Control of Emissions from Nonroad Spark-Ignition Engines and Equipment

This Proposed Rule document was issued by the Environmental Protection Agency (EPA)

For related information, Open Docket Folder


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 60, 63, 85, 89, 90, 91, 1027, 1045, 1048, 1051, 1054, 1060, 1065, 1068, and 1074
[EPA-HQ-OAR-2004-0008; FRL-8303-7]
RIN 2060-AM34

Control of Emissions from Nonroad Spark-Ignition Engines and Equipment

Agency

Environmental Protection Agency (EPA).

Action

Proposed rule.

Summary

We are proposing emission standards for new nonroad spark-ignition engines that will substantially reduce emissions from these engines. The proposed exhaust emission standards would apply in 2009 for new marine spark-ignition engines, including first-time EPA standards for sterndrive and inboard engines. The proposed exhaust emission standards would apply starting in 2011 and 2012 for different sizes of new land-based, spark-ignition engines at or below 19 kilowatts (kW). These small engines are used primarily in lawn and garden applications. We are also proposing evaporative emission standards for vessels and equipment using any of these engines. In addition, we are making other minor amendments to our regulations. We estimate that by 2030, the proposed standards would result in significant annual reductions of pollutant emissions from regulated engine and equipment sources nationwide, including 631,000 tons of volatile organic hydrocarbon emissions, 98,200 tons of NO X emissions, and 6,300 tons of direct particulate matter (PM 2.5) emissions. These reductions correspond to significant reductions in the formation of ground-level ozone. We also expect to see annual reductions of 2,690,000 tons of carbon monoxide emissions, with the greatest reductions in areas where there have been problems with individual exposures. The requirements in this proposal would result in substantial benefits to public health and welfare and the environment. We estimate that by 2030, on an annual basis, these emission reductions would prevent 450 PM-related premature deaths, approximately 500 hospitalizations, 52,000 work days lost, and other quantifiable benefits every year. The total estimated annual benefits of this rule in 2030 are approximately $3.4 billion. Estimated costs in 2030 are many times less at approximately $240 million.

Dates

Comments: Comments must be received on or before August 3, 2007. Under the Paperwork Reduction Act, comments on the information collection provisions must be received by OMB on or before June 18, 2007.

Addresses

Submit your comments, identified by Docket No. EPA-HQ-OAR-2004-0008, by one of the following methods:

Follow the on-line instructions for submitting comments.

E-mail:

Fax: (202) 260-4400.

Mail: Environmental Protection Agency, Air Docket, Mail-code 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460. In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 20503.

Hand Delivery: EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC, Attention Docket No. EPA-HQ-OAR-2004-0008. Such deliveries are accepted only during the Docket's normal hours of operation, special arrangements should be made for deliveries of boxed information.

Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-2004-0008. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through or e-mail. The Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through www.regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional instructions on submitting comments, go to Unit XIII of the SUPPLEMENTARY INFORMATION section of this document.

Docket: All documents in the docket are listed in the index. Although listed in the index, some information is not publicly available, such as CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in or in hard copy at the “Control of Emissions from Nonroad Spark-Ignition Engines, Vessels and Equipment” Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744 and the telephone number for the “Control of Emissions from Nonroad Spark-Ignition Engines, Vessels, and Equipment” Docket is (202) 566-1742.

Hearing: A hearing will be held at 9:30 a.m. on Tuesday, June 5, 2007 at the Sheraton Reston Hotel. The hotel is located at 11810 Sunrise Valley Drive in Reston, Virginia; their phone number is 703-620-9000. For more information on these hearings or to request to speak, see Section XIII.

For Further Information Contact

Carol Connell, Environmental Protection Agency, Office of Transportation and Air Quality, Assessment and Standards Division, 2000 Traverwood Drive, Ann Arbor, Michigan 48105; telephone number: 734-214-4349; fax number: 734-214-4050; e-mail address: .

Supplementary Information

Does This Action Apply to Me?

This action will affect you if you produce or import new spark-ignition engines intended for use in marine vessels or in new vessels using such engines. This action will also affect you if you produce or import new spark-ignition engines below 19 kilowatts used in nonroad equipment, including agricultural and construction equipment, or produce or import such nonroad vehicles.

The following table gives some examples of entities that may have to follow the regulations; however, since these are only examples, you should carefully examine the proposed regulations. Note that we are proposing minor changes in the regulations that apply to a wide range of products that may not be reflected in the following table (see Section XI). If you have questions, call the person listed in the FOR FURTHER INFORMATION CONTACT section of this preamble:

Category NAICS codes a SIC codes b Examples of potentially regulated entities
Industry 333618 3519 Manufacturers of new engines.
Industry 333111 3523 Manufacturers of farm machinery and equipment.
Industry 3331123524Manufacturers of lawn and garden tractors (home).
Industry 336612 3731, 3732 Manufacturers of marine vessels.
Industry 811112, 811198 7533, 7549 Commercial importers of vehicles and vehicle components.

What Should I Consider as I Prepare My Comments for EPA?

Submitting CBI. Do not submit this information to EPA through www.regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

Tips for Preparing Your Comments. When submitting comments, remember to:

  • Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).
  • Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
  • Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
  • Describe any assumptions and provide any technical information and/or data that you used.
  • If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
  • Provide specific examples to illustrate your concerns and suggest alternatives.
  • Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
  • Make sure to submit your comments by the comment period deadline identified.

Table of Contents

I. Introduction

A. Overview

B. Why Is EPA Taking This Action?

C. What Regulations Currently Apply to Nonroad Engines or Vehicles?

D. Putting This Proposal into Perspective

E. What Requirements Are We Proposing?

F. How Is This Document Organized?

II. Public Health and Welfare Effects

A. Ozone

B. Particulate Matter

C. Air Toxics

D. Carbon Monoxide

III. Sterndrive and Inboard Marine Engines

A. Overview

B. Engines Covered by This Rule

C. Proposed Exhaust Emission Standards

D. Test Procedures for Certification

E. Additional Certification and Compliance Provisions

F. Small-Business Provisions

G. Technological Feasibility

IV. Outboard and Personal Watercraft Engines

A. Overview

B. Engines Covered by This Rule

C. Proposed Exhaust Emission Standards

D. Changes to Existing OB/PWC Test Procedures

E. Additional Certification and Compliance Provisions

F. Other Adjustments to Regulatory Provisions

G. Small-Business Provisions

H. Technological Feasibility

V. Small SI Engines

A. Overview

B. Engines Covered by This Rule

C. Proposed Requirements

D. Testing Provisions

E. Certification and Compliance Provisions for Small SI Engines and Equipment

F. Small Business Provisions

G. Technological Feasibility

VI. Evaporative Emissions

A. Overview

B. Fuel Systems Covered by This Rule

C. Proposed Evaporative Emission Standards

D. Emission Credit Programs

E. Testing Requirements

F. Certification and Compliance Provisions

G. Small-Business Provisions

H. Technological Feasibility

VII. General Concepts Related to Certification and Other Requirements

A. Scope of Application

B. Emission Standards and Testing

C. Demonstrating Compliance

D. Other Concepts

VIII. General Nonroad Compliance Provisions

A. Miscellaneous Provisions (Part 1068, subpart A)

B. Prohibited Acts and Related Requirements (Part 1068, subpart B)

C. Exemptions (Part 1068, subpart C)

D. Imports (Part 1068, subpart D)

E. Selective Enforcement Audit (Part 1068, subpart E)

F. Defect Reporting and Recall (Part 1068, subpart F)

G. Hearings (Part 1068, subpart G)

IX. General Test Procedures

A. Overview

B. Special Provisions for Nonroad Spark-Ignition Engines

X. Energy, Noise, and Safety

A. Safety

B. Noise

C. Energy

XI. Proposals Affecting Other Engine and Vehicle Categories

A. State Preemption

B. Certification Fees

C. Amendments to General Compliance Provisions in 40 CFR Part 1068

D. Amendments Related to Large SI Engines (40 CFR Part 1048)

E. Amendments Related to Recreational Vehicles (40 CFR Part 1051)

F. Amendments Related to Heavy-Duty Highway Engines (40 CFR Part 85)

G. Amendments Related to Stationary Spark-Ignition Engines (40 CFR Part 60)

XII. Projected Impacts

A. Emissions from Small Nonroad and Marine Spark-Ignition Engines

B. Estimated Costs

C. Cost per Ton

D. Air Quality Impact

E. Benefits

F. Economic Impact Analysis

XIII. Public Participation

XIV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

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

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

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

I. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use

J. National Technology Transfer Advancement Act

I. Introduction

A. Overview

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. Ground-level ozone is linked to potentially serious health problems, especially respiratory effects, and environmental degradation. Carbon monoxide emissions are also related to health problems. Over the past quarter century, state and federal agencies have established emission control programs that make significant progress in addressing these concerns.

This proposal includes steps that would reduce the mobile-source contribution to air pollution in the United States. In particular, we are proposing standards that would require manufacturers to substantially reduce emissions from marine spark-ignition engines and from nonroad spark-ignition engines below 19 kW that are generally used in lawn and garden applications. (1) We refer to these as Marine SI engines and Small SI engines, respectively. The proposed standards are a continuation of the process of establishing standards for nonroad engines and vehicles as required by Clean Air Act section 213. All the nonroad engines subject to this proposal are already regulated under existing emission standards, except sterndrive and inboard marine engines, which will be subject to EPA emission standards for the first time.

Nationwide, emissions from Marine SI engines and Small SI engines contribute significantly to mobile source air pollution. By 2020 without the proposed requirements these engines will account for about 27 percent (1,352,000 tons) of mobile source volatile organic hydrocarbon compounds (VOC) emissions, 31 percent (16,374,000 tons) of mobile source carbon monoxide (CO) emissions, 4 percent (202,000 tons) of mobile source oxides of nitrogen (NO X) emissions, and 16 percent (39,000 tons) of mobile source particulate matter (PM 2.5) emissions. The proposed standards will reduce exposure to these emissions and help avoid a range of adverse health effects associated with ambient ozone, CO, and PM levels. In addition, the proposed standards will help reduce acute exposure to CO, air toxics, and PM for persons who operate or who work with or are otherwise active in close proximity to these engines. They will also help address other environmental problems associated with Marine SI engines and Small SI engines, such as visibility impairment in our national parks and other wilderness areas. These effects are described in more detail in subsequent sections of this Preamble.

B. Why Is EPA Taking This Action?

Clean Air Act section 213(a)(1) directs us to study emissions from nonroad engines and vehicles to determine, among other things, whether these emissions “cause, or significantly contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” Section 213(a)(2) further requires us to determine whether emissions of CO, VOC, and NO X from all nonroad engines significantly contribute to ozone or CO concentrations in more than one nonattainment area. If we determine that emissions from all nonroad engines do contribute significantly to these nonattainment areas, section 213(a)(3) then requires us to establish emission standards for classes or categories of new nonroad engines and vehicles that cause or contribute to such pollution. We may also set emission standards under section 213(a)(4) regulating any other emissions from nonroad engines that we find contribute significantly to air pollution which may reasonably be anticipated to endanger public health or welfare.

Specific statutory direction to propose standards for nonroad spark-ignition engines comes from section 428(b) of the 2004 Consolidated Appropriations Act, which requires EPA to propose regulations under the Clean Air Act “that shall contain standards to reduce emissions from new nonroad spark-ignition engines smaller than 50 horsepower.”  (2) As highlighted above and more fully described in Section II, these engines emit pollutants that contribute to ground-level ozone and ambient CO levels. Human exposure to ozone and CO can cause serious respiratory and cardiovascular problems. Additionally, these emissions contribute to other serious environmental degradation. This proposal implements Congress' mandate by proposing new requirements for particular nonroad engines and equipment that are regulated as part of EPA's overall nonroad emission control program.

We are proposing this rule under the procedural authority of section 307(d) of the Clean Air Act.

C. What Regulations Currently Apply to Nonroad Engines or Vehicles?

EPA has been setting emission standards for nonroad engines and/or vehicles since Congress amended the Clean Air Act in 1990 and included section 213. These amendments have led to a series of rulemakings to reduce the air pollution from this widely varying set of products. In these rulemakings, we divided the broad group of nonroad engines and vehicles into several different categories for setting application-specific requirements. Each category involves many unique characteristics related to the participating manufacturers, technology, operating characteristics, sales volumes, and market dynamics. Requirements for each category therefore take on many unique features regarding the stringency of standards, the underlying expectations regarding emission control technologies, the nature and extent of testing, and the myriad details that comprise the implementation of a compliance program.

At the same time, the requirements and other regulatory provisions for each engine category share many characteristics. Each rulemaking under section 213 sets technology-based standards consistent with the Clean Air Act and requires annual certification based on measured emission levels from test engines or vehicles. As a result, the broader context of EPA's nonroad emission control programs demonstrates both strong similarities between this rulemaking and the requirements adopted for other types of engines or vehicles and distinct differences as we take into account the unique nature of these engines and the companies that produce them.

We completed the Nonroad Engine and Vehicle Emission Study to satisfy Clean Air Act section 213(a)(1) in November 1991. (3) On June 17, 1994, we 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 (56 FR 31306). Since then we have undertaken several rulemakings to set emission standards for the various categories of nonroad engines. Table I-1 highlights the different engine or vehicle categories we have established and the corresponding cites for emission standards and other regulatory requirements. Table I-2 summarizes the series of EPA rulemakings that have set new or revised emission standards for any of these nonroad engines or vehicles. These actions are described in the following sections, with additional discussion to explain why we are not proposing more stringent standards for certain types of nonroad spark-ignition engines below 50 horsepower.

Table I-1.—Nonroad Engine Categories for EPA Emission Standards
Engine categories CFR cite for regulationse establishing emission standards Cross reference to Table I.C-2
1. Locomotives engines 40 CFR Part 92d
2. Marine diesel engines 40 CFR Part 94g, i, j
3. Other nonroad diesel engines 40 CFR Parts 89 and 1039 a, e, k
4. Marine SI engines 4 40 CFR Part 91c
5. Recreational vehicles 40 CFR Part 1051i
6. Small SI engines 5 40 CFR Part 90b, f, h
7. Large SI engines 4 40 CFR Part 1048i
Table I-2.—EPA's Rulemakings for Nonroad Engines
Nonroad engines (categories and sub-categories) Final rulemaking Date
a. Land-based diesel engines ≥37 kW Tier 1 56 FR 31306 June 17, 1994.
b. Small SI engines—Phase 1 60 FR 34581July 3, 1995.
c. Marine SI engines—outboard and personal watercraft61 FR 52088October 4, 1996.
d. Locomotives 63 FR 18978April 16, 1998.
e. Land-based diesel engines—Tier 1 and Tier 2 for engines <37 kW—Tier 2 and Tier 3 for engines ≥37 kW 63 FR 56968October 23, 1998.
f. Small SI engines (Nonhandheld)—Phase 2 64 FR 15208March 30, 1999.
g. Commercial marine diesel <30 liters per cylinder64 FR 73300December 29, 1999.
h. Small SI engines (Handheld)—Phase 2 65 FR 24268April 25, 2000.
i. Recreational vehicles, Industrial spark-ignition engines >19 kW, and Recreational marine diesel 67 FR 68242November 8, 2002.
j. Marine diesel engines ≥2.5 liters/cylinder68 FR 9746February 28, 2003.
k. Land-based diesel engines—Tier 4 69 FR 38958June 29, 2004.
(1) Small SI Engines

We have previously adopted emission standards for nonroad spark-ignition engines at or below 19 kW in two phases. The first phase of these standards introduced certification and an initial level of emission standards for both handheld and nonhandheld engines. On March 30, 1999 we adopted a second phase of standards for nonhandheld engines, including both Class I and Class II engines, which are almost fully phased-in today (64 FR 15208). (6) These standards involved emission reductions based on improving engine calibrations to reduce exhaust emissions and added a requirement that emission standards must be met over the engines' entire useful life as defined in the regulations. We believe catalyst technology has now developed to the point that it can be applied to all nonhandheld Small SI engines to reduce exhaust emissions. Various emission control technologies are similarly available to address the different types of fuel evaporative emissions we have identified.

For handheld engines, we adopted Phase 2 exhaust emission standards in April 25, 2000 (65 FR 24268). These standards were based on the application of catalyst technology, with the expectation that manufacturers would have to make considerable investments to modify their engine designs and production processes. A technology review we completed in 2003 indicated that manufacturers were making progress toward compliance, but that additional implementation flexibility was needed if manufacturers were to fully comply with the regulations by 2010. This finding and a change in the rule were published in the Federal Register on January 12, 2004 (69FR1824). At this point, we have no information to suggest that manufacturers can uniformly apply new technology or make design improvements to reduce exhaust emissions below the Phase 2 levels. We therefore believe the Phase 2 standards continue to represent the greatest degree of emission reduction achievable for these engines. (7) However, we believe it is appropriate to apply evaporative emission standards to the handheld engines similar to those we are proposing for the nonhandheld engines. Manufacturers can control evaporative emissions in a way that has little or no impact on exhaust emissions.

(2) Marine SI Engines

On October 4, 1996 we adopted emission standards for spark-ignition outboard and personal watercraft engines that have recently been fully phased in (61 FR 52088). We decided not to finalize emission standards for sterndrive or inboard marine engines at that time. Uncontrolled emission levels from sterndrive and inboard marine engines were already significantly lower than the outboard and personal watercraft engines. We did, however, leave open the possibility of revisiting the need for emission standards for sterndrive and inboard engines in the future. See Section III for further discussion of the scope and background of past and current rulemakings for these engines.

We believe existing technology can be applied to all Marine SI engines to reduce emissions of harmful pollutants, including both exhaust and evaporative emissions. Manufacturers of outboard and personal watercraft engines can continue the trend of producing four-stroke engines and advanced-technology two-stroke engines to further reduce emissions. For sterndrive/inboard engines, manufacturers can add technologies, such as fuel injection and aftertreatment, that can safely and substantially improve the engines' emission control capabilities.

(3) Large SI Engines

We adopted emission standards for Large SI engines on November 8, 2002 (67 FR 68242). This includes Tier 1 standards for 2004 through 2006 model years and Tier 2 standards starting with 2007 model year engines. Manufacturers are today facing a considerable challenge to comply with the Tier 2 standards, which are already substantially more stringent than any of the standards proposed or contemplated for the other engine categories in this proposal. The Tier 2 standards also include evaporative emission standards, new transient test procedures, and additional exhaust emission standards to address off-cycle emissions, and diagnostic requirements. Stringent standards for this category of engines, and in particular, engines between 25 and 50 horsepower (19 to 37 kW), have been completed in the recent past, and are currently being implemented. Because of that we do not have information on the actual Tier 2 technology that manufacturers will use and do not have information at this time on possible advances in technology beyond Tier 2. We therefore believe the evidence provided in the recently promulgated rulemaking continues to represent the best available information regarding the appropriate level of standards for these engines under section 213 at this time. California Air Resources Board (ARB) has adopted an additional level of emission control for Large SI engines starting with the 2010 model year. However, as described in Section I.D.1, their new standards would not increase overall stringency beyond that reflected in the federal standards. As a result, we believe it would be inappropriate to pursue more stringent emission standards for these engines in this rulemaking.

Note that the Large SI standards apply to nonroad spark-ignition engines above 19 kW. However, we adopted a special provision for engine families where production engines have total displacement at or below 1000 cc and maximum power at or below 30 kW, allowing these engine families to instead certify to the applicable standards for Small SI engines.

(4) Recreational Vehicles

We adopted exhaust and evaporative emission standards for recreational vehicles in our November 8, 2002 final rule (67FR68242). These standards apply to all-terrain vehicles, off-highway motorcycles, and snowmobiles. (8) These exhaust emission standards will be fully phased in starting with the 2007 model year. The evaporative emission standards apply starting with the 2008 model year.

Recreational vehicles will soon be subject to permeation requirements that are very similar to the requirements proposed in this rulemaking. We have also learned more about controlling running losses and diffusion emissions that may eventually lead us to propose comparable standards for recreational vehicles. We expect to revisit these questions in the context of a rulemaking to modify the duty cycle for all-terrain vehicles, as described below. Considering these new requirements for recreational vehicles in this later rulemaking would give us additional time to collect information to better understand the feasibility, costs, and benefits of applying these requirements to recreational vehicles.

The following sections describe the state of technology and regulatory requirements for the different types of recreational vehicles.

(a) All-Terrain Vehicles

The regulations for all-terrain vehicles (ATV) specify testing based on a chassis-based transient procedure. However, on an interim basis, we are permitting manufacturers the option to use a steady-state engine-based procedure to allow manufacturers an opportunity to develop the field operating data needed to determine if ATV operation is dominantly steady state or transient in nature and to develop an appropriate emission test cycle from that information. The emissions test procedure and duty cycle are critical to getting the degree of emission control expected from these engines. We are continuing to work toward a resolution of this test cycle development initiative in a separate action. The anticipated changes to the test cycle raise new questions we will need to work through before we are prepared to change the existing regulation and perhaps pursue new emission control requirements. In particular, we will need to further explore the extent to which the new duty cycle represents in-use operation and whether engine or chassis testing is more appropriate in simulating in-use operation for accurate emission characterization and measurements. We believe it is appropriate to consider more stringent exhaust emission standards for these engines after we have had the opportunity to address the emission test cycle issue and to thus establish a long-term testing protocols and related requirements.

(b) Off-Highway Motorcycles

For off-highway motorcycles, manufacturers are in many cases making a substantial transition to move away from two-stroke engines in favor of four-stroke engines. This transition is now underway. While it may eventually be appropriate to apply aftertreatment or other additional emission control technologies to off-highway motorcycles, we need more time for this transition to be completed and to assess the success of aftertreatment technologies such as catalysts on similar applications such as highway motorcycles. As EPA and manufacturers learn more in implementing emission standards, we would expect to be able to better judge the potential for broadly applying new technology to achieve further emission reductions from off-highway motorcycles.

(c) Snowmobiles

In our November 8, 2002 final rule we set three phases of exhaust emission standards for snowmobiles (67 FR 68242). Environmental and industry groups challenged the third phase of these standards. The court decision upheld much of EPA's reasoning for the standards, but vacated the NO X standard and remanded the CO and HC standards to clarify the analysis and evidence upon which the standards are based. See Bluewater Network, et al v. EPA, 370 F 3d 1 (D.C. Cir. 2004). A large majority of snowmobile engines are rated below 50 hp and there is still a fundamental need for time to pass to allow us to assess the success of 4 stroke engine technology in the market place. This is an important of the assessment we need to conduct with regard to 2012 and later model year emission standards. Thus we believe is appropriate to address this in a separate rulemaking. (9) We expect to complete that work with sufficient lead time for manufacturers to meet any revised Phase 3 standards that we might adopt for the 2012 model year, consistent with the original rulemaking requirements.

(5) Nonroad Diesel Engines

The 2004 Consolidated Appropriations Act providing the specific statutory direction for this rulemaking focuses on nonroad spark-ignition engines. Nonroad diesel engines are therefore not included within the scope of that Congressional mandate. However, we have gone through several rulemakings to set standards for these engines under the broader authority of Clean Air Act section 213. In particular, we have divided nonroad diesel engines into three groups for setting emission standards. We adopted a series of standards for locomotives on April 16, 1998, including requirements to certify engines to emission standards when they are rebuilt (63 FR 18978). We also adopted emission standards for marine diesel engines over several different rulemakings, as described in Table I-2. These included separate actions for engines below 37 kW, engines installed in oceangoing vessels, engines installed in commercial vessels involved in inland and coastal waterways, and engines installed in recreational vessels. We have recently proposed new emission standards for both locomotive and marine diesel engines (72 FR 15938, April 3, 2007).

Finally, all other nonroad diesel engines are grouped together for EPA's emission standards. We have adopted multiple tiers of increasingly stringent standards in three separate rulemakings, as described in Table I-2. We most recently adopted Tier 4 standards based on the use of ultra-low sulfur diesel fuel and the application of exhaust aftertreatment technology (69 FR 38958, June 29, 2004).

D. Putting This Proposal Into Perspective

Most manufacturers that will be subject to this rulemaking are also affected by regulatory developments in California and in other countries. Each of these is described in more detail below.

(1) State Initiatives

Clean Air Act section 209 prohibits California and other states from setting emission standards for new motor vehicles and new motor vehicle engines, but authorizes EPA to waive this prohibition for California, in which case other states may adopt California's standards. Similar preemption and waiver provisions apply for emission standards for nonroad engines and vehicles, whether new or in-use. However for new locomotives, new engines used in locomotives, and new engines used in farm or construction equipment with maximum power below 130 kW, California and other states are preempted and there is no provision for a waiver of preemption. In addition, in section 428 of the amendment to the 2004 Consolidated Appropriations Act, Congress further precluded other states from adopting new California standards for nonroad spark-ignition engines below 50 horsepower. In addition, the amendment required that we specifically address the safety implications of any California standards for these engines before approving a waiver of federal preemption. We are proposing to codify these changes to preemption in this rule.

California ARB has adopted requirements for five groups of nonroad engines: (1) Diesel- and Otto-cycle small off-road engines rated under 19 kW; (2) spark-ignition engines used for marine propulsion; (3) land-based nonroad recreational engines, including those used in all-terrain vehicles, off-highway motorcycles, go-carts, and other similar vehicles; (4) new nonroad spark-ignition engines rated over 19 kW not used in recreational applications; and (5) new land-based nonroad diesel engines rated over 130 kW. They have also approved a voluntary registration and control program for existing portable equipment.

In the 1990s California ARB adopted Tier 1 and Tier 2 standards for Small SI engines consistent with the federal requirements. In 2003, they moved beyond the federal program by adopting exhaust HC+NO X emission standards of 10 g/kW-hr for Class I engines starting in the 2007 model year and 8 g/kW-hr for Class II engines starting in the 2008 model year. In the same rule they adopted evaporative emission standards for nonhandheld equipment, requiring control of fuel tank permeation, fuel line permeation, diurnal emissions, and running losses.

California ARB has adopted two tiers of exhaust emission standards for outboard and personal watercraft engines beyond EPA's original standards. The most recent standards, which apply starting in 2008, require HC+NO X emission levels as low as 16 g/kW-hr. For sterndrive and inboard engines, California has adopted a 5 g/kW-hr HC+NO X emission standard for 2008 and later model year engines, with testing underway to confirm the feasibility of standards. California ARB's marine programs include no standards for exhaust CO emissions or evaporative emissions.

The California emission standards for recreational vehicles have a different form than the comparable EPA standards but are roughly equivalent in stringency. The California standards include no standards for controlling evaporative emissions. Another important difference between the two programs is California ARB's reliance on a provision allowing noncompliant vehicles to be used in certain areas that are less environmentally sensitive as long as they have a specified red sticker that would identify their lack of emission controls to prevent them from operating in other areas.

California ARB in 1998 adopted requirements that apply to new nonroad engines rated over 25 hp produced for California, with standards phasing in from 2001 through 2004. Texas has adopted these initial California ARB emission standards statewide starting in 2004. More recently, California ARB has proposed exhaust emission standards and new evaporative emission standards for these engines, consistent with EPA's 2007 model year standards. Their proposal also included an additional level of emission control for Large SI engines starting with the 2010 model year. However, their proposed standards would not increase overall stringency beyond that reflected in the federal standards. Rather, they aim to achieve reductions in HC+NO X emissions by removing the flexibility incorporated into the federal standards allowing manufacturers to have higher HC+NO X emissions by certifying to a more stringent CO standard.

(2) Actions in Other Countries

While the proposed emission standards will apply only to engines sold in the United States, we are aware that manufacturers in many cases are selling the same products into other countries. To the extent that we have the same emission standards as other countries, manufacturers can contribute to reducing air emissions without being burdened by the costs associated with meeting differing or inconsistent regulatory requirements. The following discussion describes our understanding of the status of emission standards in countries outside the United States.

Regulations for spark ignition engines in handheld and nonhandheld equipment are included in the “Directive 97/68/EC of the European Parliament and of the Council of 16 December 1997 on the approximation of the laws of the Member States relating to measures against the emission of gaseous and particulate pollutants from internal combustion engines to be installed in non-road mobile machinery (OJ L 59, 27.2.1998, p. 1)”, as amended by “Directive 2002/88/EC of the European Parliament and of the Council of 9 December 2002”. The Stage I emission standards are to be met by all handheld and nonhandheld engines by 24 months after entry into force of the Directive (as noted in a December 9, 2002 amendment to Directive 97/68/EC). The Stage I emission standards are similar to the U.S. EPA's Phase 1 emission standards for handheld and nonhandheld engines. The Stage II emission standards are implemented over time for the various handheld and nonhandheld engine classes from 2005 to 2009 with handheld engines ≥ 50cc on August 1, 2008. The Stage II emission standards are similar to EPA's Phase 2 emission standards for handheld and nonhandheld engines. Six months after these dates Member States shall permit placing on the market of engines, whether or not already installed in machinery, only if they meet the requirements of the Directive.

The European Commission has adopted emission standards for recreational marine engines, including both diesel and gasoline engines. These requirements apply to all new engines sold in member countries and began in 2006 for four-stroke engines and in 2007 for two-stroke engines. Table I-3 presents the European standards for diesel and gasoline recreational marine engines. The numerical emission standards for NO X are based on the applicable standard from MARPOL Annex VI for marine diesel engines (See Table I-3). The European standards are roughly equivalent to the nonroad diesel Tier 1 emission standards for HC and CO. Emission measurements under the European standards rely on the ISO D2 duty cycle for constant-speed engines and the ISO E5 duty cycle for other engines.

Table I-3.—European Emission Standards for Recreational Marine Engines
Engine Type HC NO X CO PM
Two-Stroke Spark-Ignition 30 + 100/P 0.75 10.0150 + 600/P
Four-Stroke Spark-Ignition 6 + 50/P 0.75 15.0150 + 600/P
Compression-Ignition 1.5 + 2/P 0.5 9.8 5.0 1.0

E. What Requirements Are We Proposing?

EPA's emission control provisions require engine, vessel and equipment manufacturers to design and produce their products to meet the emission standards we adopt. To ensure that engines, vessels and equipment meet the expected level of emission control, we also require compliance with a variety of additional requirements, such as certification, labeling engines, and meeting warranty requirements. The following sections provide a brief summary of the new requirements we are proposing in this rulemaking. See the later sections for a full discussion of the proposal.

(1) Marine SI Engines and Vessels

We are proposing a more stringent level of emission standards for outboard and personal watercraft engines starting with the 2009 model year. The proposed standards for engines above 40 kW are 16 g/kW-hr for HC+NO X and 200 g/kW-hr for CO. For engines below 40 kW, the standards increase gradually based on the engine's maximum power. We expect manufacturers to meet these standards with improved fueling systems and other in-cylinder controls. The levels of the standards are consistent with the requirements recently adopted by California ARB with the advantage of a simplified form of the standard for different power ratings and with a CO emission standard. We are not pursuing catalyst-based emission standards for outboard and personal watercraft engines. As is discussed later in this preamble, the application of catalyst-based standards to the marine environment creates special technology challenges that must be addressed. Unlike the sterndrive/inboard engines discussed in the next paragraph, outboard and personal watercraft engines are not built from automotive engine blocks and are not as easily amenable to the fundamental engine modifications, fuel system upgrades, and other engine control modifications needed to get acceptable catalyst performance. This proposal is an appropriate next step in the evolution of technology-based standards for outboard and personal watercraft engines as they are likely to lead to the elimination of carbureted two-stroke engines in favor of direct-injection two-stroke engines and to encourage the fuel system upgrades and related engine modifications needed to achieve the required reductions and to potentially set the stage for future considerations.

