth below.

PART 94--CONTROL OF AIR POLLUTION FROM MARINE COMPRESSION-IGNITION
ENGINES

Subpart A--General Provisions for Emission Regulations for Marine
Compression-Ignition Engines

Sec.
94.1 Applicability.
94.2 Definitions.
94.3 Abbreviations.
94.4 Treatment of confidential information.
94.5 Reference materials.
94.6 Regulatory structure.
94.7 General standards and requirements.
94.8 Exhaust emission standards.
94.9 Compliance with emission standards.
94.10 Warranty period.
94.11 Requirements for rebuilding certified marine engines.

Subpart B--Test Procedures

94.101 Applicability.
94.102 General provisions.
94.103 Test procedures for Category 1 marine engines.
94.104 Test procedures for Category 2 marine engines.
94.105 Test cycles.
94.106 Supplemental test procedures.
94.107 Determination of rated speed.
94.108 Test fuels.

Subpart C--Certification Provisions

94.201 Applicability.
94.202 Definitions.
94.203 Application for certification.
94.204 Designation of engine families.
94.205 Prohibited controls, adjustable parameters.
94.206 Required information.
94.207 Special test procedures.
94.208 Certification.
94.209 Special provisions for post-manufacturer marinizers.
94.210 Amending the application and certificate of conformity.
94.211 Emission-related maintenance instructions for purchasers.
94.212 Labeling.
94.213 Submission of engine identification numbers.
94.214 Production engines.
94.215 Maintenance of records; submittal of information; right of
entry.
94.216 Hearing procedures.
94.217 Emission data engine selection.
94.218 Deterioration factor determination.
94.219 Durability data engine selection.
94.220 Service accumulation.
94.221 Application of good engineering judgment.

Subpart D--Certification Averaging, Banking, and Trading Provisions

94.301 Applicability.
94.302 Definitions.
94.303 General provisions.
94.304 Compliance requirements.
94.305 Credit generation and use calculation.
94.306 Certification.
94.307 Labeling.
94.308 Maintenance of records.
94.309 Reports.
94.310 Notice of opportunity for hearing.

Subpart E--Emission-related Defect Reporting Requirements, Voluntary
Emission Recall Program

94.401 Applicability.
94.402 Definitions.
94.403 Emission defect information report.
94.404 Voluntary emissions recall reporting.
94.405 Alternative report formats.
94.406 Reports filing: record retention.
94.407 Responsibility under other legal provisions preserved.
94.408 Disclaimer of production warranty applicability.

Subpart F--Production Line Testing

94.501 Applicability.
94.502 Definitions.
94.503 General requirements.
94.504 Right of entry and access.
94.505 Sample selection for testing.
94.506 Test procedures.
94.507 Sequence of testing.
94.508 Calculation and reporting of test results.
94.509 Maintenance of records; submittal of information.
94.510 Compliance with criteria for production line testing.
94.511 [Reserved]
94.512 Suspension and revocation of certificates of conformity.

[[Page 68558]]

94.513 Request for public hearing.
94.514 Administrative procedures for public hearing.
94.515 Hearing procedures.
94.516 Appeal of hearing decision.
94.517 Treatment of confidential information.

Subpart G--[Reserved]

Subpart H--Recall Regulations

94.701 Applicability.
94.702 Definitions.
94.703 Applicability of Part 85 Subpart S.

Subpart I--Importation of Nonconforming Engines

94.801 Applicability.
94.802 Definitions.
94.803 Admission.
94.804 Exemptions.
94.805 Prohibited acts; penalties.

Subpart J--Exclusion and Exemption Provisions

94.901 Purpose and applicability.
94.902 Definitions.
94.903 Exclusions.
94.904 Exemptions.
94.905 Testing exemption.
94.906 Manufacturer-owned exemption, display exemption, and
competition exemption.
94.907 Non-marine-specific engine exemption.
94.908 National security exemption.
94.909 Export exemptions.
94.910 Granting of exemptions.
94.911 Submission of exemption requests.

Subpart K--[Reserved]

Subpart L--General Enforcement Provisions and Prohibited Acts

94.1101 Applicability.
94.1102 Definitions.
94.1103 Prohibited acts.
94.1104 General enforcement provisions.
94.1105 Injunction proceedings for prohibited acts.
94.1106 Penalties.
94.1107 Warranty provisions.
94.1108 In-use compliance provisions.

Appendix I to Part 94--Emission-Related Engine Parameters and
Specifications

Authority: 42 U.S.C. 7522, 7523, 7524, 7525, 7541, 7542, 7543,
7545, 7547, 7549, 7550 and 7601(a).

Subpart A--General Provisions for Emission Regulations for
Compression-ignition Marine Engines

Sec. 94.1 Applicability.

(a) Except as noted in paragraphs (b) and (c) of this section, the
provisions of this part apply to manufacturers, rebuilders, owners and
operators of:
(1) Marine compression-ignition propulsion engines manufactured on
or after January 1, 2004;
(2) Marine compression-ignition auxiliary engines manufactured on
or after January 1, 2004; and
(3) Marine vessels manufactured on or after January 1, 2004 and
which include a compression ignition engine.
(b) Notwithstanding the provision of paragraph (c) of this section,
the requirements and prohibitions of this part do not apply with
respect to the engines identified in paragraphs (a)(1) through (3) of
this section where such engines are:
(1) Category 3 marine engines;
(2) Engines rated below 37 kW; or
(3) Engines on foreign vessels.
(c) The provisions of subpart L of this part apply to all persons
with respect to the engines identified in paragraphs (a)(1) through (3)
of this section.
(d) The provisions of this part do not apply to any persons with
respect to the engines not identified in paragraphs (a)(1) through (3)
of this section.
(e) The prohibition specified in Sec. 94.1103(a)(6) applies to all
persons with respect to recreational marine engines. Notwithstanding
the provision of paragraph (c) of this section, requirements or
prohibitions other than the prohibition specified in Sec. 94.1103(a)(6)
of this part do not apply with respect to recreational marine engines.

Sec. 94.2 Definitions.

(a) The definitions of this section apply to this subpart. They
also apply to all subparts of this part, except where noted otherwise.
(b) As used in this part, all terms not defined in this section
shall have the meaning given them in the Act:
Act means the Clean Air Act as amended (42 U.S.C. 7401 et seq.).
Adjustable Parameter means any device, system, or element of design
which is physically or electronically capable of being adjusted
(including those which are difficult to access) and which, if adjusted,
may affect emissions or engine performance during emission testing.
Administrator means the Administrator of the Environmental
Protection Agency or his/her authorized representative.
Aftertreatment system or aftertreatment component or aftertreatment
technology means any system or component or technology mounted
downstream of the exhaust valve or exhaust port whose design function
is to reduce exhaust emissions.
Applicable standard means a standard to which an engine is subject;
or, where an engine is certified to another standard or FEL, applicable
standard means the other standard or FEL to which the engine is
certified, as allowed by Sec. 94.8. This definition does not apply to
subpart D of this part.
Auxiliary means relating to a marine engine that is not a
propulsion engine.
Auxiliary emission control device (AECD) means any element of
design which senses temperature, vessel speed, engine RPM, atmospheric
pressure, manifold pressure or vacuum, or any other parameter for the
purpose of activating, modulating, delaying, or deactivating the
operation of any part of the emission control system (including, but
not limited to injection timing); or any other feature that causes in-
use emissions to be higher than those measured under test conditions.
Averaging means the exchange of emission credits among engine
families within a given manufacturer's product line.
Banking means the retention of emission credits by a credit holder
for use in future calendar year averaging or trading as permitted by
the regulations in this part.
Base engine means a land-based engine to be marinized, as
configured prior to marinization.
Blue Sky Series engine means an engine meeting the requirements of
Sec. 94.7(e).
Calibration means the set of specifications, including tolerances,
specific to a particular design, version, or application of a
component, or components, or assembly capable of functionally
describing its operation over its working range. This definition does
apply to subpart B of this part.
Category 1 means relating to a marine engine with a rated power
greater than or equal to 37 kilowatts and a specific engine
displacement less than 5.0 liters per cylinder.
Category 2 means relating to a marine engine with a specific engine
displacement greater than or equal to 5.0 liters per cylinder but less
than 20 liters per cylinder.
Category 3 means relating to a marine engine with a specific engine
displacement greater than or equal to 20 liters per cylinder.
Commercial marine engine means a marine engine that is not a
recreational marine engine.
Compression-ignition means relating to a type of engine with
operating characteristics significantly similar to the theoretical
Diesel combustion cycle. The non-use of a throttle to regulate intake
air flow for controlling power during normal operation is indicative of
a compression-ignition engine.
Configuration means any subclassification of an engine family which
can be described on the basis of gross power, emission control system,
governed speed, injector size, engine

[[Page 68559]]

calibration, and other parameters as designated by the Administrator.
Constant-speed engine means an engine that is governed to operate
only at a single rated speed.
Crankcase emissions means airborne substances emitted to the
atmosphere from any portion of the engine crankcase ventilation or
engine lubrication system.
Defeat device means an AECD or other control feature that reduces
the effectiveness of the emission control system under conditions which
may reasonably be expected to be encountered in normal engine operation
and use, unless the AECD or other control feature has been identified
by the manufacturer in the application for certification, and:
(1) Such conditions are substantially represented by the portion of
the applicable test cycle of Sec. 94.105 during which the applicable
emission rates are measured;
(2) The need for the AECD or other control feature is justified in
terms of protecting the engine or vessel against damage or accident; or
(3) The AECD or other control feature does not go beyond the
requirements of engine starting.
Deterioration factor means the difference between exhaust emissions
at the end of useful life and exhaust emissions at the low hour test
point expressed as either: the ratio of exhaust emissions at the end of
useful life to exhaust emissions at the low mileage test point (for
multiplicative deterioration factors); or the difference between
exhaust emissions at the end of useful life and exhaust emissions at
the low hour test point (for additive deterioration factors).
Diesel fuel means any fuel suitable for use in diesel engines which
is commonly or commercially known or sold as diesel fuel.
Dress means to modify a land-based engine for use in a marine
vessel, where such modification would not reasonably be expected to
potentially affect emissions. This definition does not apply for
engines that are not certified to Tier 2 or later standards.
Dresser means any entity that dresses an engine.
Emission control system means those devices, systems or elements of
design which control or reduce the emission of substances from an
engine. This includes, but is not limited to, mechanical and electronic
components and controls, and computer software.
Emission credits means the amount of emission reduction or
exceedance, by an engine family, below or above the emission standard,
respectively, as calculated under subpart D of this part. Emission
reductions below the standard are considered as ``positive credits,''
while emission exceedances above the standard are considered as
``negative credits.'' In addition, ``projected credits'' refer to
emission credits based on the projected applicable production/sales
volume of the engine family. ``Reserved credits'' are emission credits
generated within a calendar year waiting to be reported to EPA at the
end of the calendar year. ``Actual credits'' refer to emission credits
based on actual applicable production/sales volume as contained in the
end-of-year reports submitted to EPA.
Emission-data engine means an engine which is tested for purposes
of emission certification or production line testing.
Emission-related defect means a defect in design, materials, or
workmanship in a device, system, or assembly which affects any
parameter or specification enumerated in Appendix I of this part.
Emission-related maintenance means that maintenance which
substantially affects emissions or which is likely to affect the
deterioration of the engine or vessel with respect to emissions.
Engine family means a group of engine configurations that are
expected to have similar emission characteristics throughout the useful
lives of the engines (see Sec. 94.204), and that are (or were) covered
(or requested to be covered) by a specific certificate of conformity.
Engineering analysis means a summary of scientific and/or
engineering principles and facts that support a conclusion made by a
manufacturer, with respect to compliance with the provisions of this
part.
EPA Enforcement Officer means any officer or employee of the
Environmental Protection Agency so designated in writing by the
Administrator or his/her designee.
Exhaust emissions means substances (i.e., gases and particles)
emitted to the atmosphere from any opening downstream from the exhaust
port or exhaust valve of an engine.
Exhaust gas recirculation means an emission control technology that
reduces emissions by routing gases that had been exhausted from the
combustion chamber(s) back into the engine to be mixed with incoming
air prior to or during combustion. The use of valve timing to increase
the amount of residual exhaust gas in the combustion chamber(s) that is
mixed with incoming air prior to or during combustion is not considered
to be exhaust gas recirculation for the purposes of this part.
Family Emission Limit (FEL) means an emission level declared by the
certifying manufacturer to serve in lieu of an otherwise applicable
emission standard for certification and compliance purposes in the
averaging, banking and trading program. FELs are expressed to the same
number of decimal places as the applicable emission standard.
Foreign trade vessel means a vessel that spends less than 25
percent of its operating time within 320 nautical kilometers of U.S.
territory, and which does not operate solely between the United States,
Canada, Mexico, Bermuda, or the Bahamas.
Foreign vessel means a vessel of foreign registry or a vessel
operated under the authority of a country other than the United States.
Fuel system means the combination of fuel tank(s), fuel pump(s),
fuel lines and filters, pressure regulator(s), and fuel injection
components, fuel system vents, and any other component involved in the
delivery of fuel to the engine.
Green Engine Factor means a factor that is applied to emission
measurements from an engine that has had little or no service
accumulation. The Green Engine Factor adjusts emission measurements to
be equivalent to emission measurements from an engine that has had
approximately 300 hours of use.
Identification number means a specification (for example, model
number/serial number combination) which allows a particular engine to
be distinguished from other similar engines.
IMO NOX Technical Code means the ``Technical Code on
Control of Emission of Nitrogen Oxides From Marine Diesel Engines'', as
adopted on September 26, 1997 by the International Maritime
Organization in conference Resolution 2, Conference of the Parties to
the International Convention for the Prevention of Pollution from Ship,
1973 as modified by the protocol of 1978 relating thereto (reported in
MP/Conf. 3/35, 22 October 1997). The IMO NOX Technical Code
has been incorporated by reference at Sec. 94.5 of this part.
Importer means an entity or person who imports engines from a
foreign country into the United States (including its territories).
Intermediate Speed means peak torque speed if peak torque speed
occurs from 60 to 75 percent of rated speed. If peak torque speed is
less than 60 percent of rated speed, intermediate speed means 60
percent of rated speed.

[[Page 68560]]

If peak torque speed is greater than 75 percent of rated speed,
intermediate speed means 75 percent of rated speed.
Low hour engine means an engine during the interval between the
time that normal assembly operations and adjustments are completed and
the time that 300 additional operating hours have been accumulated
(including hours accumulated during emission testing, if performed).
Malfunction means a condition in which the operation of a component
in an engine occurs in a manner other than that specified by the
certifying manufacturer (e.g., as specified in the application for
certification); or the operation of engine in that condition.
Manufacturer means any person engaged in the manufacturing or
assembling of new engines or importing such engines for resale, or who
acts for and is under the control of any such person in connection with
the distribution of such engines. The term manufacturer includes post-
manufacturer marinizers, but does not include any dealer with respect
to new engines received by such person in commerce.
Marine means relating to a vessel or an engine that is installed or
intended to be installed on a vessel.
Marine engine means a diesel engine that is installed or intended
to be installed on a vessel. This definition does not include portable
auxiliary engines for which the fueling, cooling and exhaust systems
are not integral parts of the vessel.
Marine vessel has the meaning specified in the General Provisions
of the United States Code, 1 U.S.C. 3.
Maximum rated power means the maximum brake power output of an
engine.
Method of aspiration means the method whereby air for fuel
combustion enters the engine (e.g., naturally aspirated or
turbocharged).
Model year means the manufacturer's annual new model production
period which includes January 1 of the calendar year, ends no later
than December 31 of the calendar year, and does not begin earlier than
January 2 of the previous calendar year. Where a manufacturer has no
annual new model production period, model year means calendar year.
New marine engine means:
(1)(i) An engine, the equitable or legal title to which has never
been transferred to an ultimate purchaser;
(ii) An engine placed in a vessel, the equitable or legal title to
which has never been transferred to an ultimate purchaser; or
(iii) An engine that has not been placed into service on a vessel.
(2) Where the equitable or legal title to an engine or vessel is
not transferred to an ultimate purchaser prior to its being placed into
service, the engine ceases to be new after it is placed into service.
(3) With respect to imported engines, the term ``new marine
engine'' means a engine that is not covered by a certificate of
conformity under this part at the time of importation, and that was
manufactured after the compliance date of the emission standards in
this part which is applicable to such engine (or which would be
applicable to such engine had it been manufactured for importation into
the United States).
New vessel means a vessel, the equitable or legal title to which
has never been transferred to an ultimate purchaser. Where the
equitable or legal title to a vessel is not transferred to an ultimate
purchaser prior to its being placed into service, the vessel ceases to
be new when it is placed into service.
Nonconforming marine engine means a marine engine which is not
covered by a certificate of conformity prior to importation or being
offered for importation (or for which such coverage has not been
adequately demonstrated to EPA); or a marine engine which was
originally covered by a certificate of conformity, but which is not in
a certified configuration, or otherwise does not comply with the
conditions of that certificate of conformity. (Note: Domestic marine
engines which are not covered by a certificate of conformity prior to
their introduction into U.S. commerce are considered to be noncomplying
marine engines.)
Oxides of nitrogen means nitric oxide and nitrogen dioxide. Oxides
of nitrogen are expressed quantitatively as if the nitric oxide were in
the form of nitrogen dioxide (oxides of nitrogen are assumed to have a
molecular weight equivalent to nitrogen dioxide).
Post-manufacture marinizer means a person who produces a marine
engine by substantially modifying an engine, whether certified or
uncertified, complete or partially complete, and is not controlled by
the manufacturer of the base engine or by an entity that also controls
the manufacturer of the base engine. For the purpose of this
definition, ``substantially modify'' means changing a Tier 2 or later
engine in a way that could reasonably be expected to potentially change
engine emission characteristics, or changing an uncertified or Tier 1
in any way. Vessel manufacturers that substantially modify engines are
post-manufacturer marinizers.
Power assembly means the components of an engine in which
combustion of fuel occurs, and consists of the cylinder, piston and
piston rings, valves and ports for admission of charge air and
discharge of exhaust gases, fuel injection components and controls,
cylinder head and associated components.
Presentation of credentials means the display of the document
designating a person as an EPA enforcement officer.
Primary fuel means that type of fuel (e.g., petroleum distillate
diesel fuel) that is expected to be consumed in the greatest quantity
(volume basis) when the engine is operated in use.
Propulsion means relating to an engine that moves a vessel through
the water or directs the movement of a vessel.
Rated power means the maximum brakepower output of an engine.
Rated speed is the maximum test speed defined in Sec. 94.107.
Rebuilder means any person that rebuilds or remanufactures an
engine.
Recreational marine engine means a propulsion marine engine that is
intended by the manufacturer to be installed on a recreational vessel,
and which is permanently labeled as follows:
``THIS RECREATIONAL ENGINE DOES NOT COMPLY WITH FEDERAL MARINE
ENGINE EMISSION REQUIREMENTS FOR NONRECREATIONAL VESSELS.
INSTALLATION OF THIS ENGINE IN ANY NONRECREATIONAL VESSEL IS A
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.''
Recreational vessel means a vessel being manufactured or operated
primarily for pleasure, or being leased, rented or chartered to another
for the latter's pleasure (except where the vessel is leased, rented,
or chartered for more than six passengers). Vessels for hire which can
carry more than six passengers, whether or not they ever actually do,
are not recreational vessels. For this definition the term ``operated
primarily for pleasure,'' does not include vessels used solely for
competition or used at any time in any other way to generate income or
revenue in any way not associated with the hiring out of the vessel to
other people for their pleasure.
Service life means the total life of an engine. Service life begins
when the engine is originally manufactured and continues until the
engine is permanently removed from service.
Small manufacturer means a manufacturer that is classified as a
small business by the Small Business Administration.
Specific emissions means emissions expressed on the basis of
observed brake

[[Page 68561]]

power, using units of g/kW-hr. Observed brake power measurement
includes accessories on the engine if these accessories are required
for running an emission test (except for the cooling fan). When it is
not possible to test the engine in the gross conditions, for example if
the engine and transmission form a single integral unit, the engine may
be tested in the net condition. Power corrections from net to gross
conditions will be allowed with prior approval of the Administrator.
Specified by a certificate of conformity or specified in a
certificate of conformity means stated or otherwise specified in a
certificate of conformity or an approved application for certification.
Test engine means an engine in a test sample.
Test sample means the collection of engines or vessels selected
from the population of an engine family for emission testing.
Tier 2 means relating to an engine subject to the Tier 2 emission
standards listed in Sec. 94.8.
Tier 3 means relating to an engine subject to the Tier 3 emission
standards listed in Sec. 94.8.
Total hydrocarbon equivalent 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 petroleum-fueled engine hydrocarbons. The
hydrogen-to-carbon ratio of the equivalent hydrocarbon is 1.85:1.
Trading means the exchange of engine emission credits between
credit holders.
Ultimate purchaser means, with respect to any new engine or vessel,
the first person who in good faith purchases such new engine or vessel
for purposes other than resale.
United States. United States includes the customs territory of the
United States as defined in 19 U.S.C. 1202, and the Virgin Islands,
Guam, American Samoa, and the Commonwealth of the Northern Mariana
Islands.
U.S.-directed production volume means the number of marine engine
units, subject to this part, produced by a manufacturer for which the
manufacturer has reasonable assurance that sale was or will be made to
ultimate purchasers in the United States.
Useful life means the period during which an engine is designed to
properly function in terms of reliability and fuel consumption, without
being remanufactured, specified as hours of use and years. It is the
period during which a new engine is required to comply with all
applicable emission standards. (Note: Sec. 94.9(a) specifies minimum
requirements for useful life values.)
Voluntary emission recall means a repair, adjustment, or
modification program voluntarily initiated and conducted by a
manufacturer to remedy any emission-related defect for which
notification of engine or vessel owners has been provided.

Sec. 94.3 Abbreviations.

The abbreviations of this section apply to all subparts of this
part and have the following meanings:

AECD--Auxiliary emission control device
API--American Petroleum Institute
ASTM--American Society for Testing and Materials
deg.C--Degrees celsius
CI--Compression ignition
CO--Carbon monoxide
CO2--Carbon dioxide
disp.--volumetric displacement of an engine cylinder
EGR--Exhaust gas recirculation
EP--End point
EPA--Environmental Protection Agency
FEL--Family emission limit
ft--foot or feet
FTP--Federal Test Procedure
g--gram(s)
g/kW-hr--Grams per kilowatt hour
gal--U.S. gallon
h--hour(s)
HC--hydrocarbon
Hg--Mercury
hp--horsepower
ICI--Independent Commercial Importer
in--inch(es)
K--Kelvin
kg--kilogram(s)
km--kilometer(s)
kPa--kilopascal(s)
kW--kilowatt
m--meter(s)
max--maximum
mg--milligram(s)
min--minute
ml--milliliter(s)
mm--millimeter
NIST--National Institute for Standards and Testing
NMHC-Non-methane hydrocarbons
NTIS--National Technical Information Service
NO--nitric oxide
NO2--nitrogen dioxide
NOX--oxides of nitrogen
No.--number
O2--oxygen
pct--percent
PM--particulate matter
PMM--post-manufacturer marinizer
ppm--parts per million by volume
ppmC--parts
per million, carbon
rpm--revolutions per minute
s--second(s)
SAE--Society of Automotive Engineers
SEA--Selective Enforcement Auditing
SI--International system of units (i.e., metric)
THC--Total hydrocarbon
THCE--Total hydrocarbon equivalent
U.S.--United States
U.S.C.--United States Code
vs--versus
W--watt(s)
wt--weight

Sec. 94.4 Treatment of confidential information.

(a) Any manufacturer may assert that some or all of the information
submitted pursuant to this part is entitled to confidential treatment
as provided by 40 CFR part 2, subpart B.
(b) Any claim of confidentiality must accompany the information at
the time it is submitted to EPA.
(c) To assert that information submitted pursuant to this part is
confidential, a person or manufacturer must indicate clearly the items
of information claimed confidential by marking, circling, bracketing,
stamping, or otherwise specifying the confidential information.
Furthermore, EPA requests, but does not require, that the submitter
also provide a second copy of its submittal from which all confidential
information has been deleted. If a need arises to publicly release
nonconfidential information, EPA will assume that the submitter has
accurately deleted the confidential information from this second copy.
(d) If a claim is made that some or all of the information
submitted pursuant to this part is entitled to confidential treatment,
the information covered by that confidentiality claim will be disclosed
by EPA only to the extent and by means of the procedures set forth in
40 CFR part 2, subpart B.
(e) Information provided without a claim of confidentiality at the
time of submission may be made available to the public by EPA without
further notice to the submitter, in accordance with 40 CFR
2.204(c)(2)(i)(A).

Sec. 94.5 Reference materials.

