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]]
    
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    Part II
    
    
    
    
    
    Environmental Protection Agency
    
    
    
    
    
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    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.
    
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    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
    
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    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-
    
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    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.
    ---------------------------------------------------------------------------
    
        \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
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                     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
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    
        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
    
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    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 103 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 103 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 103 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 103 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
    
    
    

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)
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