We are proposing new exhaust emission standards for sterndrive and inboard marine engines. The proposed standards are 5.0 g/kW-hr for HC+NO X and 75.0 g/kW-hr for CO starting with the 2009 model year. We expect manufacturers to meet these standards with three-way catalysts and closed-loop fuel injection. To ensure proper functioning of these emission control systems in use, we are proposing a requirement that engines have a diagnostic system for detecting a failure in the emission control system. For sterndrive and inboard marine engines at or above 373 kW with high-performance characteristics (generally referred to as “SD/I high-performance engines”), we are proposing an HC+NO X emission standard of 5.0 g/kW-hr and a CO standard of 350 g/kW-hr. We are also proposing a variety of other special provisions for these engines to reflect unique operating characteristics and to make it feasible to meet emission standards using emission credits. These standards are consistent with the requirements recently adopted by California ARB, with some adjustment to the provisions for SD/I high-performance engines and with a CO emission standard.

The emission standards described above relate to engine operation over a prescribed duty cycle for testing in the laboratory. We are also proposing not-to-exceed (NTE) standards that establish emission limits when engines operate under normal speed-load combinations that are not included in the duty cycles for the other engine standards.

We are proposing new standards to control evaporative emissions for all Marine SI vessels. The new standards include requirements to control fuel tank permeation, fuel line permeation, and diurnal emissions, including provisions to ensure that refueling emissions do not increase.

We are proposing to place these new regulations for Marine SI engines in 40 CFR part 1045 rather than changing the current regulations in 40 CFR part 91. This new part will allow us to improve the clarity of regulatory requirements and update our regulatory compliance program to be consistent with the provisions we have recently adopted for other nonroad programs. We are also making a variety of changes to 40 CFR part 91 to make minor adjustments to the current regulations and to prepare for the transition to 40 CFR part 1045.

(2) Small SI Engines and Equipment

We are proposing HC+NO X exhaust emission standards of 10.0 g/kW-hr for Class I engines starting in the 2012 model year and 8.0 g/kW-hr for Class II engines starting in the 2011 model year. For both classes of nonhandheld engines, we are proposing to maintain the existing CO standard of 610 g/kW-hr. We expect manufacturers to meet these standards by improving engine combustion and adding catalysts. These standards are consistent with the requirements recently adopted by California ARB.

For spark-ignition engines used in marine generators, we are proposing a more stringent Phase 3 CO emission standard of 5.0 g/kW-hr. This would apply equally to all sizes of engines subject to the Small SI standards.

We are proposing new evaporative emission standards for both handheld and nonhandheld engines. The new standards include requirements to control permeation from fuel tanks and fuel lines. For nonhandheld engines we are also proposing to require control of diffusion emissions and running losses.

We are proposing to place the new regulations for Small SI engines from 40 CFR part 90 to 40 CFR part 1054. This new part will allow us to improve the clarity of regulatory requirements and update our regulatory compliance program to be consistent with the provisions we have recently adopted for other nonroad programs.

F. How Is This Document Organized?

Since this proposal covers a broad range of engines and equipment that vary in design and use, many readers may be interested only in certain aspects of the proposal. We have therefore attempted to organize this preamble in a way that allows each reader to focus on the material of particular interest. The Air Quality discussion in Section II, however, is general in nature and applies to all the categories covered by this proposal.

The next several sections contain our proposal for Small SI engines and equipment and Marine SI engines and vessels. Sections III through V describe the proposed requirements related to exhaust emission standards for each of the affected engine categories, including standards, effective dates, testing information, and other specific requirements. Section VI details the proposed requirements related to evaporative emission requirements for all categories. Sections VII through IX contain some general concepts that are relevant to all of the engines, vessels and equipment covered by this proposal, such as certification requirements and general testing procedures and compliance provisions. Section X discusses how we took energy, noise, and safety factors into consideration for the proposed standards.

Section XI describes a variety of proposed provisions that affect other categories of engines besides those that are the primary subject of this proposal. This includes the following changes:

  • We are proposing to reorganize the regulatory language related to preemption of state standards and to clarify certain provisions. We are also requesting comment regarding a petition to reconsider some of the provisions including the extent to which states may regulate the use and operation of nonroad engines and vehicles.
  • We are incorporating new provisions related to certification fees for newly regulated products covered by this proposal. This involves some restructuring of the regulatory language. We are also proposing various technical amendments, such as identifying an additional payment method, that would apply broadly to our certification programs.
  • We are proposing changes to 40 CFR part 1068 to clarify how the provisions apply with respect to evaporative emission standards. We are also proposing various technical amendments. These changes would apply to all types of nonroad engines that are subject to the provisions of part 1068.
  • We are proposing several technical amendments for Large SI engines and recreational vehicles, largely to maintain consistency across programs for different categories of engines and vehicles.
  • We are proposing to amend provisions related to the delegated-assembly exemption for heavy-duty highway engines as part of the effort to apply these provisions to Small SI engines, as described in Section V.E.2.
  • We are proposing to apply the new standards for Small SI engines to the comparable stationary engines.

Section XII summarizes the projected impacts and benefits of this proposal. Finally, Sections XIII and XIV contain information about public participation and how we satisfy our various administrative requirements.

II. Public Health and Welfare Effects

The engines, vessels and equipment that would be subject to the proposed standards generate emissions of hydrocarbons (HC), nitrogen oxides (NO X), particulate matter (PM) and carbon monoxide (CO) that contribute to nonattainment of the National Ambient Air Quality Standards (NAAQS) for ozone, PM and CO. These engines, vessels and equipment also emit hazardous air pollutants (air toxics) that are associated with a host of adverse health effects. Emissions from these engines, vessels and equipment also contribute to visibility impairment and other welfare and environmental effects.

The health and environmental effects associated with emissions from Small SI engines and equipment and Marine SI engines and vessels are a classic example of a negative externality (an activity that imposes uncompensated costs on others). With a negative externality, an activity's social cost (the cost on society imposed as a result of the activity taking place) exceeds its private cost (the cost to those directly engaged in the activity). In this case, as described in this section, emissions from Small SI engines and equipment and Marine SI engines and vessels impose public health and environmental costs on society. The market system itself cannot correct this externality. The end users of the equipment and vessels are often unaware of the environmental impacts of their use for lawn care or recreation. Because of this, consumers fail to send the market a signal to provide cleaner equipment and vessels. In addition, producers of these engines, equipment, and vessels are rewarded for emphasizing other aspects of these products (e.g., total power). To correct this market failure and reduce the negative externality, it is necessary to give producers social cost signals. The standards EPA is proposing will accomplish this by mandating that Small SI engines and equipment and Marine SI engines and vessels reduce their emissions to a technologically feasible limit. In other words, with this proposed rule the costs of the services provided by these engines and equipment will account for social costs more fully.

This section summarizes the general health and welfare effects of these emissions. Interested readers are encouraged to refer to the Draft RIA for more in-depth discussions.

A. Ozone

Ground-level ozone pollution is formed by the reaction of volatile organic compounds (VOC), of which HC are the major subset, and NO X in the lower atmosphere in the presence of heat and sunlight. These pollutants, often referred to as ozone precursors, are emitted by many types of pollution sources, such as highway and nonroad motor vehicles and engines (including those subject to this proposed rule), power plants, chemical plants, refineries, makers of consumer and commercial products, industrial facilities, and smaller area sources. The engine, vessel and equipment controls being proposed will reduce VOCs and NO X.

The science of ozone formation, transport, and accumulation is complex. (10) Ground-level ozone is produced and destroyed in a cyclical set of chemical reactions, many of which are sensitive to temperature and sunlight. When ambient temperatures and sunlight levels remain high for several days and the air is relatively stagnant, ozone and its precursors can build up and result in more ozone than typically would occur on a single high-temperature day. Ozone also can be transported into an area from pollution sources found hundreds of miles upwind, resulting in elevated ozone levels even in areas with low VOC or NO X emissions.

The current ozone NAAQS, established by EPA in 1997, has an 8-hour averaging time. (11) The 8-hour ozone NAAQS is based on well-documented science demonstrating that more people were experiencing adverse health effects at lower levels of exertion, over longer periods, and at lower ozone concentrations than addressed by the previous one-hour ozone NAAQS. The current ozone NAAQS addresses ozone exposures of concern for the general population and populations most at risk, including children active outdoors, outdoor workers, and individuals with pre-existing respiratory disease, such as asthma. The 8-hour ozone NAAQS is met at an ambient air quality monitoring site when the average of the annual fourth-highest daily maximum 8-hour average ozone concentration over three years is less than or equal to 0.084 parts per million (ppm).

(1) Health Effects of Ozone

The health and welfare effects of ozone are well documented and are assessed in the EPA's 2006 ozone Air Quality Criteria Document (ozone AQCD) and staff paper. (12 13) Ozone can irritate the respiratory system, causing coughing, throat irritation, and/or uncomfortable sensation in the chest. Ozone can reduce lung function and make it more difficult to breathe deeply, and breathing may become more rapid and shallow than normal, thereby limiting a person's activity. Ozone can also aggravate asthma, leading to more asthma attacks that require a doctor's attention and/or the use of additional medication. Animal toxicologic evidence indicates that with repeated exposure, ozone can inflame and damage the lining of the lungs, which may lead to permanent changes in lung tissue and irreversible reductions in lung function. People who are more susceptible to effects associated with exposure to ozone include children, the elderly, and individuals with respiratory disease such as asthma. There is also suggestive evidence that certain people may have greater genetic susceptibility. Those with greater exposures to ozone, for instance due to time spent outdoors (e.g., outdoor workers), are also of concern.

The recent ozone AQCD also examined relevant new scientific information that has emerged in the past decade, including the impact of ozone exposure on such health effects as changes in lung structure and biochemistry, inflammation of the lungs, exacerbation and causation of asthma, respiratory illness-related school absence, hospital admissions and premature mortality. Animal toxicologic studies have suggested potential interactions between ozone and PM with increased responses observed to mixtures of the two pollutants compared to either ozone or PM alone. The respiratory morbidity observed in animal studies along with the evidence from epidemiologic studies supports a causal relationship between acute ambient ozone exposures and increased respiratory-related emergency room visits and hospitalizations in the warm season. In addition, there is suggestive evidence of a contribution of ozone to cardiovascular-related morbidity and non-accidental and cardiopulmonary mortality.

EPA typically quantifies ozone-related health impacts in its regulatory impact analyses (RIAs) when possible. In the analysis of past air quality regulations, ozone-related benefits have included morbidity endpoints and welfare effects such as damage to commercial crops. EPA has not recently included a separate and additive mortality effect for ozone, independent of the effect associated with fine particulate matter. For a number of reasons, including (1) Advice from the Science Advisory Board (SAB) Health and Ecological Effects Subcommittee (HEES) that EPA consider the plausibility and viability of including an estimate of premature mortality associated with short-term ozone exposure in its benefits analyses and (2) conclusions regarding the scientific support for such relationships in EPA's 2006 Air Quality Criteria for Ozone and Related Photochemical Oxidants (the CD), EPA is in the process of determining how to appropriately characterize ozone-related mortality benefits within the context of benefits analyses for air quality regulations. As part of this process, we are seeking advice from the National Academy of Sciences (NAS) regarding how the ozone-mortality literature should be used to quantify the reduction in premature mortality due to diminished exposure to ozone, the amount of life expectancy to be added and the monetary value of this increased life expectancy in the context of health benefits analyses associated with regulatory assessments. In addition, the Agency has sought advice on characterizing and communicating the uncertainty associated with each of these aspects in health benefit analyses.

Since the NAS effort is not expected to conclude until 2008, the agency is currently deliberating how best to characterize ozone-related mortality benefits in its rulemaking analyses in the interim. We do not quantify an ozone mortality benefit for the analysis of the proposed emission standards. So that we do not provide an incomplete picture of all of the benefits associated with reductions in emissions of ozone precursors, we have chosen not to include an estimate of total ozone benefits in the proposed RIA. By omitting ozone benefits in this proposal, we acknowledge that this analysis underestimates the benefits associated with the proposed standards. For more information regarding the quantified benefits included in this analysis, please refer to Chapter 8 of the Draft RIA.

(2) Plant and Ecosystem Effects of Ozone

Ozone contributes to many environmental effects, with impacts to plants and ecosystems being of most concern. Ozone can produce both acute and chronic injury in sensitive species depending on the concentration level and the duration of the exposure. Ozone effects also tend to accumulate over the growing season of the plant, so that even lower concentrations experienced for a longer duration have the potential to create chronic stress on vegetation. Ozone damage to plants includes visible injury to leaves and a reduction in food production through impaired photosynthesis, both of which can lead to reduced crop yields, forestry production, and use of sensitive ornamentals in landscaping. In addition, the reduced food production in plants and subsequent reduced root growth and storage below ground, can result in other, more subtle plant and ecosystems impacts. These include increased susceptibility of plants to insect attack, disease, harsh weather, interspecies competition and overall decreased plant vigor. The adverse effects of ozone on forest and other natural vegetation can potentially lead to species shifts and loss from the affected ecosystems, resulting in a loss or reduction in associated ecosystem goods and services. Lastly, visible ozone injury to leaves can result in a loss of aesthetic value in areas of special scenic significance like national parks and wilderness areas. The 2006 ozone AQCD presents more detailed information on ozone effects on vegetation and ecosystems.

(3) Current and Projected 8-Hour Ozone Levels

Currently, ozone concentrations exceeding the level of the 8-hour ozone NAAQS occur over wide geographic areas, including most of the nation's major population centers. (14) As of October, 2006 there are approximately 157 million people living in 116 areas designated as not in attainment with the 8-hour ozone NAAQS. There are 461 full or partial counties that make up the 116 8-hour ozone nonattainment areas. These numbers do not include the people living in areas where there is a potential risk of failing to maintain or achieve the 8-hour ozone NAAQS in the future.

EPA has already adopted many emission control programs that are expected to reduce ambient ozone levels. These control programs include the Clean Air Interstate Rule (70 FR 25162, May 12, 2005), as well as many mobile source rules, some of which are described in Section I of this preamble. As a result of these programs, the number of areas that fail to meet the 8-hour ozone NAAQS in the future is expected to decrease.

Based on the recent ozone modeling performed for the CAIR analysis, barring additional local ozone precursor controls, we estimate 37 eastern counties (where 24 million people are projected to live) will exceed the 8-hour ozone NAAQS in 2010. (15 16) An additional 148 eastern counties (where 61 million people are projected to live) are expected to be within 10 percent of the 8-hour ozone NAAQS in 2010.

States with 8-hour ozone nonattainment areas will be required to take action to bring those areas into compliance in the future. Based on the final rule designating and classifying 8-hour ozone nonattainment areas (69 FR 23951, April 30, 2004), most 8-hour ozone nonattainment areas will be required to attain the 8-hour ozone NAAQS in the 2007 to 2014 time frame and then be required to maintain the 8-hour ozone NAAQS thereafter. (17) Emissions of ozone precursors from the engines, vessels and equipment subject to the proposed standards contribute to ozone in many, if not all, of these areas. Therefore, the expected HC and NO X reductions from the standards proposed in this action will be useful to states in attaining or maintaining the 8-hour ozone NAAQS.

EPA's review of the ozone NAAQS is currently underway and a proposed decision in this review is scheduled for June 2007 with a final rule scheduled for March 2008. If the ozone NAAQS is revised then new nonattainment areas could be designated. While EPA is not relying on it for purposes of justifying this rule, the emission reductions from this rulemaking would also be helpful to states if there is an ozone NAAQS revision.

(4) Air Quality Modeling for Ozone

To model the ozone air quality benefits of this rule we used the Comprehensive Air Quality Model with Extension (CAMx). CAMx simulates the numerous physical and chemical processes involved in the formation, transport, and destruction of ozone. This model is commonly used in developing attainment demonstration State Implementation Plans (SIPs) as well as estimating the ozone reductions expected to occur from a reduction in emitted pollutants. Meteorological data are developed by a separate program, the Regional Atmospheric Modeling System (RAMS), and input into CAMx. The simulation periods modeled by CAMx include several multi-day periods when ambient measurements were representative of ozone episodes over the eastern United States: June 12-24, July 5-15 and August 7-21, 1995. The modeling domain we used includes the 37 eastern states modeled in the Clean Air Interstate Rule (CAIR). More detailed information is included in the Air Quality Modeling Technical Support Document (TSD), which is located in the docket for this rule.

Note that the emission control scenarios used in the air quality and benefits modeling are slightly different than the emission control program in this proposal reflecting further refinement of the regulatory program since we performed the air quality modeling for this proposal. Additional detail on the difference between the modeled and proposed inventories is included in Section 3.6 of the Draft RIA.

(5) Results of the Air Quality Modeling for Ozone

According to air quality modeling performed for this proposal, the proposed controls for emissions from the engines, vessels and equipment subject to the proposed standards are expected to provide nationwide improvements in ozone levels. On a population-weighted basis, the average modeled future-year 8-hour ozone design values would decrease by 0.7 ppb in 2020 and 0.8 ppb in 2030. (18) Within areas predicted to have design values greater than 85 ppb the average decrease would be somewhat higher: 0.8 ppb in 2020 and 1.0 ppb in 2030.

B. Particulate Matter

Particulate matter (PM) represents a broad class of chemically and physically diverse substances. It can be principally characterized as discrete particles that exist in the condensed (liquid or solid) phase spanning several orders of magnitude in size. PM is further described by breaking it down into size fractions. PM 10 refers to particles generally less than or equal to 10 micrometers (μm) in diameter. PM 2.5 refers to fine particles, those particles generally less than or equal to 2.5 μm in diameter. Inhalable (or “thoracic” ) coarse particles refer to those particles generally greater than 2.5 μm but less than or equal to 10 μm in diameter. Ultrafine PM refers to particles with diameters generally less than 100 nanometers (0.1 μm). Larger particles (>10 μm) tend to be removed by the respiratory clearance mechanisms, whereas smaller particles are deposited deeper in the lungs.

Fine particles are produced primarily by combustion processes and by transformations of gaseous emissions (e.g., SO x, NO X and VOCs) in the atmosphere. The chemical and physical properties of PM 2.5 may vary greatly with time, region, meteorology and source category. Thus, PM 2.5, may include a complex mixture of different pollutants including sulfates, nitrates, organic compounds, elemental carbon and metal compounds. These particles can remain in the atmosphere for days to weeks and travel through the atmosphere hundreds to thousands of kilometers.

EPA's final rule to amend the PM NAAQS addressed revisions to the primary and secondary NAAQS for PM to provide increased protection of public health and welfare, respectively (71 FR 61144, October 17, 2006). The primary PM 2.5 NAAQS include a short-term (24-hour) and a long-term (annual) standard. The level of the 24-hour PM 2.5 NAAQS has been revised from 65μg/m 3 to 35μg/m 3 to provide increased protection against health effects associated with short-term exposures to fine particles. The current form of the 24-hour PM 2.5 standard was retained (e.g., based on the 98th percentile concentration averaged over three years). The level of the annual PM 2.5 NAAQS was retained at 15μg/m 3, continuing protection against health effects associated with long-term exposures. The current form of the annual PM 2.5 standard was retained as an annual arithmetic mean averaged over three years, however, the following two aspects of the spatial averaging criteria were narrowed: (1) The annual mean concentration at each site shall be within 10 percent of the spatially averaged annual mean, and (2) the daily values for each monitoring site pair shall yield a correlation coefficient of at least 0.9 for each calendar quarter. With regard to the primary PM 10 standards, the 24-hour PM 10 NAAQS was retained at a level of 150μg/m 3 not to be exceeded more than once per year on average over a three-year period. Given that the available evidence does not suggest an association between long-term exposure to coarse particles at current ambient levels and health effects, EPA has revoked the annual PM 10 standard.

With regard to the secondary PM standards, EPA has revised these standards to be identical in all respects to the revised primary standards. Specifically, EPA has revised the current 24-hour PM 2.5 secondary standard by making it identical to the revised 24-hour PM 2.5 primary standard, retained the annual PM 2.5 and 24-hour PM 10 secondary standards, and revoked the annual PM 10 secondary standards. This suite of secondary PM standards is intended to provide protection against PM-related public welfare effects, including visibility impairment, effects on vegetation and ecosystems, and material damage and soiling.

(1) Health Effects of PM

Scientific studies show ambient PM is associated with a series of adverse health effects. These health effects are discussed in detail in the 2004 EPA Particulate Matter Air Quality Criteria Document (PM AQCD) as well as the 2005 PM Staff Paper. (19 20) Further discussion of health effects associated with PM can also be found in the Draft RIA.

Health effects associated with short-term exposures (e.g. hours to days) in ambient PM 2.5 include premature mortality, increased hospital admissions, heart and lung diseases, increased cough, adverse lower-respiratory symptoms, decrements in lung function and changes in heart rate rhythm and other cardiac effects. Studies examining populations exposed to different levels of air pollution over a number of years, including the Harvard Six Cities Study and the American Cancer Society Study, show associations between long-term exposure to ambient PM 2.5 and both total and cardiorespiratory mortality. In addition, the reanalysis of the American Cancer Society Study shows an association between fine particle and sulfate concentrations and lung cancer mortality. The engines, vessels and equipment covered in this proposal contribute to both acute and chronic PM 2.5 exposures. Additional information on acute exposures is available in Section 2.5 of the Draft RIA.

Recently, several studies have highlighted the adverse effects of PM specifically from mobile sources. (21 22) Studies have also focused on health effects due to PM exposures on or near roadways. (23) Although these studies include all air pollution sources, including both spark-ignition (gasoline) and diesel powered vehicles, they indicate that exposure to PM emissions near roadways, thus dominated by mobile sources, are associated with health effects. The proposed controls may help to reduce exposures, and specifically exposures near the source, to mobile source related PM 2.5.

(2) Visibility

Visibility can be defined as the degree to which the atmosphere is transparent to visible light. (24) Visibility impairment manifests in two principal ways: as local visibility impairment and as regional haze. (25) Local visibility impairment may take the form of a localized plume, a band or layer of discoloration appearing well above the terrain as a result from complex local meteorological conditions. Alternatively, local visibility impairment may manifest as an urban haze, sometimes referred to as a “brown cloud.” This urban haze is largely caused by emissions from multiple sources in the urban areas and is not typically attributable to only one nearby source or to long-range transport. The second type of visibility impairment, regional haze, usually results from multiple pollution sources spread over a large geographic region. Regional haze can impair visibility over large regions and across states.

Visibility is important because it has direct significance to people's enjoyment of daily activities in all parts of the country. Individuals value good visibility for the well-being it provides them directly, where they live and work, and in places where they enjoy recreational opportunities. Visibility is also highly valued in significant natural areas such as national parks and wilderness areas, and special emphasis is given to protecting visibility in these areas. For more information on visibility see the 2004 PM AQCD as well as the 2005 PM Staff Paper. (26 27)

Fine particles are the major cause of reduced visibility in parts of the United States. To address the welfare effects of PM on visibility, EPA set secondary PM 2.5 standards that would act in conjunction with the establishment of a regional haze program. In setting this secondary standard, EPA concluded that PM 2.5 causes adverse effects on visibility in various locations, depending on PM concentrations and factors such as chemical composition and average relative humidity. The secondary (welfare-based) PM 2.5 NAAQS was established as equal to the suite of primary (health-based) NAAQS. Furthermore, section 169 of the Act provides additional authorities to remedy existing visibility impairment and prevent future visibility impairment in the 156 national parks, forests and wilderness areas categorized as mandatory class I Federal areas (62 FR 38680-81, July 18, 1997). (28) In July 1999 the regional haze rule (64 FR 35714) was put in place to protect the visibility in mandatory class I federal areas. Visibility can be said to be impaired in both PM 2.5 nonattainment areas and mandatory class I federal areas.

(a) Current Visibility Impairment

Recently designated PM 2.5 nonattainment areas indicate that, as of October 2006, almost 90 million people live in nonattainment areas for the 1997 PM 2.5 NAAQS. Thus, at least these populations would likely be experiencing visibility impairment, as well as many thousands of individuals who travel to these areas. In addition, while visibility trends have improved in mandatory Class I federal areas, the most recent data show that these areas continue to suffer from visibility impairment. In summary, visibility impairment is experienced throughout the U.S., in multi-state regions, urban areas, and remote mandatory class I federal areas. (29 30) The mandatory class I federal areas are listed in Chapter 2 of the RIA for this action. The areas that have design values above the 1997 PM 2.5 NAAQS are also listed in Chapter 2 of the RIA for this action.

(b) Future Visibility Impairment

Recent modeling for the CAIR was used to project visibility conditions in mandatory class I federal areas across the country in 2015. The results for the mandatory class I federal areas suggest that these areas are predicted to continue to have annual average deciview levels above background in the future. (31) Modeling done for the PM NAAQS projected PM 2.5 levels in 2015. These projections include all sources of PM 2.5, including the engines, vessels and equipment covered in this rule, and suggest that PM 2.5 levels above the NAAQS will persist into the future.

The engines, vessels and equipment that would be subject to these proposed standards contribute to visibility concerns in these areas through both their primary PM emissions and their VOC and NO X emissions, which contribute to the formation of secondary PM 2.5. Reductions in these direct and secondary PM emissions will help to improve visibility across the nation, including mandatory class I federal areas.

(3) Atmospheric Deposition

Wet and dry deposition of ambient particulate matter delivers a complex mixture of metals (e.g., mercury, zinc, lead, nickel, aluminum, cadmium), organic compounds (e.g., POM, dioxins, furans) and inorganic compounds (e.g., nitrate, sulfate) to terrestrial and aquatic ecosystems. The chemical form of the compounds deposited is impacted by a variety of factors including ambient conditions (e.g., temperature, humidity, oxidant levels) and the sources of the material. Chemical and physical transformations of the particulate compounds occur in the atmosphere as well as the media onto which they deposit. These transformations in turn influence the fate, bioavailability and potential toxicity of these compounds. Atmospheric deposition has been identified as a key component of the environmental and human health hazard posed by several pollutants including mercury, dioxin and PCBs. (32)

Adverse impacts on water quality can occur when atmospheric contaminants deposit to the water surface or when material deposited on the land enters a waterbody through runoff. Potential impacts of atmospheric deposition to waterbodies include those related to both nutrient and toxic inputs. Adverse effects to human health and welfare can occur from the addition of excess particulate nitrate nutrient enrichment, which contributes to toxic algae blooms and zones of depleted oxygen, which can lead to fish kills, frequently in coastal waters. Particles contaminated with heavy metals or other toxins may lead to the ingestion of contaminated fish, ingestion of contaminated water, damage to the marine ecology, and limited recreational uses. Several studies have been conducted in U.S. coastal waters and in the Great Lakes Region in which the role of ambient PM deposition and runoff is investigated. (33 34 35 36 37)

Adverse impacts on soil chemistry and plant life have been observed for areas heavily impacted by atmospheric deposition of nutrients, metals and acid species, resulting in species shifts, loss of biodiversity, forest decline and damage to forest productivity. Potential impacts also include adverse effects to human health through ingestion of contaminated vegetation or livestock (as in the case for dioxin deposition), reduction in crop yield, and limited use of land due to contamination.

(4) Current and Projected PM

In 2005 EPA designated 39 nonattainment areas for the 1997 PM 2.5 NAAQS based on air quality design values (using 2001-2003 or 2002-2004 measurements) and a number of other factors (70 FR 943, January 5, 2005). (38) These areas are comprised of 208 full or partial counties with a total population exceeding 88 million. As mentioned in Section II.B.2, the 1997 PM 2.5 NAAQS was recently revised and the 2006 PM 2.5 NAAQS became effective on December 18, 2006. Table II-1 presents the number of counties in areas currently designated as nonattainment for the 1997 PM 2.5 NAAQS as well as the number of additional counties that have monitored data that is violating the 2006 PM 2.5 NAAQS. Nonattainment areas will be designated with respect to the new 2006 PM 2.5 NAAQS in early 2010.

Table II-1.—Fine Particle Standards: Current Nonattainment Areas and Other Violating Counties
Nonattainment areas/other violating counties Number of counties Population 1
1997 PM 2.5 Standards: 39 areas currently designated 20888,394,000
2006 PM 2.5 Standards: counties with violating monitors 2 4918,198,676
Total 257106,592,676

Based on modeling performed for the PM NAAQS analysis, we estimate that 52 counties (where 53 million people are projected to live) will exceed the 2006 PM 2.5 standard in 2015. (39) In addition, 54 counties (where 27 million people are projected to live) are expected to be within 10 percent of the 2006 PM 2.5 NAAQS in 2015.

Areas designated as not attaining the 1997 PM 2.5 NAAQS will need to attain these standards in the 2010 to 2015 time frame, and then be required to maintain the NAAQS thereafter. The attainment dates associated with the potential new 2006 PM 2.5 nonattainment areas would likely be in the 2015 to 2020 timeframe. The emission standards being proposed in this action would become effective as early as 2009 making the expected HC, NO X and PM inventory reductions from this rulemaking useful to states in attaining or maintaining the PM 2.5 NAAQS.

(5) Current PM

As of October 2006 approximately 28.5 million people live in 46 designated PM 10 nonattainment areas, which include all or part of 46 counties. These population numbers do not include the people living in areas where there is a potential risk of failing to maintain or achieve the PM 10 NAAQS in the future. The expected PM, HC and NO X inventory reductions from these proposed standards would be useful to states in maintaining the PM 10 NAAQS.

C. Air Toxics

Emissions from the engines, vessels and equipment subject to the proposed standards contribute to ambient levels of gaseous air toxics known or suspected as human or animal carcinogens, or that have non-cancer health effects. These compounds include benzene, 1,3-butadiene, formaldehyde, acetaldehyde, acrolein, polycyclic organic matter (POM), and naphthalene. All of these compounds, except acetaldehyde, were identified as national or regional risk drivers in the 1999 National-Scale Air Toxics Assessment (NATA) and have significant inventory contributions from mobile sources. That is, for a significant portion of the population, these compounds pose a significant portion of the total cancer risk from breathing outdoor air toxics. The reductions in the emissions from these engines, vessels and equipment would help reduce exposure to these harmful substances.

Air toxics can cause a variety of cancer and noncancer health effects. A number of the mobile source air toxic pollutants described in this section are known or likely to pose a cancer hazard in humans. Many of these compounds also cause adverse noncancer health effects resulting from chronic, (40) subchronic, (41) or acute  (42) inhalation exposures. These include neurological, cardiovascular, liver, kidney, and respiratory effects as well as effects on the immune and reproductive systems.

Benzene. The EPA's Integrated Risk Information (IRIS) database lists benzene as a known human carcinogen (causing leukemia) by all routes of exposure, and that exposure is associated with additional health effects, including genetic changes in both humans and animals and increased proliferation of bone marrow cells in mice. (43 44 45) EPA states in its IRIS database that data indicate a causal relationship between benzene exposure and acute lymphocytic leukemia and suggests a relationship between benzene exposure and chronic non-lymphocytic leukemia and chronic lymphocytic leukemia. A number of adverse noncancer health effects including blood disorders, such as preleukemia and aplastic anemia, have also been associated with long-term exposure to benzene. (46 47) The most sensitive noncancer effect observed in humans, based on current data, is the depression of the absolute lymphocyte count in blood. (48 49) In addition, recent work, including studies sponsored by the Health Effects Institute (HEI), provides evidence that biochemical responses are occurring at lower levels of benzene exposure than previously known. (50 51 52 53) EPA's IRIS program has not yet evaluated these new data.

1,3-Butadiene. EPA has characterized 1,3-butadiene as carcinogenic to humans by inhalation. (54 55) The specific mechanisms of 1,3-butadiene-induced carcinogenesis are unknown. However, it is virtually certain that the carcinogenic effects are mediated by genotoxic metabolites of 1,3-butadiene. Animal data suggest that females may be more sensitive than males for cancer effects, but there are insufficient data in humans from which to draw conclusions about sensitive subpopulations. 1,3-Butadiene also causes a variety of reproductive and developmental effects in mice; no human data on these effects are available. The most sensitive effect was ovarian atrophy observed in a lifetime bioassay of female mice. (56)

Formaldehyde. Since 1987, EPA has classified formaldehyde as a probable human carcinogen based on evidence in humans and in rats, mice, hamsters, and monkeys. (57) EPA is currently reviewing recently published epidemiological data. For instance, recently released research conducted by the National Cancer Institute (NCI) found an increased risk of nasopharyngeal cancer and lymphohematopoietic malignancies such as leukemia among workers exposed to formaldehyde. (58 59) NCI is currently performing an update of these studies. A recent National Institute of Occupational Safety and Health (NIOSH) study of garment workers also found increased risk of death due to leukemia among workers exposed to formaldehyde. (60) Based on the developments of the last decade the working group of the International Agency for Research on Cancer (IARC) concluded in 2004 that formaldehyde is carcinogenic to humans (Group 1), a higher classification than previous IARC evaluations, on the basis of sufficient evidence in humans and sufficient evidence in experimental animals.