(a) The documents in paragraph (b) of this section have been
incorporated by reference. The incorporation by reference was approved
by the Director of the Federal Register in accordance with 5 U.S.C.
552(a) and 1 CFR part 51. Copies may be inspected at U.S. EPA, OAR, 401
M Street, SW., Washington, DC 20460, or at the Office of the Federal
Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
(b) The following paragraphs and tables set forth the material that
has

[[Page 68562]]

been incorporated by reference in this part:
(1) ASTM material. The following table sets forth material from the
American Society for Testing and Materials that has been incorporated
by reference. The first column lists the number and name of the
material. The second column lists the section(s) of the part, other
than this section, in which the matter is referenced. The second column
is presented for information only and may not be all-inclusive. More
recent versions of these standards may be used with advance approval of
the Administrator. Copies of these materials may be obtained from
American Society for Testing and Materials, 100 Barr Harbor Dr., West
Conshohocken, PA 19428. The table follows:

------------------------------------------------------------------------
40 CFR part 94
Document number and name reference
------------------------------------------------------------------------
ASTM D86-97:
``Standard Test Method for Distillation of Sec. 94.108
Petroleum Products at Atmospheric Pressure''.
ASTM D93-97:
``Standard Test Methods for Flash Point by Sec. 94.108
Pensky-Martens Closed Cup Tester''.
ASTM D129-95:
``Standard Test Method for Sulfur in Sec. 94.108
Petroleum Products (General Bomb Method)''.
ASTM D287-92:
``Standard Test Method for API Gravity of Sec. 94.108
Crude Petroleum and Petroleum Products''
(Hydrometer Method).
ASTM D445-97:
``Standard Test Method for Kinematic Sec. 94.108
Viscosity of Transparent and Opaque Liquids
(and the Calculation of Dynamic Viscosity)''.
ASTM D613-95:
``Standard Test Method for Cetane Number of Sec. 94.108
Diesel Fuel Oil''.
ASTM D1319-98:
``Standard Test Method for Hydrocarbon Types Sec. 94.108
in Liquid Petroleum Products by Fluorescent
Indicator Adsorption''.
ASTM D2622-98:
``Standard Test Method for Sulfur in Sec. 94.108
Petroleum Products by Wavelength Dispersive
X-ray Fluorescence Spectrometry''.
ASTM D5186-96: ``Standard Test Method for
``Determination of the Aromatic Content and Sec. 94.108
Polynuclear Aromatic Content of Diesel Fuels
and Aviation Tubine Fuels By Supercritical
Fluid Chromatography''.
ASTM E29-93a:
``Standard Practice for Using Significant Secs. 94.9, 94.305,
Digits in Test Data to Determine Conformance 94.509
with Specifications''.
------------------------------------------------------------------------

(2) IMO material. The following table sets forth material from the
International Maritime Organization that has been incorporated by
reference. The first column lists the name of the material. The second
column lists the section(s) of the part, other than this section, in
which the matter is referenced. The second column is presented for
information only and may not be all-inclusive. More recent versions of
these standards may be used with advance approval of the Administrator.
Copies of these materials may be obtained from the International
Maritime Organization, 4 Albert Embankment, London SE1 7SR,U.K. The
table follows:

------------------------------------------------------------------------
40 CFR part 94
Document number and name reference
------------------------------------------------------------------------
Technical Code on Control of Emission of Nitrogen Sec. 94.105
Oxides From Marine Diesel Engines, as adopted on
September 26, 1997 by the International Maritime
Organization in conference Resolution 2,
Conference of the Parties to the International
Convention for the Prevention of Pollution from
Ship, 1973 as modified by the protocol of 1978
relating thereto (reported in MP/Conf. 3/35, 22
October 1997).
------------------------------------------------------------------------

Sec. 94.6 Regulatory structure.

This section provides an overview of the regulatory structure of
this part.
(a) The regulations of this part 94 are intended to control
emissions from in-use marine engines.
(b) The engines for which the regulations of this part (i.e., 40
CFR part 94) apply are specified by Sec. 94.1, and by the definitions
of Sec. 94.2. The point at which an engine or vessel becomes subject to
the regulations of this part is determined by the definitions of new
marine engine and new marine vessel in Sec. 94.2. Subpart J of this
part contains provisions exempting certain engines and vessels from the
emission standards in this part under special circumstances.
(c) To comply with the requirements of this part, a manufacturer
must demonstrate to EPA that the engine meets the applicable standards
of Secs. 94.7 and 94.8, and all other requirements of this part. The
requirements of this certification process are described in subparts C
and D of this part.
(d) Subpart B of this part specifies procedures and equipment to be
used for conducting emission tests for the purpose of the regulations
of this part.
(e) Subparts E, F, and H of this part specify requirements for
manufacturers after certification; that is during production and use of
the engines.
(f) Subpart I of this part contains requirements applicable to the
importation of marine engines covered by the provisions of this part.
(g) Subpart L of this part describes prohibited acts and contains
other enforcement provisions relating to marine engines and vessels
covered by the provisions of this part.
(h) Unless specified otherwise, the provisions of this part apply
to all marine engines and vessels subject to the emission standards of
this part.

[[Page 68563]]

Sec. 94.7 General standards and requirements.

(a) Marine engines and vessels may not be equipped with a defeat
device.
(b) An engine may not be equipped with an emission control system
for the purpose of complying with emission standards if such a system
will cause or contribute to an unreasonable risk to public health,
welfare, or safety in its operation or function.
(c) An engine with an emission control system may not emit any
noxious or toxic substance which would not be emitted in the operation
of the engine in the absence of such a system, except as specifically
permitted by regulation.
(d) All engines subject to the emission standards of this part
shall be equipped with a connection in the engine exhaust system that
is located downstream of the engine and before any point at which the
exhaust contacts water (or any other cooling/scrubbing medium) for the
temporary attachment of gaseous and/or particulate emission sampling
equipment. This connection shall be internally threaded with standard
pipe threads of a size not larger than one-half inch, and shall be
closed by a pipe-plug when not in use.
(e) All engines subject to the emission standards of this part
shall broadcast on engine's controller area networks actual engine
percent torque and actual engine speed.

Sec. 94.8 Exhaust emission standards.

(a) Exhaust emissions from marine compression-ignition engines
shall not exceed the applicable exhaust emission standards contained in
Table A-1 as follows:

Table A-1.--Primary Exhaust Emission Standards (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
THC+NOX g/kW-
Subcategory liters/cylinder Tier Model year * hr CO g/kW-hr PM g/kW-hr
----------------------------------------------------------------------------------------------------------------
Power 37 kW and Tier 2......... 2004 7.2 5.0 0.40
disp. <0.9. tier="" 3.........="" 2008="" 4.0="" 5.0="" ..............="" 0.9=""> disp. <1.2..... tier="" 2.........="" 2004="" 7.2="" 5.0="" 0.30="" tier="" 3.........="" 2008="" 4.0="" 5.0="" ..............="" 1.2=""> disp. <1.5..... tier="" 2.........="" 2004="" 7.2="" 3.5="" 0.20="" tier="" 3.........="" 2008="" 4.0="" 3.5="" ..............="" 1.5=""> disp. <2.0..... tier="" 2.........="" 2004="" 7.2="" 3.5="" 0.20="" tier="" 3.........="" 2008="" 4.0="" 3.5="" ..............="" 2.0=""> disp. <2.5..... tier="" 2.........="" 2004="" 7.2="" 3.5="" 0.20="" tier="" 3.........="" 2008="" 4.0="" 3.5="" ..............="" 2.5=""> disp. <5.0..... tier="" 2.........="" 2006="" 7.2="" 3.5="" 0.20="" tier="" 3.........="" 2010="" 5.0="" 3.5="" ..............="" 5.0=""> disp. <20...... tier="" 2.........="" 2006="" 7.2="" 2.0="" 0.27="" tier="" 3.........="" 2010="" 5.0="" 2.0="" ..............="" ----------------------------------------------------------------------------------------------------------------="" *="" the="" model="" years="" listed="" indicate="" the="" model="" years="" for="" which="" the="" specified="" tier="" of="" standards="" take="" effect.="" (b)="" exhaust="" emissions="" of="" oxides="" of="" nitrogen,="" carbon="" monoxide,="" hydrocarbon,="" and="" particulate="" matter="" (and="" smoke,="" as="" applicable)="" shall="" be="" measured="" using="" the="" procedures="" set="" forth="" in="" subpart="" b="" of="" this="" part.="" (c)="" in="" lieu="" of="" the="">X standards, THC+NOX
standards, and PM standards specified in paragraph (a) of this section,
manufacturers may elect to include engine families in the averaging,
banking, and trading program, the provisions of which are specified in
subpart D of this part. The manufacturer shall then set a family
emission limit (FEL) which will serve as the standard for that engine
family.
(d)(1) Naturally aspirated engines to which this subpart is
applicable shall not discharge crankcase emissions into the ambient
atmosphere, unless such crankcase emissions are permanently routed into
the exhaust and included in all exhaust emission measurements.
(2) For engines using turbochargers, pumps, blowers, or
superchargers for air induction, if the engine discharges crankcase
emissions into the ambient atmosphere in use, these crankcase emissions
shall be included in all exhaust emission measurements.
(e) Exhaust emissions from engines subject to the standards (or
FELs) in paragraph (a), (c), or (f) of this section shall not exceed
1.25 times the applicable standards (or FELs) when tested in accordance
with the supplemental test procedures specified in Sec. 94.106.
(f) The following paragraphs define the requirements for low-
emitting Blue Sky Series engines.
(1) Voluntary standards. Engines may be designated ``Blue Sky
Series'' engines through the 2007 model year by meeting the voluntary
standards listed in Table A-2, which apply to all certification and in-
use testing.

Table A-2.--Voluntary Emission Standards (g/kW-hr)
------------------------------------------------------------------------
Rated brake power (kW) THC+NOX PM
------------------------------------------------------------------------
power 37 kW disp. <0.9................ 4.0="" 0.24="" 0.9=""> disp. <1.2........................ 4.0="" 0.18="" 1.2=""> disp. <2.5........................ 4.0="" 0.12="" 2.5=""> disp. <5.0........................ 5.0="" 0.12="" 5.0=""> disp. <20......................... 5.0="" 0.16="" ------------------------------------------------------------------------="" (2)="" additional="" standards.="" blue="" sky="" series="" engines="" are="" subject="" to="" all="" provisions="" that="" would="" otherwise="" apply="" under="" this="" part.="" (3)="" test="" procedures.="" manufacturers="" may="" use="" an="" alternate="" procedure="" to="" demonstrate="" the="" desired="" level="" of="" emission="" control="" if="" approved="" in="" advance="" by="" the="" administrator.="" (g)="" standards="" for="" alternative="" fuels.="" the="" standards="" described="" in="" this="" section="" apply="" to="" compression-ignition="" engines,="" irrespective="" of="" fuel,="" with="" the="" following="" two="" exceptions:="" (1)="" engines="" fueled="" with="" natural="" gas="" shall="" comply="" with="">X standards that are numerically equivalent to the
THC+NOX described in paragraph (a) of this section; and
(2) Engines fueled with alcohol fuel shall comply with
THCE+NOX standards that are numerically equivalent to the
THC+NOX described in paragraph (a) of this section.

Sec. 94.9 Compliance with emission standards.

(a) The general standards and requirements in Sec. 94.7 and the
emission standards in Sec. 94.8 apply to each new engine throughout its
useful life period. The useful life is specified as hours and years,
and ends when either of the values (hours or years) is exceeded.

[[Page 68564]]

(1) The minimum useful life in terms of hours is equal to 10,000
hours for Category 1 and 20,000 hours for Category 2. The minimum
useful life in terms of years is 10 years.
(2) The manufacturer shall specify a longer useful life if the
engine is designed to remain in service longer than the applicable
minimum useful life. A manufacturer's recommended time to
remanufacture/rebuild which is longer than the minimum useful life is
one indicator of a longer design life.
(b) Certification is the process by which manufacturers apply for
and obtain certificates of conformity from EPA, which allows the
manufacturer to introduce into commerce new marine engines for sale or
use in the U.S.
(1) Compliance with the applicable emission standards by an engine
family shall be demonstrated by the certifying manufacturer before a
certificate of conformity may be issued under Sec. 94.208.
Manufacturers shall demonstrate compliance using emission data,
measured using the procedures specified in subpart B of this part, from
a low hour engine. A development engine that is equivalent in design to
the marine engines being certified may be used for Category 2
certification.
(2) The emission values to compare with the standards shall be the
emission values of a low hour engine, or a development engine, adjusted
by the deterioration factors developed in accordance with the
provisions of Sec. 94.219. Before any emission value is compared with
the standard, it shall be rounded, in accordance with ASTM E 29-93a
(incorporated by reference at Sec. 94.5), to the same number of
significant figures as contained in the applicable standard.
(c) Upon request by the manufacturer, the Administrator may limit
the applicability of exhaust emission requirements of Sec. 94.8(e) as
necessary for safety or to otherwise protect the engine.

Sec. 94.10 Warranty period.

Warranties imposed by Sec. 94.1107 shall apply for a period of
hours equal to 50 percent of the useful life in hours or a period of
years equal to 50 percent of the useful life in years, whichever comes
first.

Sec. 94.11 Requirements for rebuilding certified engines.

(a) The provisions of this section apply with respect to engines
subject to the standards prescribed in Sec. 94.8 and are applicable to
the process of engine rebuilding (or rebuilding a portion of an engine
or engine system). The process of engine rebuilding generally includes
disassembly, replacement of multiple parts due to wear, and reassembly,
and may also include the removal of the engine from the vessel and
other acts associated with rebuilding an engine.
(b) When rebuilding an engine, portions of an engine, or an engine
system, there must be a reasonable technical basis for knowing that the
resultant engine is equivalent, from an emissions standpoint, to a
certified configuration (i.e., tolerances, calibrations,
specifications), and the model year(s) of the resulting engine
configuration must be identified. A reasonable basis would exist if:
(1) Parts installed, whether the parts are new, used, or rebuilt,
are such that a person familiar with the design and function of motor
vehicle engines would reasonably believe that the parts perform the
same function with respect to emission control as the original parts;
and
(2) Any parameter adjustment or design element change is made only:
(i) In accordance with the original engine manufacturer's
instructions; or
(ii) Where data or other reasonable technical basis exists that
such parameter adjustment or design element change, when performed on
the engine or similar engines, is not expected to adversely affect in-
use emissions.
(c) When an engine is being rebuilt and remains installed or is
reinstalled in the same vessel, it must be rebuilt to a configuration
of the same or later model year as the original engine. When an engine
is being replaced, the replacement engine must be an engine of (or
rebuilt to) a certified configuration that is equivalent, from an
emissions standpoint, to the engine being replaced.
(d) At time of rebuild, emission-related codes or signals from on-
board monitoring systems may not be erased or reset without diagnosing
and responding appropriately to the diagnostic codes, regardless of
whether the systems are installed to satisfy requirements in
Sec. 94.211 or for other reasons and regardless of form or interface.
Diagnostic systems must be free of all such codes when the rebuilt
engine is returned to service. Such signals may not be rendered
inoperative during the rebuilding process.
(e) When conducting a rebuild without removing the engine from the
vessel, or during the installation of a rebuilt engine, all critical
emission-related components listed in Appendix I of this part not
otherwise addressed by paragraphs (b) through (d) of this section must
be checked and cleaned, adjusted, repaired, or replaced as necessary,
following manufacturer recommended practices.
(f) Records shall be kept by parties conducting activities included
in paragraphs (b) through (e) of this section. The records shall
include at minimum the hours of operation at the time of rebuild, a
listing of work performed on the engine, and emission-related control
components including a listing of parts and components used, engine
parameter adjustments, emission-related codes or signals responded to
and reset, and work performed under paragraph (e) of this section.
(1) Parties may keep records in whatever format or system they
choose as long as the records are understandable to an EPA enforcement
officer or can be otherwise provided to an EPA enforcement officer in
an understandable format when requested.
(2) Parties are not required to keep records of information that is
not reasonably available through normal business practices including
information on activities not conducted by themselves or information
that they cannot reasonably access.
(3) Parties may keep records of their rebuilding practices for an
engine family rather than on each individual engine rebuilt in cases
where those rebuild practices are followed routinely.
(4) Records must be kept for a minimum of two years after the
engine is rebuilt.

Subpart B--Test Procedures

Sec. 94.101 Applicability.

Provisions of this subpart apply for testing performed by the
Administrator and for testing performed by manufacturers.

Sec. 94.102 General provisions.

(a) The test procedures specified in this subpart for marine engine
testing are intended to produce emission measurements that are
equivalent to emission measurements that would result from emission
tests performed during in-use operation using the same engine
configuration installed in a vessel.
(b) Test procedures otherwise allowed by the provisions of this
subpart shall not be used where such procedures are not consistent with
good engineering practice and the regulatory goal specified in
paragraph (a) of this section.
(c) Alternate test procedures may be used if shown to yield
equivalent results, and if approved in advance by the Administrator.

[[Page 68565]]

Sec. 94.103 Test procedures for Category 1 marine engines.

(a) Gaseous and particulate emissions shall be measured using the
test procedures specified in 40 CFR part 89, except as otherwise
specified in this subpart.
(b) The Administrator may specify changes to the provisions of
paragraph (a) of this section that are necessary to comply with the
general provisions of Sec. 94.102.

Sec. 94.104 Test procedures for Category 2 marine engines.

(a) Gaseous and particulate emissions shall be measured using the
test procedures specified in 40 CFR part 92, except as otherwise
specified in this subpart.
(b)(1) The requirements of 40 CFR part 92 related to charge air
temperatures, engine speed and load, and engine air inlet restriction
pressures do not apply for marine engines.
(2) For marine engine testing, charge air temperatures, engine
speed and load, and engine air inlet restriction pressures shall be
representative of typical in-use marine engine conditions.
(c) The Administrator may specify changes to the provisions of
paragraph (a) of this section that are necessary to comply with the
general provisions of Sec. 94.102.

Sec. 94.105 Test cycles.

(a) For the purpose of determining compliance with the emission
standards of Sec. 94.8 (a), (c), (f), and (g), propulsion engines that
are used with (or intended to be used with) fixed-pitch propellers
shall be tested using the test cycle described in Table B-1, which
follows:

Table B-1.--Duty Cycle for Propulsion Engines: Fixed-Pitch Propeller
------------------------------------------------------------------------
Engine Observed
speed ^{(1) power ^{(2) Minimum
Mode No. (percent (percent time in Weighting
of rated of max. mode factors
speed) observed) (minutes)
------------------------------------------------------------------------
1........................... 100 100 5.0 0.20
2........................... 91 75 5.0 0.50
3........................... 80 50 5.0 0.15
4........................... 63 25 5.0 0.15
------------------------------------------------------------------------
^{(1) Engine speed: 2 percent of point.
^{(2) Power: Observed power with maximum fueling rate for operation at 100
percent point. Other points: 2 percent of engine maximum
value.

(b) For the purpose of determining compliance with the emission
standards of Sec. 94.8 (a), (c), (f), and (g), constant-speed
propulsion engines that are used with (or intended to be used with)
variable-pitch propellers shall be tested using the test cycle
described in Table B-2, which follows:

Table B-2.--Duty Cycle for Propulsion Engines: Variable-Pitch Propeller
------------------------------------------------------------------------
Engine Observed
speed ^{(1) power ^{(2) Minimum
Mode No. (percent (percent time in Weighting
of rated of max. mode factors
speed) observed) (minutes)
------------------------------------------------------------------------
1........................... 100 100 5.0 0.20
2........................... 100 75 5.0 0.50
3........................... 100 50 5.0 0.15
4........................... 100 25 5.0 0.15
------------------------------------------------------------------------
^{(1) Engine speed: 2 percent of point.
^{(2) Power: Observed power with maximum fueling rate for operation at 100
percent point. Other points: 2 percent of engine maximum
value.

(c) For the purpose of determining compliance with the emission
standards of Sec. 94.8 (a), (c), (f), and (g), auxiliary engines shall
be tested using the applicable test cycle described in 40 CFR part 89.

Sec. 94.106 Supplemental test procedures.

This section describes the test procedures for supplemental testing
conducted to determine compliance with the exhaust emission
requirements of Sec. 94.8(e). In general, the supplemental test
procedures are the same as those otherwise specified by this subpart,
except that they cover any speeds, loads, ambient conditions, and
operating parameters that may be experienced in use. The test
procedures specified by other sections in this subpart also apply to
these tests, except as specified in this section.
(a) Notwithstanding other provisions of this subpart, testing
conducted to determine compliance with the exhaust emission
requirements of Sec. 94.8(e) may be conducted:
(1) At any speed and load (or combination of speeds and loads)
within the applicable Not To Exceed Zone specified in paragraph (b) of
this section;
(2) Without correction, at any ambient:
(i) Air temperature between 13 deg.C and 35 deg.C;
(ii) Water temperature (or equivalent) between 5 deg.C and
32 deg.C;
(iii) Humidity between 7.1 and 10.7 grams of moisture per kilogram
of dry air; and
(3) With any continuous sampling period not less than 30 seconds in
duration.
(b) The Not to Exceed Zone for marine propulsion engines that are
used with (or intended to be used with):
(1) Fixed-pitch propellers as defined in Figure B-1;
(2) Variable-pitch propellers defined as any load greater than or
equal to 25 percent of rated power, and any speed at which the engine
operates in use.
(c)(1) Upon request by the manufacturer, the Administrator may
specify a narrower Not to Exceed Zone for an engine family at the time
of

[[Page 68566]]

certification, provided that the narrower Not to Exceed Zone includes
all speeds and loads at which the engines are expected to normally
operate in use.
(2) The Administrator may specify, at the time of certification, a
broader Not to Exceed Zone for an engine family containing engines used
in planing vessels, provided that the broader Not to Exceed Zone
includes only speeds and loads at which the engines are expected to
normally operate in use.
(3) The Administrator may specify, at the time of certification, a
broader Not to Exceed Zone for an engine family containing engines used
in vessels with variable-pitch propellers, provided that the broader
Not to Exceed Zone includes only speeds and loads at which the engines
are expected to normally operate in use.
(d) Testing of engines over a transient test cycle shall be
conducted using the dilute emission sampling and analytical procedures
specified for diesel engines in 40 CFR Part 86, Subpart N.
(e) Notwithstanding other provisions of this subpart, testing
conducted to determine compliance with the exhaust emission
requirements of Sec. 94.8(e) may be conducted at any ambient air
temperature or humidity outside the ranges specified in
Sec. 94.106(a)(2), provided that emission measurements are corrected to
be equivalent to measurements within the ranges specified in
Sec. 94.106(a)(2). Correction of emission measurements made in
accordance with paragraph (a)(3) of this section shall be made in
accordance with good engineering practice. The measurements shall be
corrected to be within the range using the minimum possible correction.
(f) Testing conducted under this section may include transient
speed and load operation. Engine testing may not include transient
operation that cannot be replicated by similar engines as installed on
actual vessels in use.
(g) Testing conducted under this section may not include engine
starting.

BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TP11DE98.003

BILLING CODE 6560-50-C

Sec. 94.107 Determination of rated speed.

This section specifies how to determine rated speed from a lug
curve. This rated speed is the maximum test speed used in Secs. 94.105
and 94.106.
(a) Generation of lug curve. Prior to beginning emission testing,
generate maximum measured brakepower versus engine speed data points
using the applicable method specified in 40 CFR 86.1332. These data
points form the lug curve.
(b) Normalization of lug curve. (1) Identify the point (power and
speed) on the lug curve at which maximum power occurs.
(2) Normalize the power values of the lug curve by dividing them by
the maximum power value identified in

[[Page 68567]]

paragraph (b)(1) of this section, and multiplying the resulting values
by 100.
(3) Normalize the engine speed values of the lug curve by dividing
them by the speed at which maximum power occurs, which is identified in
paragraph (b)(1) of this section, and multiplying the resulting values
by 100.
(4) Maximum engine power is located on the normalized lug curve at
100 percent power and 100 percent speed.
(c) Determination of rated speed. Calculate the rated speed from
the speedfactor analysis described in this paragraph (c).
(1) For a given combination of engine power and speed (i.e., a
given power/speed point), the speedfactor is the normalized distance to
the power/speed point from the zero power, zero speed point. The value
of the speedfactor is defined as:
(2) Calculate speedfactors for the power/speed data points on the
lug curve, and determine the maximum value.
(3) Rated speed is the speed at which the maximum value for the
speedfactor occurs.

Sec. 94.108 Test fuels.

(a) Petroleum diesel test fuel. (1) The diesel fuels for testing
marine engines designed to operate on petroleum diesel fuel shall be
clean and bright, with pour and cloud points adequate for operability.
The diesel fuel may contain nonmetallic additives as follows: cetane
improver, metal deactivator, antioxidant, dehazer, antirust, pour
depressant, dye, dispersant, and biocide. The diesel fuel shall also
meet the specifications (as determined using methods incorporated by
reference at Sec. 94.5) in Table B-3 of this section, or substantially
equivalent specifications approved by the Administrator, as follows:

Table B-3.--Federal Test Fuel Specifications
----------------------------------------------------------------------------------------------------------------
Item Procedure (ASTM) \1\ Value (type 2-D)
----------------------------------------------------------------------------------------------------------------
Cetane.................................. D613-95 40-48
Distillation Range:
IBP, deg.C......................... D86-97 171-204
10% point, deg.C................... D86-97 204-238
50% point, deg.C................... D86-97 243-282
90% point, deg.C................... D86-97 293-332
EP, deg.C.......................... D86-97 321-366
Gravity, API........................ D287-92 32-37
Total Sulfur, %mass................. D129-95 or D2622-98 0.03--0.80
Hydrocarbon composition:
Aromatics, %vol..................... D1319-98 or D5186-96 10 (\2\)
Paraffins, Naphthenes, Olefins...... D1319-98 (\3\)
Flashpoint, deg.C (minimum)........ D93-97 54
Viscosity @ 38 deg.C, Centistokes.. D445-97 2.0-3.2
----------------------------------------------------------------------------------------------------------------
\1\ All ASTM procedures in this table have been incorporated by reference. See Sec. 94.6.
\2\ Minimum.
\3\ Remainder.