Formaldehyde exposure also causes a range of noncancer health effects, including irritation of the eyes (tearing of the eyes and increased blinking) and mucous membranes.

Acetaldehyde. Acetaldehyde is classified in EPA's IRIS database as a probable human carcinogen, based on nasal tumors in rats, and is considered toxic by the inhalation, oral, and intravenous routes. (61) The primary acute effect of exposure to acetaldehyde vapors is irritation of the eyes, skin, and respiratory tract. (62) The agency is currently conducting a reassessment of the health hazards from inhalation exposure to acetaldehyde.

Acrolein. Acrolein is intensely irritating to humans when inhaled, with acute exposure resulting in upper respiratory tract irritation and congestion. EPA determined in 2003 using the 1999 draft cancer guidelines that the human carcinogenic potential of acrolein could not be determined because the available data were inadequate. No information was available on the carcinogenic effects of acrolein in humans and the animal data provided inadequate evidence of carcinogenicity. (63)

Polycyclic Organic Matter (POM). POM is generally defined as a large class of organic compounds with multiple benzene rings and a boiling point greater than 100 degrees Celsius. One of these compounds, naphthalene, is discussed separately below. Polycyclic aromatic hydrocarbons (PAH) are a class of POM that contain only hydrogen and carbon atoms. A number of PAHs are known or suspected carcinogens.

Recent studies have found that maternal exposures to PAHs in a population of pregnant women were associated with several adverse birth outcomes, including low birth weight and reduced length at birth, as well as impaired cognitive development at age three. (64 65) EPA has not yet evaluated these recent studies.

Naphthalene. Naphthalene is found in small quantities in gasoline and diesel fuels but is primarily a product of combustion. EPA recently released an external review draft of a reassessment of the inhalation carcinogenicity of naphthalene. (66) The draft reassessment recently completed external peer review. (67) Based on external peer review comments, additional analyses are being considered. California EPA has released a new risk assessment for naphthalene, and the IARC has reevaluated naphthalene and re-classified it as Group 2B: possibly carcinogenic to humans. (68) Naphthalene also causes a number of chronic non-cancer effects in animals, including abnormal cell changes and growth in respiratory and nasal tissues. (69)

In addition to reducing VOC, NO X, CO and PM 2.5 emissions from these engines, vessels and equipment, the standards proposed in this document would also reduce air toxics emitted from these engines, vessels and equipment, thereby helping to mitigate some of the adverse health effects associated with operation of these engines, vessels and equipment.

D. Carbon Monoxide

Carbon monoxide (CO) is a colorless, odorless gas produced through the incomplete combustion of carbon-based fuels. The current primary NAAQS for CO are 35 ppm for the 1-hour average and nine ppm for the 8-hour average. These values are not to be exceeded more than once per year.

We have already found that emissions from nonroad engines contribute significantly to CO concentrations in more than one nonattainment area (59 FR 31306, June 17, 1994). We have also previously found that emissions from Small SI engines contribute to CO concentrations in more than one nonattainment area. We propose to find here, based on the information in this section of the preamble and Chapters 2 and 3 of the Draft RIA, that emissions from Marine SI engines and vessels likewise contribute to CO concentrations in more than one CO nonattainment area.

Carbon monoxide enters the bloodstream through the lungs, forming carboxyhemoglobin and reducing the delivery of oxygen to the body's organs and tissues. The health threat from CO is most serious for those who suffer from cardiovascular disease, particularly those with angina or peripheral vascular disease. Healthy individuals also are affected, but only at higher CO levels. Exposure to elevated CO levels is associated with impairment of visual perception, work capacity, manual dexterity, learning ability and performance of complex tasks. Carbon monoxide also contributes to ozone nonattainment since carbon monoxide reacts photochemically in the atmosphere to form ozone. (70) Additional information on CO related health effects can be found in the Carbon Monoxide Air Quality Criteria Document (CO AQCD). (71)

In addition to health effects from chronic exposure to ambient CO levels, acute exposures to higher levels are also a problem, see the Draft RIA for additional information. In recent years a substantial number of CO poisonings and deaths have occurred on and around recreational boats across the nation. (72) The actual number of deaths attributable to CO poisoning while boating is difficult to estimate because CO-related deaths in the water may be labeled as drowning. An interagency team consisting of the National Park Service, the U.S. Department of the Interior, and the National Institute for Occupational Safety and Health maintains a record of published CO-related fatal and nonfatal poisonings. (73) Between 1984 and 2004, 113 CO-related deaths and 458 non-fatal CO poisonings have been identified based on hospital records, press accounts and other information. Deaths have been attributed to exhaust from both onboard generators and propulsion engines. Houseboats, cabin cruisers, and ski boats are the most common types of boats associated with CO poisoning cases. These incidents have prompted other federal agencies, including the United States Coast Guard and National Park Service, to issue advisory statements and other interventions to boaters to avoid excessive CO exposure. (74)

As of October 2006, there were approximately 15 million people living in 6 areas (which include 10 counties) designated as nonattainment for CO. The CO nonattainment areas are presented in the Draft RIA.

EPA previously determined that emissions from nonroad engines and equipment contribute significantly to ozone and CO concentrations in more than one nonattainment area (59 FR 31306, June 17, 1994). EPA also determined that the categories of small land-based SI engines cause or contribute to ambient ozone and CO in more than one nonattainment area (65 FR 76790, Dec. 7, 2000). With regard to Marine SI engines and vessels, our NONROAD model indicates that these engines are present in each of the CO nonattainment areas and thus contribute to CO concentrations in those nonattainment areas. The CO contribution from Marine SI engines in classified CO nonattainment areas is presented in Table II-2.

Table II-2.—CO Emissions from Marine SI Engines and Vessels in Classified CO Nonattainment Areas
Area County Category CO (short tons in 2005)
Missoula, MT Missoula Marine SI94
Las Vegas, NV Clark Marine SI 3,016
Reno, NV Washoe Marine SI3,494
El Paso, TX El Paso Marine SI37
South Coast Air Basin Los Angeles Marine SI 4,615
Riverside Marine SI1,852
Orange Marine SI5,360
San Bernardino Marine SI 2,507

Based on the national inventory numbers in Chapter 3 of the Draft RIA and the local inventory numbers described in this section of the preamble, we propose to find that emissions of CO from Marine SI engines and vessels contribute to CO concentrations in more than one CO nonattainment area.

III. Sterndrive and Inboard Marine Engines

A. Overview

This section applies to sterndrive and inboard marine (SD/I) engines. Sterndrive and inboard engines are spark-ignition engines typically derived from automotive engine blocks for which a manufacturer will take steps to “marinize” the engine for use in marine applications. This marinization process includes choosing and optimizing the fuel management system, configuring a marine cooling system, adding intake and exhaust manifolds, and adding accessory drives and units. These engines typically have water-jacketed exhaust systems to keep surface temperatures low. Ambient surface water (seawater or freshwater) is generally added to the exhaust gases before the mixture is expelled under water.

As described in Section I, the initial rulemaking to set standards for Marine SI engines did not include final emission standards for SD/I engines. In that rulemaking, we finalized the finding under Clean Air Act section 213(a)(3) that all Marine SI engines cause or contribute to ozone concentrations in two or more ozone nonattainment areas in the United States. However, because uncontrolled SD/I engines appeared to be a low-emission alternative to outboard and personal watercraft engines in the marketplace, even after the emission standards for these engines were fully phased in, we decided to set emission standards only for outboard and personal watercraft engines. At that time, outboard and personal watercraft engines were almost all two-stroke engines with much higher emission rates compared to the SD/I engines, which were all four-stroke engines. We pointed out in that initial rulemaking that we wanted to avoid imposing costs on SD/I engines that could cause a market shift to increased use of the higher-emitting outboard engines, which would undermine the broader goal of achieving the greatest degree of emission control from the full set of Marine SI engines.

We believe now is an appropriate time to set standards for SD/I engines, for several reasons. First, the available technology for SD/I engines has developed significantly, so we are now able to anticipate substantial emission reductions. With the simultaneous developments in technology for outboard and personal watercraft engines, we can set standards that achieve substantial emission reductions from all Marine SI engines. Second, now that California has adopted standards for SD/I engines, the cost impact of setting new standards for manufacturers serving the California market is generally limited to the hardware costs of adding emission control technology; these manufacturers will be undergoing a complete redesign effort for these engines to meet the California standards. Third, we believe SD/I engines meeting the proposed standards will in many cases have performance advantages over pre-control engines, which will allow manufacturers of SD/I engines to promote their engines as having a greater value to justify any price increases. As a result, we believe we can achieve the maximum emission reductions from Marine SI engines by setting standards for SD/I engines based on the use of catalyst technology at the same time that we adopt more stringent standards for outboard and personal watercraft engines.

As described in Section II, we are proposing to make the finding under Clean Air Act section 213(a)(3) that Marine SI engines cause or contribute to CO concentrations in two or more nonattainment areas of the United States. We believe the proposed CO standards will also reduce the exposure of individual boaters and bystanders to potentially dangerous CO levels.

We believe catalyst technology is available for achieving these proposed standards. Catalysts have been used for decades in automotive applications to reduce emissions, and catalyst manufacturers have continued to develop and improve this technology. Design issues for using catalysts in marine applications are primarily centered on packaging catalysts in the water-jacketed, wet exhaust systems seen on most SD/I engines. Section III.G discusses recent development work that has shown success in packaging catalysts in SD/I applications. In addition, there are ongoing efforts in evaluating catalyst technology in SD/I engines being sponsored by the marine industry, U.S. Coast Guard, and California ARB.

B. Engines Covered by This Rule

(1) Definition of Sterndrive and Inboard Engines

For the purpose of this regulation, SD/I engines encompass all spark-ignition marine propulsion engines that are not outboard or personal watercraft engines. A discussion of the proposed new definitions for outboard and personal watercraft engines is in Section IV.B. We consider all the following to be SD/I engines: inboard, sterndrive (also known as inboard/outboard), airboat engines, and jet boat engines.

The existing definitions for sterndrive and inboard engines from 40 CFR part 91 are presented below:

  • Sterndrive engine means a four stroke Marine SI engine that is designed such that the drive unit is external to the hull of the marine vessel, while the engine is internal to the hull of the marine vessel.
  • Inboard engine means a four stroke Marine SI engine that is designed such that the propeller shaft penetrates the hull of the marine vessel while the engine and the remainder of the drive unit is internal to the hull of the marine vessel.

We are proposing to amend the above definitions for determining which exhaust emission standards apply to spark-ignition marine engines in 2009. The new proposed definition would be a single term to include sterndrive and inboard engines together as a single engine category. The proposed definition for sterndrive/inboard also is drafted to include all engines not otherwise classified as outboard or personal watercraft engines. Note that we are proposing to revise the definitions of outboard and personal watercraft engines as described in Section IV.B.

The proposed definition has several noteworthy impacts. First, it removes a requirement that only four-stroke engines can qualify as sterndrive/inboard engines. We believe limiting the definition to include only four-stroke engines is unnecessarily restrictive and could create an incentive to use two-stroke (or rotary) engines to avoid the proposed catalyst-based standards. Second, it removes limitations caused by reference to propellers. The definition should not refer specifically to propellers, because there are other propulsion drives on marine vessels, such as jet drives, that could be used with SD/I engines. Third, as explained in the section on the OB/PWC definitions, the proposed definitions treat engines installed in open-bay vessels (e.g. jet boats) and in vessels over 4 meters long as SD/I engines. Finally, the existing definition does not clearly specify how to treat specialty vessels such as airboats or hovercraft that use engines that are similar to those in conventional SD/I applications. Under the discretion in the regulation allowing EPA to make judgments about the scope of the SD/I engine definition, we have classified airboats as SD/I engines. See 40 CFR 91.3 for the existing definitions of the marine engine classes. We continue to believe these engines share fundamental characteristics with traditional SD/I engines and should therefore be treated the same way. However, we believe the definitions should address these applications expressly to make clear which standards apply.

We request comment on the following proposed definition:

  • Sterndrive/inboard engine means a spark-ignition engine that is used to propel a marine vessel, but is not an outboard engine or a personal watercraft engine. This includes engines on propeller-driven vessels, jet boats, airboats, and hovercraft.

High-performance SD/I engines are generally characterized by high-speed operation, supercharged air intake, customized parts, very high power densities, and a short time until rebuild (50 to 200 hours). Based on current SD/I product offerings, we are proposing to define a high-performance engine as an SD/I engine with maximum power at or above 373 kW (500 hp) that has design features to enhance power output such that the expected operating time until rebuild is substantially shorter than 480 hours.

(2) Exclusions and Exemptions

We are proposing to extend our basic nonroad exemptions to the SD/I engines and vessels covered by this proposal. These include the testing exemption, the manufacturer-owned exemption, the display exemption, and the national-security exemption. If the conditions for an exemption are met, then the engine is not subject to the exhaust emission standards. These exemptions are described in more detail under Section VIII.

In the rulemaking for recreational vehicles, we chose not to apply standards to hobby products by exempting all reduced-scale models of vehicles that are not capable of transporting a person (67 FR 68242, November 8, 2002). We are proposing to extend that same provision to SD/I marine engines (see § 1045.5).

The Clean Air Act provides for different treatment of engines used solely for competition. Rather than relying on engine design features that serve as inherent indicators of dedicated competitive use, as specified in the current regulations, we have taken the approach in more recent programs of more carefully differentiating competition and noncompetition models in ways that reflect the nature of the particular products. In the case of Marine SI engines, we do not believe there are engine design features that allow us to differentiate between engines that are used in high-performance recreational applications and those that are used solely for competition. We are therefore proposing that, starting January 1, 2009, Marine SI engines meeting all the following criteria would be considered to be used solely for competition, except in other cases where information is available indicating that engines are not used solely for competition (see § 1045.620):

  • The engine (or a vessel in which the engine is installed) may not be displayed for sale in any public dealership or otherwise offered for sale to the general public.
  • Sale of the vessel in which the engine is installed must be limited to professional racers or other qualified racers.
  • The engine must have performance characteristics that are substantially superior to noncompetitive models (e.g. higher power-to-weight ratio).
  • The engines must be intended for use only in racing events sanctioned (with applicable permits) by the Coast Guard or other public organization, with operation limited to racing events, speed record attempts, and official time trials.

Engine manufacturers would make their request for each new model year, and we would deny a request for future production if there are indications that some engines covered by previous requests are not being used solely for competition. Competition engines are produced and sold in very small quantities, so manufacturers should be able to identify which engines qualify for this exemption. We are also proposing to apply the same criteria to outboard and personal watercraft engines and vessels. We request comment on this approach to qualifying for a competition exemption.

We are proposing a new exemption to address individuals who manufacture recreational marine vessels for personal use (see § 1045.630). Under the proposed exemption, these vessels and their engines could be exempt from standards, subject to certain limitations. For example, an individual may produce one such vessel over a ten-year period, the vessel may not be used for commercial purposes, and any exempt engines may not be sold for at least five years. The vessel must generally be built from unassembled components, rather than simply completing assembly of a vessel that is otherwise similar to one that will be certified to meet emission standards. This proposal addresses the concern that hobbyists who make their own vessels could otherwise be a manufacturer subject to the full set of emission standards by introducing these vessels into commerce. We expect this exemption to involve a very small number of vessels.

C. Proposed Exhaust Emission Standards

We are proposing technology-based exhaust emission standards for new SD/I engines. These standards are similar to the exhaust emission standards that California ARB recently adopted (see Section I). This section describes the proposed requirements for SD/I engines for controlling exhaust emissions. See Section V for a description of the proposed requirements related to evaporative emissions.

(1) Standards and Dates

We are proposing exhaust emission standards of 5 g/kW-hr HC+NO X and 75 g/kW-hr CO for SD/I engines, starting with the 2009 model year (see § 1045.105). On average, this represents about a 70 percent reduction in HC+NO X and a 50 percent reduction in CO from baseline engine configurations. Due to the challenges of controlling CO emissions at high load, the expected reduction in CO emissions from low to mid-power operation is expected to be more than 80 percent. We are proposing additional lead time for small businesses as discussed in Section III.F.2. The proposed standards would be based on the same duty cycle that currently is in place for outboard and personal watercraft engines, as described in Section III.D. Section III.F discusses the technological feasibility of these standards in more detail. We request comment on the feasibility and appropriateness of the proposed standards.

The proposed standards are largely based on the use of small catalytic converters that can be packaged in the water-cooled exhaust systems typical for these applications. California ARB also adopted an HC+NO X standard of 5 g/kW-hr, but they did not adopt a standard for CO emissions. We believe the type of catalyst used to achieve the HC+NO X standard will also be effective in reducing CO emissions enough to meet the proposed standard, so no additional technology will be needed to control CO emissions.

Manufacturers have expressed concern that the proposed implementation dates may be difficult to meet, for certain engines, due to anticipated changes in engine block designs produced by General Motors. As described in the Draft RIA and in the docket, the vast majority of SD/I engines are based on automotive engine blocks sold by General Motors. (75) There are five basic engine blocks used, and recently GM has announced that it will discontinue production of the 4.3L and 8.1L engine blocks in 2009. GM anticipates that it will offer a 4.1L engine block and a 6.0L supercharged engine block to the marine industry as replacements. Full run production of these new blocks is anticipated in mid to late 2009. SD/I engine manufacturers have expressed concern that they will not be able to begin the engineering processes related to marinizing these engines, including the development of catalyst-equipped exhaust manifolds, until mid-2007, when they are expecting to see the first prototypes of the two replacement engine models. In addition, they are concerned that they do not have enough remaining years of sales of the 4.3L and 8.1L engines to justify the cost of developing catalyst-equipped exhaust manifolds for these engines and amortizing the costs of the required tooling while also developing the two new engine models.

The SD/I requirements begin in earnest in California in the 2008 model year. Manufacturers have indicated that they plan to use catalysts to meet the California standards in 2008 for three or four of the five engine models used in SD/I applications but to potentially have limited availability of the 4.3L or 8.1L engines until the catalyst-equipped versions of the two new engine models (4.1L and 6.0L) have been marinized and meet the new California emission standards. At this point, the manufacturers project that the two new engine models would be available for sale in California in 2010. Some 4.3L and 8.1L engines may be available in California during the phase-out based on the possibility of some use of catalyst for one or both of these displacements and the use of transitional flexibilities.

These are unique circumstances because the SD/I engine manufacturers' plans and products depend on the manufacture of the base engine by a company not directly involved in marine engine manufacturing. The SD/I sales represent only a small fraction of total engine sales and thus did not weigh heavily in GM's decision to replace the existing engine blocks with two comparable versions during the timeframe when the SD/I manufacturers are facing new emission standards. SD/I manufacturers have stated that alternative engine blocks that meet their are not available in the interim, and that it would be cost-prohibitive for them to produce their own engine blocks.

EPA is proposing that the Federal SD/I standards take effect for the 2009 model year, one year after the same standards apply in California. We believe a requirement to extend the California standards nationwide after a one-year delay allows manufacturers adequate time to incorporate catalysts across their product lines as they are doing in California. Once the technology is developed for use in California, it would be available for use nationwide soon thereafter. In fact, one company currently certified to the California standards is already offering catalyst-equipped SD/I engines nationwide. However, we request comment on whether an additional year of lead time would be appropriate for engines not using catalysts in California in 2008. This is potentially the 4.3L or 8.1L SD/I engines. Under this alternative, engines based on the three engine blocks not being changed would be required to meet the standards in 2009. Also, engines built from the 4.3L and/or the 8.1L GM blocks would be required to meet the EPA standards if sold in California in 2008 or 2009. Otherwise the new standards for these engines could be delayed for an additional model year (until 2010). Assuming product plans follow through as projected, the two new engine blocks would be required to meet the standards in the 2010 model year.

Another possibility would be to address this issue through the combination of the flexibilities provided through an ABT program and a phase-in of the standards over two model years (2009/2010) instead of implementation in one model year (2009). Under this approach, manufacturers could certify and sell the 4.3L and 8.1L engines in the 2009 model year without catalysts or with limited use of catalysts through emissions averaging. This approach would have the advantage of giving manufacturers flexibility in how they choose to phase in their catalyst-equipped engines. However, engine manufacturers have expressed concern that, even though they will be offering limited configurations of catalyzed engines in California in 2008, that the lead time is short and they will not have the ability to fully catalyze their entire line of engines for 2009. Thus, if the rule is structured in a manner to permit it, marine engine manufacturers would sell a mix of catalyzed and non-catalyzed engines in 2009. Since boat builders can determine which engines are purchased and can choose either catalyzed or non-catalyzed versions of the engines if available, manufacturers are concerned that it would be difficult for SD/I engine manufacturers to ensure compliance with standards based on sales and horsepower weightings. Engine manufacturers, not boat builders, are subject to exhaust emission standards. Thus, a phase-in approach, which would be based on a projection that a certain number of catalyzed engines would be sold, may not be a feasible approach for this industry. The industry would thus prefer a mandatory implementation date as discussed below without a phase-in that uses averaging. The industry's concerns notwithstanding, there are benefits to this approach. Therefore, we are requesting comment on phasing in the proposed standards over the 2009-2010 timeframe. Under this approach, the standards would be 10 g/kW-hr HC+NO X and 100 g/kW-hr CO in 2009. The proposed standards would then go into effect in 2010. During the phase-in period, the proposed family emission limit (FEL) caps (see Section III.C.3) would still apply.

A third alternative, preferred by the two large SD/I manufacturers, would be full compliance with the 5 g/kW-hr standard in 2010 except for the 4.1L engine and the 6.0L supercharged engine and requiring those engines to comply with the standards in 2011. Manufacturers have expressed the view that there is value in limiting production volumes of catalyst-equipped engines only to California for two years to gain in-use experience before selling these engines nationwide. Under this approach, any technical issues that may arise with catalyst designs or in-use performance would affect only a small portion of the fleet, which would help minimize in-use concerns and costs associated with warranty claims. This approach would also provide additional lead time for those configurations not modified for California and the two new engine displacements. In addition, as discussed above, manufacturers stated that an averaging-based phase-in program that required the introduction of catalyst-equipped engines outside of California before 2010 is problematic because of marketplace and competitive issues as discussed above. For these reasons, we request comment on whether the proposed standards for SD/I engines should be delayed to 2010 for the three engine models that are not being modified and with an additional model year (2011) for the 4.1L and 6.0L supercharged engines.

Under stoichiometric or lean conditions, catalysts are effective at oxidizing CO in the exhaust. However, under very rich conditions, catalysts are not effective for reducing CO emissions. In contrast, NO X emissions are effectively reduced under rich conditions. SD/I engines often run at high power modes for extended periods of time. Under high-power operation, engine marinizers must calibrate the engine to run rich as an engine-protection strategy. If the engine were calibrated for a stoichometric air-fuel ratio at high power, high temperatures could lead to failures in exhaust valves and engine heads. In developing the proposed CO standard for SD/I engines, we considered an approach where test Mode 1 (full power) would be excluded from the weighted CO test level and the other four test modes would be re-weighted accordingly. Under this approach, the measured CO emissions from catalyst-equipped engines were observed to be 65-85 percent lower without Mode 1, even though the weighting factor for Mode 1 is only 6 percent of the total cycle weighting. These test results are presented in Chapter 4 of the Draft RIA. We request comment on finalizing a CO standard of 25 g/kW-hr based on a four-mode duty cycle that excludes Mode 1 instead of the proposed CO standard. Under this approach, we also request comment on CO cap, such as 350 g/kW-hr, specific to Mode 1. Manufacturers would still measure CO emissions at Mode 1 to demonstrate compliance with this cap.

Controlling CO emissions at high power may be a more significant issue with supercharged 6.0L engines due to uncertainty with regard to the air fuel ratio of the engine at high power. Engine manufacturers have not yet received prototype engines; however, they have expressed concern that these engines may need to be operated with a rich air-fuel ratio even at Mode 2 as an engine-protection strategy. (76) This concern is based on previous experience with other supercharged engines. If this is the case, it may affect the potential CO emission reductions from these engines. To address the uncertainties related to the two new SD/I engines (4.1L and 6.0L supercharged) we are asking for comment on a CO averaging standard with a maximum family emission limit to cap high CO emissions. Specifically, we request comment on averaging standard of 25 g/kW-hr CO based on a four-mode test, as discussed above, with a maximum family emission limit for the four-mode test of 75 g/kW-hr.

Engines used on jet boats may have been classified under the existing definitions as personal watercraft engines. As described above, engines used in jet boats or personal watercraft-like vessels 4 meters or longer would be classified as SD/I engines under the proposed definitions. Such engines subject to part 91 today would therefore need to continue meeting EPA emission standards as personal watercraft engines through the 2008 model year under part 91, after which they would need to meet the new SD/I standards under the proposed part 1045. This is another situation where the transition period discussed above may be helpful. In contrast, as discussed above, air boats have been classified as SD/I engines under EPA's discretionary authority and are not required to comply with part 91.

As described above, engines used solely for competition would not be subject to the proposed regulations, but many SD/I high-performance engines are sold for recreational use. High-performance SD/I engines have very high power outputs, large exhaust gas flow rates, and relatively high concentrations of hydrocarbons and carbon monoxide in the exhaust gases. From a conceptual perspective, the application of catalytic converter technology to these engines is feasible. As is the case in similar heavy-duty highway gasoline engines, these catalytic converters would have to be quite large in volume, perhaps on the order of the same volume as the engine displacement, and would involve significant heat rejection issues. Highway heavy-duty gasoline engine certification information from the late 1970s and early 1980s suggests that it is possible to achieve HC and CO emission reductions around 20 to 40 percent by adding an air pump to increase the level of oxygen in the exhaust stream. This would be a relatively low-cost and durable method of oxidizing HC and CO when the exhaust gases are hot enough to support further oxidation reactions. California ARB has implemented the same HC+NO X standards we are proposing but is expecting manufacturers to rely on emissions averaging within the SD/I class. This is not viable for small business manufacturers who do not have other products with which to average.

Even if manufacturers use catalysts to control HC+NO X emissions from high-performance engines, controlling CO emissions continues to present a technological challenge. Since these engines generally operate with fuel-rich combustion, there is little or no oxygen in the exhaust stream. As a result, any oxidation of hydrocarbon compounds in the catalyst would likely increase CO levels, rather than oxidizing all the way to CO 2. We are therefore proposing a CO standard for high-performance engines of 350 g/kW-hr. We believe this is achievable with more careful control of fueling under idle conditions. Control of air-fuel ratios at idle should result in improved emission control even after multiple rebuilds. Basing standards on non-catalyst hardware such as an air pump could enable lower CO levels.

We are proposing a variety of provisions to simplify the requirements for exhaust emission certification and compliance for these engines, as described in Section IV.F. We are also proposing not to apply the not-to-exceed emission standards to high-performance SD/I marine engines.

We also request comment on two alternative approaches to define emission standards for high-performance engines. First, we could set the HC+NO X standard at 5 g/kW-hr and allow for emission credits as described above, but allow small-volume manufacturers of high-performance engines to meet a HC+NO X emission standard in the range of 15 to 22 g/kW-hr. See Section III.F.2 for our proposed definition of small-volume SD/I engine manufacturers. We would also need to adopt an FEL cap of 22 g/kW-hr for HC+NO X for all manufacturers under this approach to avoid the situation where only small-volume manufacturers of high-performance engines need to make design changes to reduce these emissions. Our concern is that a large manufacturer would otherwise be able to use emission credits to avoid making design changes to their high-performance engines. This emission level is consistent with measured HC+NO X emission values from these engines showing a range of emission levels with different types of fuel systems and different calibrations, as shown in the Draft RIA. Treating small-volume manufacturers of high-performance engines differently may be appropriate because they have little or no access to emission credits.

Second, we could alternatively set the high-performance engine HC+NO X standard in the range of 15 to 22 g/kW-hr for all companies and disallow the use of emission credits for meeting this standard. This would require all companies to redesign their engines, rather than use emission credits, to reduce emissions to a standard that is tailored to high-performance engines.

We request comment on the primary approach as well as the two alternatives for high-performance engine standards. Comment is requested on the costs and general positives and negatives of each approach. Comment is also requested on the technology required if a level above the proposed standards is supported, as well as information on safety and energy implications of the alternative emission standards. If a commenter supports either of the two alternative approaches, information and data are requested to assist EPA in setting the appropriate HC+NO X and CO emission standards within the 15 to 22 g/kW-hr range.

We are also aware that there may be some very small sterndrive or inboard engines. In particular, sailboats may have small propulsion engines for backup power. These engines would fall under the proposed definition of sterndrive/inboard engines, even though they are much smaller and may experience very different in-use operation. These engines may have more in common with marine auxiliary engines that are subject to land-based standards. Nevertheless, these engines share some important characteristics with bigger SD/I engines, such as reliance on four-stroke technology and access to water-based cooling. It is also true that emission standards are based on specific emission levels expected from engines of comparable sizes, so the standards adjust automatically with the size of the engine to require a relatively constant level of stringency. These engines are not like the very small outboard engines that are subject to less stringent standards because of their technical limitations in controlling emissions. Accordingly, we believe these engines can incorporate the same technologies as the bigger marine propulsion engines and meet the same emission standards. However, we request comment on the need for adjusting the emission standards for these engines to accommodate any technology constraints related to their unique designs. Specifically, we request comment on allowing manufacturers the option of certifying small SD/I engines to the proposed standards for auxiliary marine engines discussed in Section V.C.1. We also request comment on the possibility that some other small engines may inappropriately fall into the category of sterndrive/inboard engines. We request comment on the engine size for which any special accommodations must be made. Such comments should also address any issues that may exist for these engines with regard to meeting the proposed standards, or identify any other appropriate way of differentiating these engines from conventional sterndrive/inboard engines.

(2) Not-To-Exceed Standards

We are proposing emission standards for an NTE zone representing a multiplier times the duty cycle standard for HC+NO X and for CO (see § 1045.105). Section III.D.2 describes the proposed NTE test procedures and gives an overview of the proposed NTE provisions. In addition, Section III.D.2 presents the specific multipliers for the proposed NTE standards.

The NTE approach is consistent with the concept of a weighted modal emission test such as the steady-state tests included in this rule. The proposed duty cycle standard itself is intended to represent the average emissions under steady-state conditions. Because it is an average, manufacturers design their engines with emission levels at individual points varying as needed to maintain maximum engine performance and still meet the engine standard. The NTE limit would be an additional requirement. It is intended to ensure that emission controls function with relative consistency across the full range of expected operating conditions.

(3) Emission Credit Programs
(a) Averaging, Banking, and Trading

We are proposing averaging, banking, and trading of emission credits for sterndrive and inboard marine engines for meeting HC+NO X and CO standards (see § 1045.105 and part 1045, subpart H). See Section VII.C.5 for a description of general provisions related to averaging, banking, and trading programs. Emission credit calculations would be based on the maximum engine power for an engine family, as described in Section IV.F.

As with previous emission control programs, we are also proposing not to allow an emission family to earn credits for one pollutant if it is using credits to meet the standard for another pollutant. In other words, an engine family that does not meet the CO standard would not be able to earn HC+NO X emission credits, or vice versa. This should rarely be an issue for SD/I engines, because the same catalyst technology is effective for controlling HC+NO X and CO emissions. In addition, as with previous emission control programs, we are proposing that engines sold in California would not be included in this ABT program because they are already subject to California HC+NO X requirements.

Credit generation and use is calculated based on the family emission limit (FEL) of the engine family and the standard. We are proposing FEL caps to prevent the sale of very-high emitting engines. For HC+NO X, the proposed FEL cap is 16 g/kW-hr for HC+NO X emissions from engines below 373 kW; this emission level is equal to the first phase of the California SD/I standards. We are proposing an FEL cap of 150 g/kW-hr for CO emissions from engines below 373 kW. These FEL caps represent the average baseline emission levels of SD/I engines, based on data described in the Draft RIA. The analogous figures for high-performance engines are 30 g/kW-hr for HC+NO X and 350 g/kW-hr for CO, as described in Section III.C.(d).

Except as specified below for jet boat engines, we are proposing to keep OB/PWC engines and SD/I engines in separate averaging sets. This means that credits earned by SD/I and OB/PWC engines are counted separately and may not be exchanged to demonstrate compliance with emission standards. Most of the engine manufacturers building SD/I engines do not also build OB/PWC engines. The exception to this is the largest manufacturer in both categories. We are concerned that allowing averaging, banking, or trading between OB/PWC engines and SD/I engines would not provide the greatest achievable reductions, because the level of the standard we are proposing is premised on the use of aftertreatment technology in SD/I engines, and is based on what is feasible for SD/I engines. We did not set the SD/I level based on the reductions achievable between OB/PWC and SD/I, but instead based on what is achievable by SD/I engines alone. The proposed limitation on ABT credits is consistent with this approach to setting the level of the SD/I standard. In addition, allowing such credit usage could provide an incentive to avoid the use of aftertreatment technologies in SD/I engines. This could create a competitive disadvantage for the many small manufacturers of SD/I engines that do not also produce OB/PWC engines.

We propose that emission credits for SD/I engines have an unlimited credit life with no discounting. We consider these emission credits to be part of the overall program for complying with the proposed standards. Given that we may consider further reductions beyond these standards in the future, we believe it will be important to assess the ABT credit situation that exists at the time any further standards are considered. We would need to set such future emission standards based on the statutory direction that emission standards must represent the greatest degree of emission control achievable, considering cost, safety, lead time, and other factors. Emission credit balances will be part of the analysis for determining the appropriate level and timing of new standards. If we were to allow the use of credits generated under this proposed program for future, more stringent, standards, we may, depending on the level of emission credit banks, need to adopt emission standards at more stringent levels or with an earlier start date than we would absent the continued or limited use of existing emission credits. Alternatively, we could adopt future standards without allowing the use of existing emission credits.

We are requesting comment on one particular issue regarding credit life. As proposed, credits earned under the exhaust ABT program would have an unlimited lifetime. This could result in a situation where credits generated by an engine sold in a model year are not used until many years later when the engines generating the credits have been scrapped and are no longer part of the fleet. EPA believes there may be value to limiting the use of credits to the period that the credit-generating engines exist in the fleet. For this reason, EPA requests comment on limiting the lifetime of the credits to five years or, alternatively, to the regulatory useful life of the engine.

(b) Early-Credit Approaches

We are proposing an early-credit program in which a manufacturer could earn emission credits before 2009 with early introduction of emission controls designed to meet the proposed standards (see § 1045.145). For engines produced by small-volume SD/I manufacturers that are eligible for the proposed two-year delay described in Section III.F.2, early credits could be earned before 2011. While we believe adequate lead time is provided to meet the proposed standards, we recognize that flexibility in timing could help some manufacturers—particularly small manufacturers—to meet the new standards. Other manufacturers that are able to comply early on certain models would be better able to transition their full product line to the new standards by spreading out the transition over two years or more. Under this approach, we anticipate that manufacturers would generate credits through the use of catalysts.

Manufacturers would generate these credits based on the difference between the measured emission level of the clean engines and an assigned baseline level (16 g/kW-hr HC+NO X and 150 g/kW-hr CO). These assigned baseline levels are based on data presented in Chapter 4 of the Draft RIA representing the average level observed for uncontrolled engines. We are also proposing to provide bonus credits to any manufacturer that certifies early to the proposed standard to provide a further incentive for introducing catalysts in SD/I engines. The bonus credits would take the form of a multiplier times the earned credits. The proposed multipliers are 1.25 for one year early, 1.5 for two years early, and 2.0 for three years early. For example, a small-volume manufacturer certifying an engine to 5.0 g/kW-hr HC+NO X in 2009 (2 years early) would get a bonus multiplier of 1.5. Therefore, early HC+NO X credits would be calculated using the following equation: credits [grams] = (16−5) × Power [kW] × Useful Life [hours] × Load Factor × 1.5. We are proposing to use a load factor of 0.207, that is currently used in the OB/PWC calculations.

To earn these credits, the engine would have to meet both the proposed HC+NO X and CO standards. These early credits would be treated the same as emission credits generated after the emission standards start to apply. This approach would provide an incentive for manufacturers to pull ahead significantly cleaner technologies. We believe such an incentive would lead to early introduction of catalysts on SD/I and help promote earlier market acceptance of this technology. Because of the proposed credit life, these credits would only be able to be used during the transition period to the new standards. We believe this proposed early credit program will allow manufactures to comply to the proposed standards in an earlier time frame than they would otherwise because it allows them to spread out their development resources over multiple years. To ensure that manufacturers do not generate credits for already required activities, no credits would be generated for the proposed federal program for engines that are produced for sale in California. We request comment on this approach.

Alternatively, we request comment on the alternative of an early “family banking” approach. Under this approach, we would allow manufacturers to certify an engine family early to the proposed standards. For each year of certifying engines early, the manufacturer would be able to delay certification of a comparable number of engines by one year, taking into account the relative power ratings of the different engine families. This would be based on the actual sales and would require no calculation or accounting of emission credits. This approach would not provide the same degree of precision as the early-credit program described above, but it may be an effective way of helping manufacturers make the transition to new emission standards. See 40 CFR 1048.145(a) for an example of regulations that implement such a family banking program.

We request comment on the above early-credit approaches or any other approach that would help manufacturers bring the product lines into compliance with the proposed standards without compromising overall emission reductions. Any allowance for high-emitting or late-compliant engines should be offset by emission controls that achieve emission reductions beyond that required by the new standards. We request comment on the merits of the various approaches noted above and others that commenters may wish to suggest. We request that commenters provide detailed comments on how the approaches described above should be set up, enhanced, or constrained to ensure that they serve their purpose without diminishing the overall effectiveness of the standards.

(c) Jet Boats

Sterndrive and inboard vessels are typically propelled by traditional SD/I engines based on automotive engine blocks. As explained in Section IV, we are proposing to amend the definition of personal watercraft engine to ensure that engines used on jet boats would no longer be classified as personal watercraft engines but instead as SD/I engines because jet boats are more comparable to SD/I vessels. However, manufacturers in some cases make these jet boats by installing an engine also used in outboard or personal watercraft applications (less than 4 meters in length) and coupling the engine to a jet drive for propelling the jet boat. Thus, manufacturers of outboard or personal watercraft engines may also manufacture the same or similar engine for use on what we would propose here to be considered a jet boat (whose engine we would therefore proposed to be subject to SD/I standards).

We are proposing to allow some flexibility in meeting new emission standards for jet boat engines because they are currently designed to use engines derived from OB/PWC applications and because of their relatively low sales volumes. We are also proposing to allow manufacturers to use emission credits generated from outboard and personal watercraft engines to demonstrate that their jet boat engines meet the proposed HC+NO X and CO standards for SD/I engines (see § 1045.660 and § 1045.701). We further propose that such engine manufacturers may only use this provision if the engines are certified as outboard or personal watercraft engines, and if the majority of units sold in the United States from those related engine families are sold for use as outboard or personal watercraft engines. We would decide whether a majority of engine units are sold for use as outboard or personal watercraft engines based on projected sales volumes from the application for certification. Manufacturers would need to group SD/I engines used for jet boats in a separate engine family from the outboard or personal watercraft engine to ensure proper labeling and calculation of emission credits, but manufacturers could rely on emission data from the same prototype engine for certifying both engine families. Finally, we propose that manufacturers of jet boat engines subject to SD/I standards and using credits from outboard or personal watercraft engines must certify these jet boat engines to an FEL that meets or exceed the standards for outboard and personal watercraft engines. This limits the degree to which manufacturers may take advantage of emission credits to produce engines that are emitting at higher levels than competitive engines. As such, the FELs for these engines must therefore be at or below the proposed emission standards for outboard and personal watercraft engines.

(d) SD/I High-Performance Engines

We are proposing that the ABT program described above (III.C.3(a) through (c)) would also include SD/I high-performance engines. Manufacturers would be able to use emission credits from conventional SD/I engines to offset credit deficits from higher-emitting SD/I high-performance engines. Although SD/I high-performance engines represent fewer than 1 percent of total SD/I engine sales, there are many more companies producing SD/I high-performance engines than conventional SD/I engines. Because of the relatively small sales of these engines, a large manufacturer with a broad product line could readily offset a potential credit deficit by using credits from high-volume SD/I engines. In contrast, most manufacturers of SD/I high-performance engines are small businesses that do not also produce conventional SD/I engines. Section III.F discusses special provisions intended to reduce the burden for small businesses to meet the proposed standards. We request comment on whether this ABT program would create a competitive disadvantage for small businesses.

We are proposing an approach in which manufacturers can use default emission factor of 30 g/kW-hr for HC+NO X emissions and 350 g/kW-hr for CO emissions in lieu of testing for certification. For purposes of this ABT program these default emission factors, if used in lieu of testing, would be used for certification to an FEL at these levels. Thus, the emission credits needed would be the difference between the default levels and the applicable standard (see § 1045.240). These default emission levels represent the highest emission rates observed on uncontrolled engines. Manufacturers would always have the option of conducting tests to establish a measured emission rate to reduce or eliminate the need to use emission credits. While this testing may require additional setup and preparation, we believe it would be possible even for the most high-powered engines. To avoid the possibility of manufacturers selectively taking advantage of the default values, we would require them to rely on measured values for both HC+NO X and CO emissions if they do testing.

For the purposes of the credit calculations, we are proposing to use an hours term longer than the proposed useful life for these engines. The proposed useful life for traditional SD/I engines is intended to reflect the full useable life of the engine. For high-performance engines the proposed useful life is intended to reflect the expected time until the engine is rebuilt. High-performance engines are typically rebuilt several times. In fact, manufacturers have indicated that it is common for the boat owner to own two pairs of engines so that they can use one pair while the other is being rebuilt. Therefore, the proposed useful life does not reflect the full life of the engine, including rebuilds, over which emission credits would be used (or generated). We are proposing, for purposes of the credit calculations, that a life of 480 hours would be used for high-performance SD/I engines at or below 485 kW and 250 hours for engines above 485 kW. We request comment on the number of times that high-performance engines are typically rebuilt and how the number of rebuilds should be addressed in the credit calculations.

(4) Crankcase Emissions

Due to blowby of combustion gases and the reciprocating action of the piston, exhaust emissions can accumulate in the crankcase. Uncontrolled engine designs route these vapors directly to the atmosphere. Closed crankcases have become standard technology for automotive engines and for outboard and personal watercraft engines. Manufacturers generally do this by routing crankcase vapors through a valve into the engine's air intake system. We propose to require manufacturers to prevent crankcase emissions from SD/I marine engines (see § 1045.115). Because automotive engine blocks are already tooled for closed crankcases, the cost of adding a valve for positive crankcase ventilation is small for SD/I engines. Even with non-automotive blocks, the tooling changes necessary for closing the crankcase are straight-forward.

(5) Durability Provisions

We rely on pre-production certification, and other programs, to ensure that engines control emissions throughout their intended lifetime of operation. Section VII describes how we are proposing to require manufacturers to incorporate laboratory aging in the certification process, how we limit the extent of maintenance that manufacturers may specify to keep engines operating as designed, and other general provisions related to certification. The following sections describe additional provisions that are specific to SD/I engines.

(a) Useful Life

We are proposing to specify a useful life period of 480 hours or ten years, whichever comes first. The engines would be subject to the emission standards during this useful life period. This is consistent with the requirements adopted by California ARB (see § 1045.105). We are further proposing that the 480-hour useful life period is a baseline value, which may be extended if data show that the average service life for engines in the family is longer. For example, we may require that the manufacturer certify the engine over a longer useful life period that more accurately represents the engines' expected operating life if we find that in-use engines are typically operating substantially more than 480 hours. This approach is similar to what we adopted for recreational vehicles.

For high-performance SD/I engines (at or above 373 kW), we are proposing a useful life of 150 hours or 3 years for engines at or below 485 kW and a useful life of 50 hours or 1 year for engines above 485 kW. Due to the high power and high speed of these engines, mechanical parts are often expected to wear out quickly. For instance, one manufacturer indicated that some engines above 485 kW have scheduled head rebuilds between 50 and 75 hours of operation. These proposed useful life values are consistent with the California ARB regulations for high-performance SD/I engines. We request comment on the proposed useful life requirements for high performance marine engines.

Some SD/I engines below 373 kW may be designed for high power output even though they do not reach the power threshold to qualify as SD/I high-performance engines. Because they do not qualify for the shorter useful life that applies to SD/I high-performance engines, they would be subject to the default value of 480 hours for other SD/I engines. However, to address the limited operating life for engines that are designed for especially high power output, we are proposing to allow manufacturers to request a shorter useful life for such an engine family based on information showing that engines in the family rarely operate beyond the requested shorter period. For example, if engines designed for extremely high performance are typically rebuilt after 250 hours of operation, this would form the basis for establishing a shorter useful life period for those engines. See the proposed regulations for additional detail in establishing a shorter useful life.

(b) Warranty Periods

We are proposing that manufacturers must provide an emission-related warranty during the first 3 years or 480 hours of engine operation, whichever comes first (see § 1045.120). This warranty period would apply equally to emission-related electronic components on SD/I high-performance engines. However, we are proposing shorter warranty periods for emission-related mechanical components on SD/I high-performance engines because these parts are expected to wear out more rapidly than comparable parts on traditional SD/I engines. Specifically, we are proposing a warranty period for emission-related mechanical components of 3 years or 150 hours for engines between 373 and 485 kW, and 1 year or 50 hours for engines above 485 kW. These proposed warranty periods are the same as those adopted by the California ARB.

If the manufacturer offers a longer warranty for the engine or any of its components at no additional charge, we propose that the emission-related warranty for the respective engine or component must be extended by the same amount. The emission-related warranty includes components related to controlling exhaust, evaporative, and crankcase emissions from the engine. This approach to setting warranty requirements is consistent with provisions that apply in most other programs for nonroad engines.

(6) Engine Diagnostics

We are proposing to require that manufacturers design their SD/I engines to diagnose malfunctioning emission control systems starting with the introduction of the proposed standards (see § 1045.110). As discussed in the Draft RIA, three-way catalyst systems with closed-loop fueling control work well only when the air-fuel ratios are controlled to stay within a narrow range around stoichiometry. Worn or broken components or drifting calibrations over time can prevent an engine from operating within the specified range. This increases emissions and can lead to significantly increased fuel consumption and engine wear. The operator may or may not notice the change in the way the engine operates. We are not proposing to require similar diagnostic controls for OB/PWC or Small SI engines because the anticipated emission control technologies for these other applications are generally less susceptible to drift and gradual deterioration. We have adopted similar diagnostic requirements for Large SI engines operating in forklifts and other industrial equipment that also use three-way catalysts to meet emission standards.

This diagnostic requirement focuses solely on maintaining stoichiometric control of air-fuel ratios. This kind of design detects problems such as broken oxygen sensors, leaking exhaust pipes, fuel deposits, and other things that require maintenance to keep the engine at the proper air-fuel ratio.

Diagnostic monitoring provides a mechanism to help keep engines tuned to operate properly, with benefits for both controlling emissions and maintaining optimal performance. There are currently no inspection and maintenance programs for marine engines, so the most important variable in making the emission control and diagnostic systems effective is in getting operators to repair the engine when the diagnostic light comes on. This calls for a relatively simple design to avoid signaling false failures as much as possible. The diagnostic requirements in this rule therefore focus on detecting inappropriate air-fuel ratios, which is the most likely failure mode for three-way catalyst systems. The malfunction indicator light must go on when an engine runs for a full minute under closed-loop operation without reaching a stoichiometric air-fuel ratio.

California ARB has adopted diagnostic requirements for SD/I engines that involve a more extensive system for monitoring catalyst performance and other parameters. We would accept a California-approved system as meeting EPA requirements. However, we believe the simpler system described above is better matched to the level of emission control involved, and is more appropriate in the context of recreational boating by consumers who are not subject to any systematic requirements for inspecting or maintaining their engines.

The proposed regulations direct manufacturers to follow standard practices defined in documents adopted by the International Organization for Standardization (ISO) that establish protocols for automotive systems. The proposed regulations also state that we may approve variations from these industry standards, because individual manufacturers may have systems with unique operating parameters that warrant a deviation from the automotive approach. Also, if a new voluntary consensus standard is adopted to define appropriate practices for marine engines, we would expect to incorporate that new standard into our regulations. See § 1045.110 of the draft regulations for more information.

D. Test Procedures for Certification

(1) General Provisions

The proposed test procedures are generally the same for both SD/I and OB/PWC engines. This involves laboratory measurement of emissions while the engine operates on the ISO E4 duty cycle. This is a five-mode steady-state duty cycle including an idle mode and four modes lying on a propeller curve with an exponent of 2.5, as shown in Appendix II to part 1045 of the draft regulations. The International Organization for Standardization (ISO) intended for this cycle to be used for recreational spark-ignition marine engines installed in vessels up to 24 m in length. Because most or all vessels over 24 m have diesel engines, we believe the E4 duty cycle is most appropriate for SD/I engines covered by this rule. There may be some spark-ignition engines installed in vessels somewhat longer than 24 m, but we believe the E4 duty cycle is no less appropriate in these cases. See Section IV.D for a discussion of adjustments to the test procedures related to the migration to 40 CFR part 1065, testing with a ramped-modal cycle, determining maximum test speed for denormalizing the duty cycle, and testing at higher altitudes.

The E4 duty cycle is gives a weighting of 40 percent for idle. High-performance engine manufacturers have expressed their belief that the E4 duty cycle overstates the idle fraction of operation of high-performance engines. They stated that these engines are rarely operated at idle and are therefore primarily designed for mid-range and high-power operation at the expense of rough idle operation. We request comment on whether the modes for the proposed duty cycle should be reweighted toward higher power for high-performance engines. Commenters should support their assertions with data on high-performance engine use. If constructive data are forthcoming, we may finalize an alternative cycle weighting for high-performance engines based on this data.

(2) Not-to-Exceed Test Procedures and Standards

We are proposing not-to-exceed (NTE) requirements similar to those established for marine diesel engines. Engines would be required to meet the NTE standards during normal in-use operation. We request comment on applying the proposed NTE requirements to spark-ignition marine engines and on the application of the requirements to these engines.

(a) Concept

Our goal is to achieve control of emissions over a wide range of ambient conditions and over the broad range of in-use speed and load combinations that can occur on a marine engine. This would ensure real-world emission control, rather than just controlling emissions under certain laboratory conditions. An important tool for achieving this goal is an in-use testing program with an objective standard and an easily implemented test procedure. Our traditional approach has been to set a numerical standard on a specified test procedure and rely on the additional prohibition of defeat devices to ensure in-use control over a broad range of operation not included in the test procedure.

We are proposing to apply the same prohibition on defeat devices for OB/PWC and SD/I engines (see § 1045.115).

No single test procedure or test cycle can cover all real-world applications, operations, or conditions. Yet to ensure that emission standards are providing the intended benefits in use, we 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 emission controls are employed during real-world operation, not just under laboratory testing 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. We believe using the traditional approach, i.e., using only a standardized laboratory test procedure and test cycle, makes it difficult to ensure that engines will operate with the same level of control in use as in the laboratory.

Because the proposed duty cycle uses only five modes on an average propeller curve to characterize marine engine operation, we are concerned that an engine designed to the proposed duty cycle would not necessarily perform the same way over the range of speed and load combinations seen on a boat. This proposed duty cycle is based on an average propeller curve, but a marine propulsion engine may never be fitted with an “average propeller.” For instance, an engine fit to a specific boat may operate differently based on how heavily the boat is loaded.

To ensure that engines control emissions over the full range of speed and load combinations seen on boats, we propose to establish a zone under the engine's power curve where the engine may not exceed a specified emission limit (see § 1045.105 and § 1045.515). This limit would apply to all regulated pollutants during steady-state operation. In addition, we propose that a wide range of real ambient conditions be included in testing with this NTE zone. The NTE zone, limit, and ambient conditions are described below.

We believe there are significant advantages to establishing NTE standards. The proposed NTE test procedure is flexible, so it can represent the majority of in-use engine operation and ambient conditions. The NTE approach thus takes all 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 because either the engines would have to be removed from the vessel or care would have to be taken to achieve laboratory-type conditions on the vessel. With the NTE approach, in-use testing and compliance become much easier since emissions may be sampled during normal boating. By establishing an objective measurement, this approach makes enforcement of defeat device provisions easier and provides more certainty to the industry.

Even with the NTE requirements, we believe it is still appropriate to retain standards based on the steady-state duty cycle. This is the standard that we expect the certified marine engines to meet on average in use. The NTE testing is focused more on maximum emissions for segments of operation and, in most cases, would not require additional technology beyond what is used to meet the proposed standards. In some cases, the calibration of the engine may need to be adjusted. We believe that basing the emission standards on a distinct cycle and using the NTE zone to ensure in-use control creates a comprehensive program.

We believe the technology used to meet the standards over the five-mode duty cycle will meet the caps that apply across the NTE zone. We therefore do not expect the proposed NTE standards to cause manufacturers to need additional technology. We believe the NTE standard will not result in a large amount of additional testing, because these engines should be designed to perform as well in use as they do over the five-mode test. However, our cost analysis in the Draft RIA accounts for some additional testing, especially in the early years, to provide manufacturers with assurance that their engines would meet the proposed NTE requirements.

(b) Shape of NTE Zone

Figure III-1 illustrates our proposed NTE zone for SD/I engines. We developed this zone based on the range of conditions that these engines typically see in use. Manufacturers collected data on several engines installed on vessels and operated under light and heavy load. Chapter 4 of the Draft RIA presents this data and describes the development of the boundaries and conditions associated with the proposed NTE zone. Although significant in-use engine operation occurs at low speeds, we are excluding operation below 40 percent of maximum test speed because brake-specific emissions increase dramatically as power approaches zero. An NTE limit for low-speed or low-power operation would be very hard for manufacturers and EPA to implement in a meaningful way. We are proposing NTE limits for the subzones shown in Figure III-1, as described below. We request comment on the proposed NTE zone and subzones.

Image #EP18MY07.000

We propose to allow manufacturers to request approval for adjustments to the size and shape of the NTE zone for certain engines, if they can show that the engine will not see operation outside of the revised NTE zone in use (see § 1045.515). We would not want manufacturers to go to extra lengths to design and test their engines to control emissions for operation that will not occur 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 they 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, the manufacturer would be responsible for notifying us so the NTE zone can be modified appropriately to include this operation for that engine family.

(c) Excluded Operation

As with marine diesel engines, we are proposing that only steady-state operation be included for NTE testing (see § 1045.515). Steady-state operation would generally mean setting the throttle (or speed control) in a fixed position. We believe most operation with Marine SI engines involves nominally steady-state operator demand. It is true that boats often experience rapid accelerations, such as with water skiing. However, boats are typically designed for planing operation at relatively high speeds. This limits the degree to which we would expect engines to experience frequent accelerations during extended operation. Also, because most of the transient events involve acceleration from idle to reach a planing condition, most transient engine operation is outside the NTE zone and would therefore not be covered by NTE testing anyway. Moreover, we believe OB/PWC and SD/I engines designed to comply with steady-state NTE requirements will be using technologies that also work effectively under the changing speed and load conditions that may occur. If we find there is substantial transient operation within the NTE zone that causes significantly increased emissions from installed engines, we will revisit this provision in the future. We request comment on the appropriateness of excluding transient operation from NTE requirements.

We are aware that SD/I engines may not be able to meet emission standards under all conditions, such as times when emission control must be compromised for startability or safety. We are proposing to specify that NTE testing excludes engine starting and warm-up. We would allow manufacturers to design their engines to utilize engine protection strategies that would not be covered by defeat device provisions or NTE standards. This is analogous to the tampering exemptions incorporated into 40 CFR 1068.101(b)(1) to address emergencies. We believe it is appropriate to allow manufacturers to design their engines with “limp-home” capabilities to prevent a scenario where an engine fails to function, leaving an operator on the water without any means of propulsion.

(d) NTE Emission Limits

We are proposing NTE limits for the subzones shown in Figure III-1 above based on data collected from several SD/I engines equipped with catalysts. These data and our analysis are presented in Chapter 4 of the Draft RIA. See Section IV.C for a discussion of NTE limits for OB/PWC engines.

Because the proposed NTE zone does not include the idle point, which is weighted at 40 percent of the certification duty cycle, brake-specific emissions throughout most of the proposed NTE zone are less than the weighted average from the steady-state testing. For most of the NTE zone, we are therefore proposing a limit equal to the duty cycle standard (i.e., NTE multiplier = 1.0). However, data on low-emission engines show that brake-specific emissions increase for engine speeds below 50 percent of maximum test speed (Subzone 4). We are therefore proposing an HC+NO X cap of 1.5 times the certification level in Subzone 4. Emission data on catalyst-equipped engines also show higher emissions near full-power operation. We understand that richer air-fuel ratios are needed under high-power operation to protect the engines from overheating. We are therefore proposing higher NTE limits for engine speeds at or above 90 percent of rated test speed and at or above 100 percent of peak torque measured at the rated test speed (Subzone 1). Specifically, we are proposing an HC+NO X cap of 1.5 times the duty cycle standard and a CO cap of 3.5 times the duty cycle standard for Subzone 1. We request comment on the proposed NTE limits for SD/I engines. These limits are summarized in Table III-1.

Table III-1.—Proposed NTE Limits by Subzone for SD/I Engines
PollutantSubzone 1Subzone 2Subzone 3Subzone 4
HC+NO X 1.5 1.0 1.0 1.5
CO 3.5 1.0 1.0 1.0

SD/I engine manufacturers have begun developing prototype engines with catalysts, and one manufacturer is currently selling SD/I engines equipped with catalysts. These manufacturers have indicated that they begin moving to richer air-fuel ratio calibrations at torque values greater than 80 percent of maximum. These richer air-fuel ratios give more power but because more fuel is burned also lead to higher hydrocarbon and carbon monoxide emission rates. Part of the manufacturers' rationale in selecting the appropriate air-fuel ratio in this type of operation is to protect the engine by minimizing excess air, which would lead to greater engine temperatures as increased combustion of fuel and exhaust gases. To avoid the adverse effects of this potential for overheating, we request comment on whether subzone 1 should be expanded to accommodate the engine-protection strategies needed for SD/I engines at high power. In addition, we request comment on the proposed NTE limits in subzone 1 with respect to open-loop engine operation, especially for carbon monoxide.

Marine engine manufacturers have suggested alternative approaches to setting NTE limits for marine engines, which are discussed in Section IV.C.2. Largely, these suggestions have been made to address the emission variability between test modes seen in direct-injection two-stroke outboard and PWC engines. However, we request comment on alternative approaches for SD/I engines as well.

(e) Ambient Conditions

Variations in ambient conditions can affect emissions. Such conditions include air temperature, water temperature, and barometric pressure, and humidity. We are proposing to apply the comparable ranges for these variables as for marine diesel engines (see § 1045.515). Within the ranges, there is no calculation to correct measured emissions to standard conditions. Outside of the ranges, emissions could be corrected back to the nearest end of the range using good engineering practice. The proposed ranges are 13 to 35 °C (55 to 95 °F) for ambient air temperature, 5 to 27 °C (41 to 80 °F) for ambient water temperature, and 94.0 to 103.325 kPa for atmospheric pressure. We do not specify a range of humidity values, but propose only to require that laboratory testing be conducted at humidity levels representing in-use conditions.

(f) Measurement Methods

While it may be easier to test outboard engines in the laboratory, there is a strong advantage to using portable measurement equipment to test SD/I engines and personal watercraft without removing the engine from the vessel. Field testing would also provide a much better means of measuring emissions to establish compliance with the NTE standards, because it is intended to ensure control of emissions during normal in-use operation that may not occur during laboratory testing over the specified duty cycle. We propose to apply the field testing provisions for all SD/I engines. These field-testing procedures are described further in Section IV.E.2.d. We request comment on any ways the field testing procedures should be modified to address the unique operating characteristics of marine engines.

A parameter to consider is the minimum sampling time for field testing. A longer period allows for greater accuracy, due mainly to the smoothing effect of measuring over several transient events. On the other hand, an overly long sampling period can mask areas of engine operation with poor emission control characteristics. To balance these concerns, we are applying a minimum sampling period of 30 seconds. This is consistent with the requirement for marine diesel engines. Spark-ignition engines generally don't have turbochargers and they control emissions largely by maintaining air-fuel ratio. Spark-ignition engines are therefore much less prone to consistent emission spikes from off-cycle or unusual engine operation. We believe the minimum 30 second sampling time will ensure sufficient measurement accuracy and will allow for meaningful measurements.

We do not specify a maximum sampling time. We expect manufacturers testing in-use engines to select an approximate sampling time before measuring emissions; however, the standards apply for any sampling time that meets the minimum.

(g) Certification

We propose to require that manufacturers state in their application for certification that their engines will comply with the NTE standards under any nominally steady-state combination of speeds and loads within the proposed NTE zone (see § 1045.205). The manufacturer would also provide a detailed description of all testing, engineering analysis, and other information that forms the basis for the statement. This statement would be based on testing and, if applicable, other research that supports such a statement, consistent with good engineering judgment. We would be able to review the basis for this statement during the certification process. For marine diesel engines, we have provided guidance that manufacturers may demonstrate compliance with NTE standards by testing their engines at a number of standard points throughout the NTE zone. In addition, manufacturers must test at a few random points chosen by EPA prior to the testing. We request comment on this approach for Marine SI engines.

E. Additional Certification and Compliance Provisions

(1) Production Line Testing

We are proposing to require that manufacturers routinely test engines at the point of production to ensure that production variability does not affect the engine family's compliance with emission standards (see part 1045, subpart D). These proposed testing requirements are the same as we are proposing for outboard and personal watercraft engines and are very similar to those already in place in part 91. See Section VII.C.7 and the draft regulations for a detailed description of these requirements. We may also require manufacturers to perform production line testing under the selective enforcement auditing provisions described in Section VIII.E.

(2) In-Use Testing

Manufacturers of OB/PWC engines have been required to test in-use engines to show that they continue to meet emission standards. We contemplated a similar requirement for SD/I engines, but have decided not to propose a requirement for a manufacturer-run in-use testing program at this time. Manufacturers have pointed out that it would be very difficult to identify a commercial fleet of boats that could be set up to operate for hundreds of hours, because it is very uncommon for commercial operators to have significant numbers of SD/I vessels. Where there are commercial fleets of vessels that may be conducive to accelerated in-use service accumulation, these vessels generally use outboard engines. Manufacturers could instead hire drivers to operate the boats, but this may be cost-prohibitive. We request comment on any other alternative approaches that might be available for accumulating operating hours with SD/I engines. For example, to the extent that boat builders maintain a fleet of boats for product development or employees' recreational use, those engines may be available for emission testing after in-use operation.

There is also a question about access to the engines for testing. If engines need to be removed from vessels for testing in the laboratory, it is unlikely that owners would cooperate. However, we are proposing test procedures with specified portable equipment that would potentially allow for testing engines that remain installed in boats. This is described in Section IV.E.2.d.