(2) Other diesel fuels may be used for testing provided:
(i) They are commercially available; and
(ii) Information, acceptable to the Administrator, is provided to
show that only the designated fuel would be used in service; and
(iii) Use of a fuel listed under paragraph (a)(1) of this section
would have a detrimental effect on emissions or durability; and
(iv) Written approval from the Administrator of the fuel
specifications is provided prior to the start of testing.
(3) The specification of the fuel to be used under paragraphs
(a)(1) and (a)(2) of this section shall be reported in the application
for certification.
(b) Other fuel types. (1) For engines which are designed to be
capable of using a type of fuel (or mixed fuel) other than petroleum
diesel fuel (e.g., natural gas or methanol), and which are expected to
use that type of fuel (or mixed fuel) in service, a commercially
available fuel of that type shall be used for exhaust emission testing.
The Administrator shall determine the specifications of the fuel to be
used for testing, based on the engine design, the specifications of
commercially available fuels, and the recommendation of the
manufacturer.
(2) The specification of the fuel to be used under paragraph (b)(1)
of this section shall be reported in the application for certification.
(c)(1) Particulate emission measurements from engines without
exhaust aftertreatment obtained using a diesel fuel containing more
than 0.40 weight percent sulfur may be adjusted to a sulfur content of
0.40 weight percent.
(2) Adjustments to the particulate measurement shall be made using
the following equation:

PMadj=PM-[BSFC *0.0917 *(FSF-0.0040)]

Where:

PMadj=adjusted measured PM level [g/Kw-hr]
PM=measured weighted PM level [g/Kw-hr]
BSFC=measured brake specific fuel consumption [G/Kw-hr]
FSF=fuel sulfur weight fraction

Subpart C--Certification Provisions

Sec. 94.201 Applicability.

The requirements of this subpart are applicable to manufacturers of
engines subject to the standards of subpart A of this part.

Sec. 94.202 Definitions.

The definitions of subpart A of this part apply to this subpart.

Sec. 94.203 Application for certification.

(a) For each engine family that complies with all applicable
standards and requirements, the manufacturer shall submit to the
Administrator a completed application for a certificate of conformity.
(b) The application shall be approved and signed by the authorized
representative of the manufacturer.
(c) The application shall be updated and corrected by amendment,
where necessary, as provided for in Sec. 94.210 to accurately reflect
the manufacturer's production.
(d) Each application shall include the following information:

[[Page 68568]]

(1)(i) A description of the basic engine design, including but not
limited to, the engine family specifications, the provisions of which
are contained in Sec. 94.208;
(ii) A list of distinguishable configurations to be included in the
engine family;
(2) An explanation of how the emission control system operates,
including detailed descriptions of:
(i) All emission control system components;
(ii) The injection timing map or maps (i.e., degrees before or
after top-dead-center), and any functional dependence of such timing on
other operational parameters (e.g., engine coolant temperature or
engine speed);
(iii) Each auxiliary emission control device (AECD); and
(iv) All fuel system components to be installed on any production
or test engine(s);
(3) A description of the test engine;
(4) Special or alternate test procedures, if applicable;
(5) A description of the operating cycle and the period of
operation necessary to accumulate service hours on the test engine and
stabilize emission levels;
(6) A description of all adjustable operating parameters (e.g.,
injection timing and fuel rate), including the following:
(i) The nominal or recommended setting and the associated
production tolerances;
(ii) The intended adjustable range and the physically adjustable
range;
(iii) The limits or stops used to limit adjustable ranges;
(iv) Production tolerances of the limits or stops used to establish
each physically adjustable range; and
(v) Information relating to the reason that the physical limits or
stops used to establish the physically adjustable range of each
parameter, or any other means used to inhibit adjustment, are the most
effective means possible of preventing adjustment of parameters to
settings outside the manufacturer's specified adjustable ranges on in-
use engines;
(7) For families participating in the averaging, banking, and
trading program, the information specified in subpart D of this part;
(8) Projected U.S. directed production volume information for each
configuration;
(9) A description of the test equipment and fuel proposed to be
used;
(10) All test data obtained by the manufacturer on each test
engine;
(11) The intended useful life period for the engine family, in
accordance with Sec. 94.9(a);
(12) The intended deterioration factors for the engine family, in
accordance with Sec. 94.218; and
(13) All information--including but not limited to message or
parameter identification, scaling, limit, offset, and transfer
function--required for EPA to interpret all messages and parameters
broadcast on an engine's controller area network. (The manufacturer may
reference publicly released controller area network standards where
applicable. The format of this information shall be provided in a
format similar to publicly released documents pertaining to controller
area network standards.)
(14) An unconditional statement certifying that all engines
included in the engine family comply with all requirements of this part
and the Clean Air Act.
(15) A statement indicating whether the engine will be used in
planing vessels or vessels with variable-pitch propellers.
(e) At the Administrator's request, the manufacturer shall supply
such additional information as may be required to evaluate the
application.
(f) (1) If the manufacturer submits some or all of the information
specified in paragraph (d) of this section in advance of its full
application for certification, the Administrator shall review the
information and make the determinations required in Sec. 94.208 (d)
within 90 days of the manufacturer's submittal.
(2) The 90-day decision period is exclusive of any elapsed time
during which EPA is waiting for additional information requested from a
manufacturer regarding an adjustable parameter (the 90-day period
resumes upon receipt of the manufacturer's response). For example, if
EPA requests additional information 30 days after the manufacturer
submits information under paragraph (f)(1) of this section, then the
Administrator would make a determination within 60 days of the receipt
of the requested information from the manufacturer.
(g)(1) The Administrator may modify the information submission
requirements of paragraph (d) of this section, provided that all of the
information specified therein is maintained by the manufacturer as
required by Sec. 94.215, and amended, updated, or corrected as
necessary.
(2) For the purposes of this paragraph (g), Sec. 94.215 includes
all information specified in paragraph (d) of this section, whether or
not such information is actually submitted to the Administrator for any
particular model year.
(3) The Administrator may review a manufacturer's records at any
time. At the Administrator's discretion, this review may take place
either at the manufacturer's facility or at another facility designated
by the Administrator.

Sec. 94.204 Designation of engine families.

This section specifies the procedure and requirements for grouping
of engines into engine families.
(a) Manufacturers shall divide their engines into groupings of
engines which are expected to have similar emission characteristics
throughout their useful life. Each group shall be defined as a separate
engine family.
(b) For Category 1 marine engines, the following characteristics
distinguish engine families:
(1) Fuel;
(2) Cooling method (including cooling medium);
(3) Method of air aspiration;
(4) Method of exhaust aftertreatment (for example, catalytic
converter or particulate trap);
(5) Combustion chamber design;
(6) Bore;
(7) Stroke;
(8) Number of cylinders, (engines with aftertreatment devices
only);
(9) Cylinder arrangement (engines with aftertreatment devices
only); and
(10) Fuel system configuration
(c) For Category 2 marine engines, the following characteristics
distinguish engine families:
(1) The combustion cycle (e.g., diesel cycle);
(2) The type of engine cooling employed (air-cooled or water-
cooled), and procedure(s) employed to maintain engine temperature
within desired limits (thermostat, on-off radiator fan(s), radiator
shutters, etc.);
(3) The bore and stroke dimensions;
(4) The approximate intake and exhaust event timing and duration
(valve or port);
(5) The location of the intake and exhaust valves (or ports);
(6) The size of the intake and exhaust valves (or ports);
(7) The overall injection, or as appropriate ignition, timing
characteristics (i.e., the deviation of the timing curves from the
optimal fuel economy timing curve must be similar in degree);
(8) The combustion chamber configuration and the surface-to-volume
ratio of the combustion chamber when the piston is at top dead center
position, using nominal combustion chamber dimensions;
(9) The location of the piston rings on the piston;

[[Page 68569]]

(10) The method of air aspiration (turbocharged, supercharged,
naturally aspirated, Roots blown);
(11) The turbocharger or supercharger general performance
characteristics (e.g., approximate boost pressure, approximate response
time, approximate size relative to engine displacement);
(12) The type of air inlet cooler (air-to-air, air-to-liquid,
approximate degree to which inlet air is cooled);
(13) The intake manifold induction port size and configuration;
(14) The type of fuel and fuel system configuration;
(15) The configuration of the fuel injectors and approximate
injection pressure;
(16) The type of fuel injection system controls (i.e., mechanical
or electronic);
(17) The type of smoke control system;
(18) The exhaust manifold port size and configuration; and
(19) The type of exhaust aftertreatment system (oxidation catalyst,
particulate trap), and characteristics of the aftertreatment system
(catalyst loading, converter size vs engine size).
(d) Upon request by the manufacturer, engines that are eligible to
be included in the same engine family based on the criteria in
paragraph (b) or (c) of this section may be divided into different
engine families. This request must be accompanied by information the
manufacturer believes supports the use of these different engine
families.
(e) Upon request by the manufacturer, the Administrator may allow
engines that would be required to be grouped into separate engine
families based on the criteria in paragraph (b) or (c) of this section
to be grouped into a single engine family if the manufacturer
demonstrates that the engines will have similar emission
characteristics. This request must be accompanied by emission
information supporting the appropriateness of such combined engine
families.

Sec. 94.205 Prohibited controls, adjustable parameters.

(a) Any system installed on, or incorporated in, a new engine to
enable such engine to conform to the standards contained in this part:
(1) Shall not in its operation or function cause significant (as
determined by the Administrator) emission into the ambient air of any
noxious or toxic substance that would not be emitted in the operation
of such engine without such system, except as specifically permitted by
regulation;
(2) Shall not in its operation, function or malfunction result in
any unsafe condition endangering the engine, the ship, its operators,
riders or property on a ship, or persons or property in close proximity
to the engine; and
(3) Shall function during all in-use operation, except as otherwise
allowed by this part.
(b) In specifying the adjustable range of each adjustable parameter
on a new engine, the manufacturer, shall:
(1) Ensure that safe engine operating characteristics are available
within that range, as required by section 202(a)(4) of the Clean Air
Act, taking into consideration the production tolerances; and
(2) To the maximum extent practicable, limit the physical range of
adjustability to that which is necessary for proper operation of the
engine.

Sec. 94.206 Required information.

(a) The manufacturer shall perform the tests required by the
applicable test procedures, and submit to the Administrator the
information required by this section: Provided, that if requested by
the manufacturer, the Administrator may waive any requirement of this
section for testing of engines for which the required emission data are
otherwise available.
(b) The manufacturer shall submit exhaust emission deterioration
factors, with supporting data. The determination of the deterioration
factors shall be conducted in accordance with good engineering practice
to ensure that the engines covered by a certificate issued under
Sec. 94.208 will meet all of the emission standards in Sec. 94.8 in use
for the useful life of the engine.
(c) The manufacturer shall submit emission data on such engines
tested in accordance with the applicable test procedures of subpart B
of this part. These data shall include zero hour data, if generated. In
lieu of providing the emission data required by paragraph (a) of this
section, the Administrator may, upon request of the manufacturer, allow
the manufacturer to demonstrate (on the basis of previous emission
tests, development tests, or other testing information) that the engine
will conform with the applicable emission standards of Sec. 94.8.
(d) The manufacturer shall submit a statement that the engines for
which certification is requested conform to the requirements in
Sec. 94.7 and that the descriptions of tests performed to ascertain
compliance with the general standards in Sec. 94.7, and the data
derived from such tests, are available to the Administrator upon
request.
(e) The manufacturer shall submit a statement that the emission
data engine used to demonstrate compliance with the applicable
standards of this part is in all material respects as described in the
manufacturer's application for certification; that it has been tested
in accordance with the applicable test procedures utilizing the fuels
and equipment described in the application for certification; and that
on the basis of such tests, the engine family conforms to the
requirements of this part. If, on the basis of the data supplied and
any additional data as required by the Administrator, the Administrator
determines that the test engine was not as described in the application
for certification or was not tested in accordance with the applicable
test procedures utilizing the fuels and equipment as described in the
application for certification, the Administrator may make the
determination that the engine does not meet the applicable standards.
If the Administrator makes such a determination, he/she may withhold,
suspend, or revoke the certificate of conformity under Sec. 94.208
(c)(3)(i).

Sec. 94.207 Special test procedures.

(a) Establishment of special test procedures by EPA. The
Administrator may, on the basis of written application by a
manufacturer, establish special test procedures other than those set
forth in this part, for any engine that the Administrator determines is
not susceptible to satisfactory testing under the specified test
procedures set forth in subpart B of this part.
(b) Use of alternate test procedures by a manufacturer. (1) A
manufacturer may elect to use an alternate test procedure, provided
that it is equivalent to the specified procedures with respect to the
demonstration of compliance, its use is approved in advance by the
Administrator, and the basis for the equivalence with the specified
test procedures is fully described in the manufacturer's application.
(2) The Administrator may reject data generated under alternate
test procedures if the data do not correlate with data generated under
the specified procedures.

Sec. 94.208 Certification.

(a) If, after a review of the application for certification, test
reports and data acquired from an engine or from a development data
engine, and any other information required or obtained by EPA, the
Administrator determines that the application is complete and that the
engine family meets the requirements of the Act and this part, he/she
will issue a certificate of conformity with respect to such engine
family, except as

[[Page 68570]]

provided by paragraph (c)(3) of this section. The certificate of
conformity is valid for each engine family from the date of issuance by
EPA until 31 December of the model year or calendar year for which it
is issued and upon such terms and conditions as the Administrator deems
necessary or appropriate to ensure that the production engines covered
by the certificate will meet the requirements of the Act and of this
part.
(b) [Reserved]
(c) (1) The manufacturer shall bear the burden of establishing to
the satisfaction of the Administrator that the conditions upon which
the certificates were issued were satisfied or excused.
(2) The Administrator will determine whether the test data included
in the application represents all engines of the engine family.
(3) Notwithstanding the fact that any engine(s) may comply with
other provisions of this subpart, the Administrator may withhold or
deny the issuance of any certificate of conformity, or suspend or
revoke any such certificate(s) which has (have) been issued with
respect to any such engine(s) if:
(i) The manufacturer submits false or incomplete information in its
application for certification thereof;
(ii) The manufacturer renders inaccurate any test data which it
submits pertaining thereto or otherwise circumvents the intent of the
Act, or of this part with respect to such engine;
(iii) Any EPA Enforcement Officer is denied access on the terms
specified in Sec. 94.215 to any facility or portion thereof which
contains any of the following:
(A) An engine which is scheduled to undergo emissions testing, or
which is undergoing emissions testing, or which has undergone emissions
testing; or
(B) Any components used or considered for use in the construction,
modification or buildup of any engine which is scheduled to undergo
emissions testing, or which is undergoing emissions testing, or which
has undergone emissions testing for purposes of emissions
certification; or
(C) Any production engine which is or will be claimed by the
manufacturer to be covered by the certificate; or
(D) Any step in the construction of the engine; or
(E) Any records, documents, reports or histories required by this
part to be kept concerning any of the items listed in paragraphs
(c)(3)(iii)(A) through (D) of this section; or
(iv) Any EPA Enforcement Officer is denied ``reasonable
assistance'' (as defined in Sec. 94.215).
(4) In any case in which a manufacturer knowingly submits false or
inaccurate information or knowingly renders inaccurate or invalid any
test data or commits any other fraudulent acts and such acts contribute
substantially to the Administrator's decision to issue a certificate of
conformity, the Administrator may deem such certificate void ab initio.
(5) In any case in which certification of an engine is to be
withheld, denied, revoked or suspended under paragraph (c)(3) of this
section, and in which the Administrator has presented to the
manufacturer involved reasonable evidence that a violation of
Sec. 94.215 in fact occurred, the manufacturer, if it wishes to contend
that, even though the violation occurred, the engine in question was
not involved in the violation to a degree that would warrant
withholding, denial, revocation or suspension of certification under
paragraph (c)(3) of this section, shall have the burden of establishing
that contention to the satisfaction of the Administrator.
(6) Any revocation, suspension, or voiding of certification under
paragraph (c)(3) of this section shall:
(i) Be made only after the manufacturer concerned has been offered
an opportunity for a hearing conducted in accordance with Sec. 94.216;
and
(ii) Extend no further than to forbid the introduction into
commerce of engines previously covered by the certification which are
still in the hands of the manufacturer, except in cases of such fraud
or other misconduct that makes the certification invalid ab initio.
(7) The manufacturer may request, within 30 days of receiving
notification, that any determination made by the Administrator under
paragraph (c)(3) of this section to withhold or deny certification be
reviewed in a hearing conducted in accordance with Sec. 94.216. The
request shall be in writing, signed by an authorized representative of
the manufacturer and shall include a statement specifying the
manufacturer's objections to the Administrator's determinations, and
data in support of such objections. If the Administrator finds, after a
review of the request and supporting data, that the request raises a
substantial factual issue, he/she will grant the request with respect
to such issue.
(d) In approving an application for certification, the
Administrator may specify:
(1) A broader range of adjustability than recommended by the
manufacturer for those engine parameters which are subject to
adjustment, if the Administrator determines that it will not be
practical to keep the parameter adjusted within the recommended range
in use;
(2) A longer useful life period, if the Administrator determines
that the useful life of the engines in the engine family, as defined in
Sec. 94.2, is longer than the period specified by the manufacturer;
and/or
(3) Larger deterioration factors, if the Administrator determines
that the deterioration factors specified by the manufacturer do not
meet the requirements of Sec. 94.218.
(e) Within 30 days following receipt of notification of the
Administrator's determinations made under paragraph (d) of this
section, the manufacturer may request a hearing on the Administrator's
determinations. The request shall be in writing, signed by an
authorized representative of the manufacturer and shall include a
statement specifying the manufacturer's objections to the
Administrator's determinations and data in support of such objections.
If, after review of the request and supporting data, the Administrator
finds that the request raises a substantial factual issue, the
manufacturer shall be provided with a hearing in accordance with
Sec. 94.216 with respect to such issue.

Sec. 94.209 Special provisions for post-manufacturer marinizers.

(a) Eligibility requirements. To be eligible to use the provisions
of paragraph (b) of this section, the manufacturer shall demonstrate
that it has met all the following requirements:
(1) The manufacturer must be a post-manufacturer marinizer as
defined in Sec. 94.2;
(2) The base engine used for modification shall have a Certificate
of Conformity issued under 40 CFR part 89 or 40 CFR part 92 or the
heavy-duty engine provisions of 40 CFR part 86; and (3) The certified
emission levels (after application of deterioration factors) of the
base engine shall be below the numerical levels of the otherwise
applicable standards of this part for all pollutants.
(b) Broader engine families. (1) In lieu of the requirements of
Sec. 94.204, the manufacturer may group its engines into engine
families that consist of engines that are within a single category of
engines and have similar emission deterioration characteristics.
(2) All other provisions of this subpart shall apply to these
engines using the engine family defined in (b)(1) of this section.
(c) Hardship relief. Post-manufacture marinizers may take any of
the otherwise prohibited actions identified

[[Page 68571]]

in Sec. 94.1103(a)(1) if approved in advance by the Administrator, and
subject to the following requirements:
(1) Application for relief must be submitted to the Engine Programs
and Compliance Division of the EPA in writing prior to the earliest
date in which the applying manufacturer would be in violation of
Sec. 94.1103. The manufacturer must submit evidence showing that the
requirements for approval have been met.
(2) [Reserved]
(3) The conditions causing the impending violation must not be
substantially the fault of the applying manufacturer.
(4) The conditions causing the impending violation must be such
that the applying manufacturer will experience serious economic
hardship if relief is not granted.
(5) The applying manufacturer must demonstrate that no other
allowances under this part will be available to avoid the impending
violation.
(6) Any relief granted must begin within one year after the
implementation date of the standard applying to the engines for which
relief is requested, and may not exceed one year in duration.
(7) The Administrator may impose other conditions on the granting
of relief including provisions to recover the lost environmental
benefit.
(d) Compliance date of standards. Post-manufacture marinizers may
elect to delay the compliance date of the standards in Sec. 94.8 by one
year, instead of using the provisions of paragraph (c) of this section.
Post-manufacture marinizers wishing to take advantage of this provision
must inform the Director of the Engine Programs and Compliance Division
of their intent to do so in writing before the date that compliance
with the standards would otherwise be mandatory.

Sec. 94.210 Amending the application and certificate of conformity.

(a) The manufacturer shall notify the Administrator when changes to
information required to be described in the application for
certification are to be made to a product line covered by a certificate
of conformity. This notification shall include a request to amend the
application or the existing certificate of conformity. Except as
provided in paragraph (e) of this section, no manufacturer shall make
said changes or produce said engines prior to receiving approval from
EPA.
(b) A manufacturer's request to amend the application or the
existing certificate of conformity shall include the following
information:
(1) A full description of the change to be made in production, or
of the engines to be added;
(2) Engineering evaluations or data showing that the engines as
modified or added will comply with all applicable emission standards;
and
(3) A determination whether the manufacturer's original test fleet
selection is still appropriate, and if the original test fleet
selection is determined not to be appropriate, test fleet selection(s)
representing the engines changed or added which would have been
required if the engines had been included in the original application
for certification.
(c) The Administrator may require the manufacturer to perform tests
on the engine representing the engine to be added or changed.
(d)(1) Based on the description of the amendment and data derived
from such testing as the Administrator may require or conduct, the
Administrator will determine whether the change or addition would still
be covered by the certificate of conformity then in effect.
(2) If the Administrator determines that the change or new
engine(s) meets the requirements of this part and the Act, the
appropriate certificate of conformity shall be amended.
(3) If the Administrator determines that the changed engine(s) does
not meet the requirements of this part and the Act, the certificate of
conformity will not be amended. The Administrator shall provide a
written explanation to the manufacturer of the decision not to amend
the certificate. The manufacturer may request a hearing on a denial.
(e) A manufacturer may make changes in or additions to production
engines concurrently with the notification to the Administrator, as
required by paragraph (a) of this section, if the manufacturer complies
with the following requirements:
(1) In addition to the information required in paragraph (b) of
this section, the manufacturer shall supply supporting documentation,
test data, and engineering evaluations as appropriate to demonstrate
that all affected engines will still meet applicable emission
standards.
(2) If, after a review, the Administrator determines additional
testing is required, the manufacturer shall provide the required test
data within 30 days or cease production of the affected engines.
(3) If the Administrator determines that the affected engines do
not meet applicable requirements, the Administrator will notify the
manufacturer to cease production of the affected engines and to recall
and correct at no expense to the owner all affected engines previously
produced.
(4) Election to produce engines under this paragraph will be deemed
to be a consent to recall all engines that the Administrator determines
do not meet applicable standards and to cause such nonconformity to be
remedied at no expense to the owner.

Sec. 94.211 Emission-related maintenance instructions for purchasers.