While we are not proposing a program to require manufacturers to routinely test in-use engines, the Clean Air Act allows us to perform our own testing at any time with in-use engines to evaluate whether they continue to meet emission standards throughout the useful life. This may involve either laboratory testing or in-field testing with portable measurement equipment. For laboratory tests, we could evaluate compliance with either the duty cycle standards or the not-to-exceed standards. For testing with engines that remain installed on marine vessels, we would evaluate compliance with the not-to-exceed standards. In addition, we may require the manufacturer to conduct a reasonable degree of testing under Clean Air Act section 208 if we have reason to believe that an engine family does not conform to the regulations. This testing may take the form of a Selective Enforcement Audit, or we may require the manufacturer to test in-use engines.

(3) Certification Fees

Under our current certification program, manufacturers pay a fee to cover the costs for various certification and other compliance activities associated with implementing the emission standards. As explained below, we are proposing to assess EPA's compliance costs associated with SD/I engines based on EPA's existing fees regulation. Section VI describes our proposal to establish a new fees category, based on the cost study methodology used in establishing EPA's existing fees regulation, for costs related to the proposed evaporative emission standards for both vessels and equipment that would be subject to standards under this proposal.

EPA established a fee structure by grouping together various manufacturers and industries into fee categories, with an explanation that separation of industries into groups was appropriate to tailor the applicable fee to the level of effort expected for EPA to oversee the range of certification and compliance responsibilities (69 FR 26222, May 11, 2004). As part of this process, EPA conducted a cost analysis to determine the various compliance activities associated with each fee category and EPA's associated annual cost burden. Once the total EPA costs were determined for each fee category, the total number of certificates involved within a fee category was added together and divided into the total costs to determine the appropriate assessment for each anticipated certificate. (77) One of the fee categories created was for “Other Engines and Vehicles,” which includes marine engines (both compression-ignition and spark-ignition), nonroad spark-ignition engines (above and below 19 kW), locomotive engines, recreational vehicles, heavy-duty evaporative systems, and heavy-duty engines certified only for sale in California. These engine and vehicle types were grouped together because EPA planned a more basic certification review than, for example, light-duty vehicles.

EPA determined in the final fees rulemaking that it would be premature to assess fees for the SD/I engines since they were not yet subject to emission standards. The fee calculation nevertheless includes a projection that there will eventually be 25 certificates of conformity annually for SD/I engines. We are proposing to now formally include SD/I engines in the “Other Engines and Vehicles” category and assess a fee of $839 for each certificate of conformity in 2006. Note that we will continue to update assessed fees each year, so the actual fee in 2009 and later model years will depend on these annual calculations (see § 1027.105).

(4) Special Provisions Related to Partially Complete Engines

It is common practice for Marine SI engines for one company to produce the base engine for a second company to modify for the final application. Since our regulations prohibit the sale of uncertified engines, we are proposing provisions to clarify the status of these engines and defining a path by which these engines can be handled without violating the regulations. See Section XI for more information.

(5) Use of Engines Already Certified to Other Programs

In some cases, manufacturers may want to use engines already certified under our other programs. Engines certified to the emission standards for highway applications in part 86 or Large SI applications in part 1048 are meeting more stringent standards. We are therefore proposing to allow the pre-existing certification to be valid for engines used in marine applications, on the condition that the engine is not changed from its certified configuration in any way (see § 1045.605). Manufacturers would need to demonstrate that fewer than five percent of the total sales of the engine model are for marine applications. There are also a few minor notification and labeling requirements to allow for EPA oversight of this provision.

(6) Import-Specific Information at Certification

We are proposing to require additional information to improve our ability to oversee compliance related to imported engines (see § 1045.205). In the application for certification, we are proposing to require the following additional information: (1) The port or ports at which the manufacturer will import the engines, (2) the names and addresses of the agents the manufacturer has authorized to import the engines, and (3) the location of the test facilities in the United States where the manufacturer will test the engines if we select them for testing under a selective enforcement audit.

F. Small-Business Provisions

(1) Small Business Advocacy Review Panel

On June 7, 1999, we convened a Small Business Advocacy Review Panel under section 609(b) of the Regulatory Flexibility Act as amended by the Small Business Regulatory Enforcement Fairness Act of 1996. The purpose of the Panel was to collect the advice and recommendations of representatives of small entities that could be affected by this proposed rule and to report on those comments and the Panel's findings and recommendations as to issues related to the key elements of the Initial Regulatory Flexibility Analysis under section 603 of the Regulatory Flexibility Act. We convened a Panel again on August 17, 2006 to update our review for this new proposal. The Panel reports have been placed in the rulemaking record for this proposal. Section 609(b) of the Regulatory Flexibility Act directs the review Panel to report on the comments of small entity representatives and make findings as to issues related to identified elements of an initial regulatory flexibility analysis (IRFA) under RFA section 603. Those elements of an IRFA are:

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

In addition to the EPA's Small Business Advocacy Chairperson, the Panel consisted of the Director of the Assessment and Standards Division of the Office of Transportation and Air Quality, the Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget, and the Chief Counsel for Advocacy of the Small Business Administration.

Using definitions provided by the Small Business Administration (SBA), companies that manufacture internal-combustion engines and that employ fewer than 1000 employees are considered small businesses for a Small Business Advocacy Review (SBAR) Panel. Equipment manufacturers, boat builders, and fuel system component manufacturers that employ fewer than 500 people are considered small businesses for the SBAR Panel. Based on this information, we asked 25 companies that met the SBA small business thresholds to serve as small entity representatives for the duration of the Panel process. Of these 25 companies, 13 were involved in the marine industry. These companies represented a cross-section of SD/I engine manufacturers, boat builders, and fuel system component manufacturers.

With input from small entity representatives, the Panel reports provide findings and recommendations on how to reduce potential burden on small businesses that may occur as a result of this proposed rule. The Panel reports are included in the rulemaking record for this proposal. In light of the Panel reports, and where appropriate, the agency has made changes to the provisions anticipated for the proposed rule. The proposed options recommended to us by the Panel are described below.

(2) Proposed Burden Reduction Approaches for Small-Volume SD/I Engine Manufacturers

We are proposing several options for small-volume SD/I engine manufacturers. For purposes of determining which engine manufacturers are eligible for the small business provisions described below for SD/I engine manufacturers, we are proposing criteria based on a production cut-off of 5,000 SD/I engines per year. Under this approach, we would allow engine manufacturers that exceed the production cut-off level noted above to request treatment as a small business if they have fewer than the number of employees specified above. In such a case, the manufacturer would provide information to EPA demonstrating the number of employees in their employ. The proposed options would be used at the manufacturers' discretion. We request comment on the appropriateness of these options, which are described in detail below.

(a) Additional Lead Time

One small business marine engine manufacturer is already using catalytic converters on some of its production SD/I marine engines below 373 kW. These engines have been certified to meet standards adopted by California ARB that are equivalent to the proposed standards. However, other small businesses producing SD/I engines have stated that they are not as far along in their catalyst development efforts. These manufacturers support the concept of receiving additional time for compliance, beyond the implementation date for large manufacturers.

High-performance SD/I engine manufacturers are typically smaller businesses than other SD/I engine manufacturers. The majority of high-performance engine manufacturers produce fewer than 100 engines per year for sale in the United States, and some produce only a few engines per year. Due to these very low sales volumes, additional lead time may be useful to the manufacturers to help spread out the compliance efforts and costs.

As recommended in the SBAR Panel report, EPA is proposing an implementation date of 2011 for SD/I engines below 373 kW produced by small business marine engine manufacturers and a date of 2013 for small business manufacturers of high-performance (at or above 373 kW) marine engines (see § 1045.145). As discussed earlier, we have requested comment on alternative non-catalyst based standard of 22 g/kW-hr for high-performance SD/I marine engines. In the case of an alternative non-catalyst based standard, less lead time may be necessary. EPA requests comments on the proposed additional lead time in the implementation of the proposed SD/I exhaust emission standards for small businesses.

(b) Exhaust Emission ABT

As discussed above, we are proposing an averaging, banking, and trading (ABT) credit program for exhaust emissions from SD/I marine engines (see part 1045, subpart H). Small businesses expressed some concern that ABT could give a competitive advantage to large businesses. Specifically, there was an equity concern that if credits generated by SD/I engines below 373 kW could be used for high-performance SD/I engines, that one large manufacturer could use these credits to meet the high-performance SD/I engine standards without making any changes to their engines. EPA requests comment on the desirability of credit trading between high-performance and other SD/I marine engines and the impact it could have on small businesses.

(c) Early Credit Generation for ABT

The SBAR Panel recommended an early banking program and expressed belief that bonus credits will provide greater incentive for more small business engine manufacturers to introduce advanced technology earlier across the nation than would otherwise occur. As discussed above, we are proposing an early banking program in which bonus credits could be earned for certifying early (see § 1045.145). This program, combined with the additional lead time for small businesses, would give small-volume SD/I engine manufacturers ample opportunity to bank emission credits prior to the proposed implementation date of the standards.

(d) Assigned Emission Rates for High-Performance SD/I Engines

Small businesses commented that certification may be too costly to amortize effectively over the small sales volumes for high-performance SD/I engines. One significant part of certification costs is engine testing. This includes testing for emissions over the specified duty cycle, deterioration testing, and not to exceed (NTE) zone testing. Even in the case where an engine manufacturer is using emission credits to comply with the standard, the manufacturer would still need to test engines to calculate how many emission credits are needed. One way of minimizing this testing burden would be to allow manufacturers to use assigned baseline emission rates for certification based on previously generated emission data. As discussed earlier in this preamble, we are proposing assigned baseline HC+NO X and CO emission rates for all high-performance SD/I engines. These assigned emission rates are based on test data presented in Chapter 4 of the Draft RIA.

(e) Alternative Standards for High-Performance SD/I Engines

Small businesses expressed concern that catalysts have not been demonstrated on high-performance engines and that they may not be practicable for this application. In addition, the concern was expressed that emission credits may not be available at a reasonable price. As discussed earlier, we are requesting comment on the need for and level of alternative standards for high-performance marine engines.

The proposed NTE standards discussed above would likely require additional certification and development testing. The SBAR Panel recommended that NTE standards not apply to any high-performance SD/I engines, as it would minimize the costs of compliance testing for small businesses. For these reasons, we are not proposing to apply NTE standards to high-performance SD/I engines (See § 1045.105).

(f) Broad Engine Families for High-Performance SD/I Engines

Testing burden could be reduced by using broader definitions of engine families. Typically in EPA engine and equipment programs, manufacturers are able to group their engine lines into engine families for certification to the standards. Engines in a given family must have many similar characteristics including the combustion cycle, cooling system, fuel system, air aspiration, fuel type, aftertreatment design, number of cylinders and cylinder bore sizes. A manufacturer would then perform emission tests only on the engine in that family that would be most likely to exceed an emission standard. We are proposing to allow small businesses to group all of their high performance SD/I engines into a single engine family for certification, subject to good engineering judgment (see § 1045.230).

(g) Simplified Test Procedures for High-Performance SD/I Engines

Existing testing requirements include detailed specifications for the calibration and maintenance of testing equipment and tolerances for performing the actual tests. For laboratory equipment and testing, these specifications and tolerances are intended to achieve the most repeatable results feasible given testing hardware capabilities. For in-use testing, EPA allows for different equipment than is specified for the laboratory and with arguably less restrictive specifications and tolerances. The purpose of separate requirements for in-use testing is to account for the variability inherent in testing outside of the laboratory. These less restrictive specifications allow for lower cost emission measurement devices, such as portable emission measurement units. For high performance SD/I engines, it may be difficult to hold the engine at idle or high power within the tolerances currently specified by EPA in the laboratory test procedure. Therefore, we are proposing less restrictive specifications and tolerances, for testing high performance SD/I engines, which would allow the use of portable emission measurement equipment (see § 1065.901(b)). This would facilitate less expensive testing for these small businesses without having a negative effect on the environment.

(h) Reduced Testing Requirements

We are proposing that small-volume engine manufacturers may rely on an assigned deterioration factor to demonstrate compliance with the standards for the purposes of certification rather than doing service accumulation and additional testing to measure deteriorated emission levels at the end of the regulatory useful life (see § 1045.240). EPA is not proposing actual levels for the assigned deterioration factors with this proposal. EPA intends to analyze available emission deterioration information to determine appropriate deterioration factors for SD/I engines. The data will likely include durability information from engines certified to California ARB's standards and may also include engines certified early to EPA's standards. Prior to the implementation date for the SD/I standards, EPA will provide guidance to engine manufacturers specifying the levels of the assigned deterioration factors for small-volume engine manufacturers.

We are also proposing that small-volume engine manufacturers would be exempt from the production-line testing requirements (see § 1045.301). While we are proposing to exempt small-volume engine manufacturers from production line testing, we believe requiring limited production-line testing could be beneficial to implement the ongoing obligation to ensure that production engines are complying with the standards. Therefore, we request comment on the alternative of applying limited production-line testing to small-volume engine manufacturers with a requirement to test one production engine per year.

(i) Hardship Provisions

We are proposing two types of hardship provisions for SD/I engine manufacturers consistent with the Panel recommendations. The first type of hardship is an unusual circumstances hardship, which would be available to all businesses regardless of size. The second type of hardship is an economic hardship provision, which would be available to small businesses only. Sections VIII.C.8 and VIII.C.9 provide a description of the proposed hardship provisions that would apply to SD/I engine manufacturers.

Because boat builders in many cases will depend on engine manufacturers to supply certified engines in time to produce complying boats, we are also proposing a hardship provision for all boat builders, regardless of size, that would allow the builder to request more time if they are unable to obtain a certified engine and they are not at fault and would face serious economic hardship without an extension (see § 1068.255). Section VIII.C.10 provides a description of the proposed hardship provisions that would apply to boat builders.

G. Technological Feasibility

(1) Level of Standards

Over the past few years, developmental programs have demonstrated the capabilities of achieving significant reductions in exhaust emissions from SD/I engines. California ARB has acted on this information to set an HC+NO X emission standard of 5 g/kW-hr for SD/I engines, starting in 2008. Chapter 4 of the Draft RIA presents data from several SD/I engines with catalysts packaged within water-cooled exhaust manifolds. Four of these engines were operated with catalysts in vessels for 480 hours. The remaining engines were tested with catalysts that had been subjected to a rapid-aging cycle in the laboratory. Data from these catalyst-equipped engines generally show emission levels below the proposed standards.

(2) Implementation Dates

We anticipate that manufacturers will use the same catalyst designs to meet the proposed standards that they will use to meet the California ARB standards for SD/I engines in 2008. We believe a requirement to extend the California standards nationwide after a one-year delay allows manufacturers adequate time to incorporate catalysts across their product lines. Once the technology is developed for use in California, it would be available for use nationwide. In fact, one company currently certified to the California standards is already offering catalyst-equipped SD/I engines nationwide. As discussed above, we request comment on the effect that anticipated product changes for specific General Motors engine blocks may have on the proposed implementation dates.

(3) Technological Approaches

Engine manufacturers can adapt readily available technologies to control emissions from SD/I engines. Electronically controlled fuel injection gives manufacturers more precise control of the air/fuel ratio in each cylinder, thereby giving them greater flexibility in how they calibrate their engines. With the addition of an oxygen sensor, electronic controls give manufacturers the ability to use closed-loop control, which is especially valuable when using a catalyst. In addition, manufacturers can achieve HC+NO X reductions through the use of exhaust gas recirculation. However, the most effective technology for controlling emissions is a three-way catalyst in the exhaust stream.

In SD/I engines, the exhaust manifolds are water-jacketed and the water mixes with the exhaust stream before exiting the vessel. Manufacturers add a water jacket to the exhaust manifold to meet temperature-safety protocol. They route this cooling water into the exhaust to protect the exhaust couplings and to reduce engine noise. Catalysts must therefore be placed upstream of the point where the exhaust and water mix—this ensures the effectiveness and durability of the catalyst. Because the catalyst must be small enough to fit in the exhaust manifold, potential emission reductions are not likely to exceed 90 percent, as is common in land-based applications. However, as discussed in Chapter 4 of the Draft RIA, demonstration programs have shown that emissions may be reduced by 70 to 80 percent for HC+NO X and 30 to 50 percent for CO over the proposed test cycle. Larger reductions, especially for CO, have been achieved at lower-speed operation.

There have been concerns that aspects of the marine environment could result in unique durability problems for catalysts. The primary aspects that could affect catalyst durability are sustained operation at high load, saltwater effects on catalyst efficiency, and thermal shock from cold water coming into contact with a hot catalyst. Modern catalysts perform well at temperatures up to 1100° C, which is much higher than would be seen in a marine exhaust manifold. These catalysts have also been shown to withstand the thermal shock of being immersed in water. More detail on catalyst durability is presented in the Draft RIA. In addition, use of catalysts in automotive, motorcycle, and handheld equipment has shown that catalysts can be packaged to withstand vibration in the exhaust manifold.

Manufacturers already strive to design their exhaust systems to prevent water from reaching the exhaust ports. If too much water reaches the exhaust ports, significant durability problems would result from corrosion or hydraulic lock. As discussed in the Draft RIA, industry and government worked on a number of cooperative test programs in which several SD/I engines were equipped with catalysts and installed in vessels to prove out the technology. Early in the development work, a study was performed on an SD/I engine operating in a boat to see if water was entering the part of the manifold where catalysts would be installed. Although some water was collected in the exhaust manifold, it was found that this water came from water vapor that condensed out of the combustion products. This was easily corrected using a thermostat to prevent overcooling from the water jacket.

Four SD/I engines equipped with catalysts were operated in vessels for 480 hours on fresh water. This time period was intended to represent the full expected operating life of a typical SD/I engine. No significant deterioration was observed on any of these catalysts, nor was there any evidence of water reaching the catalysts. In addition, the catalysts were packaged such that the exhaust system met industry standards for maximum surface temperatures.

Testing has been performed on one engine in a vessel on both fresh water and saltwater over a test protocol designed by industry to simulate the worst-case operation for water reversion. No evidence was found of water reaching the catalysts. After the testing, the engine had emission rates below the proposed HC+NO X standard. We later engaged in a test program to evaluate three additional engines with catalysts in vessels operating on saltwater for extended periods. Early in the program, two of the three manifolds experienced corrosion in the salt-water environment resulting in water leaks and damage to the catalyst. These manifolds were rebuilt with guidance from experts in the marine industry and additional hours have been accumulated on the boats. Although the accumulated hours are well below the 480 hours performed on fresh water, the operation completed has shown no visible evidence of water reversion or damage to the catalysts.

One SD/I engine manufacturer began selling engines equipped with catalysts in Summer 2006. They have certified their engines to the California ARB standards, and are selling their catalyst-equipped engines nationwide. This manufacturer indicated that they have successfully completed durability testing, including extended in-use testing on saltwater. Other manufacturers have indicated that they will have catalyst-equipped SD/I engines for sale in California by the end of this year.

(4) Regulatory Alternatives

In developing the proposed emission standards, we considered both what was achievable without catalysts and what could be achieved with larger, more efficient catalysts than those used in our test programs. Chapter 4 of the Draft RIA presents data on SD/I engines equipped with exhaust gas recirculation (EGR). HC+NO X emission levels below 10 g/kW-hr were achieved for each of the engines. CO emissions ranged from 25 to 185 g/kW-hr. We believe EGR would be a technologically feasible and cost-effective approach to reducing emissions from SD/I marine engines. However, we believe greater reductions could be achieved through the use of catalysts. We considered basing an interim standard on EGR, but were concerned that this would divert manufacturers' resources away from catalyst development and could have the effect of delaying emission reductions from this sector.

Several of the marine engines with catalysts that were tested as part of the development of the proposed standards had HC+NO X emission rates in the 3-4 g/kW-hr range, even with consideration of expected in-use emissions deterioration associated with catalyst aging. However, we believe a standard of 5 g/kW-hr is still appropriate given the potential variability in in-use performance and in test data. The test programs described in Chapter 4 of the Draft RIA did not investigate larger catalysts for SD/I applications. The goal of the testing was to demonstrate catalysts that would work within the packaging constraints associated with water jacketing the exhaust and fitting the engines into engine compartments on boats. However, we did perform testing on engines equipped with both catalysts and EGR. These engines showed emission results in the 2-3 g/kW-hr range. We expect that these same reductions could be achieved more simply through the use of larger catalysts or catalysts with higher precious metal loading. Past experience indicates that most manufacturers will strive to achieve emission reductions well below the proposed standards to give them certainty that they will pass the standards in-use, especially as catalysts on SD/I engines are a new technology. Therefore, we do not believe it is necessary at this time to set a lower standard for these engines.

(5) Our Conclusions

We believe the proposed 2009 exhaust emission standards for SD/I engines represent the greatest degree of emission reduction feasible in this time frame. Manufacturers could meet the proposed standards through the use of three-way catalysts packaged in the exhaust systems upstream of where the water and exhaust mix. One manufacture is already selling engines with this technology and by 2009 many other manufacturers will have experience in producing engines with catalysts for sale in California.

As discussed in Section X, we do not believe the proposed standards would have negative effects on energy, noise, or safety and may lead to some positive effects.

IV. Outboard and Personal Watercraft Engines

A. Overview

This section applies to spark-ignition outboard and personal watercraft (OB/PWC) marine engines and vessels. OB/PWC engines are currently required to meet the HC+NO X exhaust emissions and other related requirements under 40 CFR part 91. As a result of these standards, manufacturers have spent the last several years developing new technologies to replace traditional, carbureted, two-stroke engine designs. Many of these technologies are capable of emission levels well below the current standards. We are proposing new HC+NO X and CO exhaust emission standards for OB/PWC marine engines.

For outboard and personal watercraft engines, the current emission standards regulate only HC+NO X emissions. As described in Section II, we are proposing in this notice to make the finding under Clean Air Act section 213(a)(3) that Marine SI engines cause or contribute to CO nonattainment in two or more areas of the United States.

We believe manufacturers can use readily available technological approaches to design their engines to meet the proposed standards. In fact, as discussed in Chapter 4 of the Draft RIA, manufacturers are already producing several models of four-stroke engines and direction-injection two-stroke engines that meet the proposed standards. The most important compliance step for the proposed standards will be to retire high-emitting designs that are still available and replace them with these cleaner engines. We are not proposing standards based on the use of catalytic converters in OB/PWC engines. While this may be an attractive technology in the future, we do not believe there has been sufficient development work on the application of catalysts to OB/PWC engines to use as a basis for standards at this time.

Note that we are proposing to migrate the regulatory requirements for marine spark-ignition engines from 40 CFR part 91 to 40 CFR part 1045. This gives us the opportunity to update the details of our certification and compliance program to be consistent with the comparable provisions that apply to other engine categories and describe regulatory requirements in plain language. Most of the change in regulatory text provides improved clarity without substantially changing procedures or compliance obligations. Where there is a change that warrants further attention, we describe the need for the change below.

B. Engines Covered by This Rule

(1) Definition of Outboard and Personal Watercraft Engines and Vessels

The proposed standards are intended to apply to outboard marine engines and engines used to propel personal watercraft. We are proposing to change the existing definitions of outboard and personal watercraft to reflect this intent. The existing definitions of outboard engine and personal watercraft marine engine are presented below:

  • Outboard engine is a Marine SI engine that, when properly mounted on a marine vessel in the position to operate, houses the engine and drive unit external to the hull of the marine vessel.
  • Personal watercraft engine (PWC) is a Marine SI engine that does not meet the definition of outboard engine, inboard engine, or sterndrive engine, except that the Administrator in his or her discretion may classify a PWC as an inboard or sterndrive engine if it is comparable in technology and emissions to an inboard or sterndrive engine.

With the proposed implementation of catalyst-based standards for sterndrive and inboard marine engines, we believe the above definitions could be problematic. Certain applications using SD/I engines and able to apply catalyst control would not be categorized as SD/I under the existing definitions in at least two cases. First, an airboat engine, which is often mounted well above the hull of the engine and used to drive an aircraft-like propeller could be misconstrued as an outboard engine. However, like traditional sterndrive and inboard engines, airboat engines are typically derived from automotive-based engines without substantial modifications for marine application. Airboat engines can use the same technologies that are available to sterndrive and inboard engines, so we believe they should be subject to the same standards. To address the concerns about classifying airboats, we are proposing to change the outboard definition to specify that the engine and drive unit be a single, self-contained unit that is designed to be lifted out of the water. This clarifies that air boats are not outboard engines; air boats do not have engines and drive units that are designed to be lifted out of the water. We are proposing the following definition:

  • Outboard engine means an assembly of a spark-ignition engine and drive unit used to propel a marine vessel from a properly mounted position external to the hull of the marine vessel. An outboard drive unit is partially submerged during operation and can be tilted out of the water when not in use.

Second, engines used on jet boats (with an open bay for passengers) have size, power, and usage characteristics that are very similar to sterndrive and inboard applications, but these engines may be the same as OB/PWC engines, rather than the marinized automotive engines traditionally used on sterndrive vessels. We believe classifying such engines as personal watercraft engines is inappropriate because it would subject the jet boats to less stringent emission standards than other boats with similar size and power characteristics. This different approach could lead to increased use of high-emitting engines in these vessels. Under the current regulations, engines powering jet boats could be treated as SD/I engines at the discretion of the Agency, because they are comparable in technology to conventional SD/I engines. We are proposing definitions that would explicitly exclude jet boats and their engines from being treated as personal watercraft engines or vessels. Instead, we are proposing to classify jet boat engines as SD/I.

The proposed definitions conform to the existing definition of personal watercraft established by the International Organization for Standardization (ISO 13590). This ISO standard excludes open-bay vessels and specifies a maximum vessel length of 4 meters. The ISO standard therefore excludes personal watercraft-like vessels 4 meters or greater and jet boats. Thus, engines powering such vessels would be classified as sterndrive/inboard engines. We believe this definition effectively serves to differentiate vessels in a way that groups propulsion engines into categories that are appropriate for meeting different emission standards. This approach is shown below with the corresponding proposed definition of personal watercraft engine. We are proposing one change to the ISO definition for domestic regulatory purposes; we propose to remove the word “inboard” to prevent confusion between PWC and inboard engines and state specifically that a vessel powered by an outboard marine engine is not a PWC. We are proposing the following definition:

  • Personal watercraft means a vessel less than 4.0 meters (13 feet) in length that uses an installed internal combustion engine powering a water jet pump as its primary source of propulsion and is designed with no open load carrying area that would retain water. The vessel is designed to be operated by a person or persons positioned on, rather than within, the confines of the hull. A vessel using an outboard engine as its primary source of propulsion is not a personal watercraft.
  • Personal watercraft engine means a spark-ignition engine used to propel a personal watercraft.

Section III.C.2 describes special provisions that would allow manufacturers extra flexibility with emission credits if they want to continue using outboard or personal watercraft engines in jet boats. These engines would need to meet the standards for sterndrive/inboard engines, but we believe it is appropriate for them to make this demonstration using emission credits generated by other outboard and personal watercraft engines because these vessels are currently using these engine types. We request comment on this approach to defining personal watercraft, especially as it relates to vessels 4 meters or longer and jet boats.

(2) Exclusions and Exemptions

We are proposing to maintain the existing exemptions for OB/PWC engines. These include the testing exemption, the manufacturer-owned exemption, the display exemption, and the national-security exemption. If the conditions for an exemption are met, the engine is not subject to the exhaust emission standards. These exemptions are described in more detail under Section VIII.

The Clean Air Act provides for different treatment of engines used solely for competition. In the initial rulemaking to set standards for OB/PWC engines, we adopted the conventional definitions that excluded engines from the regulations if they had features that would be difficult to remove and that would make it unsafe, impractical, or unlikely to be used for noncompetitive purposes. We have taken the approach in other programs of more carefully differentiating competition and noncompetition models, and are proposing these kinds of changes in this rule. The proposed changes to the existing provisions relating to competition engines would apply equally to all types of Marine SI engines. See Section III and § 1045.620 of the regulations for a full discussion of the proposed approach.

We are proposing a new exemption to address individuals who manufacture recreational marine vessels for personal use (see § 1045.630). Under the proposed exemption, these vessels and their engines could be exempt from standards, subject to certain limitations. For example, an individual may produce one such vessel over a ten-year period, the vessel may not be used for commercial purposes, and any exempt engines may not be sold for at least five years. The vessel must generally be built from unassembled components, rather than simply completing assembly of a vessel that is otherwise similar to one that will be certified to meet emission standards. This proposal addresses the concern that hobbyists who make their own vessels would otherwise be manufacturers subject to the full set of emission standards by introducing these vessels into commerce. We expect this exemption to involve a very small number of vessels.

In the rulemaking for recreational vehicles, we chose not to apply standards to hobby products by exempting all reduced-scale models of vehicles that are not capable of transporting a person (67 FR 68242, November 8, 2002). We are proposing to extend that same provision to OB/PWC marine engines (see § 1045.5).

C. Proposed Exhaust Emission Standards

We are proposing more stringent exhaust emission standards for new OB/PWC marine engines. These proposed standards can be met through the expanded reliance on four-stroke engines and two-stroke direct-injection engines. This section describes the proposed requirements for OB/PWC engines for controlling exhaust emissions. See Section V for a description of the proposed requirements related to evaporative emissions.

(1) Standards and Dates

We are proposing new HC+NO X standards for OB/PWC engines starting in model year 2009 that would achieve more than a 60 percent reduction from the existing 2006 standards. We are also proposing new CO emission standards. These proposed standards would result in meaningful CO reductions from many engines and prevent CO from increasing from engines that already use technologies with lower CO emissions. The proposed emission standards are largely based on certification data from cleaner-burning Marine SI engines, such as four-stroke engines and two-stroke direct-injection engines. Section IV.F discusses the technological feasibility of these standards in more detail. Table IV-1 presents the proposed exhaust emission standards for OB/PWC. We are also proposing to apply not-to-exceed emission standards over a range of engine operating conditions, as described in Section IV.C.2. (See § 1045.103.)

Table IV-1—Proposed OB/PWC Exhaust Emission Standards [g/kW-hr] for 2009 Model Year
Pollutant P a ≤ 40 kW P a > 40 kW
HC+NO X 28-0.3 × P 16
CO 500-5.0 × P 300

The proposed emission standards for HC+NO X are similar in stringency to the 2008 model year standards adopted in California, and we expect that the same technology anticipated to be used in California can be used to meet these proposed standards. However, we are proposing to simplify the form of the standards. The existing EPA 2006 and California ARB 2008 requirements use a functional relationship to set the emission standard for each engine family depending on the power rating—the numerical value of the standard increases with decreasing power ratings, especially for the smallest engines. However, as described in Chapter 4 of the Draft RIA, certification data show that brake-specific emission rates (in g/kW-hr) are relatively constant for engines with maximum engine power above 40 kW. We are therefore proposing a single standard for engines with maximum engine power above 40 kW. For smaller engines, the relationship between brake-specific emissions and maximum engine power is pronounced. We are proposing a simple linear function for the standards for these engines, as shown in Table IV-1. While this approach differs slightly from the California ARB standards, we believe it provides a good match for establishing a comparable level of stringency while simplifying the form of the regulatory standard.

The proposed implementation date gives an additional year beyond the implementation date of the California standards of similar stringency. Manufacturers generally sell their lower-emission engines, which are already meeting the 2008 California standards, nationwide. However, the additional year would give manufacturers time to address any models that may not meet the upcoming California standards or are not generally sold in California. We request comment on additional regulatory flexibility that manufacturers may need to transition to the proposed standards. For instance, a modest phase-in of the standards may be useful to manufacturers to complete an orderly turnover of high-emitting engines. This phase-in could take the form of giving an extra year for compliance with the proposed standards for a small percentage of engines (e.g., 10 percent of projected sales) or phasing-in the level of the standard (e.g., 20-25 g/kW-hr HC+NO X). Any comments on proposed transitional flexibility should give details that fully describe the recommended program.

The proposed standards include the same general provisions that apply today. For example, engines must control crankcase emissions. The regulations also require compliance over the full range of adjustable parameters and prohibit the use of defeat devices. (See § 1045.115.)