(a) The manufacturer shall furnish or cause to be furnished to the
ultimate purchaser of each new engine, subject to the standards
prescribed in Sec. 94.8, written instructions for the proper
maintenance and use of the engine as are reasonable and necessary to
assure the proper functioning of the emissions control system,
consistent with the applicable provisions of paragraph (b) of this
section.
(1) The maintenance and use instructions required by this section
shall be clear and easily understandable.
(2) The maintenance instructions required by this section shall
contain a general description of the documentation that would
demonstrate that the ultimate purchaser or any subsequent owner had
complied with the instructions.
(b)(1) The manufacturer must provide in boldface type on the first
page of the written maintenance instructions notice that maintenance,
replacement, or repair of the emission control devices and systems may
be performed by any engine repair establishment or individual.
(2) The instructions under paragraph (b)(1) of this section will
not include any condition on the ultimate purchaser's or owner's using,
in connection with such engine, any component or service (other than a
component or service provided without charge under the terms of the
purchase agreement) which is identified by brand, trade, or corporate
name. Such instructions also will not directly or indirectly
distinguish between service performed by any other service
establishments with which such manufacturer has a commercial
relationship and service performed by independent vessel or engine
repair facilities with which such manufacturer has no commercial
relationship.
(3) The prohibition of paragraph (b)(2) of this section may be
waived by the Administrator if:
(i) The manufacturer satisfies the Administrator that the engine
will function properly only if the component or service so identified
is used in connection with such engine, and

[[Page 68572]]

(ii) The Administrator finds that such a waiver is in the public
interest.
(c) The manufacturer shall provide to the Administrator, no later
than the time of the submission required by Sec. 94.203, a copy of the
emission-related maintenance instructions that the manufacturer
proposes to supply to the ultimate purchaser or owner in accordance
with this section. The Administrator will review such instructions to
determine whether they are reasonable and necessary to ensure the
proper functioning of the engine's emission control systems. If the
Administrator determines that such instructions are not reasonable and
necessary to ensure the proper functioning of the emission control
systems, he/she may disapprove the application for certification or may
require that the manufacturer modify the instructions.
(d) Any revision to the maintenance instructions which will affect
emissions shall be supplied to the Administrator at least 30 days
before being supplied to the ultimate purchaser or owner unless the
Administrator consents to a lesser period of time, and is subject to
the provisions of Sec. 94.210.
(e) This paragraph (e) specifies emission-related scheduled
maintenance for purposes of obtaining durability data for marine
engines. The maintenance intervals specified in this paragraph are
minimum intervals.
(1) All emission-related scheduled maintenance for purposes of
obtaining durability data must occur at the same or longer hours of use
intervals as those specified in the manufacturer's maintenance
instructions furnished to the ultimate purchaser of the engine under
paragraph (a) of this section. This maintenance schedule may be updated
as necessary throughout the testing of the engine, provided that no
maintenance operation is deleted from the maintenance schedule after
the operation has been performed on the test equipment or engine.
(2) Any emission-related maintenance which is performed on
equipment, engines, subsystems, or components must be technologically
necessary to ensure in-use compliance with the emission standards. The
manufacturer must submit data which demonstrate to the Administrator
that all of the emission-related scheduled maintenance which is to be
performed is technologically necessary. Scheduled maintenance must be
approved by the Administrator prior to being performed or being
included in the maintenance instructions provided to the purchasers
under paragraph (a) of this section.
(i) The Administrator may require longer maintenance intervals than
those listed in paragraphs (e)(3) and (e)(4) of this section where the
listed intervals are not technologically necessary.
(ii) The Administrator may allow manufacturers to specify shorter
maintenance intervals than those listed in paragraphs (e)(3) and (e)(4)
of this section where technologically necessary for Category 2 engines.
(3) The adjustment, cleaning, repair, or replacement of items
listed in paragraphs (e)(3)(i) through (e)(3)(iii) of this section
shall occur at 1,500 hours of use and at 1,500-hour intervals
thereafter.
(i) Exhaust gas recirculation system-related filters and coolers.
(ii) Positive crankcase ventilation valve.
(iii) Fuel injector tips (cleaning only).
(4) The adjustment, cleaning and repair of items in paragraphs
(e)(4)(i) through (e)(4)(vii) of this section shall occur at 3,000
hours of use and at 3,000-hour intervals thereafter for engines rated
under 130 kW, or at 4,500-hour intervals thereafter for nonroad
compression-ignition engines rated at or above 130 kW.
(i) Fuel injectors.
(ii) Turbocharger.
(iii) Electronic engine control unit and its associated sensors and
actuators.
(iv) Particulate trap or trap-oxidizer system (including related
components).
(v) Exhaust gas recirculation system (including all related control
valves and tubing), except as otherwise provided in paragraph (e)(3)(i)
of this section.
(vi) Catalytic convertor.
(vii) Any other add-on emission-related component (i.e., a
component whose sole or primary purpose is to reduce emissions or whose
failure will significantly degrade emission control and whose function
is not integral to the design and performance of the engine).
(f) Scheduled maintenance not related to emissions which is
reasonable and technologically necessary (e.g., oil change, oil filter
change, fuel filter change, air filter change, cooling system
maintenance, adjustment of idle speed, governor, engine bolt torque,
valve lash, injector lash, timing, lubrication of the exhaust manifold
heat control valve, etc.) may be performed on durability vehicles at
the least frequent intervals recommended by the manufacturer to the
ultimate purchaser, (e.g., not the intervals recommended for severe
service).
(g) Adjustment of engine idle speed on emission data engines may be
performed once before the low-hour emission test point. Any other
engine, emission control system, or fuel system adjustment, repair,
removal, disassembly, cleaning, or replacement on emission data
vehicles shall be performed only with advance approval of the
Administrator.
(h) Equipment, instruments, or tools may not be used to identify
malfunctioning, maladjusted, or defective engine components unless the
same or equivalent equipment, instruments, or tools will be available
to dealerships and other service outlets and are:
(1) Used in conjunction with scheduled maintenance on such
components; or
(2) Used subsequent to the identification of a vehicle or engine
malfunction, as provided in paragraph (e) of this section for emission
data engines; or
(3) Specifically authorized by the Administrator.
(i) All test data, maintenance reports, and required engineering
reports shall be compiled and provided to the Administrator in
accordance with Sec. 94.215.
(j)(1) The components listed in paragraphs (j)(1)(i) through
(j)(1)(vi) of this section are defined as critical emission-related
components.
(i) Catalytic convertor.
(ii) Electronic engine control unit and its associated sensors and
actuators.
(iii) Exhaust gas recirculation system (including all related
filters, coolers, control valves, and tubing).
(iv) Positive crankcase ventilation valve.
(v) Particulate trap or trap-oxidizer system.
(vi) Any other add-on emission-related component (i.e., a component
whose sole or primary purpose is to reduce emissions or whose failure
will significantly degrade emission control and whose function is not
integral to the design and performance of the engine).
(2) All critical emission-related scheduled maintenance must have a
reasonable likelihood of being performed in use. The manufacturer must
show the reasonable likelihood of such maintenance being performed in-
use. Critical emission-related scheduled maintenance items which
satisfy one of the conditions defined in paragraphs (j)(2)(i) through
(j)(2)(vi) of this section will be accepted as having a reasonable
likelihood of being performed in use.
(i) Data are presented which establish for the Administrator a
connection between emissions and vehicle performance such that as
emissions increase due to lack of maintenance, vehicle performance will
simultaneously deteriorate to a point unacceptable for typical
operation.

[[Page 68573]]

(ii) Survey data are submitted which adequately demonstrate to the
Administrator with an 80 percent confidence level that 80 percent of
such engines already have this critical maintenance item performed in-
use at the recommended interval(s).
(iii) A clearly displayed visible signal system approved by the
Administrator is installed to alert the equipment operator that
maintenance is due. A signal bearing the message ``maintenance needed''
or ``check engine,'' or a similar message approved by the
Administrator, shall be actuated at the appropriate usage point or by
component failure. This signal must be continuous while the engine is
in operation and not be easily eliminated without performance of the
required maintenance. Resetting the signal shall be a required step in
the maintenance operation. The method for resetting the signal system
shall be approved by the Administrator. The system must not be designed
to deactivate upon the end of the useful life of the engine or
thereafter.
(iv) A manufacturer may desire to demonstrate through a survey that
a critical maintenance item is likely to be performed without a visible
signal on a maintenance item for which there is no prior in-use
experience without the signal. To that end, the manufacturer may in a
given model year market up to 200 randomly selected vehicles per
critical emission-related maintenance item without such visible
signals, and monitor the performance of the critical maintenance item
by the owners to show compliance with paragraph (j)(2)(ii) of this
section. This option is restricted to two consecutive model years and
may not be repeated until any previous survey has been completed. If
the critical maintenance involves more than one engine family, the
sample will be sales weighted to ensure that it is representative of
all the families in question.
(v) The manufacturer provides the maintenance free of charge, and
clearly informs the customer that the maintenance is free in the
instructions provided under paragraph (a) of this section.
(vi) The manufacturer uses any other method which the Administrator
approves as establishing a reasonable likelihood that the critical
maintenance will be performed in-use.
(3) Visible signal systems used under paragraph (j)(2)(iii) of this
section are considered an element of design of the emission control
system. Therefore, disabling, resetting, or otherwise rendering such
signals inoperative without also performing the indicated maintenance
procedure is a prohibited act.

Sec. 94.212 Labeling.

(a) General requirements. (1) Each new engine covered by a
certificate of conformity under Sec. 94.208 shall be labeled by the
manufacturer in the manner described in this paragraph (b) of this
section at the time of manufacture.
(2) Each new marine engine modified from a base engine by post-
manufacturer marinizers in accordance with the provisions of
Sec. 94.209 (b) and covered by a certificate of conformity under
Sec. 94.208 shall be labeled by the PMM in the manner described in
paragraph (b) of this section.
(b) Engine labels. (1) Engine labels meeting the specifications of
paragraph (b)(2) of this section shall be applied by every manufacturer
at the point of original manufacture.
(2)(i) Engine labels shall be permanent and legible and shall be
affixed to the engine in a position in which it will be readily visible
after installation of the engine in the vessel.
(ii) The label shall be attached to an engine part necessary for
normal operation and not normally requiring replacement during the
useful life of the engine.
(iii) The label shall be affixed by the manufacturer in such manner
that it cannot be removed without destroying or defacing the label. The
label shall not be affixed to any equipment which is easily detached
from such engine.
(iv) The label may be made up of more than one piece, provided that
all pieces are permanently attached to the same engine part.
(v) The label shall contain the following information lettered in
the English language in block letters and numerals, which shall be of a
color that contrasts with the background of the label:
(A) The label heading: Marine Engine Emission Control Information.
(B) Full corporate name and trademark of the manufacturer.
(C) The model year.
(D) The category and subcategory of marine engine.
(E) Engine family and configuration identification.
(F) A prominent unconditional statement of compliance with U.S.
Environmental Protection Agency regulations which apply to marine
engines designated by the parameters of paragraph (b)(2)(v) (A) through
(E) of this section
(G) The useful life of the engine.
(H) The standards and/or FELs to which the engine was certified.
(I) Engine tune-up specifications and adjustments, as recommended
by the manufacturer in accordance with the applicable emission
standards, including but not limited to idle speeds(s), injection
timing, valve lash (as applicable), as well as other parameters deemed
necessary by the manufacturer.
(c) The provisions of this section shall not prevent a manufacturer
from also providing on the label any other information that such
manufacturer deems necessary for, or useful to, the proper operation
and satisfactory maintenance of the vessel or engine.

Sec. 94.213 Submission of engine identification numbers.

(a) Upon request of the Administrator, the manufacturer of any
engine covered by a certificate of conformity shall, within 30 days of
receipt of such request, identify by engine identification number, the
engines covered by the certificate of conformity.
(b) The manufacturer of any engines covered by a certificate of
conformity shall provide to the Administrator, within 60 days of the
issuance of a certificate of conformity, an explanation of the elements
in any engine identification coding system in sufficient detail to
enable the Administrator to identify those engines which are covered by
a certificate of conformity.

Sec. 94.214 Production engines.

Any manufacturer obtaining certification under this part shall
supply to the Administrator, upon his/her request, a reasonable number
of production engines, as specified by the Administrator. The engines
shall be representative of the engines, emission control systems, and
fuel systems offered and typical of production engines available for
sale or use under the certificate. These engines shall be supplied for
testing at such time and place and for such reasonable periods as the
Administrator may require.

Sec. 94.215 Maintenance of records; submittal of information; right of
entry.

(a) Any manufacturer subject to any of the standards or procedures
prescribed in this subpart shall establish, maintain and retain the
following adequately organized and indexed records:
(1) General records. The records required to be maintained by this
paragraph (a) shall consist of:
(i) Identification and description of all certification engines for
which testing is required under this subpart.
(ii) A description of all emission control systems which are
installed on

[[Page 68574]]

or incorporated in each certification engine.
(iii) A description of all procedures used to test each such
certification engine.
(iv) A copy of all applications for certification, filed with the
Administrator.
(2) Individual records. (i) A brief history of each engine used for
certification under this subpart including:
(A) In the case where a current production engine is modified for
use as a certification engine, a description of the process by which
the engine was selected and of the modifications made. In the case
where the certification engine is not derived from a current production
engine, a general description of the buildup of the engine (e.g.,
whether experimental heads were cast and machined according to supplied
drawings). In the cases in the previous two sentences, a description of
the origin and selection process for fuel system components, ignition
system components (as applicable), intake air pressurization and
cooling system components, cylinders, pistons and piston rings, exhaust
smoke control system components, and exhaust aftertreatment devices as
applicable, shall be included. The required descriptions shall specify
the steps taken to assure that the certification engine, with respect
to its engine, drivetrain, fuel system, emission control system
components, exhaust aftertreatment devices, or any other devices or
components as applicable, that can reasonably be expected to influence
exhaust emissions will be representative of production engines and that
either: all components and/or engine, construction processes, component
inspection and selection techniques, and assembly techniques employed
in constructing such engines are reasonably likely to be implemented
for production engines; or that they are as close as practicable to
planned construction and assembly process.
(B) A complete record of all emission tests performed (except tests
performed by EPA directly), including test results, the date and
purpose of each test, and the number of hours accumulated on the
engine.
(C) A record and description of all maintenance and other servicing
performed, giving the date of the maintenance or service and the reason
for it.
(D) A record and description of each test performed to diagnose
engine or emission control system performance, giving the date and time
of the test and the reason for it.
(E) A brief description of any significant events affecting the
engine during the period covered by the history and not described by an
entry under one of the previous headings, including such extraordinary
events as accidents involving the engine or dynamometer runaway.
(ii) Each such history shall be started on the date that the first
of any of the selection or buildup activities in paragraph (a)(2)(i)(A)
of this section occurred with respect to the certification engine and
shall be kept in a designated location.
(3) All records, other than routine emission test records, required
to be maintained under this subpart shall be retained by the
manufacturer for a period of 8 years after issuance of all certificates
of conformity to which they relate. Routine emission test records shall
be retained by the manufacturer for a period of one (1) year after
issuance of all certificates of conformity to which they relate.
Records may be retained as hard copy or reduced to computer disks,
etc., depending on the record retention procedures of the manufacturer:
Provided, that in every case all the information contained in the hard
copy shall be retained.
(4) Nothing in this section limits the Administrator's discretion
in requiring the manufacturer to retain additional records or submit
information not specifically required by this section.
(5) Pursuant to a request made by the Administrator, the
manufacturer shall submit to him/her the information that is required
to be retained.
(6) EPA may void a certificate of conformity ab initio for an
engine family for which the manufacturer fails to retain the records
required in this section or to provide such information to the
Administrator upon request.
(b) The manufacturer of engines subject to any of the standards
prescribed in this part shall submit to the Administrator, at the time
of issuance by the manufacturer, copies of all instructions or
explanations regarding the use, repair, adjustment, maintenance, or
testing of such engine, relevant to the control of crankcase, or
exhaust emissions issued by the manufacturer, for use by other
manufacturers, assembly plants, distributors, dealers, owners and
operators. Any material not translated into the English language need
not be submitted unless specifically requested by the Administrator.
(c) Any manufacturer participating in averaging, banking and
trading program of subpart D of this part 94 must comply with the
maintenance of records requirements of Sec. 94.308.
(d)(1) Any manufacturer who has applied for certification of a new
engine subject to certification testing under this subpart shall admit
or cause to be admitted any EPA Enforcement Officer during operating
hours on presentation of credentials to any of the following:
(i) Any facility where any such tests or any procedures or
activities connected with such test are or were performed;
(ii) Any facility where any engine which is being tested (or was
tested, or is to be tested) is present;
(iii) Any facility where any construction process or assembly
process used in the modification or buildup of such an engine into a
certification engine is taking place or has taken place; or
(iv) Any facility where any record or other document relating to
any of the activities listed in this paragraph (d)(1) is located.
(2) Upon admission to any facility referred to in paragraph (d)(1)
of this section, any EPA Enforcement Officer shall be allowed:
(i) To inspect and monitor any part or aspect of such procedures,
activities and testing facilities including, but not limited to,
monitoring engine preconditioning, emissions tests, service
accumulation, maintenance, and engine storage procedures, and to verify
correlation or calibration of test equipment;
(ii) To inspect and make copies of any such records, designs, or
other documents, including those records specified in subpart D of this
part; and
(iii) To inspect and/or photograph any part or aspect of any such
certification engine and any components to be used in the construction
thereof.
(3) In order to allow the Administrator to determine whether or not
production engines, conform to the conditions upon which a certificate
of conformity has been issued, or conform in all material respects to
the design specifications applicable to those engines, as described in
the application for certification for which a certificate of conformity
has been issued, any manufacturer shall admit any EPA Enforcement
Officer on presentation of credentials to:
(i) Any facility where any document, design or procedure relating
to the translation of the design and construction of engines and
emission related components described in the application for
certification or used for certification testing into production engines
is located or carried on;
(ii) Any facility where any engines to be introduced into commerce
are manufactured; and

[[Page 68575]]

(iii) Any facility where records specified this section are
located.
(4) On admission to any such facility referred to in paragraph
(d)(3) of this section, any EPA Enforcement Officer shall be allowed:
(i) To inspect and monitor any aspects of such manufacture and
other procedures;
(ii) To inspect and make copies of any such records, documents or
designs;
(iii) To inspect and photograph any part or aspect of any such
engine(s) and any component used in the assembly thereof that are
reasonably related to the purpose of his/her entry; and
(iv) To inspect and make copies of any records and documents
specified in this section.
(5) Any EPA Enforcement Officer shall be furnished by those in
charge of a facility being inspected with such reasonable assistance as
he/she may request to help him/her discharge any function listed in
this part. Each applicant for or recipient of certification is required
to cause those in charge of a facility operated for its benefit to
furnish such reasonable assistance without charge to EPA whether or not
the applicant controls the facility.
(6) The duty to admit or cause to be admitted any EPA Enforcement
Officer applies to any facility involved in the manufacturing or
assembling of engines, whether or not the manufacturer owns or controls
the facility in question and applies both to domestic and to foreign
manufacturers and facilities. EPA will not attempt to make any
inspections which it has been informed that local law forbids. However,
if local law makes it impossible to do what is necessary to insure the
accuracy of data generated at a facility, no informed judgment that an
engine is certifiable or is covered by a certificate can properly be
based on those data. It is the responsibility of the manufacturer to
locate its testing and manufacturing facilities in jurisdictions where
this situation will not arise.
(7) For purposes of this section:
(i) ``Presentation of credentials'' shall mean display of the
document designating a person as an EPA Enforcement Officer.
(ii) Where component or engine storage areas or facilities are
concerned, ``operating hours'' shall mean all times during which
personnel other than custodial personnel are at work in the vicinity of
the area or facility and have access to it.
(iii) Where facilities or areas other than those covered by
paragraph (d)(7)(ii) of this section are concerned, ``operating hours''
shall mean all times during which an assembly line is in operation or
all times during which testing, maintenance, service accumulation,
production or compilation of records, or any other procedure or
activity related to certification testing, to translation of designs
from the test stage to the production stage, or to engine manufacture,
or assembly is being carried out in a facility.
(iv) ``Reasonable assistance'' includes, but is not limited to,
clerical, copying, interpretation and translation services, the making
available on request of personnel of the facility being inspected
during their working hours to inform the EPA Enforcement Officer of how
the facility operates and to answer his questions, and the performance
on request of emissions tests on any engine which is being, has been,
or will be used for certification testing. Such tests shall be
nondestructive, but may require appropriate service accumulation. A
manufacturer may be compelled to cause the personal appearance of any
employee at such a facility before an EPA Enforcement Officer by
written request for his appearance, signed by the Assistant
Administrator for Air and Radiation or the Assistant Administrator for
Enforcement and Compliance Assurance, served on the manufacturer. Any
such employee who has been instructed by the manufacturer to appear
will be entitled to be accompanied, represented and advised by counsel.
(v) Any entry without 24 hour prior written or oral notification to
the affected manufacturer shall be authorized in writing by the
Assistant Administrator for Air and Radiation or the Assistant
Administrator for Enforcement and Compliance Assurance.
(8) EPA may void a certificate of conformity ab initio for engines
introduced into commerce if the manufacturer (or contractor for the
manufacturer, if applicable) fails to comply with any provision of this
section.

Sec. 94.216 Hearing procedures.

(a)(1) After granting a request for a hearing under Sec. 94.210 or
Sec. 94.208, the Administrator shall designate a Presiding Officer for
the hearing.
(2) The hearing shall be held as soon as practicable at a time and
place fixed by the Administrator or by the Presiding Officer.
(3) In the case of any hearing requested pursuant to Sec. 94.208,
the Administrator may in his/her discretion direct that all argument
and presentation of evidence be concluded within such fixed period not
less than 30 days as he/she may establish from the date that the first
written offer of a hearing is made to the manufacturer. To expedite
proceedings, the Administrator may direct that the decision of the
Presiding Officer (who may, but need not be the Administrator) shall be
the final EPA decision.
(b)(1) Upon his/her appointment pursuant to paragraph (a) of this
section, the Presiding Officer will establish a hearing file. The file
shall consist of the notice issued by the Administrator under
Sec. 94.210 or Sec. 94.208 together with any accompanying material, the
request for a hearing and the supporting data submitted therewith, and
all documents relating to the request for certification and all
documents submitted therewith, and correspondence and other data
material to the hearing.
(2) The hearing file will be available for inspection by the
applicant at the office of the Presiding Officer.
(c) An applicant may appear in person, or may be represented by
counsel or by any other duly authorized representative.
(d)(1) The Presiding Officer, upon the request of any party, or in
his/her discretion, may arrange for a prehearing conference at a time
and place specified by him/her to consider the following:
(i) Simplification of the issues;
(ii) Stipulations, admissions of fact, and the introduction of
documents;
(iii) Limitation of the number of expert witnesses;
(iv) Possibility of agreement disposing of all or any of the issues
in dispute;
(v) Such other matters as may aid in the disposition of the
hearing, including such additional tests as may be agreed upon by the
parties.
(2) The results of the conference shall be reduced to writing by
the Presiding Officer and made part of the record.
(e)(1) Hearings shall be conducted by the Presiding Officer in an
informal but orderly and expeditious manner. The parties may offer oral
or written evidence, subject to the exclusion by the Presiding Officer
of irrelevant, immaterial and repetitious evidence.
(2) Witnesses will not be required to testify under oath. However,
the Presiding Officer shall call to the attention of witnesses that
their statements may be subject to the provisions of 18 U.S.C. 1001
which imposes penalties for knowingly making false statements or
representations, or using false documents in any matter within the
jurisdiction of any department or agency of the United States.
(3) Any witness may be examined or cross-examined by the Presiding
Officer, the parties, or their representatives.

[[Page 68576]]

(4) Hearings shall be reported verbatim. Copies of transcripts of
proceedings may be purchased by the applicant from the reporter.
(5) All written statements, charts, tabulations, and similar data
offered in evidence at the hearings shall, upon a showing satisfactory
to the Presiding Officer of their authenticity, relevancy, and
materiality, be received in evidence and shall constitute a part of the
record.
(6) Oral argument may be permitted in the discretion of the
Presiding Officer and shall be reported as part of the record unless
otherwise ordered by him/her.
(f)(1) The Presiding Officer shall make an initial decision which
shall include written findings and conclusions and the reasons or basis
therefor on all the material issues of fact, law, or discretion
presented on the record. The findings, conclusions, and written
decision shall be provided to the parties and made a part of the
record. The initial decision shall become the decision of the
Administrator without further proceedings unless there is an appeal to
the Administrator or motion for review by the Administrator within 30
days of the date the initial decision was filed.
(2) On appeal from or review of the initial decision, the
Administrator shall have all the powers which he/she would have in
making the initial decision including the discretion to require or
allow briefs, oral argument, the taking of additional evidence or the
remanding to the Presiding Officer for additional proceedings. The
decision by the Administrator shall include written findings and
conclusions and the reasons or basis therefor on all the material
issues of fact, law, or discretion presented on the appeal or
considered in the review.

Sec. 94.217 Emission data engine selection.

(a) The manufacturer must select for testing, from each engine
family, the engine configuration which is expected to be worst-case for
exhaust emission compliance on in-use engines, considering all exhaust
emission constituents and the range of installation options available
to vessel builders.
(b) Each engine in the test fleet must be constructed to be
representative of production engines.
(c) After review of the manufacturer's test fleet, the
Administrator may select from the available fleet one additional test
engine from each engine family.
(d) Each engine selected shall be tested according to the
provisions of subpart B of this part.
(e) In lieu of testing an emission data engine selected under
paragraph (a) of this section and submitting the resulting data, a
manufacturer may, with Administrator approval, use emission data on a
similar engine for which certification has previously been obtained or
for which all applicable data required under this subpart have
previously been submitted. These data must be submitted in the
application for certification.

Sec. 94.218 Deterioration factor determination.

Manufacturers shall determine exhaust emission deterioration
factors using good engineering judgement according to the provisions of
this section. Every deterioration factor must be, in the
Administrator's judgment, consistent with emissions increases observed
in-use based on emission testing of similar engines. Deterioration
factors that predict emission increases over the useful life of an
engine that are significantly less than the emission increases over the
useful life observed from in-use testing of similar engines shall not
be used.
(a) A separate exhaust emission deterioration factor shall be
established for each engine family and for each emission constituent
applicable to that family.
(b) Calculation procedures. (1) For engines not utilizing
aftertreatment technology (e.g., catalyst). For each applicable
emission constituent, an additive deterioration factors shall be used;
that is, a deterioration factor that when added to the low mileage
emission rate equals the emission rate at the end of useful life.
However, if the deterioration factor supplied by the manufacturer is
less than zero, it shall be zero for the purposes of this section.
(2) For engines utilizing aftertreatment technology (e.g.,
catalyst). For each applicable emission constituent, a multiplicative
deterioration factors shall be used; that is deterioration factors that
when multiplied by the low mileage emission rate equal the emission
rate at the end of useful life. However, if the deterioration factor
supplied by the manufacturer is less than one, it shall be one for the
purposes of this section.
(c) Rounding. (1) In the case of a multiplicative exhaust emission
deterioration factor, the factor shall be rounded to three places to
the right of the decimal point in accordance with ASTM E 29-93a
(incorporated by reference at Sec. 94.5).
(2) In the case of an additive exhaust emission deterioration
factor, the factor shall be established to a minimum of two places to
the right of the decimal in accordance with ASTM E 29-93a (incorporated
by reference at Sec. 94.5).
(d)(1) Except as allowed by paragraph (d)(2) of this section, the
manufacturer shall determine the deterioration factors based on service
accumulation and related testing, according to the manufacturer's
procedures, and the provisions of Secs. 94.219 and 94.220. The
manufacturer shall determine the form and extent of this service
accumulation, consistent with good engineering practice, and shall
describe this process in the application for certification.
(2) Alternatives to service accumulation and testing for the
determination of a deterioration factor. A written explanation of the
appropriateness of using an alternative must be included in the
application for certification.
(i) Carryover and carryacross of durability emission data. In lieu
of testing an emission data or durability data engine selected under
Sec. 94.217 or Sec. 94.219, and submitting the resulting data, a
manufacturer may, with Administrator approval, use exhaust emission
deterioration data on a similar engine for which certification to the
same standard has previously been obtained or for which all applicable
data required under this subpart have previously been submitted. These
data must be submitted in the application for certification.
(ii) Use of non-marine deterioration data. In the case where a
manufacturer produces a certified motor vehicle engine, locomotive
engine, or other nonroad engine that is similar to the marine engine to
be certified, deterioration data from the non-marine engine may be
applied to the marine engine. This application of deterioration data
from such an engine to a marine engine is subject to Administrator
approval, and the determination of whether the engines are similar
shall be based on good engineering judgment.
(iii) Engineering analysis for established technologies. In the
case where an engine family uses technology which is well established,
an analysis based on good engineering practices may be used in lieu of
testing to determine a deterioration factor for that engine family.
Engines using exhaust gas recirculation or aftertreatment are excluded
from this provision. The manufacturer shall provide a written statement
to the Administrator that all data, analyses, test procedures,
evaluations, and other documents, on which the deterioration factor is
based, are available to the Administrator upon request.

[[Page 68577]]

Sec. 94.219 Durability data engine selection.

(a) The manufacturer shall select for durability testing, from each
engine family, the engine configuration which is expected to generate
the highest level of exhaust emission deterioration on engines in use,
considering all exhaust emission constituents and the range of
installation options available to vessel builders. The manufacturer
shall use good engineering judgment in making this selection.
(b) In lieu of testing the engine selected in paragraph (a) of this
section, the manufacturer may select, using good engineering judgement,
an equivalent or worse-case engine configuration. Carryover data
satisfying the provisions of Sec. 94.220 may also be used in lieu of
testing the configuration selected in paragraph (a) of this section.
(c) Durability data engines shall be built from subsystems and
components that are representative of actual production engines.

Sec. 94.220 Service accumulation.

(a) Stabilized emission service accumulation for emission data
engines.
(1) Each test emission data engine in the test fleet must be
operated with all emission control systems operating properly for a
period sufficient to stabilize emissions.
(2) A manufacturer may elect to consider as stabilized emission
levels from emission data engines with 125 or fewer hours of service.
(b) Durability data engines shall accummulate service in a manner
which will represent the emission levels from in-use engines over their
full useful life, consistent with good engineering judgement.
(1) Components may be removed from the engine and aged separately.
(2) End of useful life emission levels and deterioration factors
may be projected from durability data engines which have completed less
than full useful life service accumulation, provided that the amount of
service accumulation completed and projection procedures are determined
using good engineering judgement.
(c) No maintenance, other than recommended lubrication and filter
changes or maintenance otherwise allowed by this part, may be performed
during service accumulation without the Administrator's approval.
(d) Service accumulation should be performed in a manner using good
engineering judgment to ensure that emissions are representative of in-
use engines.
(e) The manufacturer must maintain, and provide to the
Administrator if requested, records stating the rationale for selecting
the service accumulation period and records describing the method used
to accumulate service hours on the test engine(s).

Sec. 94.221 Application of good engineering judgment.

(a) The manufacturer shall exercise good engineering judgment in
making all decisions called for under this subpart, including but not
limited to selections, categorizations, determinations, and
applications of the requirements of the subpart.
(b) Upon written request by the Administrator, the manufacturer
shall provide within 15 working days (or such longer period as may be
allowed by the Administrator) a written description of the engineering
judgment in question.
(c) The Administrator may reject any such decision by a
manufacturer if it is not based on good engineering judgment or is
otherwise inconsistent with the requirements of this subpart.
(d) If the Administrator rejects a decision by a manufacturer with
respect to the exercise of good engineering judgment, the following
provisions shall apply:
(1) If the Administrator determines that incorrect information was
deliberately used in the decision process, that important information
was deliberately overlooked, that the decision was not made in good
faith, or that the decision was not made with a rational basis, the
Administrator may suspend or void ab initio a certificate of
conformity.
(2) If the Administrator determines that the manufacturer's
decision is not covered by the provisions of paragraph (d)(1) of this
section, but that a different decision would reflect a better exercise
of good engineering judgment, then the Administrator will notify the
manufacturer of this concern and the basis of the concern.
(i) The manufacturer shall have at least 30 days to respond to this
notice. The Administrator may extend this response period upon request
from the manufacturer if it is necessary to generate additional data
for the manufacturer's response.
(ii) The Administrator shall make the final ruling after
considering the information provided by the manufacturer during the
response period. If the Administrator determines that the
manufacturer's decision was not made using good engineering judgment,
he/she may reject that decision and apply the new ruling to future
corresponding decisions as soon as practicable.
(e) The Administrator shall notify the manufacturer in writing
regarding any decision reached under paragraph (d)(1) or (2) of this
section. The Administrator shall include in this notification the basis
for reaching the determination.
(f) Within 30 working days following receipt of notification of the
Administrator's determinations made under paragraph (d) of this
section, the manufacturer may request a hearing on those
determinations. The request shall be in writing, signed by an
authorized representative of the manufacturer, and shall include a
statement specifying the manufacturer's objections to the
Administrator's determinations, and data or other analysis in support
of such objections. If, after review of the request and supporting data
or analysis, the Administrator finds that the request raises a
substantial factual issue, he/she shall provide the manufacturer a
hearing in accordance with Sec. 94.216 of this subpart with respect to
such issue.

Subpart D--Certification Averaging, Banking, and Trading Provisions

Sec. 94.301 Applicability.

Marine engine families subject to the standards of subpart A of
this part are eligible to participate in the certification averaging,
banking, and trading program described in this subpart. The provisions
of this subpart apply to manufacturers of new engines that are subject
to the emission standards of Sec. 94.8.

Sec. 94.302 Definitions.

The definitions of subpart A of this part apply to this subpart.
The following definitions also apply.
Applicable standard means a standard that would have otherwise been
applicable had the engine not been certified under this subpart to an
FEL different than that standard.
Broker means any entity that facilitates a trade between a buyer
and seller.
Buyer means the entity that receives credits as a result of trade
or transfer.
Reserved credits means credits that have been generated but have
not yet been reviewed by EPA or used to demonstrate compliance under
the averaging provisions of this subpart.
Seller means the entity that provides credits during a trade.

Sec. 94.303 General provisions.

(a) Participation in the averaging, banking, and trading program is
voluntary. A manufacturer may choose to involve some or all of its
engine families in any or all aspects of the program.

[[Page 68578]]

(b) An engine family is eligible to participate in the
certification averaging, banking, and trading program for
THC+NOX and PM emissions if it is subject to regulation
under this part with certain exceptions specified in paragraph (c) of
this section. No averaging, banking, and trading program is available
for meeting the CO standards of this part.
(c) Engines may not participate in the certification averaging,
banking, and trading program if they are exported. Only engines
certified under this part are eligible for inclusion in this
certification averaging, banking, and trading program.
(d) Averaging involves the generation of credits by a manufacturer
for use by that same manufacturer in the same calendar year. A
manufacturer may use averaging during certification to offset an
emission exceedance of an engine family caused by an FEL above the
applicable emission standard, subject to the provisions of this
subpart.
(e) Banking involves the generation of credits by a manufacturer in
a given calendar year for use in a subsequent model year. A
manufacturer may bank actual credits only after the end of the calendar
year and after EPA has reviewed the manufacturer's end-of-year reports.
During the calendar year and before submittal of the end-of-year
report, credits originally designated in the certification process for
banking will be considered reserved and may be redesignated for trading
or averaging in the end-of-year report. Credits declared for banking
from the previous calendar year that have not been reviewed by EPA may
be used in averaging or trading transactions. However, such credits may
be revoked at a later time following EPA review of the end-of-year
report or any subsequent audit actions.
(f) Trading involves the sale of banked credits for use in
certification of new engines under this part. Only banked credits may
be traded; reserved credits may not be traded.

Sec. 94.304 Compliance requirements.

(a) Manufacturers wishing to participate in certification
averaging, banking and trading programs shall select a FEL for each
engine family they wish to include. The level of the FEL shall be
selected by the manufacturer, subject to the upper limits described in
paragraph (m) of this section. An engine family certified to an FEL is
subject to all provisions specified in this part, except that the
applicable FEL replaces the applicable THC+NOX and PM
emission standard for the family participating in the averaging,
banking, and trading program.
(b) A manufacturer may certify one or more engine families at FELs
above or below the applicable emission standard, provided the summation
of the manufacturer's projected balance of all credit transactions in a
given calendar year is greater than or equal to zero, as calculated for
each family under Sec. 94.305 and reported under Sec. 94.309.
(c) Manufacturers certifying engine families with FELs exceeding
the applicable emission standard shall obtain emission credits in
amounts sufficient to address the shortfall. Credits may be obtained
from averaging, banking, or trading, subject to the restrictions
described in this subpart.
(d) Manufacturers certifying engine families with FELs below the
applicable emission standard may generate emission credits to average,
bank, or trade, or a combination thereof.
(e) Engine families may not generate credits for one pollutant
while also using credits for another pollutant in the same model year.
(f) Credits may only be used for certification; they may not be
used to remedy a violation of the FEL determined by production line or
in-use testing. Credits may be used to allow subsequent production of
engines for an engine family failing production line testing if the
manufacturer elects to recertify to a higher FEL.
(g) [Reserved].
(h) If an FEL is changed after initial certification in any given
model year, the manufacturer must conduct production line testing to
verify that the emission levels are achieved.
(i) Manufacturers participating in the averaging, banking and
trading program must demonstrate compliance with the applicable
emission standards at the end of the model year. Manufacturers that
have certified engine families to FELs above the applicable emission
standards and do not have sufficient emission credits to offset the
difference between the emission standard and the FEL for such engine
family (ies) will be in violation of the conditions of the certificate
of conformity for such engine family (ies). The certificates of
conformity may be voided ab initio for those engine families.
(j) In the event of a negative credit balance resulting from a
credit trade, both the buyer(s) and the seller(s) are liable, except in
cases involving fraud. Certificates of all engine families
participating in a negative trade may be voided ab initio.
(1) Where a buyer of credits is not responsible for causing the
negative credit balance, it is only liable to supply additional credits
equivalent to any amount of invalid credits that it used.
(2) Credit holders responsible for the credit shortfall may be
subject to the requirements of Sec. 94.309(g)(3).
(k) Averaging sets. Credits generated by engine families in one
averaging set may not be used for compliance by engine families in any
other averaging set. The averaging sets are defined as:
(1) Category 1 engines certified to the Tier 2 standards.
(2) Category 2 engines certified to the Tier 2 standards.
(3) Category 1 engines certified to the Tier 3 standards.
(4) Category 2 engines certified to the Tier 3 standards.
(l) Credit life shall be unlimited.
(m) Upper limits. The FELs for THC+NOX and PM for new
engines certified for participation in this averaging, banking and
trading program may not exceed the following values:
(1) For Category 1 engines, the FEL may not exceed the levels
contained in Table D-1.

Table D-1.--Category 1 Upper Limits for Family Emission Limits
----------------------------------------------------------------------------------------------------------------
THC+NOX FEL g/ PM FEL g/kW-
Subcategory liters/cylinder Tier Model year* kW-hr hr
----------------------------------------------------------------------------------------------------------------
Power 37 kW disp. < 0.9="" tier="" 2.....................="" 2004="" 11.5="" 1.2="" tier="" 3.....................="" 2008="" 7.5="" 1.2="" 0.9=""> disp. < 1.2........="" tier="" 2.....................="" 2004="" 11.5="" 1.2="" tier="" 3.....................="" 2008="" 7.5="" 1.2="" 1.2=""> disp. < 1.5........="" tier="" 2.....................="" 2004="" 10.5="" 0.54="" tier="" 3.....................="" 2008="" 7.5="" 0.54="" 1.5=""> disp. < 2.0........="" tier="" 2.....................="" 2004="" 10.5="" 0.54="" tier="" 3.....................="" 2008="" 7.5="" 0.54="" [[page="" 68579]]="" 2.0=""> disp. < 2.5........="" tier="" 2.....................="" 2006="" 10.5="" 0.54="" tier="" 3.....................="" 2008="" 7.5="" 0.54="" 2.5=""> disp. < 5.0........="" tier="" 2.....................="" 2008="" 10.5="" 0.54="" tier="" 3.....................="" 2010="" 7.5="" 0.54="" ----------------------------------------------------------------------------------------------------------------="" *="" the="" model="" years="" listed="" indicate="" the="" model="" years="" for="" which="" the="" specified="" tier="" of="" limits="" take="" effect.="" (2)="" for="" category="" 2="" engines,="" the="" fel="" may="" not="" exceed="" the="" levels="" contained="" in="" table="" d-2.="" table="" d-2.--category="" 2="" upper="" limits="" for="" family="" emission="" limits="" ------------------------------------------------------------------------="">X
Tier Model FEL g/kW- PM FEL g/
year* hr kW-hr
------------------------------------------------------------------------
Tier 2................................. 2008 10.7 0.60
Tier 3................................. 2010 7.5 0.60
------------------------------------------------------------------------
*The model years listed indicate the model years for which the specified
tier of limits take effect.

Sec. 94.305 Credit generation and use calculation.

(a) For each participating engine family, THC+NOX and PM
emission credits (positive or negative) are to be calculated according
to the equation in paragraph (b) of this section and rounded in
accordance with ASTM E29-93a, to the nearest one-hundredth of a
megagram (Mg). Consistent units are to be used throughout the
calculation.
(b) Credits for each engine family are calculated as:

Emission credits = (Std--FEL) X (UL) X (Production) X (AvgPR) X (LF) X
(10-\6\)

Where:

(i) Std=the applicable cycle-weighted marine engine
THC+NOX and/or PM emission standard in grams per kilowatt-
hour.
(ii) FEL = the family emission limit for the engine family in grams per
kilowatt-hour. (The FEL may not exceed the limit established in
Sec. 94.304(m) for each pollutant.)
(iii) UL = the useful life in hours.
(iv) Production = the number of engines participating in the averaging,
banking, and trading program within the given engine family during the
calendar year (or the number of engines in the subset of the engine
family for which credits are being calculated). Quarterly production
projections are used for initial certification. Actual applicable
production/sales volumes are used for end-of-year compliance
determination.
(v) AvgPR = average power rating of all of the configurations within an
engine family, calculated on a sales-weighted basis, in kilowatts.
(vi) LF = the load factor, dependent on whether the engine is intended
for propulsion or auxiliary applications, as follows:

(A) 0.69 for propulsion engines,
(B) 0.51 for auxiliary engines.

Sec. 94.306 Certification.

(a) In the application for certification a manufacturer must:
(1) Declare its intent to include specific engine families in the
averaging, banking, and/or trading programs. Separate declarations are
required for each pollutant (THC+NOX and PM).
(2) Declare FELs for each engine family participating in
certification averaging, banking, and/or trading.
(i) The FELs must be to the same number of significant digits as
the emission standard.
(ii) In no case may the FEL exceed the upper limit prescribed in
Sec. 94.304(m).
(3) Conduct and submit detailed calculations of projected emission
credits (positive or negative) based on quarterly production
projections for each participating family and for each pollutant, using
the applicable equation in Sec. 94.305 and the applicable values of the
terms in the equation for the specific family.
(i) If the engine family is projected to have negative emission
credits, state specifically the source (manufacturer/engine family) of
the credits necessary to offset the credit deficit according to
quarterly projected production.
(ii) If the engine family is projected to generate credits, state
specifically where the quarterly projected credits will be applied
(manufacturer/engine family or reserved).
(4) Submit a statement that the engines for which certification is
requested will not, to the best of the manufacturer's belief, cause the
manufacturer to have a negative credit balance when all credits are
calculated for all the manufacturer's engine families participating in
the averaging, banking, and trading program.
(b) Based on this information, each manufacturer's certification
application must demonstrate:
(1) That at the end of model year production, each engine family
has a net emissions credit balance equal to or greater than zero for
any pollutant and program for which participation in certification
under averaging, banking, and/or trading is being sought. The equation
in section Sec. 94.305 shall be used in this calculation for each
engine family.
(2) That the manufacturer will obtain sufficient credits to be used
to comply with the emission standard for any engine family with an FEL
that exceeds the applicable emission standard, or where credits will be
applied if the FEL is less than the emission standard. In cases where
credits are being obtained, for each engine family involved the
manufacturer must identify specifically the source of the credits being
used (manufacturer/engine family). All such reports shall include all
credits involved in certification averaging, banking, or trading.
(3) That in cases where credits are being generated/supplied, the
use of such credits is specifically designated (manufacturer/engine
family or reserved). All such reports shall include all credits
involved in certification averaging, banking, or trading.
(c) Manufacturers must monitor projected versus actual production
throughout the model year to ensure that compliance with emission
standards is achieved at the end of the model year
(d) At the end of the model year, the manufacturer must provide the
end-of-year reports required under Sec. 94.309.
(1) Projected credits based on the information supplied in the
certification application may be used to obtain a certificate of
conformity. However, any such projected credits must be validated based
on review of the end of model year reports and may be revoked at a
later time based on follow-up audits or any other verification measure
deemed appropriate by the Administrator.
(2) Compliance for engine families using averaging, banking, or
trading will be determined at the end of the model

[[Page 68580]]

year. Manufacturers that have certified engine families with credit
balances for THC+NOX and/or PM that do not equal or exceed
zero shall be in violation of the conditions of the certificate of
conformity for such engine families. The certificate of conformity may
be voided ab initio for those engine families.
(e) Other conditions of certification. (1) All certificates issued
are conditional upon compliance by the manufacturer with the provisions
of this subpart both during and after the calendar year of production.
(2) Failure to comply with all provisions of this subpart will be
considered to be a failure to satisfy the conditions upon which the
certificate was issued, and the certificate may be deemed void ab
initio.
(3) The manufacturer bears the burden of establishing to the
satisfaction of the Administrator that the conditions upon which the
certificate was issued were satisfied or waived.

Sec. 94.307 Labeling.

For all engines included in the certification averaging, banking,
and trading program, the FEL to which the engine is certified must be
included on the label required in Sec. 94.212.

Sec. 94.308 Maintenance of records.

(a) The manufacturer of any engine that is certified under the
averaging, banking, and trading program must establish, maintain, and
retain the following adequately organized and indexed records for each
such engine produced:
(1) EPA engine family and configuration;
(2) Engine identification number;
(3) Engine calendar year and build date;
(4) Rated power;
(5) Purchaser and destination or owner; and
(6) Assembly plant.
(b) The manufacturer of any engine family that is certified under
the averaging, banking, and trading program must establish, maintain,
and retain the following adequately organized and indexed records for
each such family:
(1) Model year and EPA engine family;
(2) Family Emission Limit(s) (FEL);
(3) Rated power for each configuration;
(4) Projected applicable production/sales volume for the calendar
year;
(5) Actual applicable production/sales volume for the calendar
year; and
(6) Useful life.
(c) Any manufacturer producing an engine family participating in
trading of credits must maintain the following records on a quarterly
basis for each engine family in the trading program:
(1) The model year and engine family;
(2) The actual quarterly and cumulative applicable production/sales
volume;
(3) The values required to calculate credits as given in
Sec. 94.305;
(4) The resulting type and number of credits generated/required;
(5) How and where credit surpluses are dispersed; and
(6) How and through what means credit deficits are met.
(d) The manufacturer must retain all records required to be
maintained under this section for a period of 8 years from the due date
for the end-of-calendar year report. Records may be retained as hard
copy or reduced to microfilm, ADP diskettes, and so forth, depending on
the manufacturer's record retention procedure; provided, that in every
case all information contained in the hard copy is retained.
(e) Nothing in this section limits the Administrator's discretion
in requiring the manufacturer to retain additional records or submit
information not specifically required by this section.
(f) Pursuant to a request made by the Administrator, the
manufacturer must submit to the Administrator the information that the
manufacturer is required to retain.
(g) EPA may void ab initio a certificate of conformity for an
engine family for which the manufacturer fails to retain the records
required in this section or to provide such information to the
Administrator upon request.

Sec. 94.309 Reports.

(a) Manufacturers must submit the certification information as
required under Sec. 94.306, and end-of-year reports each year as part
of their participation in certification averaging, banking, and trading
programs.
(b) Quarterly reports. All entities involved in credit trades must
submit quarterly reports. The reports shall include the source or
recipient of the credits, the amount of credits involved plus remaining
balances, details regarding the pollutant, and model year as well as
the information prescribed in Sec. 94.308(c). Copies of contracts
related to credit trading must be included or supplied by the buyer,
seller, and broker, as applicable.
(c) End-of-year reports must include the information prescribed in
Sec. 94.308(b). The report shall include a calculation of credit
balances for each family to show that the summation of the
manufacturer's use of credits results in a credit balance equal to or
greater than zero. The report shall be consistent in detail with the
information submitted under Sec. 94.306 and show how credit surpluses
were dispersed and how credit shortfalls were met on a family specific
basis. The end-of-year report shall incorporate any information
reflected in previous quarterly reports.
(d) The applicable production/sales volume for quarterly and end-
of-year reports must be based on the location of either the point of
first retail sale by the manufacturer or the point at which the engine
is placed into service, whichever occurs first. This is called the
final product purchase location.
(e) Each quarterly and end-of-year report submitted shall include a
statement certifying to the accuracy and authenticity of the material
reported therein.
(f) Requirements for submission. (1) Quarterly reports must be
submitted within 90 days of the end of the calendar quarter to: Group
Manager, Engine Compliance Programs Group, Engine Programs and
Compliance Division U.S. Environmental Protection Agency, 6403-J, 401 M
St., SW, Washington, D.C. 20460.
(2) End-of-year reports must be submitted within 120 days of the
end of the calendar year to: Group Manager, Engine Compliance Programs
Group, Engine Programs and Compliance Division U.S. Environmental
Protection Agency, 6403-J, 401 M St., SW, Washington, D.C. 20460.
(3) Failure by a manufacturer participating in the averaging,
banking, or trading program to submit any quarterly or end-of-year
reports in the specified time for all engines is a violation of
sections 203(a)(1) and 213 of the Clean Air Act for each engine.
(4) A manufacturer generating credits for banking only who fails to
submit end-of-year reports in the applicable specified time period (120
days after the end of the calendar year) may not use or trade the
credits until such reports are received and reviewed by EPA. Use of
projected credits pending EPA review is not permitted in these
circumstances.
(g) Reporting errors. (1) Errors discovered by EPA or the
manufacturer in the end-of-year report, including errors in credit
calculation, may be corrected 180-days subsequent to submission of the
end-of-year report. Errors discovered by EPA after 180-days shall be
correctable if, as a result of the correction, the manufacturer's 's
credits are reduced. Errors in the manufacturer's favor are not
corrected if discovered after the 180-day correction period allowed.
(2) If EPA or the manufacturer determines that a reporting error
occurred on an end-of-year report

[[Page 68581]]

previously submitted to EPA under this section, the manufacturer's
credits and credit calculations will be recalculated. Erroneous
positive credits will be void. Erroneous negative credit balances may
be corrected by EPA.
(3) If EPA review of a manufacturer's end-of-year report indicates
a credit shortfall, the manufacturer will be permitted to purchase the
necessary credits to bring the credit balance to zero. These credits
must be supplied at the ratio of 1.1 credits for each 1.0 credit
needed. If sufficient credits are not available to bring the credit
balance to zero for the family(ies) involved, EPA may void the
certificate(s) for that family(ies) ab initio. In addition, all engines
within an engine family for which there are insufficient credits will
be considered to have violated the conditions of the certificate of
conformity and therefore are not covered by that certificate.
(4) If within 180 days of receipt of the manufacturer's end-of-year
report, EPA review determines a reporting error in the manufacturer's
favor (that is, resulting in an increased credit balance) or if the
manufacturer discovers such an error within 180 days of EPA receipt of
the end-of-year report, the credits are restored for use by the
manufacturer.

Sec. 94.310 Notice of opportunity for hearing.

Any voiding of the certificate under this subpart will be made only
after the manufacturer concerned has been offered an opportunity for a
hearing conducted in accordance with Sec. 94.216 and, if a manufacturer
requests such a hearing, will be made only after an initial decision by
the Presiding Officer.

Subpart E--Emission-related Defect Reporting Requirements,
Voluntary Emission Recall Program

Sec. 94.401 Applicability.

The requirements of this subpart of this part are applicable to
manufacturers of engines subject to the provisions of subpart A of this
part. The requirement to report emission-related defects affecting a
given class or category of engines applies for eight years from the end
of the year in which such engines were manufactured.

Sec. 94.402 Definitions.

The definitions of Subpart A of this part apply to this subpart.

Sec. 94.403 Emission defect information report.

(a) A manufacturer must file a defect information report whenever
it determines, in accordance with procedures it established to identify
either safety-related or performance defects, (or based on other
information) that a specific emission-related defect exists in 25 or
more Category 1 marine engines, or 10 or more Category 2 marine
engines. No report must be filed under this paragraph for any emission-
related defect corrected prior to the sale of the affected engines to
an ultimate purchaser.
(b) Defect information reports required under paragraph (a) of this
section must be submitted not more than 15 working days after the same
emission-related defect is found to effect 25 or more Category 1 marine
engines, or 10 or more Category 2 marine engines. Information required
by paragraph (c) of this section that is either not available within 15
working days or is significantly revised must be submitted as it
becomes available.
(c) Except as provided in paragraph (b) of this section, each
defect report must contain the following information in substantially
the format outlined:
(1) The manufacturer's corporate name.
(2) A description of the defect.
(3) A description of each class or category of engines potentially
affected by the defect including make, model, calendar year produced,
purchaser and any other information as may be required to identify the
engines affected.
(4) For each class or category of engines described in response to
paragraph (c)(3) of this section, the following shall also be provided:
(i) The number of engines known or estimated to have the defect and
an explanation of the means by which this number was determined.
(ii) The address of the plant(s) at which the potentially defective
engines were produced.
(5) An evaluation of the emissions impact of the defect and a
description of any operational or performance problems which a
defective engine might exhibit.
(6) Available emissions data which relate to the defect.
(7) An indication of any anticipated follow-up by the manufacturer.

Sec. 94.404 Voluntary emissions recall reporting.