(2) Not-to-Exceed Standards

Section III.D.2 describes NTE standards for sterndrive and inboard engines. We are proposing to apply the same NTE testing provisions to OB/PWC engines, including the same NTE zone and subzones and ambient conditions (see § 1045.515). However, data presented in Chapter 4 of the Draft RIA suggest that different emission limits would be appropriate for OB/PWC engines. For instance, we are proposing higher limits at full power for SD/I engines equipped with catalysts because the engines must operate rich at this mode to protect catalysts and exhaust valves. Because we are not anticipating the use of catalysts on OB/PWC to meet the exhaust emission standards, we believe it is not necessary to adopt such high limits for OB/PWC engines.

The Draft RIA describes the available emission data that allow us to specify appropriate modal caps for OB/PWC engines based on four-stroke engine technology. The available data for direct-injection two-stroke engines showed two different distinct patterns in modal emission rates. We are therefore proposing two alternative sets of NTE limits—manufacturers could use either set of NTE limits for their OB/PWC engines. To offset the relaxed limits for certain subzones, we are proposing more stringent limits for other subzones for these alternative approaches. Table IV-2 presents the proposed sets of NTE limits for the subzones described in Section III.D.2. We request comment on the proposed NTE limits for OB/PWC engines.

Table IV-2—Proposed NTE Limits by Subzone for OB/PWC Engines
Approach Pollutant Subzone 4 Subzone 3 Subzone 2 Subzone 1
Primary HC+NO X 1.6 1.2 1.2 1.2
CO 1.5 1.5 1.5 1.5
Alternative 1 HC+NO X 2.0 0.8 0.8 2.0
CO 1.0 1.0 1.5 3.0
Alternative 2 HC+NO X 3.0 1.0 1.0 1.0
CO 2.0 1.0 1.0 1.5

Marine engine manufacturers indicated that they are concerned that the differences in engine designs, especially for direct-injection two-stroke engines, may result in emission variation that would make it difficult to meet a fixed set of NTE limits for all engines. To address this variability, they have suggested two alternative approaches to setting NTE limits for marine engines. The first approach would be to base the NTE limits on the modal test results from the certification test rather than fixed values that would apply to all engines. NTE limits would then be linearly interpolated between the modes as a function of speed and load. For example, if the modal results were 2.0 g/kW-hr at Mode 3 and 4.0 g/kW-hr at Mode 4, the interpolated value half way between these modal test points would be 3 g/kW-hr. A multiplier would then be applied to this interpolated value to create the NTE limit. This multiplier would be intended to account for testing and production variability. The multiplier would not likely need to be as large as the proposed general multipliers for the subzones presented above because it would be applied to a surface generated from each manufacturer's actual modal data. Because the NTE cap would be calculated from the individual test modes in the steady-state test, it may be necessary for the manufacturers to assign family emission limits for each of the test modes in the proposed NTE zone.

The second conceptual approach would be to use a weighted average approach to the NTE limit rather than to have individual NTE limits for each subzone. Under this approach, an emission measurement would be made in each of the subzones plus idle. These measurements could be made at any operation point within each subzone. The measured emissions would then be combined using the weighting factors for the modal test. This weighted average emission level would be required to be below the standard (or family emission limit) times a multiplier (under this approach, only a single multiplier would be needed). The purpose of the multiplier would be to allow for some variability within each subzone. Because the weighted average emissions from the subzones would have the tendency of approaching the steady-state test value, this multiplier would not be expected to be much higher than 1.0. However, one drawback to this approach is that there is no specific cap for each mode and a weighted average approach may not be as effective in capping modal emissions as would be specific limits for each subzone. More detail on this concept is available in the docket. (78)

We request comment on the two alternative NTE limit approaches described above. Specifically, commenters should provide detail on what advantages (and disadvantages) these alternatives may provide and what effect they may have on in-use emissions and the potential for improving the manufacturer in-use testing program. In addition, commenters should describe what emission limits or multipliers would be appropriate for the alternative approaches and provide test data supporting these conclusions.

(3) Emission Credit Programs

Engine manufacturers may use emission credits to meet OB/PWC standards under part 91. See Section VII.C.5 for a description of general provisions related to averaging, banking, and trading programs.

We propose to adopt an ABT program for the new HC+NO X emission standards that is similar to the existing program (see part 1045, subpart H). Credits may be used interchangeably between outboard and personal watercraft engine families. Credits earned under the current program may also be used to comply with the new OB/PWC standards as described below.

We are proposing an unlimited life for emission credits earned under the proposed new standards for OB/PWC engines. We consider these emission credits to be part of the overall program for complying with proposed standards. Given that we may consider further reductions beyond the proposed standards in the future, we believe it will be important to assess the ABT credit situation that exists at the time any future standards are considered. We would need to set such future emission standards based on the statutory direction that emission standards must represent the greatest degree of emission control achievable, considering cost, safety, lead time, and other factors. Emission credit balances will be part of the analysis for determining the appropriate level and timing of new standards. If we were to allow the use of existing emission credits for meeting future standards, we may, depending on the level of emission credit banks, need to adopt emission standards at more stringent levels or with an earlier start date than we would absent the continued or limited use of existing emission credits. Alternatively, we could adopt future standards without allowing the use existing credits. The proposal described in this notice describes a middle path in which we allow the use of existing credits to meet the proposed new standards, with provisions that limit the use of these credits based on a three-year credit life.

We are requesting comment on one particular issue regarding credit life. As proposed, credits earned under the new exhaust ABT program would have an unlimited lifetime. This could result in a situation where credits generated by an engine sold in a model year are not used until many years later when the engines generating the credits have been scrapped and are no longer part of the fleet. EPA believes there may be value to limiting the use of credits to the period that the credit-generating engines exist in the fleet. For this reason, EPA requests comment on limiting the lifetime of the credits generated under the proposed exhaust ABT program to five years or, alternatively, to the regulatory useful life of the engine.

We are interested in using a common emission credit calculation methodology across our programs. Therefore, we are proposing to use the same emission credit equation for OB/PWC engines that is common in many of our other programs. This equation results in a simpler calculation than is currently used for OB/PWC engines. The primary difference is that the regulatory useful life would be used in the credit calculation rather than a discounted useful life function based on engine type and power rating. In addition, the emission credits would be reported in units of kilograms rather than grams. We anticipate that this change in the credit calculation would directionally increase the relative value of emission credits generated under the existing ABT program. However, due to the proposed limit on credit life and the proposed FEL cap for OB/PWC engines, we do not believe that this increase in relative value will significantly hamper the introduction of clean engine technology. We request comment on the new credit calculation and on whether credits generated under the existing OB/PWC standards should be adjusted to be more equivalent to credits generated under the proposed ABT program.

We are proposing an averaging program for CO emissions. Under this program, manufacturers could generate credits with engine families that have FELs below the CO emission standard to be used for engine families in their product line in the same model year that are above the CO standard. However, we are proposing to disallow banking for CO emissions. We are concerned that a banking program could result in a large accumulation of credits based on a given company's mix of engine technologies. If banking were allowed, the proposed CO standard would need to be substantially more stringent to reflect the capability for industry-wide average CO emission levels. We generally allow trading only with banked credits, so we are also proposing to disallow trading of CO emission credits.

As with previous emission control programs, we are also proposing not to allow manufacturers to earn credits for one pollutant for an emission family that is using credits to meet the standard for another pollutant. In other words, an engine family that does not meet the CO standard would not be able to earn HC+NO X emission credits, or vice versa. In addition, as with the current standards, we are proposing that engines sold in California would not be included in this ABT program because they are already subject to California requirements.

Under the existing standards, no cap is set on FELs for certifying engine families. This was intended to allow manufacturers to sell old-technology two-stroke engines by making up the emissions deficit with credits under the ABT program. For engines subject to the new emission standards, we are proposing FEL caps to prevent the sale of very high-emitting engines. For HC+NO X, the proposed FEL cap is based on the existing 2006 standards. For CO, the proposed FEL cap is 150 g/kW-hr above the proposed standard. We believe this will still allow a great deal of flexibility for manufacturers using credits, but will require manufacturers to stop producing engines that emit pollutants at essentially uncontrolled levels.

Except as specified in Section III.C.2 for jet boats, we are proposing to specify that OB/PWC engines and SD/I engines are in separate averaging sets. This means that credits earned by OB/PWC engines may be used only to offset higher emissions from other OB/PWC engines, and credits earned by SD/I engines may be used only to offset higher emissions from other SD/I engines. We are allowing jet boats to use OB/PWC credits because there are currently small sales of these engines currently using OB/PWC engines. Most of the engine manufacturers building SD/I engines do not also build OB/PWC engines. The exception to this is the largest manufacturer in both categories. We are concerned that allowing averaging, banking, and trading between OB/PWC engines and SD/I engines would not provide the greatest achievable reductions, because the level of the standard we are proposing is premised on the technology used in OB/PWC engines, and is based on what is feasible for these engines. We did not set the OB/PWC level based on the reductions achievable between OB/PWC and SD/I, but instead based on what is achievable by OB/PWC itself. The proposed limitation on ABT credits is consistent with this approach to setting the level of the OB/PWC standards. We are also concerned that allowing trading between OB/PWC and SD/I could create a competitive disadvantage for the many small manufacturers of SD/I engines that do not also produce OB/PWC engines. In addition, we are proposing SD/I emission standards that would likely require the use of aftertreatment. We would not want to provide an incentive to use credits from the OB/PWC marine sector to avoid the use of aftertreatment technologies in SD/I engines.

We request comment on the structure of the proposed ABT program, including the new provisions related to CO emissions. For any commenters suggesting that we include banking or trading for CO emissions, we solicit further comment on what the appropriate CO standard should be to account for the greater regulatory flexibility and therefore greater degree of control achievable using emissions credits. We also request comment on the use and level of the proposed FEL caps and on the approach to defining averaging sets.

(4) Durability Provisions

We are proposing to keep the existing useful life periods from 40 CFR part 91. The specified useful life for outboard engines is 10 years or 350 hours of operation, whichever comes first. The useful life for personal watercraft engines is 5 years or 350 hours of operation, whichever comes first. (See § 1045.103.)

We are proposing to update the specified emissions warranty periods for outboard and personal watercraft engines to align with our other emission control programs (see § 1045.120). Most nonroad engines have emissions warranty periods that are half of the total useful life period. As a result, we are proposing a warranty period for outboard engines of five years or 175 hours of operation, whichever comes first. The proposed warranty period for personal watercraft engines is 30 months or 175 hours, whichever comes first. This contrasts somewhat with the currently specified warranty period of 200 hours or two years (or three years for specified major emission control components). The proposed approach would slightly decrease the warranty period in terms of hours, but would somewhat increase the period in terms of calendar years (or months). We request comment on this revised approach to defining warranty periods.

If the manufacturer offers a longer mechanical warranty for the engine or any of its components at no additional charge, we propose that the emission-related warranty for the respective engine or component must be extended by the same amount. The emission-related warranty includes components related to controlling exhaust, evaporative, and crankcase emissions from the engine. This approach to setting warranty requirements is consistent with provisions that apply in most other programs for nonroad engines.

We are proposing to keep the existing requirements related to demonstrating the durability of emission controls for purposes of certification (see § 1045.235, § 1045.240, and § 1045.245). Manufacturers must run engines long enough to develop and justify full-life deterioration factors. This allows manufacturers to generate a deterioration factor that helps ensure that the engines will continue to control emissions over a lifetime of operation. The new requirement to generate deterioration factors for CO emissions is the same as that for HC+NO X emissions. For the HC+NO X standard, we propose to specify that manufacturers use a single deterioration factor for the sum of HC and NO X emissions. However, if manufacturers get our approval to establish a deterioration factor on an engine that is tested with service accumulation representing less than the full useful life for any reason, we would require separate deterioration factors for HC and NO X emissions. The advantage of a combined deterioration factor is that it can account for an improvement in emission levels with aging. However, for engines that have service accumulation representing less than the full useful life, we believe it is not appropriate to extrapolate measured values indicating that emission levels for a particular pollutant will decrease.

Under the current regulations, emission-related maintenance is not allowed during service accumulation to establish deterioration factors. The only maintenance that may be done must be (1) Regularly scheduled, (2) unrelated to emissions, and (3) technologically necessary. This typically includes changing engine oil, oil filter, fuel filter, and air filter. In addition, we are proposing to specify that manufacturers may not schedule critical emission-related maintenance during the useful life period (see § 1045.125). This would prevent manufacturers from designing engines with emission controls that depend on scheduled maintenance that is not likely to occur with in-use engines. We request comment on all aspects of our provisions related to manufacturers' prescribed maintenance.

D. Changes to Existing OB/PWC Test Procedures

We are proposing a number of minor changes to the test procedures for OB/PWC to make them more consistent with the test procedures for other nonroad spark-ignition engines. These test provisions would apply to SD/I marine engines as well.

(1) Duty Cycle

A duty cycle is the set of modes (engine speed and load) over which an engine is operated during a test. For purposes of exhaust emission testing, we are proposing to keep the existing duty cycle specified for OB/PWC engines, with two adjustments (see § 1045.505). First, we are proposing that manufacturers may choose to run the specified duty cycle as a ramped-modal cycle, as described in Section IX.B. Second, we are proposing to change the low-power test mode from a specified 25 percent load condition to 25.3 percent load, which would complete the intended alignment with the E4 duty cycle adopted by the International Organization for Standardization.

We request comment on the appropriateness of changing part 91 to include the correction to the duty cycle described above. We request comment regarding whether a change in the specification for the current standards may cause some existing test data to be considered invalid. For example, testing from an earlier model year may have involved measurements that were slightly below 25 percent load, but within the specified tolerance for testing. These measurements may be used for carryover engine families today, but increasing the load point in the regulation could cause some measurements to be outside the tolerance once it shifts to a nominal value of 25.3 percent.

(2) Maximum Test Speed

The definition of maximum test 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 duty cycles for testing. Engine manufacturers currently declare the rated speeds for their engines and then used the rated speed as the maximum speed for testing. However, we have established an objective procedure for measuring this engine parameter to have a clearer reference point for an engine's maximum test speed. This is important to ensure that engines are tested at operating points that correspond with in-use operation. This also helps ensure that the NTE zone is appropriately matched to in-use operating conditions.

We propose to define the maximum test speed for any engine to be 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 normalized maximum-power versus speed curve. Maximum test speed is defined at that point where the length of this line reaches its maximum value. This change would apply to testing of OB/PWC engines as well as SD/I engines. We request comment on the use and definition of maximum test speed.

(3)

We are proposing to specify that OB/PWC engines certified to the proposed exhaust emission standards use the test procedures in 40 CFR part 1065 instead of those in 40 CFR part 91. (79) We are proposing that the new procedures would apply starting with the introduction of proposed exhaust standards, though we allow manufacturers to start using these new procedures earlier as an alternative procedure. The procedures in part 1065 include updated provisions to account for newer measurement technologies and improved calculation and corrections procedures. Part 1065 also specifies more detailed provisions related to alternate procedures, including a requirement to conduct testing representative of in-use operation. In many cases, we allow carryover of emission test data from one year to another. After the implementation of the proposed standards, we are proposing to allow carryover of any test data generated prior to 2009 under the test procedures in 40 CFR part 91.

(4) Altitude

EPA emission standards generally apply at a wide range of altitudes, as reflected in the range of barometric pressures in the specified test procedures. For marine spark-ignition engines, it is clear that the large majority of operation is at sea level or at inland lakes that are not at high altitude. We are therefore proposing a specific range of barometric pressures from 94.0 to 103.325 kPa, which corresponds to all altitudes up to about 2,000 feet (see § 1045.501). Manufacturers are expected to design emission control systems that continue to function effectively at lower barometric pressures (i.e., higher altitudes), but we would not require that engines meet emission standards when tested at altitudes more than 2,000 feet above sea level.

(5) Engine Break-in

Testing new engines requires a period of engine operation to stabilize emission levels. The regulations specify two separate figures for break-in periods. First, for certification, we establish a limit on how much an engine may operate and still be considered a “low-hour” engine. The results of testing with the low-hour engine are compared with a deteriorated value after some degree of service accumulation to establish a deterioration factor. For Large SI engines, we require that low-hour test engines have no more than 300 hours of engine operation. However, given the shorter useful life for marine engines, this would not make for a meaningful process for establishing deterioration factors, even if there is a degree of commonality between the two types of engines. We are proposing for all marine spark-ignition engines that low-hour engines generally have no more than 30 hours of engine operation (see § 1045.801). This allows some substantial time for break-in, stabilization, and running multiple tests, without approaching a significant fraction of the useful life. The current regulation in part 91 specifies that manufacturers perform the low-hour measurement after no more than 12 hours of engine operation (see § 91.408(a)(1)). The proposed approach, 30 hours of engine operation, is consistent with what we have done for recreational vehicles and would give manufacturers more time to complete a valid low-hour test.

For production-line testing there is also a concern about how long an engine should operate to reach a stabilized emission level. We are proposing to keep the provision in part 91 that allows for a presumed stabilization period of 12 hours (see § 90.117(a)). We believe 12 hours is sufficient to stabilize the emissions from the engine.

We request comment on these specified values for stabilizing new engines for emission measurements.

E. Additional Certification and Compliance Provisions

(1) Production-Line Testing

We are proposing to continue to require that manufacturers routinely test engines at the point of production to ensure that production variability does not affect the engine family's compliance with emission standards. This is largely based on the existing test requirements, but includes a variety of changes. See Section VII.C.7 for a detailed description of these requirements. We may also require manufacturers to perform production line testing under the selective enforcement auditing provisions described in Section VIII.E.

(2) In-Use Testing

We are also proposing to continue the requirements related to the manufacturer-run in-use testing program. Under this program, manufacturers test field-aged engines to determine whether they continue to meet emission standards (see part 1045, subpart E). We are proposing to make a variety of changes and clarifications to the existing requirements, as described in the following sections.

(a) Adjustments Related to Engine Selection

Both EPA and manufacturers have gained insights from implementing the current program. Manufacturers have expressed a concern that engine families are selected rather late in the model year, which makes it harder to prepare a test fleet for fulfilling testing obligations. On the other hand, we have seen that manufacturers certify some of their engine families well into the model year. By making selections early in the model year, we would generally be foregoing the opportunity to select engine families for which manufacturers don't apply for certification until after the selections occur.

To address these competing interests, we are proposing an approach that allows for early selection of engine families, while preserving the potential to require testing for engines that are certified later in the model year. For applications we receive by December 31 of a given calendar year for the following model year, we would expect to select engine families for testing by the end of February of the following year. If we have not made a complete selection of engine families by the end of February, manufacturers would have the option of making their own selections for in-use testing. The proposed regulations include criteria to serve as guidance for manufacturers to make appropriate selections. For example, we would expect manufacturers to most strongly consider those engine families with the highest projected sales volume and the smallest compliance margins. Manufacturers may also take into account past experience with engine families if they have already passed an in-use testing regimen and have not undergone significant design changes since that time.

We propose to treat engine families differently for in-use testing if we receive the application after December 31. This would apply, for example, if manufacturers send an application for a 2009 engine family in February 2009. In these cases, we are proposing that all these engine families are automatically subject to in-use testing, without regard to the 25 percent limitation that would otherwise dictate our selections. This may appear to increase the potential test burden, but the clear majority of applications for certification are completed before the end of the calendar year for the following model year. This proposed provision would eliminate the manufacturers' ability to game the testing system by delaying a family of potential concern until the next calendar year. We would expect to receive few new applications after the end of the calendar year. This would be consistent with the manufacturers' interest in early family selections, without jeopardizing EPA's interest in being able to select from a manufacturer's full product lineup.

We request comment on the approach to selecting engine families for in-use testing.

(b) Crankcase Emissions

Because the crankcase requirements are based on a design specification rather than emission measurements, the anticipated crankcase technologies are best evaluated simply by checking whether or not they continue to function as designed. As a result, we intend for an inspection of in-use engines to show whether these systems continue to function properly throughout the useful life, but are not proposing to require manufacturers to include crankcase measurements as part of the in-use testing program described in this section. This is consistent with the approach we have taken in other programs.

(c) In-Use Emission Credits

Clean Air Act section 213 requires engines to comply with emission standards throughout their regulatory useful lives, and section 207 requires a manufacturer to remedy in-use nonconformity when we determine that a substantial number of properly maintained and used engines fail to conform with the applicable emission standards (42 U.S.C. 7541). As described in the original rulemaking, manufacturers could use a calculation of emission credits generated under the in-use testing program to avoid a recall determination if an engine family's in-use testing results exceeded emission standards (61 FR 52095, October 4, 1996).

We are proposing a more general approach to addressing potential noncompliance under the in-use testing program than is specified in 40 CFR part 91. The proposed regulations do not specify how manufacturers would generate emission credits to offset a nonconforming engine family. The proposed approach is preferred for two primary reasons. First, manufacturers will be able to use emission data generated from field testing to characterize an engine family's average emission level. This becomes necessarily more subjective, but allows us to consider a wider range of information in evaluating the degree to which manufacturers are complying with emission standards across their product line. Second, this approach makes clearer the role of the emission credits in our consideration to recall failing engines. We plan to consider, among other information, average emission levels from multiple engine families in deciding whether to recall engines from a failing engine family. We therefore believe it is not appropriate to have a detailed emission credit program defining precisely how and when to calculate, generate, and use credits that do not necessarily have value elsewhere.

Not specifying how manufacturers generate emission credits under the in-use testing program gives us the ability to consider any appropriate test data in deciding what action to take. In generating this kind of information, some general guidelines would apply. For example, we would expect manufacturers to share test data from all engines and all engine families tested under the in-use testing program, including nonstandard tests that might be used to screen engines for later measurement. This allows us to understand the manufacturers' overall level of performance in controlling emissions to meet emission standards. Average emission levels should be calculated over a running three-year period to include a broad range of testing without skewing the results based on old designs. Emission values from engines certified to different tiers of emission standards or tested using different measurement procedures should not be combined to calculate a single average emission level. Average emission levels should be calculated according to the following equation, rounding the results to 0.1 g/kW-hr:

Average EL = Σi[(STD−CL) i × (UL) i × (Sales) i × Power i × LF i] ÷ Σi [(UL) i × (Sales) i × Power i × LF i]

Where:

Average EL = Average emission level in g/kW-hr.

Sales i = The number of eligible sales, tracked to the point of first retail sale in the U.S., for the given engine family during the model year.

(STD−CL) i = The difference between the emission standard (or Family Emission Limit) and the average emission level for an in-use testing family in g/kW-hr.

UL i = Useful life in hours.

Power i = The sales-weighted average maximum engine power for an engine family in kW.

LF i = Load factor or fraction of maximum engine power utilized in use; use 0.50 for engine families used only in constant-speed applications and 0.32 for all other engine families.

We have adopted this same approach for the in-use testing program that applies for Large SI engines in 40 CFR part 1048.

(3) Optional Procedures for Field Testing

Outboard engines are inherently portable, so it may be easier to test them in the laboratory than in the field. However, there is a strong advantage to using portable measurement equipment to test personal watercraft and SD/I engines while the engine remains installed to avoid the effort of taking the engine out and setting it up in a laboratory. Field testing would also provide a much better means of measuring emissions to establish compliance with the NTE standards, because it is intended to ensure control of emissions during normal in-use operation that may not occur during laboratory testing over the specified duty cycle. We propose to apply the field testing provisions described below as an option for all OB/PWC and SD/I engines. We request comment on any ways the field testing procedures should be modified to address the unique operating characteristics of OB/PWC or SD/I engines.

The regulations at 40 CFR part 1065, subpart J, specify how to measure emissions using portable measurement equipment. To test engines while they remain installed, analyzers are connected to the engine's exhaust to detect emission concentrations during normal operation. Exhaust volumetric flow rate and continuous power output are also needed to convert the analyzer responses to units of g/kW-hr for comparing to emission standards. These values can be calculated from measurements of the engine intake flow rate, the exhaust air-fuel ratio and the engine speed, and from torque information.

Available small analyzers and other equipment may be adapted for measuring emissions from field equipment. A portable flame ionization detector can measure total hydrocarbon concentrations. A portable analyzer based on zirconia technology can measure NO X emissions. A nondispersive infrared (NDIR) unit can measure CO. We are proposing to require manufacturers to specify how they would allow for drawing emission samples from in-use engines for testing installed engines. For example, emission samples can be drawn from the exhaust flow directly upstream of the point at which water is mixed into the exhaust flow. This should minimize collection of water in the extracted sample, though a water separator may be needed to maintain a sufficiently dry sample. Mass flow rates also factor into the torque calculation; this may be measured either in the intake or exhaust manifold.

Calculating brake-specific emissions depends on determining instantaneous engine speed and torque levels. We propose to require that manufacturers must therefore design their engines to be able to continuously monitor engine speed and torque. We have already adopted this requirement for other mobile source programs where electronic engine control is used. Monitoring speed values is straightforward. For torque, the onboard computer needs to convert measured engine parameters into useful units. Manufacturers generally will need to monitor a surrogate value such as intake manifold pressure or throttle position (or both), then rely on a look-up table programmed into the onboard computer to convert these torque indicators into Newton-meters. Manufacturers may also want to program the look-up tables for torque conversion into a remote scan tool. Part 1065 specifies the performance requirements for accuracy, repeatability, and noise related to speed and torque measurements. These tolerances are taken into account in the selection of the proposed NTE standards.

(4) Other Changes for In-use Testing

A question has been raised regarding the extent of liability if an engine family is found to be noncompliant during in-use testing. Because it can take up to two years to complete the in-use testing regimen for an engine family, we want to clarify the status of engines produced under that engine family's certificate, and under the certificates of earlier and later engine families that were effectively of the same design. For example, manufacturers in many cases use carryover data to continue certifying new engine families for a subsequent model year; this avoids the need to produce new test data for engines whose design does not change from year to year. For these cases, absent any contrary information from the manufacturer, we will maintain the discretion to include other applicable engine families in the scope of any eventual recall, as allowed by the Act.

There are a variety of smaller changes to the in-use testing provisions as a result of updating the regulatory language to reflect the language changes that we adopted for similar testing with Large SI engines. First, we are proposing to remove the requirement to select engines that have had service accumulation representing less than 75 percent of the useful life. This will allow manufacturers the flexibility to test somewhat older engines if they want to. Second, we are proposing to slightly adjust the description of the timing of the test program, specifying that the manufacturer must submit a test plan within 12 months of EPA selecting the family for testing, with a requirement to complete all testing within 24 months. This contrasts with the current requirement to complete testing within 12 months after the start of testing, which in turn must occur within 12 months of family selection. We believe the modified approach allows additional flexibility without delaying the conclusion of testing. Third, we are proposing to require that manufacturers explain why they excluded any particular engines from testing. Finally, we are proposing to require manufacturers to report any noncompliance within 15 days after completion of testing for a family, rather than 15 days after an individual engine fails. This has the advantage for manufacturers and the Agency of a more unified reporting after testing is complete, rather than piecemeal reporting before conclusions can be drawn.

(5) Use of Engines Already Certified to Other Programs

In some cases, manufacturers may want to use engines already certified under our other programs. Engines certified to the emission standards for highway applications in part 86 or Large SI applications in part 1048 are meeting more stringent standards. We are therefore proposing to allow the pre-existing certification to be valid for engines used in marine applications, on the condition that the engine is not changed from its certified configuration in any way (see § 1045.605). For outboard and personal watercraft engines, we are also proposing to allow this for engines certified to the Phase 3 emission standards for Small SI engines. Manufacturers would need to demonstrate that fewer than five percent of the total sales of the engine model are for marine applications. There are also a few minor notification and labeling requirements to allow for EPA oversight of this provision.

(6) Import-Specific Information at Certification

We are proposing to require additional information to improve our ability to oversee compliance related to imported engines (see § 1045.205). In the application for certification, we are proposing to require the following additional information: (1) The port or ports at which the manufacturer will import the engines, (2) the names and addresses of the agents the manufacturer has authorized to import the engines, and (3) the location of the test facilities in the United States where the manufacturer will test the engines if we select them for testing under a selective enforcement audit.

F. Other Adjustments to Regulatory Provisions

We are proposing to migrate the regulatory requirements for marine spark-ignition engines from 40 CFR part 91 to 40 CFR part 1045. This gives us the opportunity to update the details of our certification and compliance program to be consistent with the comparable provisions that apply to other engine categories. The following paragraphs highlight some of the changes in the new language that may involve noteworthy changes from the existing regulations. All these provisions apply equally to SD/I engines, except that they are not subject to the current requirements in 40 CFR part 91.

We are proposing some adjustments to the criteria for defining engine families (see § 1045.230). The fundamental principle behind engine families is to group together engines that will have similar emission characteristics over the useful life. We are proposing that engines within an engine family must have the same approximate bore diameter and all use the same method of air aspiration (for example, naturally aspirated vs. turbocharged). Under the current regulation, manufacturers may consider bore and stroke dimensions and aspiration method if they want to subdivide engine families beyond what would be required under the primary criteria specified in § 91.115. We believe engines with substantially different bore diameters will have combustion and operating characteristics that must be taken into account with unique engineering. Similarly, adding a turbocharger or supercharger to an engine changes the engine's combustion and emission control in important ways. Finally, we are proposing that all the engines in an engine family use the same type of fuel. This may have been a simple oversight in the current regulations, since all OB/PWC engines operate on gasoline. However, if a manufacturer would produce an engine model that runs on natural gas or another alternative fuel, that engine model should be in its own engine family.

The proposed regulatory language related to engine labels remains largely unchanged (see § 1045.135). However, we are including a provision to allow manufacturers to print labels that have a different company's trademark. Some manufacturers in other programs have requested this flexibility for marketing purposes.

The proposed warranty provisions are described above. We are proposing to add an administrative requirement to describe the provisions of the emission-related warranty in the owners manual (see § 1045.120). We expect that many manufacturers already do this, but believe it is appropriate to require this as a routine practice.

Certification procedures depend on establishing deterioration factors to predict the degradation in emission controls that occurs over the course of an engine's useful life. This typically involves service accumulation in the laboratory to simulate in-use operation. Since manufacturers do in-use testing to further characterize this deterioration rate, we are proposing to specify that deterioration factors for certification must take into account any available data from in-use testing with similar engines. This provision applies in most of our emission control programs that involve in-use testing. To the extent that this information is available, it should be factored into the certification process. For example, if in-use testing shows that emission deterioration is substantially higher than that characterized by the deterioration factor, we would expect the manufacturer to factor the in-use data into a new deterioration factor, or to revise durability testing procedures to better represent the observed in-use degradation.

Maximum engine power for an engine family is an important parameter. For engines below 40 kW, the maximum engine power determines the applicable standard. For bigger engines, emission credits are calculated based on total power output. As a result, we are proposing to specify that manufacturers determine their engines' maximum engine power as the point of maximum engine power on the engine map the manufacturers establish with their test engines (see Section VII.C.6 and § 1045.140). This value would be based on the measured maximum engine power, without correction to some standard ambient conditions.

The proposed requirements related to the application for certification would involve some new information, most of which is described above, such as installation instructions and a description of how engines comply with not-to-exceed standards (see § 1045.205). In addition, we are proposing to require that manufacturers submit projected sales volumes for each family, rather than requiring that manufacturers keep these records and make them available upon request. Manufacturers already do this routinely and it is helpful to have ready access to this information to maintain compliance oversight of the program for Marine SI engines for such things as emission credit calculations. We are also proposing that each manufacturer identify an agent for service in the United States. For companies based outside the United States, this ensures that we will be able to maintain contact regarding any official communication that may be required. We have adopted these same requirements for other nonroad programs.

We are proposing to require that manufacturers use good engineering judgment in all aspects of their effort to comply with regulatory requirements. The regulations at § 1068.5 describe how we would apply this provision and what we would require of manufacturers where we disagree with a manufacturer's judgment.

We are also proposing new defect-reporting requirements. These are requirements are described in Section VIII.

It is common practice for Marine SI engines for one company to produce the base engine for a second company to modify for the final application. Since our regulations prohibit the sale of uncertified engines, we are proposing provisions to clarify the status of these engines and defining a path by which these engines can be handled without violating the regulations. See Section XI for more information.