(a) When any manufacturer initiates a voluntary emissions recall
campaign involving an engine, the manufacturer shall submit to EPA a
report describing the manufacturer's voluntary emissions recall plan as
prescribed by this section within 15 working days of the date owner
notification was begun. The report shall contain the following:
(1) A description of each class or category of engines recalled
including the number of engines to be recalled, the calendar year if
applicable, the make, the model, and such other information as may be
required to identify the engines recalled.
(2) A description of the specific modifications, alterations,
repairs, corrections, adjustments, or other changes to be made to
correct the engines affected by the emission-related defect.
(3) A description of the method by which the manufacturer will
notify engine owners.
(4) A description of the proper maintenance or use, if any, upon
which the manufacturer conditions eligibility for repair under the
remedial plan, an explanation of the manufacturer's reasons for
imposing any such condition, and a description of the proof to be
required of an engine owner to demonstrate compliance with any such
condition.
(5) A description of the procedure to be followed by engine owners
to obtain correction of the nonconformity. This shall include
designation of the date on or after which the owner can have the
nonconformity remedied, the time reasonably necessary to perform the
labor to remedy the defect, and the designation of facilities at which
the defect can be remedied.
(6) If some or all the nonconforming engines are to be remedied by
persons other than authorized warranty agents of the manufacturer, a
description of the class of persons other than authorized warranty
agents of the manufacturer who will remedy the defect.
(7) A copy of any written notification sent to engine owners.
(8) A description of the system by which the manufacturer will
assure that an adequate supply of parts will be available to perform
the repair under the remedial plan including the date by which an
adequate supply of parts will be available to initiate the repair
campaign, the percentage of the total parts requirement of each person
who is to perform the repair under the remedial plan to be shipped to
initiate the campaign, and the method to be used to assure the supply
remains both adequate and responsive to owner demand.
(9) Three copies of all necessary instructions to be sent to those
persons who are to perform the repair under the remedial plan.
(10) A description of the impact of the changes on fuel
consumption, operation or performance, and safety of each class or
category of engines to be recalled.
(11) A sample of any label to be applied to engines which
participate in the voluntary recall campaign.

[[Page 68582]]

(b) Unless otherwise specified by the Administrator, the
manufacturer shall report on the progress of the recall campaign by
submitting subsequent reports for six consecutive quarters, or until
proven that remedial action has been adequately taken on all affected
engines, whichever occurs first, commencing with the quarter after the
voluntary emissions recall campaign actually begins. Such reports shall
be submitted no later than 25 working days after the close of each
calendar quarter. For each class or group of engine subject to the
voluntary emissions recall campaign, the quarterly report shall contain
the:
(1) Emission recall campaign number, if any, designated by the
manufacturer.
(2) Date owner notification was begun, and date completed.
(3) Number of engines involved in the voluntary emissions recall
campaign.
(4) Number of engines known or estimated to be affected by the
emission-related defect and an explanation of the means by which this
number was determined.
(5) Number of engines inspected pursuant to voluntary emission
recall plan.
(6) Number of inspected engines found to be affected by the
emissions-related defect.
(7) Number of engines actually receiving repair under the remedial
plan.
(8) Number of engines determined to be unavailable for inspection
or repair under the remedial plan due to exportation, scrappage, or for
other reasons (specify).
(9) Number of engines determined to be ineligible for remedial
action due to a failure to properly maintain or use such engines.
(10) Three copies of any service bulletins which relate to the
defect to be corrected and which have not previously been reported.
(11) Three copies of all communications transmitted to engine
owners which relate to the defect to be corrected and which have not
previously been submitted.
(c) If the manufacturer determines that any of the information
requested in paragraph (b) of this section has changed or was
incorrect, revised information and an explanatory note shall be
submitted. Answers to paragraphs (b)(5), (6), (7), (8), and (9) of this
section shall be cumulative totals.
(d) The manufacturer shall maintain in a form suitable for
inspection, such as computer information storage devices or card files,
the names and addresses of engine owners:
(1) To whom notification was given;
(2) Who received remedial repair or inspection under the remedial
plan; and (3) Who were determined not to qualify for such remedial
action when eligibility is conditioned on proper maintenance or use.
(e) The records described in paragraph (d) of this section shall be
made available to the Administrator upon request.

Sec. 94.405 Alternative report formats.

(a) Any manufacturer may submit a plan for making either of the
reports required by Secs. 94.403 and 94.404 on computer diskettes,
magnetic tape or other machine readable format. The plan shall be
accompanied by sufficient technical detail to allow a determination
that data requirements of these sections will be met and that the data
in such format will be usable by EPA.
(b) Upon approval by the Administrator of the reporting system, the
manufacturer may use such system until otherwise notified by the
Administrator.

Sec. 94.406 Reports filing: record retention.

(a) The reports required by Secs. 94.403 and 94.404 shall be sent
to: Group Manager, Engine Compliance Programs Group, Engine Programs
and Compliance Division, U.S. Environmental Protection Agency, 6403-J,
401 M St., S.W., Washington, D.C. 20460.
(b) The information gathered by the manufacturer to compile the
reports required by Secs. 94.403 and 94.404 shall be retained for not
less than 8 years from the date of the manufacture of the engines and
shall be made available to duly authorized officials of the EPA upon
request.

Sec. 94.407 Responsibility under other legal provisions preserved.

The filing of any report under the provisions of this subpart shall
not affect a manufacturer's responsibility to file reports or
applications, obtain approval, or give notice under any provision of
law.

Sec. 94.408 Disclaimer of production warranty applicability.

(a) The act of filing an Emission Defect Information Report
pursuant to Sec. 94.403 is inconclusive as to the existence of a defect
subject to the warranty provided by section 207(a) of the Act.
(b) A manufacturer may include on each page of its Emission Defect
Information Report a disclaimer stating that the filing of a Defect
Information Report pursuant to these regulations is not conclusive as
to the applicability of the Production Warranty provided by section
207(a) of the Act.

Subpart F--Manufacturer Production Line Testing Programs

Sec. 94.501 Applicability.

The requirements of this subpart of this part are applicable to
manufacturers of engines subject to the provisions of Subpart A of this
part.

Sec. 94.502 Definitions.

The definitions in Subpart A of this part apply to this subpart.

Sec. 94.503 General requirements.

(a) Manufacturers shall test production line engines in accordance
with sampling procedures specified in Sec. 94.505 and the test
procedures specified in Sec. 94.506.
(b) The Administrator may waive some or all of the requirements of
this subpart.
(c) The requirements of this subpart apply with respect to all
applicable standards and FELs of subpart A of this part, including the
supplemental standards of Sec. 94.8(e).

Sec. 94.504 Right of entry and access.

(a) To allow the Administrator to determine whether a manufacturer
is complying with the provisions of this part, one or more EPA
enforcement officers may enter during operating hours and upon
presentation of credentials any of the following places:
(1) Any facility, including ports of entry, where any engine is to
be introduced into commerce or any emission-related component is
manufactured, assembled, or stored;
(2) Any facility where any test conducted pursuant to a
manufacturer's production line testing program or any procedure or
activity connected with such test is or was performed;
(3) Any facility where any test engine is present; and
(4) Any facility where any record required under Sec. 94.509 or
other document relating to this subpart is located.
(b) Upon admission to any facility referred to in paragraph (a) of
this section, EPA enforcement officers are authorized to perform the
following inspection-related activities:
(1) To inspect and monitor any aspect of engine manufacture,
assembly, storage, testing and other procedures, and to inspect and
monitor the facilities in which these procedures are conducted;
(2) To inspect and monitor any aspect of engine test procedures or
activities, including test engine selection, preparation and service
accumulation,

[[Page 68583]]

emission test cycles, and maintenance and verification of test
equipment calibration;
(3) To inspect and make copies of any records or documents related
to the assembly, storage, selection, and testing of an engine; and
(4) To inspect and photograph any part or aspect of any engine and
any component used in the assembly thereof that is reasonably related
to the purpose of the entry.
(c) EPA enforcement officers are authorized to obtain reasonable
assistance without cost from those in charge of a facility to help the
officers perform any function listed in this subpart and they are
authorized to request the manufacturer to make arrangements with those
in charge of a facility operated for the manufacturer benefit to
furnish reasonable assistance without cost to EPA.
(1) Reasonable assistance includes, but is not limited to,
clerical, copying, interpretation and translation services; the making
available on an EPA enforcement officer's request of personnel of the
facility being inspected during their working hours to inform the EPA
enforcement officer of how the facility operates and to answer the
officer's questions; and the performance on request of emission tests
on any engine which is being, has been, or will be used for production
line testing.
(2) By written request, signed by the Assistant Administrator for
Air and Radiation or the Assistant Administrator for Enforcement and
Compliance Assurance, and served on the manufacturer, a manufacturer
may be compelled to cause the personal appearance of any employee at
such a facility before an EPA enforcement officer. Any such employee
who has been instructed by the manufacturer to appear will be entitled
to be accompanied, represented, and advised by counsel.
(d) EPA enforcement officers are authorized to seek a warrant or
court order authorizing the EPA enforcement officers to conduct the
activities authorized in this section, as appropriate, to execute the
functions specified in this section. EPA enforcement officers may
proceed ex parte to obtain a warrant or court order whether or not the
EPA enforcement officers first attempted to seek permission from the
manufacturer or the party in charge of the facility(ies) in question to
conduct the activities authorized in this section.
(e) A manufacturer is responsible for locating its foreign testing
and manufacturing facilities in jurisdictions where local law does not
prohibit an EPA enforcement officer(s) from conducting the activities
specified in this section. EPA will not attempt to make any inspections
which it has been informed local foreign law prohibits.

Sec. 94.505 Sample selection for testing.

(a) At the start of each model year, the manufacturer will begin to
select engines from each engine family for production line testing.
Each engine will be selected from the end of the production line.
Testing shall be performed throughout the entire model year to the
extent possible. Engines selected shall cover the broadest range of
production possible.
(1)(i) The required sample size for a Category 1 engine family is
one percent of projected annual production for all engine families,
provided that no engine tested fails to meet applicable emission
standards. The required sample size is zero if a manufacturer's
projected annual production for all engine families is less than 100.
(ii) The required sample size for a Category 2 engine family is one
percent of projected annual production for all engine families, with a
minimum sample size of one test per model year provided that no engine
tested fails to meet applicable emission standards.
(2) Manufacturers may elect to test additional engines. All
additional engines must be tested in accordance with the applicable
test procedures of this part.
(3) The Administrator may reject any engines selected by the
manufacturer if he or she determines that such engines are not
representitive of actual production.
(b) The manufacturer must assemble the test engines using the same
mass production process that will be used for engines to be introduced
into commerce.
(c) No quality control, testing, or assembly procedures will be
used on any test engine or any portion thereof, including parts and
subassemblies, that have not been or will not be used during the
production and assembly of all other engines of that family, except
with the approval of the Administrator.

Sec. 94.506 Test procedures.

(a)(1) For engines subject to the provisions of this subpart, the
prescribed test procedures are those procedures described in subpart B
of this part, except as provided in this section.
(2) The Administrator may, on the basis of a written application by
a manufacturer, prescribe test procedures other than those specified in
paragraph (a)(1) of this section for any engine he/she determines is
not susceptible to satisfactory testing using procedures specified in
paragraph (a)(1) of this section.
(3) If test procedures other than those in subpart B were used in
certification of the engine family being tested under this subpart
(other than alternate test procedures necessary for testing of a
development engine instead of a low hour engine under Sec. 94.9), the
manufacturer shall use the test procedures used in certification for
production line testing.
(b)(1) The manufacturer may not adjust, repair, prepare, modify, or
perform any emission test on any test engine unless this adjustment,
repair, preparation, modification and/or test is documented in the
manufacturer's engine assembly and inspection procedures and is
actually performed by the manufacturer or unless this adjustment,
repair, preparation, modification and/or test is required or permitted
under this subpart or is approved in advance by the Administrator.
(2) Any adjustable engine parameter must be set to values or
positions that are within the range specified in the approved
application for certification .
(3) The Administrator may adjust or require to be adjusted any
engine parameter which the Administrator has determined to be subject
to adjustment for certification and production line testing, to any
setting within the specified adjustable range of that parameter, as
determined by the Administrator, prior to the performance of any test.
(c) Service Accumulation/Green Engine Factor. The manufacturer
shall accumulate up to 300 hours of service on the engines to be
tested. In lieu of conducting such service accumulation, the
manufacturer may establish a Green Engine Factor for each regulated
pollutant for each engine family to be used in calculating emissions
test results. The manufacturer shall obtain the approval of the
Administrator prior to using a Green Engine Factor.
(d) The manufacturer may not perform any maintenance on test
engines after selection for testing.
(e) If an engine is shipped to a facility other than the production
facility for production line testing, and an adjustment or repair is
necessary because of such shipment, the engine manufacturer must
perform the necessary adjustment or repair only after the initial test
of the engine, except where the Administrator has determined that the
test would be impossible to perform or would permanently damage the
engine.

[[Page 68584]]

(f) If an engine cannot complete the service accumulation ( if
applicable) or an emission test, because of a malfunction, the
manufacturer may request that the Administrator authorize either the
repair of that engine or its deletion from the test sequence.
(g) Retesting. If an engine manufacturer determines that any
production line emission test of an engine is invalid, the engine must
be retested in accordance with the requirements of this subpart.
Emission results from all tests must be reported to EPA, including test
results the manufacturer determines are invalid. The engine
manufacturer must also include a detailed explanation of the reasons
for invalidating any test in the quarterly report required in
Sec. 94.508(e). In the event a retest is performed, a request may be
made to the Administrator, within ten days of the end of the production
quarter, for permission to substitute the after-repair test results for
the original test results. The Administrator will either affirm or deny
the request by the engine manufacturer within ten working days from
receipt of the request.

Sec. 94.507 Sequence of testing.

(a) If one or more engines fail a production line test, then the
manufacturer must test two additional engines for each engine that
fails.
(b) The two additional engines tested under paragraph (a) of this
section shall be selected from either the next fifteen produced in that
engine family, or from those engines produced in that engine family
within 48 hours of the completion of the failed test.

Sec. 94.508 Calculation and reporting of test results.

(a) Manufacturers shall calculate initial test results using the
applicable test procedure specified in Sec. 94.506(a). These results
must also include the Green Engine Factor, if applicable. The
manufacturer shall round these results, in accordance with ASTM E29-93a
(incorporated by reference at Sec. 94.5), to the number of decimal
places contained in the applicable emission standard expressed to one
additional significant figure.
(b) Final test results shall be calculated by summing the initial
test results derived in paragraph (a) of this section for each test
engine, dividing by the number of tests conducted on the engine, and
rounding in accordance with ASTM E29-93a (incorporated by reference at
Sec. 94.5) to the same number of decimal places contained in the
applicable standard expressed to one additional significant figure.
(c) Manufacturers shall calculate the final test results for each
test engine by applying the appropriate deterioration factors, derived
in the certification process for the engine family, to the final test
results, and rounding in accordance with ASTM E 29-93a (incorporated by
reference at Sec. 94.5) to the same number of decimal places contained
in the applicable standard expressed to one additional significant
figure.
(d) If, subsequent to an initial failure of a production line test,
the average of the test results for the failed engine and the two
additional engines tested, is greater than any applicable emission
standard or FEL, the engine family is deemed to be in non-compliance
with applicable emission standards, and the manufacturer must notify
the Administrator within 2 working days of such noncompliance.
(e) Within 30 calendar days of the end of each quarter, each
manufacturer must submit to the Administrator a report which includes
the following information:
(1) The location and description of the manufacturer's emission
test facilities which were utilized to conduct testing reported
pursuant to this section;
(2) Total production and sample size for each engine family;
(3) The applicable standards and/or FELs against which each engine
family was tested;
(4) A description of the test engines;
(5) For each test conducted:
(i) A description of the test engine, including:
(A) Configuration and engine family identification;
(B) Year, make, and build date;
(C) Engine identification number;
(D) Number of hours of service accumulated on engine prior to
testing; and
(E) Description of Green Engine Factor; how it is determined and
how it is applied;
(ii) Location(s) where service accumulation was conducted and
description of accumulation procedure and schedule, if applicable;
(iii) Test number, date, test procedure used, initial test results
before and after rounding, and final test results for all production
line emission tests conducted, whether valid or invalid, and the reason
for invalidation of any test results, if applicable;
(iv) A complete description of any adjustment, modification,
repair, preparation, maintenance, and testing which was performed on
the test engine, has not been reported pursuant to any other paragraph
of this subpart, and will not be performed on other production engines;
(v) Any other information the Administrator may request relevant to
the determination whether the new engines being manufactured by the
manufacturer do in fact conform with the regulations with respect to
which the certificate of conformity was issued;
(6) For each failed engine as defined in Sec. 94.510(a), a
description of the remedy and test results for all retests as required
by Sec. 94.512(g);
(7) The date of the end of the engine manufacturer's model year
production for each engine family tested; and
(8) The following signed statement and endorsement by an authorized
representative of the manufacturer:
This report is submitted pursuant to Sections 213 and 208 of the
Clean Air Act. This production line testing program was conducted in
complete conformance with all applicable regulations under 40 CFR part
94. No emission-related changes to production processes or quality
control procedures for the engine family tested have been made during
this production line testing program that affect engines from the
production line. All data and information reported herein is, to the
best of (Company Name) knowledge, true and accurate. I am aware of the
penalties associated with violations of the Clean Air Act and the
regulations thereunder. (Authorized Company Representative.)

Sec. 94.509 Maintenance of records; submittal of information.

(a) The manufacturer for any new engine subject to any of the
provisions of this subpart must establish, maintain, and retain the
following adequately organized and indexed records:
(1) General records. A description of all equipment used to test
engines in accordance with Sec. 94.503. The equipment requirements in
subpart B of this part apply to tests performed under this subpart.
(2) Individual records. These records pertain to each production
line test conducted pursuant to this subpart and include:
(i) The date, time, and location of each test;
(ii) The method by which the Green Engine Factor was calculated or
the number of hours of service accumulated on the test engine when the
test began and ended;
(iii) The names of all supervisory personnel involved in the
conduct of the production line test;
(iv) A record and description of any adjustment, repair,
preparation or modification performed on test engines, giving the date,
associated time, justification, name(s) of the authorizing

[[Page 68585]]

personnel, and names of all supervisory personnel responsible for the
conduct of the action;
(v) If applicable, the date the engine was shipped from the
assembly plant, associated storage facility or port facility, and the
date the engine was received at the testing facility;
(vi) A complete record of all emission tests performed pursuant to
this subpart (except tests performed directly by EPA), including all
individual worksheets and/or other documentation relating to each test,
or exact copies thereof, in accordance with the record requirements
specified in subpart B of this part;
(vii) A brief description of any significant events during testing
not otherwise described under this paragraph (a)(2) of this section,
commencing with the test engine selection process and including such
extraordinary events as engine damage during shipment.
(3) The manufacturer must establish, maintain and retain general
records, pursuant to paragraph (a)(1) of this section, for each test
cell that can be used to perform emission testing under this subpart.
(b) The manufacturer must retain all records required to be
maintained under this subpart for a period of eight (8) years after
completion of all testing. Records may be retained as hard copy (i.e.,
on paper) or reduced to microfilm, floppy disk, or some other method of
data storage, depending upon the manufacturer's record retention
procedure; provided, that in every case, all the information contained
in the hard copy is retained.
(c) The manufacturer must, upon request by the Administrator,
submit the following information with regard to engine production:
(1) Projected production for each configuration within each engine
family for which certification has been requested and/or approved.
(2) Number of engines, by configuration and assembly plant,
scheduled for production.
(d) Nothing in this section limits the Administrator's discretion
to require a manufacturer to establish, maintain, retain or submit to
EPA information not specified by this section.
(e) All reports, submissions, notifications, and requests for
approval made under this subpart must be addressed to: Group Manager,
Engine Compliance Programs Group, Engine Programs and Compliance
Division 6403-J, U.S. Environmental Protection Agency, 401 M Street SW,
Washington, DC 20460.
(f) The manufacturer must electronically submit the results of its
production line testing using an EPA information format.

Sec. 94.510 Compliance with criteria for production line testing.

(a) A failed engine is one whose final test results pursuant to
Sec. 94.508(c), for one or more of the applicable pollutants, exceed an
applicable emission standard or FEL.
(b) An engine family is deemed to be in noncompliance, for purposes
of this subpart, if at any time throughout the model year, the average
of an initial failed engine and the two additional engines tested, is
greater than any applicable emission standard or FEL.

Sec. 94.511 [Reserved]

Sec. 94.512 Suspension and revocation of certificates of conformity.

(a) The certificate of conformity is suspended with respect to any
engine that fails a production line test pursuant to Sec. 94.510(a),
effective from the time the testing of that engine is completed.
(b) The Administrator may suspend the certificate of conformity for
an engine family which is in noncompliance pursuant to Sec. 94.510(b),
thirty days after the engine family is deemed to be in noncompliance.
(c) If the results of testing pursuant to the regulations in this
subpart indicate that engines of a particular family produced at one
plant of a manufacturer do not conform to the regulations with respect
to which the certificate of conformity was issued, the Administrator
may suspend the certificate of conformity with respect to that family
for engines manufactured by the manufacturer at all other plants.
(d) The Administrator may suspend a certificate of conformity for
any engine family in whole or in part if:
(1) The manufacturer fails to comply with any of the requirements
of this subpart.
(2) The manufacturer submits false or incomplete information in any
report or information provided to the Administrator under this subpart.
(3) The manufacturer renders inaccurate any test data submitted
under this subpart.
(4) An EPA enforcement officer is denied the opportunity to conduct
activities authorized in this subpart.
(5) An EPA enforcement officer is unable to conduct activities
authorized in Sec. 94.504 for any reason.
(e) The Administrator shall notify the manufacturer in writing of
any suspension or revocation of a certificate of conformity in whole or
in part; a suspension or revocation is effective upon receipt of such
notification or thirty days from the time an engine family is deemed to
be in noncompliance under Secs. 94.508(d), 94.510(a), or 94.510(b),
whichever is earlier, except that the certificate is immediately
suspended with respect to any failed engines as provided for in
paragraph (a) of this section.
(f) The Administrator may revoke a certificate of conformity for an
engine family when the certificate has been suspended pursuant to
paragraph (b) or (c) of this section if the remedy is one requiring a
design change or changes to the engine and/or emission control system
as described in the application for certification of the affected
engine family.
(g) Once a certificate has been suspended for a failed engine, as
provided for in paragraph (a) of this section, the manufacturer must
take the following actions before the certificate is reinstated for
that failed engine:
(1) Remedy the nonconformity;
(2) Demonstrate that the engine conforms to applicable standards or
family emission limits by retesting if applicable, the engine in
accordance with this part; and
(3) Submit a written report to the Administrator, after successful
completion of testing on the failed engine, which contains a
description of the remedy and test results for each engine in addition
to other information that may be required by this part.
(h) Once a certificate for a failed engine family has been
suspended pursuant to paragraph (b) or (c) of this section, the
manufacturer must take the following actions before the Administrator
will consider reinstating the certificate:
(1) Submit a written report to the Administrator which identifies
the reason for the noncompliance of the engines, describes the remedy,
including a description of any quality control and/or quality assurance
measures to be taken by the manufacturer to prevent future occurrences
of the problem, and states the date on which the remedies will be
implemented.
(2) Demonstrate that the engine family for which the certificate of
conformity has been suspended does in fact comply with the regulations
of this part by testing engines selected from normal production runs of
that engine family. Such testing must comply with the provisions of
this subpart. If the manufacturer elects to continue testing individual
engines after suspension of a certificate, the certificate is
reinstated for any engine actually determined to be in conformance with
the applicable

[[Page 68586]]

standards or family emission limits through testing in accordance with
the applicable test procedures, provided that the Administrator has not
revoked the certificate pursuant to paragraph (f) of this section.
(i) Once the certificate has been revoked for an engine family, if
the manufacturer desires to continue introduction into commerce of a
modified version of that family, the following actions must be taken
before the Administrator may issue a certificate for that modified
family:
(1) If the Administrator determines that the change(s) in engine
design may have an effect on emission performance deterioration, the
Administrator shall notify the manufacturer, within five working days
after receipt of the report in paragraph (h)(1) of this section,
whether subsequent testing under this subpart will be sufficient to
evaluate the change or changes or whether additional testing will be
required; and
(2) After implementing the change or changes intended to remedy the
nonconformity, the manufacturer must demonstrate that the modified
engine family does in fact conform with the regulations of this part by
testing engines selected from normal production runs of that engine
family. When both of these requirements are met, the Administrator
shall reissue the certificate or issue a new certificate, as the case
may be, to include that family. If this subsequent testing reveals
failing data the revocation remains in effect.
(j) At any time subsequent to an initial suspension of a
certificate of conformity for a test engine pursuant to paragraph (a)
of this section, but not later than 30 days (or such other period as
may be allowed by the Administrator) after notification of the
Administrator's decision to suspend or revoke a certificate of
conformity in whole or in part pursuant to paragraphs (b), (c), or (f)
of this section, a manufacturer may request a hearing as to whether the
tests have been properly conducted or any sampling methods have been
properly applied.
(k) Any suspension of a certificate of conformity under paragraphs
(a), (b), (c) and (d) of this section:
(1) Shall be made only after the manufacturer concerned has been
offered an opportunity for a hearing conducted in accordance with
Secs. 94.513, 94.514, and 94.515 and
(2) Need not apply to engines no longer in the possession of the
manufacturer.
(l) After the Administrator suspends or revokes a certificate of
conformity pursuant to this section or voids a certificate of
conformity under paragraph Sec. 94.215, and prior to the commencement
of a hearing under Sec. 94.513, if the manufacturer demonstrates to the
Administrator's satisfaction that the decision to suspend, revoke, or
void the certificate was based on erroneous information, the
Administrator shall reinstate the certificate.
(m) To permit a manufacturer to avoid storing non-test engines
while conducting subsequent testing of the noncomplying family, a
manufacturer may request that the Administrator conditionally reinstate
the certificate for that family. The Administrator may reinstate the
certificate subject to the following condition: the manufacturer must
commit to recall all engines of that family produced from the time the
certificate is conditionally reinstated if the family fails subsequent
testing and must commit to remedy any nonconformity at no expense to
the owner.

Sec. 94.513 Request for public hearing.

(a) If the manufacturer disagrees with the Administrator's decision
to suspend or revoke a certificate or disputes the basis for an
automatic suspension pursuant to Sec. 94.512(a), the manufacturer may
request a public hearing.
(b) The manufacturer's request shall be filed with the
Administrator not later than 30 days after the Administrator's
notification of his or her decision to suspend or revoke, unless
otherwise specified by the Administrator. The manufacturer shall
simultaneously serve two copies of this request upon the Director of
the Engine Programs and Compliance Division, Office of Mobile Sources
and file two copies with the Hearing Clerk of the Agency. Failure of
the manufacturer to request a hearing within the time provided
constitutes a waiver of the right to a hearing. Subsequent to the
expiration of the period for requesting a hearing as of right, the
Administrator may, in his or her discretion and for good cause shown,
grant the manufacturer a hearing to contest the suspension or
revocation.
(c) A manufacturer shall include in the request for a public
hearing:
(1) A statement as to which configuration(s) within a family is to
be the subject of the hearing;
(2) A concise statement of the issues to be raised by the
manufacturer at the hearing, except that in the case of the hearing
requested under Sec. 94.512(j), the hearing is restricted to the
following issues:
(i) Whether tests have been properly conducted (specifically,
whether the tests were conducted in accordance with applicable
regulations under this part and whether test equipment was properly
calibrated and functioning);
(ii) Whether there exists a basis for distinguishing engines
produced at plants other than the one from which engines were selected
for testing which would invalidate the Administrator's decision under
Sec. 94.512(c));
(3) A statement specifying reasons why the manufacturer believes it
will prevail on the merits of each of the issues raised; and
(4) A summary of the evidence which supports the manufacturer's
position on each of the issues raised.
(d) A copy of all requests for public hearings will be kept on file
in the Office of the Hearing Clerk and will be made available to the
public during Agency business hours.

Sec. 94.514 Administrative procedures for public hearing.

(a) The Presiding Officer shall be an Administrative Law Judge
appointed pursuant to 5 U.S.C. 3105 (see also 5 CFR part 930).
(b) The Judicial Officer shall be an officer or employee of the
Agency appointed as a Judicial Officer by the Administrator, pursuant
to this section, who shall meet the qualifications and perform
functions as follows:
(1) Qualifications. A Judicial Officer may be a permanent or
temporary employee of the Agency who performs other duties for the
Agency. The Judicial Officer shall not be employed by the Office of
Enforcement or have any connection with the preparation or presentation
of evidence for a hearing held pursuant to this subpart. The Judicial
Officer shall be a graduate of an accredited law school and a member in
good standing of a recognized Bar Association of any state or the
District of Columbia.
(2) Functions. The Administrator may consult with the Judicial
Officer or delegate all or part of the Administrator's authority to act
in a given case under this section to a Judicial Officer, provided that
this delegation does not preclude the Judicial Officer from referring
any motion or case to the Administrator when the Judicial Officer
determines such referral to be appropriate.
(c) For the purposes of this section, one or more Judicial Officers
may be designated by the Administrator. As work requires, a Judicial
Officer may be designated to act for the purposes of a particular case.
(d)(1) In the case of a hearing requested under Sec. 94.512(j),
when it clearly appears from the data and other information contained
in the request for

[[Page 68587]]

a hearing that no genuine and substantial question of fact or law
exists with respect to the issues specified in Sec. 94.513(c)(2), the
Administrator may enter an order denying the request for a hearing and
reaffirming the original decision to suspend or revoke a certificate of
conformity.
(2) In the case of a hearing requested under Sec. 94.513 to
challenge a suspension of a certificate of conformity for the reason(s)
specified in Sec. 94.512(d), when it clearly appears from the data and
other information contained in the request for the hearing that no
genuine and substantial question of fact or law exists with respect to
the issue of whether the refusal to comply with this subpart was caused
by conditions and circumstances outside the control of the
manufacturer, the Administrator may enter an order denying the request
for a hearing and suspending the certificate of conformity.
(3) Any order issued under paragraph (d)(1) or (d)(2) of this
section has the force and effect of a final decision of the
Administrator, as issued pursuant to Sec. 94.516.
(4) If the Administrator determines that a genuine and substantial
question of fact or law does exist with respect to any of the issues
referred to in paragraphs (d)(1) and (d)(2) of this section, the
Administrator shall grant the request for a hearing and publish a
notice of public hearing in the Federal Register or by such other means
as the Administrator finds appropriate to provide notice to the public.
(e) Filing and service. (1) An original and two copies of all
documents or papers required or permitted to be filed pursuant to this
section and Sec. 94.513(c) must be filed with the Hearing Clerk of the
Agency. Filing is considered timely if mailed, as determined by the
postmark, to the Hearing Clerk within the time allowed by this section
and Sec. 94.513(b). If filing is to be accomplished by mailing, the
documents must be sent to the address set forth in the notice of public
hearing referred to in paragraph (d)(4) of this section.
(2) To the maximum extent possible, testimony will be presented in
written form. Copies of written testimony will be served upon all
parties as soon as practicable prior to the start of the hearing. A
certificate of service will be provided on or accompany each document
or paper filed with the Hearing Clerk. Documents to be served upon the
Director of the Engine Programs and Compliance Division must be sent by
registered mail to: Director, Engine Programs and Compliance Division
6403-J, U.S. Environmental Protection Agency, 401 M Street S.W.,
Washington, D.C. 20460. Service by registered mail is complete upon
mailing.
(f) Computation of time. (1) In computing any period of time
prescribed or allowed by this section, except as otherwise provided,
the day of the act or event from which the designated period of time
begins to run is not included. Saturdays, Sundays, and federal legal
holidays are included in computing the period allowed for the filing of
any document or paper, except that when the period expires on a
Saturday, Sunday, or federal legal holiday, the period is extended to
include the next following business day.
(2) A prescribed period of time within which a party is required or
permitted to do an act is computed from the time of service, except
that when service is accomplished by mail, three days will be added to
the prescribed period.
(g) Consolidation. The Administrator or the Presiding Officer in
his or her discretion may consolidate two or more proceedings to be
held under this section for the purpose of resolving one or more issues
whenever it appears that consolidation will expedite or simplify
consideration of these issues. Consolidation does not affect the right
of any party to raise issues that could have been raised if
consolidation had not occurred.
(h) Hearing date. To the extent possible hearings under Sec. 94.513
will be scheduled to commence within 14 days of receipt of the request
for a hearing.

Sec. 94.515 Hearing procedures.

The procedures provided in Sec. 86.1014-84 (i) through (s) of this
chapter apply for hearings requested pursuant to Sec. 94.513 regarding
suspension, revocation, or voiding of a certificate of conformity.

Sec. 94.516 Appeal of hearing decision.

The procedures provided in Sec. 86.1014-84 (t) through (aa) of this
chapter apply for appeals filed with respect to hearings held pursuant
to Sec. 94.515.

Sec. 94.517 Treatment of confidential information.

Except for information required by Sec. 94.508(e)(2) and quarterly
emission test results described in Sec. 94.508(e), information
submitted pursuant to this subpart shall be made available to the
public by EPA notwithstanding any claim of confidentiality made by the
submitter. The provisions for treatment of confidential information
described in Sec. 94.4 apply to the information required by
Sec. 94.508(e)(2) and quarterly emission test results described in
Sec. 94.508(e).

Subpart G [Reserved]

Subpart H--Recall Regulations

Sec. 94.701 Applicability.

The requirements of this subpart are applicable to all nonroad
engines subject to the provisions of this part.

Sec. 94.702 Definitions.

The definitions in Subpart A of this part apply to this subpart.

Sec. 94.703 Applicability of 40 CFR part 85, subpart S.

(a) Engines subject to provisions of this part are subject to
recall regulations specified in part 85, subpart S of this chapter,
except for the items set forth in this section.
(b) In Sec. 85.1801, section 216 of the Clean Air Act applies,
rather than section 214 of the Act.
(c) In Sec. 85.1802(a), section 213 of the Act applies, rather than
section 202 of the Act.
(d) In Sec. 85.1803(a) and Sec. 85.1805(a)(1) ``family emission
limits as defined in part 94 promulgated under section 213 of the Act''
applies, rather than the reference to ``family particulate emission
limits as defined in part 86 promulgated under section 202 of the
Act''.
(e) Throughout the subpart references to ``engines'' apply rather
than references to ``vehicles or engines''.

Subpart I--Importation of Nonconforming Engines

Sec. 94.801 Applicability.

(a) Except where otherwise indicated, this subpart is applicable to
importers of engines (and vessels containing engines) for which the
Administrator has promulgated regulations under this part prescribing
emission standards, that are offered for importation or imported into
the United States, but which engines, at the time of importation or
being offered for importation, are not covered by certificates of
conformity issued under section 213 and section 206(a) of the Clean Air
Act (that is, which are nonconforming engines as defined in Sec. 94.2),
and this part. Compliance with regulations under this subpart does not
relieve any person or entity from compliance with other applicable
provisions of the Clean Air Act.
(b) Regulations prescribing further procedures for the importation
of engines into the Customs territory of the United States, as defined
in 19 U.S.C. 1202, are set forth in U.S. Customs Service regulations
(19 CFR Chapter I).

[[Page 68588]]

Sec. 94.802 Definitions.

The definitions of Subpart A of this part apply to this subpart.

Sec. 94.803 Admission.

A nonconforming engine offered for importation may be admitted into
the United States pursuant to the provisions of this subpart. In order
to obtain admission the importer must submit to the Administrator a
written request for approval containing the following:
(a) Identification of the importer of the engine and the importer's
address, telephone number, and taxpayer identification number;
(b) Identification of the engine's owner, the owner's address,
telephone number, and taxpayer identification number;
(c) Identification of the engine including make, model,
identification number, and original production year;
(d) Information indicating the provision in this subpart under
which the engine is to be imported;
(e) Identification of the place(s) where the engine is to be stored
until EPA approval of the importer's application to the Administrator
for final admission;
(f) Authorization for EPA enforcement officers to conduct
inspections or testing otherwise permitted by the Act or regulations
thereunder; and
(g) Such other information as is deemed necessary by the
Administrator.

Sec. 94.804 Exemptions.

(a) Unless otherwise specified, any person may apply for the
exemptions allowed by this section.
(b) Notwithstanding other requirements of this subpart, a
nonconforming engine that qualifies for a temporary exemption under
this paragraph may be conditionally admitted into the United States if
prior written approval for the conditional admission is obtained from
the Administrator. Conditional admission is to be under bond. The
Administrator may request that the U.S. Customs Service require a
specific bond amount to ensure compliance with the requirements of the
Act and this subpart. A written request for a temporary exemption from
the Administrator shall contain the identification required in
Sec. 94.803 and information that demonstrates that the engines qualify
for an exemption. Noncompliance with provisions of this section may
result in the forfeiture of the total amount of the bond and/or
exportation of the engine. The following temporary exemptions are
permitted by this paragraph (b):
(1) Exemption for repairs or alterations. Upon written approval by
EPA, a person may conditionally import under bond a nonconforming
engine solely for purpose of repair(s) or alteration(s). The engine may
not be operated in the United States other than for the sole purpose of
repair or alteration or shipment to the point of repair or alteration
and to the port of export. It may not be sold or leased in the United
States and is to be exported upon completion of the repair(s) or
alteration(s).
(2) Testing exemption. A nonconforming test engine may be
conditionally imported by a person subject to the requirements of
Sec. 94.905. A test engine may be operated in the United States
provided that the operation is an integral part of the test. This
exemption is limited to a period not exceeding one year from the date
of importation unless a request is made by the appropriate importer,
and subsequently granted by EPA, concerning the engine in accordance
with Sec. 94.905 for a subsequent one-year period.
(3) Display exemptions. (i) A nonconforming engine intended solely
for display may be conditionally imported under bond subject to the
requirements of Sec. 94.906(b).
(ii) A display engine may be imported by any person for purposes
related to a business or the public interest. Such purposes do not
include collections normally inaccessible or unavailable to the public
on a daily basis, display of an engine at a dealership, private use, or
other purpose that the Administrator determines is not appropriate for
display exemptions. A display engine may not be sold or leased in the
United States and may not be operated in the United States except for
the operation incident and necessary to the display purpose.
(iii) A display exemption is granted for 12 months or for the
duration of the display purpose, whichever is shorter. Extensions of up
to 12 months each are available upon approval by the Administrator. In
no circumstances, however, may the total period of exemption exceed 36
months.
(c) National security exemption. Notwithstanding any other
requirement of this subpart, an engine may be permanently imported into
the United States under the national security exemption found at
Sec. 94.908, if prior written approval for such permanent importation
is obtained from the Administrator. A request for approval is to
contain the identification information required in Sec. 94.803 and
information that demonstrates that the importer is entitled to the
exemption.
(d) An application for exemption provided for in paragraphs (b) and
(c) of this section shall be mailed to: Group Manager, Engine
Compliance Programs Group, Engine Programs and Compliance Division,
U.S. Environmental Protection Agency, 6403-J, 401 M St., SW.,
Washington, DC 20460, Attention: Imports.

Sec. 94.805 Prohibited acts; penalties.

(a) The importation of an engine (including an engine incorporated
in an imported marine vessel) which is not covered by a certificate of
conformity other than in accordance with this subpart and the entry
regulations of the U.S. Customs Service is prohibited. Failure to
comply with this section is a violation of section 213(d) and section
203 of the Act.
(b) Unless otherwise permitted by this subpart, during a period of
conditional admission, the importer of an engine may not:
(1) Operate the engine in the United States; or
(2) Sell or lease or offer the engine for sale or lease.
(c) An engine conditionally admitted pursuant to Sec. 94.804 and
not otherwise permanently exempted or excluded by the end of the period
of conditional admission, or within such additional time as the
Administrator and the U.S. Customs Service may allow, is deemed to be
unlawfully imported into the United States in violation of section
213(d) and section 203 of the Act, unless the engine has been delivered
to the U.S. Customs Service for export or other disposition under
applicable Customs laws and regulations by the end of the period of
conditional admission. An engine not so delivered is subject to seizure
by the U.S. Customs Service.
(d) An importer who violates section 213(d) and section 203 of the
Act is subject to a civil penalty under section 205 of the Act and
Sec. 94.1106. In addition to the penalty provided in the Act and
Sec. 94.1106, where applicable, a person or entity who imports an
engine under the exemption provisions of Sec. 94.804 and, who fails to
deliver the engine to the U.S. Customs Service by the end of the period
of conditional admission is liable for liquidated damages in the amount
of the bond required by applicable Customs laws and regulations.

Subpart J--Exclusion and Exemption Provisions

Sec. 94.901 Purpose and applicability.

The provisions of this subpart of this part identify excluded
engines (i.e.,

[[Page 68589]]

engines not covered by the Act) and allow for the exemption of engines
from certain provisions of this part. The applicability of the
exclusions is described in Sec. 94.903, and the applicability of the
exemption allowances is described in Secs. 94.904 through 94.909.

Sec. 94.902 Definitions.

The definitions of Subpart A of this part apply to this subpart.

Sec. 94.903 Exclusions.

(a) Upon written request with supporting documentation, EPA will
make written determinations as to whether certain engines are excluded
from applicability of this part. Any engines that are determined to be
excluded are not subject to the regulations under this part. Requests
to determine whether certain engines are excluded should be sent to:
Group Manager, Engine Compliance Programs Group, Engine Programs and
Compliance Division, U.S. Environmental Protection Agency, 6403-J, 401
M St., SW., Washington, DC 20460.
(b) EPA will maintain a list of models of engines that have been
determined to be excluded from coverage under this part. This list will
be available to the public and may be obtained by writing to the
address in paragraph (a) of this section.
(c) In addition to the engines excluded in paragraph (a) of this
section, certain engines are not subject to the requirements and
prohibitions of this part because they are excluded from the
definitions of ``marine engine'' in Sec. 94.2.

Sec. 94.904 Exemptions.

(a) Except as specified otherwise in this subpart, the provisions
of Secs. 94.904 through 94.911 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.
(b)(1) Any person may request a testing exemption subject to the
provisions of Sec. 94.905.
(2) Any engine manufacturer may request a national security
exemption subject to the provisions of Sec. 94.908.
(3) Engines manufactured for export purposes are exempt without
application, subject to the provisions of Sec. 94.909, except as
otherwise specified by Sec. 94.909.
(4) Manufacturer-owned engines are exempt without application,
subject to the provisions of Sec. 94.906 (a).
(5) Display engines are exempt without application, subject to the
provisions of Sec. 94.906 (b).
(6) Engines used solely for the purpose of competition are exempt,
subject to the provisions of Sec. 94.906 (c).
(7) Auxiliary engines used on foreign trade vessels are exempt,
subject to the provisions of Sec. 94.906 (d).
(8) Engines that are identical to engines that are covered by a
certificate of conformity issued under 40 CFR part 89 or 40 CFR part 92
are exempt, subject to the provisions of Sec. 94.907.

Sec. 94.905 Testing exemption.

(a)(1) The Administrator may exempt from the standards and/or other
requirements and prohibitions of this part new engines that are being
used solely for the purpose of conducting a test program. Any person
requesting an exemption for the purpose of conducting a test program
must demonstrate the following:
(i) That the proposed test program has a purpose which constitutes
an appropriate basis for an exemption in accordance this section;
(ii) That the proposed test program necessitates the granting of an
exemption;
(iii) That the proposed test program exhibits reasonableness in
scope; and
(iv) That the proposed test program exhibits a degree of oversight
and control consonant with the purpose of the test program and EPA's
monitoring requirements.
(2) Paragraphs (b), (c), (d), and (e) of this section describe what
constitutes a sufficient demonstration for each of the four elements
identified in paragraphs (a)(1)(i) through (iv) of this section.
(b) With respect to the purpose of the proposed test program, an
appropriate purpose would be research, investigations, studies,
demonstrations, technology development, or training, but not national
security. A concise statement of purpose is a required item of
information.
(c) With respect to the necessity that an exemption be granted,
necessity arises from an inability to achieve the stated purpose in a
practicable manner without performing or causing to be performed one or
more of the prohibited acts under Sec. 94.1103. In appropriate
circumstances, time constraints may be a sufficient basis for
necessity, but the cost of certification alone, in the absence of
extraordinary circumstances, is not a basis for necessity.
(d) With respect to reasonableness, a test program must exhibit a
duration of reasonable length and affect a reasonable number of
engines. In this regard, required items of information include:
(1) An estimate of the program's duration; and
(2) The maximum number of engines involved.
(e) With respect to control, the test program must incorporate
procedures consistent with the purpose of the test and be capable of
affording EPA monitoring capability. As a minimum, required items of
information include:
(1) The technical nature of the testing;
(2) The location(s) of the testing;
(3) The time, work, or mileage duration of the testing;
(4) The ownership arrangement with regard to the engines involved
in the testing;
(5) The intended final disposition of the engines;
(6) The manner in which the engine identification numbers will be
identified, recorded, and made available; and (7) The means or
procedure whereby test results will be recorded.
(f) A manufacturer of new engines may request a testing exemption
to cover engines intended for use in test programs planned or
anticipated over the course of a subsequent two-year period. Unless
otherwise required by the Director, Engine Programs and Compliance
Division, a manufacturer requesting such an exemption need only furnish
the information required by paragraphs (a)(1) and (d)(2) of this
section along with a description of the recordkeeping and control
procedures that will be employed to assure that the engines are used
for purposes consistent with paragraph (a) of this section.
(g) For engines being used for the purpose of developing a
fundamentally new emission control technology related either to an
alternative fuel or an aftertreatment device, the Administrator may
exempt the engine from some or all of the applicable standards of this
part for the full useful life of the engine, subject to the provisions
of paragraphs (a) through (f) of this section.

Sec. 94.906 Manufacturer-owned exemption, display exemption,
competition exemption, and foreign trade vessel exemption.

(a) Any manufacturer-owned-owned engine, as defined by Sec. 94.2,
is exempt from Sec. 94.1103, without application, if the manufacturer
complies with the following terms and conditions:
(1) The manufacturer must establish, maintain, and retain the
following adequately organized and indexed information on each exempted
engine:
(i) Engine identification number;
(ii) Use of the engine on exempt status; and

[[Page 68590]]

(iii) Final disposition of any engine removed from exempt status.
(2) The manufacturer must provide right of entry and access to
these records to EPA Enforcement Officers as outlined in Sec. 94.208.
(3) The manufacturer must permanently affix a label to each engine
on exempt status, unless the requirement is waived or an alternate
procedure is approved by the Director, Engine Programs and Compliance
Division. This label should:
(i) Be affixed in a readily visible portion of the engine;
(ii) Be attached in such a manner that cannot be removed without
destruction or defacement;
(iii) State in the English language and in block letters and
numerals of a color that contrasts with the background of the label,
the following information:
(A) The label heading ``Emission Control Information'';
(B) Full corporate name and trademark of manufacturer;
(C) Engine displacement, engine family identification, and model
year of engine; or person of office to be contacted for further
information about the engine;
(D) The statement ``This engine is exempt from the prohibitions of
40 CFR 94.1103.''
(4) No provision of paragraph (a)(3) of this section prevents a
manufacturer from including any other information it desires on the
label.
(5) The engine is not used in revenue-generating service, or sold.
(b) Display exemption. An uncertified engine that is to be used
solely for display purposes, and that will only be operated incident
and necessary to the display purpose, and will not be sold unless an
applicable certificate of conformity has been obtained for the engine,
is exempt without request from the standards of this part.
(c) Competition exemption. The Administrator may exempt, upon
request, engines that are used solely for the purpose of competition.
(d) Foreign trade exemption. (1) The Administrator may exempt, upon
request of the vessel owner, auxiliary engines used on foreign trade
vessels.
(2) Vessel owners requesting an exemption under this paragraph (d)
must demonstrate to the Administrator that the vessel will spend less
than 25 percent of its operating time within 320 nautical kilometers of
U.S. territory.
( 3) For the purpose of this paragraph (d), the term ``vessel
owner'' includes any entities that have contracted to purchase a new
marine vessel.

Sec. 94.907 Non-marine-specific engine exemption.

(a)(1) For manufacturers selling non-marine-specific engines to be
used as propulsion engines in marine vessels, such engines are exempt,
provided:
(i) The engines are covered by a certificate of conformity issued
under 40 CFR part 89 or 40 CFR part 92;
(ii) The certified emission levels (after application of
deterioration factors) are below the numerical levels of the otherwise
applicable standards of this part for all pollutants;
(iii) More engines are reasonably projected to be sold and used
under the certificate for non-marine use than for use in marine
vessels;
(iv) The engine is sold to an engine dresser for marization prior
to being placed in a vessel;
(v) The Administrator has approved the exemption as specified in
paragraph (d) of this section.
(2) For the purposes of this section ``covered by a certificate of
conformity issued under 40 CFR part 89 or 40 CFR part 92'' means that:
(i) The engine complies with all applicable requirements of either
40 CFR part 89 or 40 CFR part 92;
(ii) The fuel system of the engine has not been modified after the
original manufacture of the engine is complete;
(iii) The engine cooling system of an installed engine meets the
original manufacturer's specifications for certified engines;
(iv) No other changes are made to the engine that could reasonably
be expected to adversely effect the emissions performance of the
engine; and
(v) The original emissions label remains clearly visible on the
engine after installation in the vessel.
(b) For manufacturers selling non-marine-specific engines to be
used as auxiliary engines in marine vessels, such engines are exempt
from the certification requirements of subpart C of this part and the
production line testing requirements of subpart F of this part,
provided that they comply with all of the requirements of paragraph (a)
of this section other than the requirement of paragraph (a)(1)(iv) of
this section. These engines are not exempt from the standards of
subpart A of this part.
(c) Manufacturers of engines exempted under this section shall:
(1) Report annually to EPA the number of engines exempted under
paragraph (a) of this section;
(2) Upon the Administrator's request, provide test data showing the
emissions of the engine when it is operated over a typical marine
engine cycle; and
(3) Notify purchasers that the engine a dressed non-marine specific
engine (e.g., is a dressed locomotive engine) that is exempt from the
requirements of this part 94.
(d)(1) Manufacturers seeking an exemption under this section shall
notify the Administrator of such intent in their applications for
certification under 40 CFR part 89 or 40 CFR part 92.
(2) The Administrator shall deny a non-marine-specific exemption in
any case where he/she has evidence that approving such an exemption
would be inappropriate because of adverse environmental or economic
impacts.

Sec. 94.908 National security exemption.

(a)(1) Any marine engine, otherwise subject to this part, which is
used in a vessel that exhibits substantial features ordinarily
associated with military combat such as armor and/or permanently
affixed weaponry and which will be owned and/or used by an agency of
the federal government with responsibility for national defense, will
be exempt from the regulations in this subpart for purposes of national
security. No request for exemption is necessary.
(2) Manufacturers may request a national security exemption for any
marine engine, otherwise subject to this part, which does not meet the
conditions described in paragraph (a)(1) of this section. A
manufacturer requesting a national security exemption must state the
purpose for which the exemption is required and the request must be
endorsed by an agency of the federal government charged with
responsibility for national defense.
(b) EPA will maintain a list of models of marine engines (and the
vessels which use them) that have been granted a national security
exemption under paragraph (a)(2) of this section. This list will be
available to the public and may be obtained by writing to the following
address: Group Manager, Engine Compliance Programs Group, Engine
Programs and Compliance Division, (6403-J) Environmental Protection
Agency, 401 M Street SW, Washington, DC 20460.