We request comment on all these changes to the regulations. Where there is an objection to any of the proposed provisions, we request comment on alternative provisions that would best address the concern on which the proposed provisions are based. Also, aside from the items described in this section, there are many minor adjustments in the regulatory text. While most of these changes are intended to improve the clarity of the regulations without imposing new requirements, we request comment on any of these changes that may be inappropriate. We also request comment on any additional changes that may be helpful in making the regulations clear or addressing the administration or implementation of the regulatory requirements.

G. Small-Business Provisions

The OB/PWC market has traditionally been made up of large businesses. In addition, we anticipate that the OB/PWC standards will be met through the expanded use of existing cleaner engine technologies. Small businesses certifying to standards today are already using technologies that could be used to meet the proposed standards. As a result, we are proposing only three small business regulatory relief provisions for small business manufacturers of OB/PWC engines. We are proposing to allow small business OB/PWC engine manufacturers to be exempt from PLT testing and to use assigned deterioration factors for certification. (EPA will provide guidance to engine manufacturers on the assigned deterioration factors prior to implementation of the new OB/PWC standards.) We are also proposing to extend the economic hardship relief for small businesses described in Section VIII.C.9 to small-business OB/PWC engine manufacturers (see § 1068.250). We are proposing small business eligibility criteria for OB/PWC engine manufacturers based on a production cut-off of 5,000 OB/PWC engines per year. We would also allow OB/PWC engine manufacturers that exceed the production cut-off level noted above but have fewer than 1,000 employees to request treatment as a small business.

In addition to the flexibilities noted above, all OB/PWC engine manufacturers, regardless of size, would be able to apply for the unusual circumstances hardship described in Section VIII.C.8 (see § 1068.245). Finally, all OB/PWC vessel manufacturers, regardless of size, that rely on other companies to provide certified engines or fuel system components for their product would be able to apply for the hardship provisions described in Section VIII.C.10 (see § 1068.255).

H. Technological Feasibility

(1) Level of Standards

Over the past several years, manufacturers have demonstrated their ability to achieve significant HC+NO X emission reductions from outboard and personal watercraft engines. This has largely been accomplished through the introduction of two-stroke direct injection engines and conversion to four-stroke engines. Current certification data for these types of engines show that these technologies may be used to achieve emission levels significantly below the existing exhaust emission standards. In fact, California has adopted standards requiring a 65 percent reduction beyond the current federal standards beginning in 2008.

Our own analysis of recent certification data show that most four-stroke outboard engines and many two-stroke direct injection outboard engines can meet the proposed HC+NO X standard. Similarly, although PWC engines tend to have higher HC+NO X emissions, presumably due to their higher power densities, many of these engines can also meet the proposed HC+NO X standard. Although there is currently no CO standard for OB/PWC engines, OB/PWC manufacturers are required to report CO emissions from their engines (see § 91.107(d)(9)). These emissions are based on test data from new engines and do not consider deterioration or compliance margins. Based on this data, all of the two-stroke direct injection engines show emissions well below the proposed standards. In addition, the majority of four-stroke engines would meet the proposed CO standards as well.

We therefore believe the proposed HC+NO X and CO emission standards can be achieved by phasing out conventional carbureted two-stroke engines and replacing them with four-stroke engines or two-stroke direct injection engines. This has been the market-driven trend over the last five years. Chapter 4 of the Draft RIA presents charts that compare certification data to the proposed standards.

(2) Implementation Dates

We are proposing to implement the new emission standards beginning with the 2009 model year. This gives an additional year beyond the implementation date of the California standards of similar stringency. This additional year may be necessary for manufacturers that don't sell engine models in California or that sell less than their full product lineup into the California market. We believe the same technology used to meet the 2008 standards in California could be used nationwide with the additional year allowed for any engine models not sold in California. Low-emission engines sold in California are generally sold nationwide as part of manufacturer compliance strategies for the Federal 2006 standards. Manufacturers have indicated that they are calibrating their four-stroke and direct-injection two-stroke engines to meet the California requirements. To meet the proposed standards, manufacturers' efforts would primarily center on phasing out their higher-emission carbureted two-stroke engines and producing more of their lower emission engines.

(3) Technological Approaches

Conventional two-stroke engines add a fuel-oil mixture to the intake air with a carburetor, and use the crankcase to force this mixed charge air into the combustion chamber. In the two-stroke design, the exhaust gases must be purged from the cylinder while the fresh charge enters the cylinder. With traditional two-stroke designs, the fresh charge, with unburned fuel and oil, would push the exhaust gases out of the combustion chamber as the combustion event concludes. As a result, 25 percent or more of the fresh fuel-oil could pass through the engine unburned. This is known as scavenging losses. Manufacturers have phased out sales of the majority of their traditional two-stroke engines to meet the federal 2006 OB/PWC exhaust emission standards. However, many of these engines still remain in the product mix as a result of emission credits.

One approach to minimizing scavenging losses in a two-stroke engine is through the use of direct fuel injection into the combustion chamber. The primary advantage of direct injection for a two-stroke is that the exhaust gases can be scavenged with fresh air and fuel can be injected into the combustion chamber after the exhaust port closes. As a result, hydrocarbon emissions, fuel economy, and oil consumption are greatly improved. Some users prefer two-stroke direct injection engines over four-stroke engines due to the higher power-to-weight ratio. Most of the two-stroke direct injection engines currently certified to the current OB/PWC emission standards have HC+NO X emissions levels somewhat higher than certified four-stroke engines. However, these engines also typically have lower CO emissions due to the nature of a heterogeneous charge. By injecting the fuel directly into a charge of air in the combustion chamber, localized areas of lean air/fuel mixtures are created where CO is efficiently oxidized.

OB/PWC manufacturers are also achieving lower emissions through the use of four-stroke engine designs. Because the combustion cycle takes place over two revolutions of the crankshaft, the fresh fuel-air charge can enter the combustion chamber after the exhaust valve is closed. This prevents scavenging losses. Manufacturers currently offer four-stroke marine engines with maximum engine power ranging from 1.5 to 224 kW. These engines are available with carburetion, throttle-body fuel injection, or multi-point fuel injection. Based on the certification data, whether the engine is carbureted or fuel-injected does not have a significant effect on combined HC+NO X emissions. For PWC engines, the HC+NO X levels are somewhat higher, primarily due to their higher power-to-weight ratio. CO emissions from PWC engines are similar to those for four-stroke outboard engines.

One manufacturer has certified two PWC engine models with oxidation catalysts. One engine model uses the oxidation catalyst in conjunction with a carburetor while the other uses throttle-body fuel injection. In this application, the exhaust system is shaped in such a way to protect the catalyst from water. The exhaust system is relatively large compared to the size of the engine. We are not aware of any efforts to develop a three-way catalyst system for PWC engines. We are also not aware of any development efforts to package a catalyst into the exhaust system of an outboard marine engine. In current designs, water and exhaust are mixed in the exhaust system to help cool the exhaust and tune the engine. Water can work its way up through the exhaust system because the lower end is under water and varying pressures in the exhaust stream can draw water against the prevailing gas flow. As discussed in Chapter 4 of the Draft RIA, saltwater can be detrimental to catalyst performance and durability. In addition, outboard engines are designed with lower units that are designed to be as thin as possible to improve the ability to turn the engine on the back of the boat and to reduce drag on the lowest part of the unit. This raises concerns about the placement and packaging of catalysts in the exhaust stream. Certainly, the success of packaging catalysts in sterndrive and inboard boats in recent development efforts (see Section III) suggests that catalysts may be feasible for outboards with additional effort. However, this has not yet been demonstrated and significant development efforts would be necessary. We request comment on the feasibility of using catalysts on OB and PWC engines.

(4) Regulatory Alternatives

We considered a level of 10 g/kW-hr HC+NO X for OB/PWC engines above 40 kW with an equivalent percent reduction below the proposed standards for engines below 40 kW. This second tier of standards could apply in the 2012 or later time frame. Such a standard would be consistent with currently certified emission levels from a significant number of four-stroke outboard engines. We have three concerns with adopting this second tier of OB/PWC standards. First, while some four-stroke engines may be able to meet a 10 g/kW-hr standard with improved calibrations, it is not clear that all engines could meet this standard without applying catalyst technology. As described in Section IV.H.3, we believe it is not appropriate to base standards in this rule on the use of catalysts for OB/PWC engines. Second, certification data for personal watercraft engines show somewhat higher exhaust emission levels, so setting the standard at 10 g/kW-hr would likely require catalysts for many models. Third, it is not clear that two-stroke engines would be able to meet the more stringent standard, even with direct injection and catalysts. These engines operate with lean air-fuel ratios, so reducing NO X emissions with any kind of aftertreatment is especially challenging.

Therefore, unlike the proposed standards for sterndrive and inboard engines, we are not adopting OB/PWC standards that will require the use of catalysts. Catalyst technology would be necessary for significant additional control of HC+NO X and CO emissions. While there is good potential for eventual application of catalyst technology to outboard and personal watercraft engines, we believe the technology is not adequately demonstrated at this point. Much laboratory and in-water work is needed.

(5) Our Conclusions

We believe the proposed emission standards can be achieved by phasing out conventional carbureted two-stroke engines in favor of four-stroke engines or two-stroke direct injection engines. The four-stroke engines or two-stroke direct injection engines are already widely available from marine engine manufacturers. One or both of these technologies are currently in place for the whole range of outboard and personal watercraft engines.

The proposed exhaust emission standards represent the greatest degree of emission control achievable in the contemplated time frame. While manufacturers can meet the proposed standards with their full product line in 2009, requiring full compliance with a nationwide program earlier, such as in the same year that California introduces new emission standards, would pose an unreasonable requirement. Allowing one year beyond California's requirements is necessary to allow manufacturers to certify their full product line to the new standards, not only those products they will make available in California. Also, as described above, we believe the catalyst technology that would be required to meet emission standards substantially more stringent than we are proposing has not been adequately demonstrated for outboard or personal watercraft engines. As such, we believe the proposed standards for HC+NO X and CO emissions are the most stringent possible in this rulemaking. More time to gain experience with catalysts on sterndrive and inboard engines and a substantial engineering effort to apply that learning to outboard and personal watercraft engines may allow us to pursue more stringent standards in a future rulemaking.

As discussed in Section X, we do not believe the proposed standards would have negative effects on energy, noise, or safety and may lead to some positive effects.

V. Small SI Engines

A. Overview

This section applies to new nonroad spark-ignition engines with rated power at or below 19 kW (“Small SI engines”). These engines are most often used in lawn and garden applications, typically by individual consumers; they are many times also used by commercial operators and they provide power for a wide range of other home, industrial, farm, and construction applications. The engines are typically air-cooled single-cylinder models, though Class II engines (with displacement over 225 cc) may have two or three cylinders, and premium models with higher power may be water-cooled.

We have already adopted two phases of exhaust standards for Small SI engines. The first phase of standards for nonhandheld engines generally led manufacturers to convert any two-stroke engines to four-stroke engines. These standards applied only to engines at the time of sale. The second phase of standards for nonhandheld engines generally led manufacturers to apply emission control technologies such as in-cylinder controls and improved carburetion, with the additional requirement that manufacturers needed to meet emission standards over a useful life period.

As described in Section I, this proposal is the result of a Congressional mandate that springs from the new California ARB standards. In 2003, the California ARB adopted more stringent standards for nonhandheld engines. These standards target emission reductions of approximately 35 percent below EPA's Phase 2 standards and are based on the expectation that manufacturers will use relatively low-efficiency three-way catalysts to control HC+NO X emissions. California ARB did not change the applicable CO emission standard. (80)

We are proposing to place these new regulations for Small SI engines in 40 CFR part 1054 rather than changing the current regulations in 40 CFR part 90. This gives us the opportunity for proposing updates to the details of our certification and compliance program that are consistent with the comparable provisions that apply to other engine categories and describe regulatory requirements in plain language. Most of the change in regulatory text provides improved clarity without changing procedures or compliance obligations. Where there is a change that warrants further attention, we describe the need for the change below.

B. Engines Covered by This Rule

This action includes proposed exhaust emission standards for new nonroad engines with rated power at or below 19 kW that are sold in the United States. The exhaust standards are for nonhandheld engines (Classes I and II). As described in Section I, handheld Small SI engines (Classes III, IV, and V) are also subject to standards, but we are not proposing changes to the level of exhaust emission standards for these engines. As described in Section VI, we are also proposing standards for controlling evaporative emissions from Small SI engines, including both handheld and nonhandheld engines. Certain of the provisions discussed in this Section V apply to both handheld and nonhandheld engines, as noted. Reference to both handheld and nonhandheld engines also includes marine auxiliary engines subject to the Small SI standards for that size engine.

(1) Engines Covered by Other Programs

The Small SI standards do not apply to recreational vehicles covered by EPA emission standards in 40 CFR part 1051. The regulations in part 1051 apply to off-highway motorcycles, snowmobiles, all-terrain vehicles, and high-speed offroad utility vehicles. However, if an amphibious vehicle with an engine at or below 19 kW is not subject to standards under part 1051, its engine would need to meet the Small SI standards. We also do not consider vehicles such as go karts or golf carts to be recreational vehicles because they are not intended for high-speed operation over rough terrain; these engines are also subject to Small SI standards. The Small SI standards do not apply to engines used in scooters or other vehicles that qualify as motor vehicles.

Consistent with the current regulation under 40 CFR part 90, Small SI standards apply to spark-ignition engines used as generators or for other auxiliary power on marine vessels, but not to marine propulsion engines. As described below, we are proposing more stringent exhaust emission standards that would apply uniquely to marine generator engines.

Engines with rated power above 19 kW are subject to emission standards under 40 CFR part 1048. However, we adopted a special provision under part 1048 allowing engines with total displacement at or below 1000 cc and with rated power at or below 30 kW to meet the applicable Small SI standards instead of the standards in part 1048. For any engines that are certified using this provision, any emission standards that we adopt for Class II engines and equipment in this rulemaking will also apply at the same time. Since these engines are not required to meet the Small SI standards we have not included them in the analyses associated with this proposal.

(2) Maximum Engine Power and Engine Displacement

Under the current regulations, rated power and power rating are not defined terms, which leaves manufacturers to determine their values. We are proposing to establish an objective approach to establishing “maximum engine power” under the regulations (see Section VII.C.6 and § 1054.140). This value has regulatory significance for Small SI engines only to establish whether or not engines are instead subject to Large SI standards. Determining maximum engine power is therefore relevant only for those engines that are approaching the line separating these two engine categories. We are proposing to require that manufacturers determine and report maximum engine power if their emission-data engine has a maximum modal power at or above 15 kW.

Similarly, the regulations depend on engine displacement to differentiate engines for the applicability of different standards. The regulations currently provide no objective direction or restriction regarding the determinations of engine displacement. We are proposing to define displacement as the intended swept volume of the engine to the nearest cubic centimeter, where the engine's swept volume is the product of the internal cross-section area of the cylinders, the stroke length, and the number of cylinders. As described Section VII.C.6 for maximum engine power, we are proposing that the intended swept volume must be within the range of the actual swept volumes of production engines considering normal production variability. If production engines are found to have different swept volumes, this should be noted in a change to the application for certification.

(3) Exempted or Excluded Engines

Under the Clean Air Act, engines that are used in stationary applications are not nonroad engines. States are generally preempted from setting emission standards for nonroad engines but this preemption does not apply to stationary engines. EPA recently adopted emission standards for stationary compression-ignition engines sold or used in the United States (71 FR 39154, July 11, 2006). In addition, EPA has proposed emission standards for stationary spark-ignition engines in a separate action (71 FR 33804, June 12, 2006). In pursuing emission standards for stationary engines, we have attempted to maintain consistency between stationary and nonroad requirements as much as possible. As explained in the proposal for stationary spark-ignition engines, since stationary spark-ignition engines below 19 kW are almost all sold into residential applications, we believe it is not appropriate to include requirements for owners or operators that would normally be part of a program for implementing standards for stationary engines. As a result, in that proposal we indicated that it is most appropriate to set exhaust and evaporative emission standards for stationary spark-ignition engines below 19 kW as if they were nonroad engines. This would allow manufacturers to make a single product that meets all applicable EPA standards for both stationary and nonroad applications.

The Clean Air Act provides for different treatment of engines used solely for competition. Rather than relying on engine design features that serve as inherent indicators of dedicated competitive use, we have taken the approach in other programs of more carefully differentiating competition and noncompetition models in ways that reflect the nature of the particular products. In the case of Small SI engines, we do not believe there are engine design features that allow us to differentiate between engines that are used solely for competition from those with racing-type features that are not used solely for competition. We are proposing that handheld and nonhandheld equipment with engines meeting all the following criteria would be considered to be used solely for competition, except in other cases where information is available indicating that engines are not used solely for competition:

  • The engine (or equipment in which the engine is installed) may not be displayed for sale in any public dealership;
  • Sale of the equipment in which the engine is installed must be limited to professional competitors or other qualified competitors;
  • The engine must have performance characteristics that are substantially superior to noncompetitive models;
  • The engines must be intended for use only in competition events sanctioned (with applicable permits) by a state or federal government agency or other widely recognized public organization, with operation limited to competition events, performance-record attempts, and official time trials.

Engine manufacturers would make their request for each new model year and we would deny a request for future production if there are indications that some engines covered by previous requests are not being used solely for competition. Competition engines are produced and sold in very small quantities so manufacturers should be able to identify which engines qualify for this exemption. We request comment on this approach to qualifying for a competition exemption. (See § 1054.620.)

In the rulemaking for recreational vehicles, we chose not to apply standards to hobby products by exempting all reduced-scale models of vehicles that were not capable of transporting a person (67 FR 68242, November 8, 2002). We are proposing to extend that same provision to handheld and nonhandheld Small SI engines. (See § 1054.5.)

In the rulemaking to establish Phase 2 emission standards, we adopted an exemption for handheld and nonhandheld engines used in rescue equipment. The regulation does not require any request, approval, or recordkeeping related to the exemption but we discovered while conducting the SBAR Panel described in Section VI.F that some companies are producing noncompliant engines under this exemption. We are proposing to keep this exemption but add several provisions to allow us to better monitor how it is used (see § 1054.625). We are proposing to keep the requirement that equipment manufacturers use certified engines if they are available. We are proposing to update this provision by adding a requirement that equipment manufacturers use an engine that has been certified to less stringent Phase 1 or Phase 2 standards if such an engine is available. We are proposing to explicitly allow engine manufacturers to produce engines for this exemption (with permanent labels identifying the particular exemption), but only if they have a written request for each equipment model from the equipment manufacturer. We are further proposing that the equipment manufacturer notify EPA of the intent to produce emergency equipment with exempted engines. Also, to clarify the scope of this provision, we are proposing to define “emergency rescue situations” as firefighting or other situations in which a person is retrieved from imminent danger. Finally, we are proposing to clarify that EPA may discontinue the exemption on a case-by-case basis if we find that engines are not used solely for emergency and rescue equipment or if we find that a certified engine is available to power the equipment safely and practically. We propose to apply the provisions of this section for new equipment built on or after January 1, 2009.

The current regulations also specify an exemption allowing individuals to import up to three nonconforming handheld or nonhandheld engines one time. We are proposing to keep this exemption with three adjustments (see § 1054.630). First, we are proposing to allow this exemption only for used equipment. Allowing importation of new equipment under this exemption is not consistent with the intent of the provision, which is to allow people to move to the United States from another country and continue to use lawn and garden equipment that may already be in the person's possession. Second, we are proposing to allow such an importation once every five years but require a statement that the person importing the exempted equipment has not used this provision in the preceding five years. The current regulations allow only one importation in a person's lifetime without including any way of making that enforceable. We believe the proposed combination of provisions represents an appropriate balance between preserving the enforceability of the exemption within the normal flow of personal property for people coming into the country. Third, we are proposing to no longer require submission of the taxpayer identification number since this is not essential for ensuring compliance.

C. Proposed Requirements

A key element of the proposed new requirements for Small SI engines is the more stringent exhaust emission standards for nonhandheld engines. We are also proposing several changes to the certification program that would apply to both handheld and nonhandheld engines. For example, we are proposing to clarify the process for selecting an engine family's useful life, which defines the length of time over which manufacturers' are responsible for meeting emission standards. We are also proposing several provisions to update the program for allowing manufacturers to use emission credits to show that they meet emission standards. The following sections describe the elements of this proposed rule.

The timing for implementation of the new exhaust emission standards is described below. Unless we specify otherwise, all the additional proposed regulatory changes would apply when engines are subject to the emission standards and the other provisions under 40 CFR part 1054. This would be model year 2012 for Class I engines and model year 2011 for Class II engines. For handheld engines, we propose to require compliance with the provisions of part 1054, including the certification provisions, starting in the 2010 model year. These proposed requirements apply to handheld engines unless stated otherwise. For convenience we refer to the handheld emission standards in part 1054 as Phase 3 standards even though the numerical values remain unchanged.

(1) Emission Standards

Extensive testing and dialogue with manufacturers and other interested parties has led us to a much better understanding of the capabilities and limitations of applying emission control technologies to Small SI nonhandheld engines. As described in the Draft RIA, we have collected a wealth of information related to the feasibility, performance characteristics, and safety implications of applying catalyst technology to these engines. We have concluded within the context of Clean Air Act section 213 that it is appropriate to propose emission standards that are consistent with those adopted by California ARB. We are proposing HC+NO X emission standards of 10.0 g/kW-hr for Class I engines starting in the 2012 model year, and 8.0 g/kW-hr for Class II engines starting in the 2011 model year (see § 1054.105). For both classes of nonhandheld engines we are proposing to maintain the existing CO standard of 610 g/kW-hr.

We are proposing to eliminate the defined subclasses for the smallest sizes of nonhandheld engines starting with implementation of the Phase 3 standards. Under the current regulations in part 90, Class I-A is designated for engines with displacement below 66 cc that may be used in nonhandheld applications. To address the technological constraints of these engines, all the current requirements for these engines are the same as for handheld engines. Class I-B is similarly designated for engines with displacement between 66 and 100 cc that may be used in nonhandheld applications. These engines are currently subject to a mix of provisions that result in an overall stringency that lies between handheld and nonhandheld engines. We are proposing to revise the regulations such that engines below 80 cc are subject to the Phase 3 handheld engine standards in part 1054 starting in the 2010 model year. We are also proposing to allow engines below 80 cc to be used without restriction in nonhandheld equipment. Identifying the threshold at 80 cc aligns with the California ARB program. For nonhandheld engines at or above 80 cc, we are proposing to treat them in every way as Class I engines. Based on the fact that it is more difficult for smaller displacement engines to achieve the same g/kW-hr emission level as larger displacement engines, it will be more of a challenge for manufacturers to achieve a 10.0 g/kW-hr HC+NO X level on these smallest Class I engines. However, for those engines unable to achieve the level of the proposed standards (either with or without a catalyst), manufacturers may elect to rely on emissions averaging to comply with emission standards. We believe all manufacturers producing engines formerly included in Class I-B also have a wide enough range of engine models that they should be able to generate sufficient credits to meet standards across the full product line. (See § 1054.101 and § 1054.801.)

We are proposing another slight change to the definition of handheld engines that may affect whether an engine is subject to handheld or nonhandheld standards. The handheld definition relies on a weight threshold for certain engines. As recently as 1999, we affirmed that the regulation should allow for the fact that switching to a heavier four-stroke engine to meet emission standards might inappropriately cause an engine to no longer qualify as a handheld engine (64 FR 5252, February 3, 1999). The regulation accordingly specifies that the weight limit is 20 kilograms for one-person augers and 14 kilograms for other types of equipment, based on the weight of the engine that was in place before applying emission control technologies. We believe it is impractical to base a weight limit on product specifications that have become difficult to establish. We are therefore proposing to increase each of the specified weight limits by 1 kilogram, representing the approximate additional weight related to switching to a four-stroke engine, and applying the new weight limit to all engines and equipment (see § 1054.801). We request comment on this adjustment to the handheld engine definition.

The regulations in part 90 allow manufacturers to rely on altitude kits to comply with emission requirements at high altitude. We are proposing to continue with this approach but to clarify that all nonhandheld engines must comply with Phase 3 standards without altitude kits at barometric pressures above 94.0 kPa, which corresponds to altitudes up to about 2,000 feet above sea level (see § 1054.115). This would ensure that all areas east of the Rocky Mountains and most of the populated areas in Pacific Coast states would have compliant engines without depending on engine modifications. This becomes increasingly important as we anticipate manufacturers relying on technologies that are sensitive to controlling air-fuel ratio for reducing emissions. Engine manufacturers must identify the altitude ranges for proper engine performance and emission control that are expected with and without the altitude kit in the owners manual. The owners manual must also state that operating the engine with the wrong engine configuration at a given altitude may increase its emissions and decrease fuel efficiency and performance. See Section V.E.5 for further discussion related to the deployment of altitude kits where the manufacturers rely on them for operation at higher altitudes.

We are proposing a slightly different approach for handheld engines with respect to altitude. Since we are not adopting more stringent exhaust emission standards, we believe it is appropriate to adopt provisions that are consistent with current practice at this time. We are therefore proposing to require handheld engines to comply with the current standards without altitude kits at barometric pressures above 96.0 kPa, which would allow for testing in most weather conditions at all altitudes up to about 1,100 feet above sea level.

Spark-ignition engines used for marine auxiliary power are covered by the same regulations as land-based engines of the same size. However, the marine versions of Small SI engines are able to make use of ambient water for enhanced cooling of the engine and exhaust system. Exhaust systems for these engines are water-jacketed to maintain low surface temperatures to minimize the risk of fires on boats where the generator is often installed in small compartments within the boat. Recently, auxiliary marine engine manufacturers have developed advanced technology in an effort to improve fuel consumption and CO emission rates for marine generators. This advanced technology includes the use of electronic fuel injection and three-way catalysts. As a result, manufacturers are offering new products with more than a 99 percent reduction in CO and have expressed their intent to offer only these advanced technology engines in the near future. They have stated that these low CO engines are due to market demand. We are proposing a CO standard of 5.0 g/kW-hr CO for marine generator engines to reflect the recent trend in marine generator engine design (see § 1054.105). For other auxiliary marine engines, we are proposing the same CO emission limits as for land-based engines. We believe this cap is necessary to prevent backsliding in CO emissions that could occur if new manufacturers were to attempt to enter the market with cheaper, high-CO designs. See Section II for a discussion of air quality concerns related to CO emissions. We request comment on the appropriateness of setting a separate standard for marine auxiliary engines and on the most appropriate level of such a standard.

At this time, we are planning to continue the current regulatory approach for wintertime engines (e.g., engines used exclusively to power equipment such as snowthrowers and ice augers). Under this proposal, the HC+NO X exhaust emission standards would be optional for wintertime engines. However, if a manufacturer chooses to certify its wintertime engines to such standards, those engines would be subject to all the requirements as if the optional standards were mandatory. We are adding a definition of wintertime engines to clarify which engines qualify for these special provisions. We are also proposing to require that manufacturers identify these as wintertime engines on the emission control information label to prevent someone from inappropriately installing these engines (either new or used) in equipment that would not qualify for the wintertime exemption.

All engines subject to standards must continue to control crankcase emissions.

(2) Useful Life

The Phase 2 standards for Small SI engines included the concept that manufacturers are responsible for meeting emission standards over a useful life period. The useful life defines the design target for ensuring the durability of emission controls under normal in-use operation for properly maintained engines. Given the very wide range of engine applications, from very low-cost consumer products to commercial models designed for continuous operation, we determined that a single useful life value for all products, which is typical for other engine programs, was not appropriate for Small SI engines. We proposed at that time to determine the useful life for an engine family based on specific criteria, but commenters suggested that such a requirement was overly rigid and unnecessary. The final rule instead specified three alternative useful life values, giving manufacturers the responsibility to select the useful life that was most appropriate for their engines and the corresponding types of equipment. The preamble to the final rule expressed a remaining concern that manufacturers might not select the most appropriate useful life value, both for ensuring effective in-use emission control and for maintaining the integrity of emission-credit calculations. The preamble also stated our intent to periodically review the manufacturers' decisions to determine whether modifications to these rules are appropriate.

The regulations in § 90.105 provide a benchmark for determining the appropriate useful life value for an engine family. The regulations direct manufacturers to select the useful life value that “most closely approximates the expected useful lives of the equipment into which the engines are anticipated to be installed.” To maintain a measure of accountability, we included a requirement that manufacturers document the basis for their selected useful life values. The suggested data included, among other things: (1) Surveys of the life spans of the equipment in which the subject engines are installed; (2) engineering evaluations of field-aged engines to ascertain when engine performance deteriorates to the point where utility and/or reliability is impacted to a degree sufficient to necessitate overhaul or replacement; and (3) failure reports from engine customers. These regulatory provisions identify the median time to retirement for in-use equipment as the marker for defining the useful life period. This allows manufacturers to consider that equipment models may fail before the engine has reached the point of failure and that engines may be installed in different types of equipment with varying usage patterns. Engines used in different types of equipment, or even engines used in the same equipment models used by different operators, may experience widely varying usage rates. The manufacturer is expected to make judgments that take this variability into account when estimating the median life of in-use engines and equipment.

Several manufacturers have made a good faith effort to select appropriate useful life values for their engine families, either by selecting only the highest value, or by selecting higher values for families that appear more likely to be used in commercial applications. At the same time, we have observed several instances in which engine models are installed in commercial equipment and marketed as long-life products but are certified to the minimum allowable useful life period. As described in the Phase 2 final rule, we are considering modifications to the regulations to address this recurring problem.

After assessing several ideas, we are proposing an approach that preserves the fundamental elements of the current provisions related to useful life but clarifies and enhances its implementation (see § 1054.107). Manufacturers will continue to select the most appropriate useful life from the same nominal values to best match the expected in-use lifetime of the equipment into which the engines in the engine family will be installed. Manufacturers must continue to document the information supporting their selected useful life. We are considering three approaches to address remaining concerns with the process of selecting useful life values.

First, for manufacturers not selecting the highest available nominal value for useful life, we would expect to routinely review the information to confirm that it complies with the regulation. Where our review indicates that the selected useful life may not be appropriate for an engine family, we may request further justification. If we determine from available information that a longer useful life is appropriate, the manufacturer must either provide additional justification or select a longer useful life for that engine family. We would encourage manufacturers to use the proposed provisions related to preliminary approval in § 1054.210 if there is any uncertainty related to the useful life selection. We would rather work to establish this together early in the certification process rather than reviewing a completed application for certification to evaluate whether the completed durability demonstration is sufficient.

Second, we believe it is appropriate to modify the regulations to allow nonhandheld engine manufacturers to select a useful life value that is longer than the three specified nominal values. Manufacturers may choose to do this for the marketing advantage of selling a long-life product or they may want to generate emission credits that correspond to an expected lifetime that is substantially longer than we would otherwise allow. We are proposing to allow manufacturers to select longer useful life values in 100-hour increments. Durability testing for certification would need to correspond to the selected useful life period. We have considered the possibility that a manufacturer might overstate an engine family's useful life to generate emission credits while knowing that engines may not operate that long. We believe the inherent testing burden and compliance liability is enough to avoid such a problem, but we are specifying maximum values corresponding with the applicable useful life for comparable diesel engines or Large SI engines. We are not proposing to allow for longer useful life values for handheld engines.

We are also proposing to require that engines and equipment be labeled to identify the applicable useful life period. The current requirement allows manufacturers to identify the useful life with code letters on the engine's emission control information label, with the numerical value of the useful life spelled out in the owners manual. We believe it is important for equipment manufacturers and consumers to be able to find an unambiguous designation showing the manufacturer's expectations about the useful life of the engine. There has also been some interest in using descriptive terms to identify the useful life on the label. We believe any terminology would communicate less effectively than the numerical value of the useful life. However, we request comment on allowing or requiring manufacturers to also include descriptive terms. We believe it would be most appropriate to characterize the three useful life values in increasing order as Residential, Premium Residential (or General Purpose), and Commercial. Any useful life values beyond the three nominal values would appropriately be identified as Heavy Commercial. Handheld engine manufacturers have suggested using the terms Light Use, Medium Use, and Heavy Use to characterize the three useful life categories applicable to handheld engines.