Sec. 94.909 Export exemptions.

(a) A new engine intended solely for export, and so labeled or
tagged on the outside of any container and on the engine, is subject to
the provisions of Sec. 94.1103, unless the importing country has new
marine engine emission standards which differ from EPA standards.
(b) For the purpose of paragraph (a) of this section, a country
having no standards whatsoever is deemed to be a

[[Page 68591]]

country having emission standards which differ from EPA standards.
(c) It is a condition of any exemption for the purpose of export
under paragraph (a) of this section, that such exemption is void ab
initio with respect to a new engine intended solely for export, where
such engine is sold, or offered for sale, to an ultimate purchaser or
otherwise distributed or introduced into commerce in the United States
for purposes other than export.

Sec. 94.910 Granting of exemptions.

(a) If upon completion of the review of an exemption request made
pursuant to Sec. 94.905 or Sec. 94.908, EPA determines it is
appropriate to grant such an exemption, a memorandum of exemption is to
be prepared and submitted to the person requesting the exemption. The
memorandum is to set forth the basis for the exemption, its scope, and
such terms and conditions as are deemed necessary. Such terms and
conditions generally include, but are not limited to, agreements by the
applicant to conduct the exempt activity in the manner described to
EPA, create and maintain adequate records accessible to EPA at
reasonable times, employ labels for the exempt engines setting forth
the nature of the exemption, take appropriate measures to assure that
the terms of the exemption are met, and advise EPA of the termination
of the activity and the ultimate disposition of the engines.
(b) Any exemption granted pursuant to paragraph (a) of this section
is deemed to cover any subject engine only to the extent that the
specified terms and conditions are complied with. A breach of any term
or condition causes the exemption to be void ab initio with respect to
any engine. Consequently, the causing or the performing of an act
prohibited under Sec. 94.1103(a)(1) or (a)(3), other than in strict
conformity with all terms and conditions of this exemption, renders the
person to whom the exemption is granted, and any other person to whom
the provisions of Sec. 94.1103(a) are applicable, liable to suit under
sections 204 and 205 of the Act.

Sec. 94.911 Submission of exemption requests.

Requests for exemption or further information concerning exemptions
and/or the exemption request review procedure should be addressed to:
Group Manager, Engine Compliance Programs Group, Engine Programs and
Compliance Division, U.S. Environmental Protection Agency, 6403-J, 401
M St., S.W., Washington, D.C. 20460.

Subpart L--General Enforcement Provisions and Prohibited Acts

Sec. 94.1101 Applicability.

The requirements of this subpart are applicable to all persons with
respect to engines subject to the provisions of subpart A of this part.

Sec. 94.1102 Definitions.

The definitions of subpart A of this part apply to this subpart.

Sec. 94.1103 Prohibited acts.

(a) The following acts and the causing thereof are prohibited:
(1)(i)(A) In the case of a manufacturer of new engines, the sale,
the offering for sale, the introduction into commerce, the delivery for
introduction into commerce, or the distribution in commerce of any new
engine manufactured after December 31, 2003 (the effective date of
applicable emission standards under this part), unless such engine is
covered by a certificate of conformity issued (and in effect) under
regulations found in this part.
(B) The manufacture of an engine for the purpose of an act listed
in paragraph (a)(1)(i)(A) of this section unless such engine is covered
by a certificate of conformity issued (and in effect) under regulations
found in this part prior to its introduction into commerce.
(ii) In the case of any person, except as provided in Subpart I of
this part, the importation into the United States of any engine
manufactured on or after the implementation date of the applicable
emission limits for the relevant engine, unless such engine is covered
by a certificate of conformity issued (and in effect) under regulations
found in this part. (2)(i) For a person to fail or refuse to permit
access to or copying of records or to fail to make reports or provide
information required under this part.
(ii) For a person to fail or refuse to permit entry, testing, or
inspection authorized under this part.
(iii) For a person to fail or refuse to perform tests, or to have
tests performed as required by this part.
(iv) For a person to fail to establish or maintain records as
required under this part. (3)(i) For a person to remove or render
inoperative a device or element of design installed on or in a engine
in compliance with regulations under this part, or to set any
adjustable parameter to a setting outside of the range specified by the
manufacturer, as approved in the application for certification by the
Administrator.
(ii) For a person to manufacture, sell or offer to sell, or
install, a part or component intended for use with, or as part of, a
engine, where a principal effect of the part or component is to bypass,
defeat, or render inoperative a device or element of design installed
on or in a engine in compliance with regulations issued under this
part, and where the person knows or should know that the part or
component is being offered for sale or installed for this use or put to
such use.
(iii) For a person to deviate from the provisions of Sec. 94.11
when rebuilding an engine (or rebuilding a portion of an engine or
engine system).
(4) For a manufacturer of a new engine subject to standards
prescribed under this part:
(i) To sell, offer for sale, or introduce or deliver for
introduction into commerce, a new engine unless the manufacturer has
complied with the requirements of Sec. 94.1107.
(ii) To sell, offer for sale, or introduce or deliver for
introduction into commerce, a new engine unless all required labels and
tags are affixed to the engine in accordance with Sec. 94.212.
(iii) To fail or refuse to comply with the requirements of
Sec. 94.1108.
(iv) Except as provided in Sec. 94.211, to provide directly or
indirectly in any communication to the ultimate purchaser or a
subsequent purchaser that the coverage of a warranty under the Act is
conditioned upon use of a part, component, or system manufactured by
the manufacturer or a person acting for the manufacturer or under its
control, or conditioned upon service performed by such persons.
(v) To fail or refuse to comply with the terms and conditions of
the warranty under Sec. 94.1107.
(5) For a manufacturer of marine vessels to distribute in commerce,
sell, offer for sale, or deliver for introduction into commerce a new
vessel containing an engine not covered by a certificate of conformity.
(6) For any person to install a recreational marine engine in a
vessel that is manufactured on or after the implementation date of the
applicable standards and that is not a recreational vessel.
(b) For the purposes of enforcement of this part, the following
apply:
(1) Nothing in paragraph (a)(3) of this section is to be construed
to require the use of any manufacturer's parts in maintaining or
repairing a engine.
(2) Actions for the purpose of repair or replacement of a device or
element of design or any other item are not considered prohibited acts
under paragraph (a)(3)(i) of this section if the action is a necessary
and temporary procedure, the device or element is replaced upon
completion of the

[[Page 68592]]

procedure, and the action results in the proper functioning of the
device or element of design.
(3) Where the Administrator determines that no engine produced by
any manufacturer and is certified to the requirements of this part is
available with the appropriate physical or performance characteristics
to repower a vessel, the Administrator may allow a replacement engine
to be produced without complying with all of the otherwise applicable
requirements of this part. Such engine shall not be subject to the
prohibitions of paragraph (a)(1) of this section, provided that:
(i) The engine requiring replacement is not certified or is
certified to emission standards that are less stringent than those in
effect when the replacement engine is built; and
(ii) The engine manufacturer or its agent takes ownership and
possession of the engine being replaced in partial exchange for the
replacement engine; and
(iii) The replacement engine is clearly labeled with the following
language, or similar alternate language approved by the Administrator:

THIS ENGINE DOES NOT COMPLY WITH FEDERAL MARINE ENGINE EMISSION
REQUIREMENTS. SALE OR INSTALLATION OF THIS ENGINE FOR ANY PURPOSE
OTHER THAN AS A REPLACEMENT ENGINE FOR AN ENGINE MANUFACTURED PRIOR
TO JANUARY 1 [INSERT APPROPRIATE YEAR] IS A VIOLATION OF FEDERAL LAW
SUBJECT TO CIVIL PENALTY; and

(iv) In cases where an engine is to be imported for replacement
purposes under the provisions of this paragraph (b)(3), the term
``engine manufacturer'' shall not apply to an individual or other
entity that does not possess a current Certificate of Conformity issued
by EPA under this part; and
(v) Where the replacement engine is intended to replace an engine
that is certified to emission standards that are less stringent than
those in effect when the replacement engine is built, the replacement
engine shall be identical in all material respects to a certified
configuration of the same or later model year as the engine being
replaced; and
(vi) Engines sold pursuant to the provisions of this paragraph will
neither generate nor use emission credits and will not be part of any
accounting under the averaging, banking and trading program.

Sec. 94.1104 General enforcement provisions.

(a) Information collection provisions. (1)(i) Every manufacturer of
new engines and other persons subject to the requirements of this part
must establish and maintain records, perform tests, make reports and
provide information the Administrator may reasonably require to
determine whether the manufacturer or other person has acted or is
acting in compliance with this part or to otherwise carry out the
provisions of this part, and must, upon request of an officer or
employee duly designated by the Administrator, permit the officer or
employee at reasonable times to have access to and copy such records.
The manufacturer shall comply in all respects with the requirements of
subpart E of this part.
(ii) Every manufacturer or owner of engines exempted from the
standards or requirements of this part must establish and maintain
records, perform tests, make reports and provide information the
Administrator may reasonably require regarding the emissions of such
engines.
(2) For purposes of enforcement of this part, an officer or
employee duly designated by the Administrator, upon presenting
appropriate credentials, is authorized:
(i) To enter, at reasonable times, any establishment of the
manufacturer, or of any person whom the manufacturer engaged to perform
any activity required under paragraph (a)(1) of this section, for the
purposes of inspecting or observing any activity conducted pursuant to
paragraph (a)(1) of this section, and
(ii) To inspect records, files, papers, processes, controls, and
facilities used in performing an activity required by paragraph (a)(1)
of this section, by the manufacturer or by a person whom the
manufacturer engaged to perform the activity.
(b) Exemption provision. The Administrator may exempt a new engine
from Sec. 94.1103 upon such terms and conditions as the Administrator
may find necessary for the purpose of export, research, investigations,
studies, demonstrations, or training, or for reasons of national
security, or for other purposes allowed by subpart J of this part.
(c) Importation provision. (1) A new engine, offered for
importation or imported by a person in violation of Sec. 94.1103 is to
be refused admission into the United States, but the Secretary of the
Treasury and the Administrator may, by joint regulation, provide for
deferring a final determination as to admission and authorizing the
delivery of such a engine offered for import to the owner or consignee
thereof upon such terms and conditions (including the furnishing of a
bond) as may appear to them appropriate to insure that the engine will
be brought into conformity with the standards, requirements, and
limitations applicable to it under this part.
(2) If a engine is finally refused admission under this paragraph
(c), the Secretary of the Treasury shall cause disposition thereof in
accordance with the customs laws unless it is exported, under
regulations prescribed by the Secretary, within 90 days of the date of
notice of the refusal or additional time as may be permitted pursuant
to the regulations.
(3) Disposition in accordance with the customs laws may not be made
in such manner as may result, directly or indirectly, in the sale, to
the ultimate consumer, of a new engine that fails to comply with
applicable standards of the Administrator under this part.
(d) Export provision. A new engine intended solely for export, and
so labeled or tagged on the outside of the container if used and on the
engine, shall be subject to the provisions of Sec. 94.1103, except that
if the country that is to receive the engine has emission standards
that differ from the standards prescribed under subpart A of this part,
then the engine must comply with the standards of the country that is
to receive the engine.
(e) Recordkeeping. Except where specified otherwise, records
required by this part must be kept for eight (8) years.

Sec. 94.1105 Injunction proceedings for prohibited acts.

(a) The district courts of the United States have jurisdiction to
restrain violations of Sec. 94.1103(a).
(b) Actions to restrain violations of Sec. 94.1103(a) must be
brought by and in the name of the United States. In an action,
subpoenas for witnesses who are required to attend a district court in
any district may run into any other district.

Sec. 94.1106 Penalties.

(a) Violations. A violation of the requirements of this subpart is
a violation of the applicable provisions of the Act, including sections
213(d) and 203, and is subject to the penalty provisions thereunder.
(1) A person who violates Sec. 94.1103(a)(1), (a)(4), (a)(5), or
(a)(6), or a manufacturer or dealer who violates Sec. 94.1103(a)(3) (i)
or (iii) is subject to a civil penalty of not more than $25,000 for
each violation unless modified by the Debt Collection Improvement Act
and/or regulations issued there under.
(2) A person other than a manufacturer or dealer who violates
Sec. 94.1103(a)(3) (i) or (iii) or any person who violates
Sec. 94.1103(a)(3)(ii) is subject to a civil penalty of not more

[[Page 68593]]

than $2,500 for each violation unless modified by the Debt Collection
Improvement Act and/or regulations issued thereunder.
(3) A violation with respect to Sec. 94.1103(a)(1), (a)(3)(i),
(a)(4), or (a)(5) constitutes a separate offense with respect to each
engine.
(4) A violation with respect to Sec. 94.1103(a)(3)(ii) constitutes
a separate offense with respect to each part or component. Each day of
a violation with respect to Sec. 94.1103(a)(5) constitutes a separate
offense.
(5) A person who violates Sec. 94.1103(a)(2) or (a)(5) is subject
to a civil penalty of not more than $25,000 per day of violation unless
modified by the Debt Collection Improvement Act and/or regulations
issued there under.
(b) Civil actions. The Administrator may commence a civil action to
assess and recover any civil penalty under paragraph (a) of this
section.
(1) An action under this paragraph (b) may be brought in the
district court of the United States for the district in which the
defendant resides or has the Administrator's principal place of
business, and the court has jurisdiction to assess a civil penalty.
(2) In determining the amount of a civil penalty to be assessed
under this paragraph (b), the court is to take into account the gravity
of the violation, the economic benefit or savings (if any) resulting
from the violation, the size of the violator's business, the violator's
history of compliance with Title II of the Act, action taken to remedy
the violation, the effect of the penalty on the violator's ability to
continue in business, and such other matters as justice may require.
(3) In any such action, subpoenas for witnesses who are required to
attend a district court in any district may run into any other
district.
(c) Administrative assessment of certain penalties. (1)
Administrative penalty authority. In lieu of commencing a civil action
under paragraph (b) of this section, the Administrator may assess any
civil penalty prescribed in paragraph (a) of this section, except that
the maximum amount of penalty sought against each violator in a penalty
assessment proceeding shall not exceed $200,000, unless the
Administrator and the Attorney General jointly determine that a matter
involving a larger penalty amount is appropriate for administrative
penalty assessment. Any such determination by the Administrator and the
Attorney General is not subject to judicial review. Assessment of a
civil penalty shall be by an order made on the record after opportunity
for a hearing held in accordance with the procedures found at part 22
of this chapter. The Administrator may compromise, or remit, with or
without conditions, any administrative penalty which may be imposed
under this section.
(2) Determining amount. In determining the amount of any civil
penalty assessed under this paragraph (c), the Administrator shall take
into account the gravity of the violation, the economic benefit or
savings (if any) resulting from the violation, the size of the
violator's business, the violator's history of compliance with Title II
of the Act, action taken to remedy the violation, the effect of the
penalty on the violator's ability to continue in business, and such
other matters as justice may require.
(3) Effect of administrator's action. (i) Action by the
Administrator under this paragraph (c) does not affect or limit the
Administrator's authority to enforce any provisions of the Act; except
that any violation with respect to which the Administrator has
commenced and is diligently prosecuting an action under this paragraph
(c), or for which the Administrator has issued a final order not
subject to further judicial review and for which the violator has paid
a penalty assessment under this paragraph shall not be the subject of a
civil penalty action under paragraph (b) of this section.
(ii) No action by the Administrator under this paragraph (c) shall
affect a person's obligation to comply with a section of this part.
(4) Finality of order. An order issued under this paragraph (c) is
to become final 30 days after its issuance unless a petition for
judicial review is filed under paragraph (c)(5) of this section.
(5) Judicial review. A person against whom a civil penalty is
assessed in accordance with this paragraph (c) may seek review of the
assessment in the United States District Court for the District of
Columbia or for the district in which the violation is alleged to have
occurred, in which such person resides, or where the person's principal
place of business is located, within the 30-day period beginning on the
date a civil penalty order is issued. The person shall simultaneously
send a copy of the filing by certified mail to the Administrator and
the Attorney General. The Administrator shall file in the court within
30 days a certified copy, or certified index, as appropriate, of the
record on which the order was issued. The court is not to set aside or
remand any order issued in accordance with the requirements of this
paragraph (c) unless substantial evidence does not exist in the record,
taken as a whole, to support the finding of a violation or unless the
Administrator's assessment of the penalty constitutes an abuse of
discretion, and the court is not to impose additional civil penalties
unless the Administrator's assessment of the penalty constitutes an
abuse of discretion. In any proceedings, the United States may seek to
recover civil penalties assessed under this section.
(6) Collection. (i) If any person fails to pay an assessment of a
civil penalty imposed by the Administrator as provided in this part
after the order making the assessment has become final or after a court
in an action brought under paragraph (c)(5) of this section has entered
a final judgment in favor of the Administrator, the Administrator shall
request that the Attorney General bring a civil action in an
appropriate district court to recover the amount assessed (plus
interest at rates established pursuant to section 6621(a)(2) of the
Internal Revenue Code of 1986 (26 U.S.C. 6621(a)(2)) from the date of
the final order or the date of final judgment, as the case may be). In
such an action, the validity, amount, and appropriateness of the
penalty is not subject to review.
(ii) A person who fails to pay on a timely basis the amount of an
assessment of a civil penalty as described in paragraph (c)(6)(i) of
this section shall be required to pay, in addition to that amount and
interest, the United States' enforcement expenses, including attorney's
fees and costs for collection proceedings, and a quarterly nonpayment
penalty for each quarter during which the failure to pay persists. The
nonpayment penalty is an amount equal to ten percent of the aggregate
amount of that person's penalties and nonpayment penalties which are
unpaid as of the beginning of such quarter.

Sec. 94.1107 Warranty provisions.

(a) The manufacturer of each engine must warrant to the ultimate
purchaser and each subsequent purchaser or owner that the engine is
designed, built, and equipped so as to conform at the time of sale with
applicable regulations under section 213 of the Act, and is free from
defects in materials and workmanship which cause such engine to fail to
conform with applicable regulations for its warranty period (as
determined under Sec. 94.10).
(b) For the purposes of this section, the owner of any engine
warranted under this part is responsible for the proper maintenance of
the engine. Proper maintenance includes replacement and/or service, as
needed, at the owner's expense at a service

[[Page 68594]]

establishment or facility of the owner's choosing, of all parts, items,
or devices which were in general use with engines prior to 1999. For
diesel engines, this would generally include replacement or cleaning of
the fuel delivery and injection system.

Sec. 94.1108 In-use compliance provisions.

(a) Effective with respect to engines subject to the requirements
of this part:
(1) If the Administrator determines that a substantial number of
any class or category of engines, although properly maintained and
used, do not conform to the regulations prescribed under section 213 of
the Act when in actual use throughout their useful life period (as
defined under Sec. 94.2), the Administrator shall immediately notify
the manufacturer of such nonconformity and require the manufacturer to
submit a plan for remedying the nonconformity of the engines with
respect to which such notification is given.
(i) The manufacturer's plan shall provide that the nonconformity of
any such engines which are properly used and maintained will be
remedied at the expense of the manufacturer.
(ii) If the manufacturer disagrees with such determination of
nonconformity and so advises the Administrator, the Administrator shall
afford the manufacturer and other interested persons an opportunity to
present their views and evidence in support thereof at a public
hearing. Unless, as a result of such hearing, the Administrator
withdraws such determination of nonconformity, the Administrator shall,
within 60 days after the completion of such hearing, order the
manufacturer to provide prompt notification of such nonconformity in
accordance with paragraph (a)(2) of this section.
(2) Any notification required to be given by the manufacturer under
paragraph (a)(1) of this section with respect to any class or category
of engines shall be given to ultimate purchasers, subsequent purchasers
(if known), and dealers (as applicable) in such manner and containing
such information as required in subparts E and H of this part.
(3)(i) The certifying manufacturer shall furnish with each new
engine written instructions for the proper maintenance and use of the
engine by the ultimate purchaser as required under Sec. 94.211.
(ii) The instruction under paragraph (a)(3)(i) of this section must
not include any condition on the ultimate purchaser's using, in
connection with such engine, any component or service (other than a
component or service provided without charge under the terms of the
purchase agreement) which is identified by brand, trade, or corporate
name. Such instructions also must not directly or indirectly
distinguish between service performed by the franchised dealers of such
manufacturer, or any other service establishments with which such
manufacturer has a commercial relationship, and service performed by
independent engine repair facilities with which such manufacturer has
no commercial relationship.
(iii) The prohibition of paragraph (a)(3)(ii) of this section may
be waived by the Administrator if:
(A) The manufacturer satisfies the Administrator that the engine
will function properly only if the component or service so identified
is used in connection with such engine; and
(B) The Administrator finds that such a waiver is in the public
interest.
(iv) In addition, the manufacturer shall indicate by means of a
label or tag permanently affixed to the engine that the engine is
covered by a certificate of conformity issued for the purpose of
assuring achievement of emission standards prescribed under section 213
of the Act. This label or tag shall also contain information relating
to control of emissions as prescribed under Sec. 94.212.
(b) The manufacturer bears all cost obligation any dealer incurs as
a result of a requirement imposed by paragraph (a) of this section. The
transfer of any such cost obligation from a manufacturer to a dealer
through franchise or other agreement is prohibited.
(c) If a manufacturer includes in an advertisement a statement
respecting the cost or value of emission control devices or systems,
the manufacturer shall set forth in the statement the cost or value
attributed to these devices or systems by the Secretary of Labor
(through the Bureau of Labor Statistics). The Secretary of Labor, and
his or her representatives, has the same access for this purpose to the
books, documents, papers, and records of a manufacturer as the
Comptroller General has to those of a recipient of assistance for
purposes of section 311 of the Act.

Appendix I to Part 94--Emission Related Engine Parameters and
Specifications

I. Basic Engine Parameters--Reciprocating Engines.
1. Compression ratio.
2. Type of air aspiration (natural, Roots blown, supercharged,
turbocharged).
3. Valves (intake and exhaust).
a. Head diameter dimension.
b. Valve lifter or actuator type and valve lash dimension.
4. Camshaft timing.
a. Valve opening--intake exhaust (degrees from TDC or BDC).
b. Valve closing--intake exhaust (degrees from TDC or BDC).
c. Valve overlap (degrees).
5. Ports--two stroke engines (intake and/or exhaust).
a. Flow area.
b. Opening timing (degrees from TDC or BDC).
c. Closing timing (degrees from TDC or BDC).
II. Intake Air System.
1. Roots blower/supercharger/turbocharger calibration.
2. Charge air cooling.
a. Type (air-to-air; air-to-liquid).
b. Type of liquid cooling (engine coolant, dedicated cooling
system).
c. Performance (charge air delivery temperature ( deg.F) at
rated power and one other power level under ambient conditions of
80 deg.F and 110 deg.F, and 3 minutes and 15 minutes after selecting
rated power, and 3 minutes and 5 minutes after selecting other power
level).
3. Temperature control system calibration.
4. Maximum allowable inlet air restriction.
III. Fuel System.
1. General.
a. Engine idle speed.
2. Fuel injection--compression ignition engines.
a. Control parameters and calibrations.
b. Transient enrichment system calibration.
c. Air-fuel flow calibration.
d. Altitude compensation system calibration.
e. Operating pressure(s).
f. Injector timing calibration.
IV. Engine Cooling System.
1. Thermostat calibration.
V. Exhaust System.
1. Maximum allowable back pressure.
VI. Exhaust Emission Control System.
1. Air injection system.
a. Control parameters and calibrations.
b. Pump flow rate.
2. EGR system.
a. Control parameters and calibrations.
b. EGR valve flow calibration.
3. Catalytic converter system.
a. Active surface area.
b. Volume of catalyst.
c. Conversion efficiency.
4. Backpressure.
VII. Crankcase Emission Control System.
1. Control parameters and calibrations.
2. Valve calibrations.
VIII. Auxiliary Emission Control Devices (AECD).
1. Control parameters and calibrations.
2. Component calibration(s).

[FR Doc. 98-32304 Filed 12-10-98; 8:45 am]
BILLING CODE 6560-50-P}}}}}}}}}}}}}}}}

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Document Information

Published:: 12/11/1998
Department:: Environmental Protection Agency
Entry Type:: Proposed Rule
Action:: Notice of Proposed Rulemaking.
Document Number:: 98-32304
Dates:: EPA will hold a hearing on the proposed rulemaking on January 19, 1999. EPA requests comments on the proposed rulemaking by February 26, 1999. More information about commenting on this action and on the public hearing and meeting may be found under Public Participation in SUPPLEMENTARY INFORMATION, below.
Pages:: 68508-68594 (87 pages)
Docket Numbers:: AMS-FRL-6196-3
RINs:: 2060-AI17: Control of Emissions of Air Pollution From New Marine Diesel Engines At or Above 37 Kilowatts
RIN Links:: https://www.federalregister.gov/regulations/2060-AI17/control-of-emissions-of-air-pollution-from-new-marine-diesel-engines-at-or-above-37-kilowatts
PDF File:: 98-32304.pdf
CFR: (126): 40 CFR 94.5); 40 CFR 94.106(a)(2); 40 CFR 94.1103(a)(3); 40 CFR 94.1103(a)(3)(ii); 40 CFR 94.308(b); More ...