In all of our other engine programs, useful life is defined in terms of years of use or extent of engine operation, whichever comes first. Under the current regulations, manufacturers are responsible for meeting emission standards for any in-use engine that is properly maintained and used over the full useful life period. Since the useful life is defined in operating hours without regard to calendar years, some engines that accumulate operating hours very slowly could remain within the useful life period for ten years or more. We request comment regarding the appropriateness of revising the useful life to limit the useful life period to five years or the specified number of operating hours, whichever comes first. Adding a five-year limit on the useful life would not change the certification process.

(3) Averaging, Banking, and Trading

EPA has included averaging, banking, and trading (ABT) programs in almost all of its recent mobile source emissions control programs. EPA's existing Phase 2 regulations for Small SI engines include an exhaust ABT program (40 CFR 90.201 through 90.211). We propose to adopt an ABT program for the Phase 3 HC+NO X exhaust emission standards that is similar to the existing program (see part 1054, subpart H in the proposed regulations). The proposed exhaust ABT program is intended to enhance the ability of engine manufacturers to meet the emission standards for the proposed model years. The proposed exhaust ABT program is also structured to avoid delay of the transition to the new exhaust emission controls. As described in Section VI, we are proposing a separate evaporative ABT program for fuel tanks used in Small SI equipment (and for fuel lines used in handheld equipment). We are proposing that credits cannot be exchanged between the exhaust ABT program and the evaporative ABT program.

The exhaust ABT program has three main components. Averaging means the exchange of emission credits between engine families within a given engine manufacturer's product line for a specific model year. Engine manufacturers divide their product line into “engine families” that are comprised of engines expected to have similar emission characteristics throughout their useful life. Averaging allows a manufacturer to certify one or more engine families at levels above the applicable emission standard, but below a set upper limit. This level then becomes the applicable standard for all of the engines in that engine family, for purposes of certification, in-use testing, and the like. However, the increased emissions must be offset by one or more engine families within that manufacturer's product line that are certified below the same emission standard, such that the average standard from all the manufacturer's engine families, weighted by engine power, regulatory useful life, and production volume, is at or below the level of the emission standard. Banking means the retention of emission credits by the engine manufacturer for use in future model year averaging or trading. Trading means the exchange of emission credits between engine manufacturers which can then be used for averaging purposes, banked for future use, or traded to another engine manufacturer.

Because we are not proposing any change in the general equation under which emission credits are calculated, EPA is proposing to allow manufacturers to use Phase 2 credits generated under the part 90 ABT program for engines that are certified in the Phase 3 program under part 1054, within the limits described below. As with the existing exhaust ABT program for Phase 2 engines in part 90, we are proposing that engines sold in California which are subject to the California ARB standards would not be included in the proposed exhaust ABT program because they are subject to California's requirements and not EPA's requirements. Furthermore, even though we are not proposing new exhaust emission standards for handheld engines, the handheld engine regulations are migrating to part 1054. Therefore, handheld engines will be included in the proposed ABT program under part 1054 with one change in the overall program as described below.

Under an ABT program, averaging is allowed only between engine families in the same averaging set, as defined in the regulations. For the exhaust ABT program, we are proposing to separate handheld engines and nonhandheld engines into two distinct averaging sets starting with the 2011 model year. Under the proposed program, credits may generally be used interchangeably between Class I and Class II engine families, with a limited restriction on Phase 3 credits during model years 2011 and 2012 as noted below. Likewise, credits will be able to be used interchangeably between all three handheld engine classes (Classes III, IV, and V). Because the Phase 2 exhaust ABT program allowed exchange across all engine classes (i.e., allowing exchanges between handheld engines and nonhandheld engines), manufacturers using credits beginning with the 2011 model year would need to show that the credits were generated within the allowed category of engines. For many companies, especially those in the handheld market, this will potentially be straightforward since they are primarily in the handheld market. For companies that have a commingled pool of emission credits generated by both handheld engines and nonhandheld engines, this will take some more careful accounting. Because manufacturers are aware of this already at the time of this proposal, keeping records to distinguish handheld credits and nonhandheld credits will be relatively straightforward for 2006 and later model years.

We are proposing two exceptions to the provision restricting credit exchanges between handheld engines and nonhandheld engines. Currently, some companies that are primarily nonhandheld engine manufacturers also sell a relatively limited number of handheld engines. Under the Phase 2 program, these engine manufacturers can use credits from nonhandheld engines to offset the higher emissions of their handheld engines. Because we are not proposing new exhaust requirements for handheld engines, we are proposing to address this existing practice by specifying that an engine manufacturer may use emission credits from their nonhandheld engines for their handheld engines under the following conditions. A manufacturer may use credits from their nonhandheld engines for their handheld engines but only where the handheld engine family is certified in 2008 and later model years without any design changes from the 2007 model year and the FEL of the handheld engine family does not increase above the level that applied in the 2007 model year unless such an increase is based on emission data from production engines. We believe this allows for engine manufacturers to continue producing these handheld engines for use in existing handheld models of low-volume equipment applications while preventing new high-emitting handheld engine families from entering the market through the use of nonhandheld engine credits. As discussed below, we are proposing to prohibit the use of Phase 2 nonhandheld engine credits after 2013 to demonstrate compliance with the Phase 3 nonhandheld engine standards. For this reason, we request comment on whether we should allow only Phase 3 nonhandheld engine credits to be used under this handheld engine credit provision after 2013 as well.

A second exception to the provision restricting credit exchanges between handheld engines and nonhandheld engines arises because of our proposed handling of engines below 80cc. Under the proposed Phase 3 program, all engines below 80cc are considered handheld engines for the purposes of the emission standards. However, a few of these engines are used in nonhandheld applications. Therefore, EPA will allow a manufacturer to generate nonhandheld ABT credits from engines below 80cc for those engines a manufacturer has determined are used in nonhandheld applications. (The credits would be generated against the applicable handheld engine standard.) These nonhandheld credits could be used within the Class I and Class II engine classes to demonstrate compliance with the Phase 3 exhaust standards (subject to applicable restrictions). The credits generated by engines below 80cc used in handheld applications could only be used for other handheld engines.

Under an ABT program, a manufacturer establishes a “family emission limit” (FEL) for each participating engine family. This FEL may be above or below the standard. The FEL becomes the enforceable emissions limit for all the engines in that family for purposes of compliance testing. FELs that are established above the standard may not exceed an upper limit specified in the ABT regulations. For nonhandheld engines we are proposing FEL caps to prevent the sale of very high-emitting engines. Under the proposed FEL cap, manufacturers would need to establish FELs at or below the levels of the Phase 2 HC+NO X emission standards of 16.1 g/kW-hr for Class I engines and 12.1 g/kW-hr for Class II engines. (The Phase 3 FEL cap for Class I engines with a displacement between 80 cc and 100 cc would be 40.0 g/kW-hr since these engines would have been Class I-B engines under the Phase 2 regulations and subject to this higher level.) For handheld engines, where we are not proposing new exhaust emission standards, we are maintaining the FEL caps as currently specified in the part 90 ABT regulations.

For nonhandheld engines we are proposing two special provisions related to the transition from Phase 2 to Phase 3 standards. First, we are proposing incentives for manufacturers to produce and sell engines certified at or below the Phase 3 standards before the standards are scheduled to be implemented. Second, we are proposing provisions to allow the use of Phase 2 credits for a limited period of time under specific conditions. The following discussions describes each of these provisions in more detail for Class I engines and Class II engines separately.

For Class I, engine manufacturers could generate early Phase 3 credits by producing engines with an FEL at or below 10.0 g/kW-hr prior to 2012. These early Phase 3 credits would be calculated and categorized into two distinct types of credits, Transitional Phase 3 credits and Enduring Phase 3 credits. For engines certified with an FEL at or below 10.0 g/kW-hr, the manufacturer would earn Transitional Phase 3 credits. The Transitional Phase 3 credits would be calculated based on the difference between 10.0 g/kW-hr and 15.0 g/kW-hr. (The 15.0 g/kW-hr level is the production-weighted average of Class I FEL values under the Phase 2 program.) Manufacturers could use the Transitional Phase 3 credits from Class I engines in 2012 through 2014 model years. For engines certified with an FEL below 10.0 g/kW-hr, manufacturers would earn Enduring Phase 3 credits in addition to the Transitional Phase 3 credits described above. The Enduring Phase 3 credits would be calculated based on the difference between the FEL for the engine family and 10.0 g/kW-hr (i.e., the applicable Phase 3 standard). The Enduring Phase 3 credits could be used once the Phase 3 standards are implemented without the model year restriction noted above for Transitional Phase 3 credits.

For Class I, engine manufacturers may use Phase 2 credits generated by nonhandheld engines for the first two years of the Phase 3 standards (i.e., model years 2012 and 2013) under certain conditions. The manufacturer must first use all of its available Phase 3 credits to demonstrate compliance with the Phase 3 standards. This would include all early Phase 3 credits (Transitional and Enduring) as well as all other Phase 3 credits, subject to the cross-class credit restriction noted below which applies prior to model year 2013. If these Phase 3 credits are sufficient to demonstrate compliance, the manufacturer may not use Phase 2 credits. If these Phase 3 credits are insufficient to demonstrate compliance, the manufacturer could use Phase 2 credits to a limited degree (under the conditions described below) to cover the remaining amount of credits needed to demonstrate compliance.

The maximum number of Phase 2 HC+NO X exhaust emission credits a manufacturer could use for their Class I engines would be calculated based on the characteristics of Class I engines produced during the 2007, 2008, and 2009 model years. For each of those years, the manufacturer would calculate a Phase 2 credit allowance using the ABT credit equation and inserting 1.6 g/kW-hr for the “Standard—FEL” term, and basing the rest of the values on the total production of Class I engines, the production-weighted power for all Class I engines, and production-weighted useful life value for all Class I engines produced in each of those years. Manufacturers would not include their wintertime engines in the calculations unless the engines are certified to meet the otherwise applicable HC+NO X emission standard. The maximum number of Phase 2 HC+NO X exhaust emission credits a manufacturer could use for their Class I engines (calculated in kilograms) would be the average of the three values calculated for model years 2007, 2008, and 2009. The calculation described above allows a manufacturer to use Phase 2 credits to cover a cumulative shortfall over the first two years for their Class I engines of 1.6 g/kW-hr above the Phase 3 standard.

The Phase 2 credit allowance for Class I engines could be used all in 2012, all in 2013, or partially in either or both model year's ABT compliance calculations. Because ABT compliance calculations must be done annually, the manufacturer will know its 2013 remaining allowance based on its 2012 calculation. For example, if a manufacturer uses all of its Phase 2 credit allowance in 2012, it will have no use of Phase 2 credits for 2013. Conversely, if a manufacturer doesn't use any Phase 2 credits in 2012, it will have all of its Phase 2 credit allowance available for use in 2013. And of course, if a manufacturer uses less than its calculated total credits based on the 1.6 g/kW-hr limit in 2012, the remainder would be available for use in 2013. This provision allows for some use of Phase 2 emission credits to address the possibility of unanticipated challenges in reaching the Phase 3 emission levels in some cases or selling Phase 3 compliant engines early nationwide, without creating a situation that would allow manufacturers to substantially delay the introduction of Phase 3 emission controls.

For Class II, engine manufacturers could generate early Phase 3 credits by producing engines with an FEL at or below 8.0 g/kW-hr prior to 2011. These early Phase 3 credits would be calculated and categorized as Transitional Phase 3 credits and Enduring Phase 3 credits. For engines certified with an FEL at or below 8.0 g/kW-hr, the manufacturer would earn Transitional Phase 3 credits. The Transitional Phase 3 credits would be calculated based on the difference between 8.0 g/kW-hr and 11.0 g/kW-hr. (The 11.0 g/kW-hr level is the production-weighted average of Class II FEL values under the Phase 2 program.) Manufacturers could use the Transitional Phase 3 credits from Class II engines in 2011 through 2013 model years. For engines certified with an FEL below 8.0 g/kW-hr, manufacturers would earn Enduring Phase 3 credits in addition to the Transitional Phase 3 credits described above. The Enduring Phase 3 credits would be calculated based on the difference between the FEL for the engine family and 8.0 g/kW-hr (i.e., the applicable Phase 3 standard). The Enduring Phase 3 credits could be used once the Phase 3 standards are implemented without the model year restriction noted above for Transitional Phase 3 credits.

For Class II, engine manufacturers may use Phase 2 credits generated by nonhandheld engines for the first three years of the Phase 3 standards (i.e., model years 2011, 2012 and 2013) under certain conditions. The manufacturer must first use all of its available Phase 3 credits to demonstrate compliance with the Phase 3 standards. This would include all early Phase 3 credits (Transitional and Enduring) as well as all other Phase 3 credits, subject to the cross-class credit restriction noted below which applies prior to model year 2013. If these credits are sufficient to demonstrate compliance, the manufacturer may not use Phase 2 credits. If these Phase 3 credits are insufficient to demonstrate compliance, the manufacturer could use Phase 2 credits to a limited degree (under the conditions described below) to cover the remaining amount of credits needed to demonstrate compliance.

The maximum number of Phase 2 HC+NO X exhaust emission credits a manufacturer could use for their Class II engines would be calculated based on the characteristics of Class II engines produced during the 2007, 2008, and 2009 model years. For each of those years, the manufacturer would calculate a Phase 2 credit allowance using the ABT credit equation and inserting 2.1 g/kW-hr for the “Standard—FEL” term, and basing the rest of the values on the total production of Class II engines, the production-weighted power for all Class II engines, and production-weighted useful life value for all Class II engines produced in each of those years. Manufacturers would not include their wintertime engines in the calculations unless the engines are certified to meet the otherwise applicable HC+NO X emission standard. The maximum number of Phase 2 HC+NO X exhaust emission credits a manufacturer could use for their Class II engines (calculated in kilograms) would be the average of the three values calculated for model years 2007, 2008, and 2009. The calculation described above allows a manufacturer to use Phase 2 credits to cover a cumulative shortfall over the first three years for their Class II engines of 2.1 g/kW-hr above the Phase 3 standard.

The Phase 2 credit allowance for Class II engines could be used all in 2011, all in 2012, all in 2013, or partially in any or all three model year's ABT compliance calculations. Because ABT compliance calculations must be done annually, the manufacturer will know its remaining allowance based on its previous calculations. For example, if a manufacturer uses all of its Phase 2 credit allowance in 2011, it will have no Phase 2 credits for 2012 or 2013. However, if a manufacturer uses less than its calculated total credits based on the 2.1 g/kW-hr limit in 2011, it will have the remainder of its allowance available for use in 2012 and 2013. This provision allows for some use of Phase 2 emission credits to address the possibility of unanticipated challenges in reaching the Phase 3 emission levels in some cases or selling Phase 3 engines nationwide, without creating a situation that would allow manufacturers to substantially delay the introduction of Phase 3 emission controls.

Engine manufacturers have raised concerns that despite all of their planning, they may not be able to accurately predict their use of credits at the beginning of the year. They are concerned that they may end up in a credit deficit situation if sales do not materialize as projected, potentially needing to use more Phase 2 credits than they have available to them. In order to prevent such a non-compliance situation from occurring, manufacturers have suggested that we allow manufacturers to carry a limited credit deficit during the initial years of the Phase 3 program. EPA has allowed such provisions in other rules, including deficit provisions for handheld engines in the Phase 2 regulations in which the manufacturer was required to cover the deficit in the next four model years with a penalty applied that increased over time depending how soon the deficit was repaid. EPA requests comment on providing some type of credit deficit provisions for the Phase 3 exhaust standards for nonhandheld engines including what limits and penalties would be appropriate if such provisions were adopted.

To avoid the use of credits to delay the introduction of Phase 3 technologies, we are also proposing that manufacturers may not use Phase 3 credits from Class I engines to demonstrate compliance with Class II engines in the 2011 and 2012 model years. Similarly, we are proposing that manufacturers may not use Phase 3 credits from Class II engines to demonstrate compliance with Class I engines in the 2012 model year. The 1.6 kW-hr and 2.1 g/kW-hr allowances discussed above may not be traded across engine classes or among manufacturers.

We are proposing to make two additional adjustments related to the exhaust ABT program for engines subject to the new emission standards. As with all our other emission control programs, we are proposing that engine manufacturers identify an engine's FEL on the emission control information label (see § 1054.135). This is important for readily establishing the enforceable level of emission control that applies for each engine. Recent experience has shown that this is also necessary in cases where the engine's build date is difficult to determine. We are proposing to require that lowering an FEL after the start of production may occur only if the manufacturer has emission data from production engines justifying the lower FEL (see § 1054.225). This prevents manufacturers from making FEL changes late in the model year to generate more emission credits (or use fewer emission credits) when there is little or no opportunity to verify whether the revised FEL is appropriate for the engine family. This provision is common in EPA's emission control programs for other engine categories. We are also proposing that the any revised FEL can apply only for engines produced after the FEL change. This is necessary to prevent manufacturers from recalculating emission credits in a way that leaves no way of verifying that the engines produced prior to the FEL change met the applicable requirements. It is also consistent with the proposal to require identification of the FEL on the emission control information label. Manufacturers have raised concerns that this approach sets up an inappropriate incentive to set FELs with the smallest possible compliance margin to avoid foregone emission credits in case production-line testing shows that actual emission levels were below that represented by the emission-data engine for certification. However, it is not clear why manufacturers should not perform sufficient testing early in the model year to be confident that the FEL is properly matched to the emission levels from production engines. Nevertheless, we request comment on any appropriate methods to use the results of production-line testing to revise FELs retroactively such that the past production is clearly compliant with respect to the modified FEL. An important element of our compliance program involves the responsibility to meet standards with production-line testing, not just with a backward-looking calculation, but with a real-time evaluation at the point of testing. We would therefore not consider allowing revised FELs to apply for more than the first half of the production for a given model year.

As described below in Section V.E.3., we are proposing that a limited number of Class II engines certified by engine manufacturers with a catalyst as Phase 3 engines, may be installed by equipment manufacturers in equipment without the catalyst. (This would only be allowed when the engine is shipped separately from the exhaust system under the provisions described in Section V.E.2.) Because engine manufacturers may be generating emission credits from these catalyst-equipped engines, EPA is concerned that engine manufacturers could be earning exhaust ABT credits for engines that are sold but never have the catalyst installed. In discussions with EPA, engine manufacturers expressed concern about the difficulty of tracking the eventual use of these engines by equipment manufacturers (i.e., whether the catalyst-equipped exhaust system was installed or not). Therefore, instead of requiring engine manufacturers to track whether equipment manufacturers install the catalyst-equipped exhaust system into the equipment, EPA is proposing for model years 2011 through 2014 that all Class II engine families which are offered for sale under the separate shipment provisions must decrease the number of ABT credits generated by the engine family by 10 percent. This adjustment would only apply to engines generating credits because those are the engines most likely to be equipped with catalysts. We believe the 10 percent decrease from credit generating engines should provide an emission adjustment commensurate with the potential use of the equipment manufacturer flexibility provisions described in Section V.E.3. We request comment on this approach to addressing the concern related to engines involving delegated-assembly provisions. In particular, we request comment regarding the amount of the credit adjustment, and whether there might be alternative approaches that would address this concern.

For all emission credits generated by engines under the Phase 3 exhaust ABT program, we are proposing an unlimited credit life. We consider these emission credits to be part of the overall program for complying with Phase 3 standards. Given that we may consider further reductions beyond the Phase 3 standards in the future, we believe it will be important to assess the ABT credit situation that exists at the time any post-Phase 3 standards are considered. We will need to set such future emission standards based on the statutory direction that emission standards must represent the greatest degree of emission control achievable, considering cost, safety, lead time, and other factors. Emission credit balances will be part of the analysis for determining the appropriate level and timing of new standards. If we were to allow the use of Phase 3 credits for meeting post-Phase 3 standards, we may, depending on the level of Phase 3 credit banks, need to adopt emission standards at more stringent levels or with an earlier start date than we would absent the continued or limited use of Phase 3 credits. Alternatively, we could adopt future standards without allowing the use of Phase 3 credits. The proposal described in this notice describes a middle path in which we allow the use of Phase 2 credits to meet the Phase 3 standards, with provisions that limit the extent and timing of using these credits.

We are requesting comment on one particular issue regarding credit life. As proposed, credits earned under the Phase 3 exhaust ABT program would have an unlimited lifetime. This could result in a situation where credits generated by an engine sold in a model year are not used until many years later when the engines generating the credits have been scrapped and are no longer part of the fleet. EPA believes there may be value to limiting the use of credits to the period that the credit-generating engines exist in the fleet. For this reason, EPA requests comment on limiting the lifetime of the credits generated under the Phase 3 exhaust ABT program to five years. The five-year period is intended to be similar to the typical median life of Small SI equipment and is consistent with the contemplated specification for defining the useful life in years in addition to operating hours (see Section V.C.2 for more information).

D. Testing Provisions

The test procedures provide an objective measurement for establishing whether engines comply with emission standards. The following sections describe a variety of proposed changes to the current test procedures. Except as identified in the following sections, we are proposing to preserve the testing-related regulatory provisions that currently apply under 40 CFR part 90. Note that we will approve any appropriate alternatives, deviations, or interpretations of the new testing requirements on a case-by-case basis rather than operating under any presumption that any such judgments made under the Phase 1 or Phase 2 programs will continue to apply.

(1) Migrating Procedures to

Manufacturers have been using the procedures in 40 CFR part 90 to test their engines for certification of Phase 1 and Phase 2 engines. As part of a much broader effort, we have adopted comprehensive testing specifications in 40 CFR part 1065 that are intended to serve as the basis for testing all types of engines. The procedures in part 1065 include updated information reflecting the current state of available technology. We are proposing to apply the procedures in part 1065 to nonhandheld engines starting with the applicability of the Phase 3 standards as specified in 40 CFR part 1054, subpart F. As described in Section IX, the procedures in part 1065 identifies new types of analyzers and updates a wide range of testing specifications, but leaves intact the fundamental approach for measuring exhaust emissions. There is no need to shift to the part 1065 procedures for nonhandheld engines before the proposed Phase 3 standards apply. See Section IX for additional information.

We are not proposing new exhaust emission standards for handheld engines so there is no natural point in time for shifting to the part 1065 procedures. For the reasons described above and in Section IX, we nevertheless believe handheld engines should also use the part 1065 procedures for measuring exhaust emissions. We propose to require manufacturers to start using the part 1065 procedures in the 2012 model year. Manufacturers would be allowed to continue certifying engines using carryover data generated under the part 90 procedures, but any new certification testing would be subject to the part 1065 procedures.

Engine manufacturers have raised one issue related to the specified test procedures in part 1065. The calculations for determining mass emissions depend on a simplifying assumption that combustion is at stoichiometry or is in fuel-lean environment. This is not the case for many Small SI engines. The equation with the simplifying assumption does not take into account the equilibrium reaction between hydrogen and water. As a result, engines with fuel-rich operation would have detectable hydrogen concentrations in the exhaust, which would cause the analyzers to have a reading for hydrocarbon emissions that is somewhat higher than the actual value. To the extent there is a concern, we believe it would always be appropriate to rely on the reference equations without the simplifying assumptions made for the equations published in part 1065. We request comment on this approach to measurements from Small SI engines.

(2) Duty Cycle

The regulations under part 90 currently specify duty cycles for testing engines for exhaust emissions. The current requirements specify how to control speeds and loads and describe the situations in which the installed engine governor controls engine speed. We are proposing to extend these provisions to testing under the new standards with a few adjustments described below. For engines equipped with an engine speed governor, the current regulations at 40 CFR 90.409(a)(3) state:

For Phase 2 Class I, Phase 2 Class I-B, and Phase 2 Class II engines equipped with an engine speed governor, the governor must be used to control engine speed during all test cycle modes except for Mode 1 or Mode 6, and no external throttle control may be used that interferes with the function of the engine's governor; a controller may be used to adjust the governor setting for the desired engine speed in Modes 2-5 or Modes 7-10; and during Mode 1 or Mode 6 fixed throttle operation may be used to determine the 100 percent torque value.

In addition the current regulations at 40 CFR 90.410(b) state:

For Phase 2 Class I, I-B, and II engines equipped with an engine speed governor, during Mode 1 or Mode 6 hold both the specified speed and load within ± five percent of point, during Modes 2-3, or Modes 7-8 hold the specified load with ± five percent of point, during Modes 4-5 or Modes 9-10, hold the specified load within the larger range provided by ± 0.27 Nm (± 0.2 lb-ft), or ± ten (10) percent of point, and during the idle mode hold the specified speed within ± ten percent of the manufacturer's specified idle engine speed (see Table 1 in Appendix A of this subpart for a description of test Modes).

Manufacturers have raised some questions about the interpretation of these provisions. Our intent is that the current requirements specify that testing be conducted as follows:

  • Full-load testing (Mode 1) occurs at wide-open throttle to maintain engines at rated speed, which is defined as the speed at which the engine's maximum power occurs (as declared by the manufacturer).
  • Idle testing (Mode 6) occurs at the manufacturer's specified idle speed with a maximum load of five percent of maximum torque. The regulation allows adjustment to control speeds that are different than would be maintained by the installed governor.
  • The installed governor must be used to control engine speed for testing at all modes with torque values between idle and full-load modes. The regulation allows adjustments for nominal speed settings that are different than would be maintained by the installed governor without modification.

We are proposing adjustments to the current regulatory requirements in 40 CFR part 90 (see § 1054.505). Since each of these proposed adjustments may have some effect on measured emission levels, we believe it is appropriate to implement these changes concurrent with the Phase 3 standards. To the extent the proposed adjustments apply to handheld engines, we believe it is appropriate to apply the changes for new testing with 2012 and later model year engines for the reasons described above for adopting the test procedures in part 1065.

First, we are proposing to require engine speed during the idle mode to be controlled by the engine's installed speed governor. We believe there is no testing limitation that would call for engine operation at idle to depart from the engine's governed speed. Allowing manufacturers to arbitrarily declare an idle speed only allows manufacturers to select an idle speed that gives them an advantage in achieving lower measured emission results, but not in a way that corresponds to in-use emission control. We are also aware that some production engines have a user-selectable control for selecting high-speed or low-speed idle (commonly identified as “rabbit/turtle” settings). We believe this parameter adjustment may have a significant effect on emissions that should be captured in the certification test procedure. As a result, we are proposing a requirement that manufacturers conduct testing with user-selectable controls set to keep the engine operating at low-speed idle if any production engines in the engine family have such an option.

Second, we are proposing an option in which manufacturers would test their nonhandheld engines using a ramped-modal version of the specified duty cycle, as described in Section IX. We expect this testing to be equivalent to the modal testing described above but would have advantages for streamlining test efforts by allowing for a single result for the full cycle instead of relying on a calculation from separate modal results. Under the proposal we would allow manufacturers the option to select this type of testing. EPA's testing would generally involve ramped-modal testing only if the engine manufacturer selected this option for certification.

Third, the part 90 regulations currently specify two duty cycles for nonhandheld engines: (1) Testing at rated speed; and (2) testing at 85 percent of rated speed. The regulations direct manufacturers simply to select the most appropriate cycle and declare the rated speed for their engines. We believe it is appropriate to make this more objective by stating that rated speed is 3600 rpm and intermediate speed is 3060 rpm, unless the manufacturer demonstrates that a different speed better represents the in-use operation for their engines. This is consistent with the most common in-use settings and most manufacturers' current practice.

In addition, we are proposing regulatory provisions to clarify how nonhandheld engines are operated to follow the prescribed duty cycle. As described in part 90, we are proposing to require that the engines operate ungoverned at wide-open throttle for the full-power mode. This test mode is used to denormalize the rest of the duty cycle. Testing at other modes occurs with the governor controlling engine speed. Before each test mode, manufacturers may adjust the governor to target the same nominal speed used for the full-power mode, with a tolerance limiting the variation in engine speed at each mode. Alternatively, testing may be done by letting the installed governor control engine speed, in which case only the torque value would need to be controlled within an established range.

A different duty cycle applies to handheld engines, which are generally not equipped with governors to control engine speed. The current regulations allow manufacturers to name their operating speed for testing at each of the test modes. We are proposing to continue the allowance for manufacturers to select an appropriate engine speed for idle operation. However, we are concerned that this approach allows manufacturers too much discretion for selecting a rated speed for high-load testing. Manufacturers are encouraged to select a speed that best represents in-use operation for the engine family, but there is no requirement to prevent a manufacturer from selecting a rated speed that results in lower emissions, independent of the speeds at which in-use engines operate. We are proposing to specify that manufacturers select a value for rated speed that matches the most common speed for full-load operation within the engine family. Engine manufacturers generally also make their own equipment, so this information should be readily available. We would expect manufacturers to identify the range of equipment models covered by a given engine family, identify the in-use operating speeds for those models, and select the full-load speed applicable for the greatest number of projected unit sales. We further propose to require manufacturers to describe in their application for certification how they selected the value for rated speed.

(3) Test Fuel

We are proposing to require Phase 3 testing with a standard test fuel consistent with the requirements under 40 CFR part 90 (see 40 CFR part 1065, subpart H). In particular, we do not believe it is appropriate to create a flexibility to allow for testing using oxygenated fuel since this could affect an engine's air-fuel ratio, which in turn could affect the engine's combustion and emission characteristics. However, we understand that engine manufacturers may have emission data from some model years before the Phase 3 standards take effect. We would allow for continued use of this pre-existing data as long as it is appropriate to use carryover data for demonstrating compliance with current standards.

Ethanol is commonly blended into in-use gasoline and is anticipated to be more widely used in the future. However, we are not proposing a test fuel containing ethanol for two reasons. First, the technical feasibility of this rule is based on certification gasoline. If an ethanol fuel blend were used as the certification fuel, the standards would need to be adjusted to account for the effects of this fuel on emissions. Second, manufacturers may not use ethanol blends to certify Small SI engines in California. The use of an ethanol blend would require manufacturers to test their engines separately for the California and Federal testing.

The test fuel specifications apply to all testing. However, we may be able to allow for testing with oxygenated fuel for production-line testing if manufacturers first establish the appropriate correction to account for the fuel's effect on emissions. We request comment on an appropriate approach that would allow for production-line testing with oxygenated fuel.

We are similarly proposing test fuel specifications for liquefied petroleum gas (LPG) and natural gas. Since natural gas has a very high methane content and methane is generally nonreactive in the atmosphere, we are proposing to apply the same emission standards for natural gas engines but not count methane emissions toward the total hydrocarbon measurement.

E. Certification and Compliance Provisions for Small SI Engines and Equipment

(1) Deterioration Factors

As part of the certification process, manufacturers generate deterioration factors to demonstrate that their engines meet emission standards over the full useful life. We are proposing some changes from the procedures currently included in part 90 (see § 1054.240 and § 1054.245). Much of the basis for these changes comes from the experience gained in testing many different engines in preparation for this proposal. First, we are proposing to discontinue bench aging of emission components. Testing has shown that operating and testing the complete engine is necessary to get accurate deterioration factors. Second, we are proposing to allow for assigned deterioration factors for a limited number of small-volume nonhandheld engine families. Manufacturers could use assigned deterioration factors for multiple small-volume nonhandheld engine families as long as the total production for all of the nonhandheld engine families for which the manufacturer is using assigned deterioration factors is estimated at the time of certification to be no more than 10,000 units per year. Third, we are proposing to allow for assigned deterioration factors for all engines produced by small-volume nonhandheld engine manufacturers.

For the HC+NO X standard, we propose to specify that manufacturers use a single deterioration factor for the sum of HC and NO X emissions. However, if manufacturers get approval to establish a deterioration factor on an engine that is tested with service accumulation representing less than the full useful life for any reason, we would require separate deterioration factors for HC and NO X emissions. The advantage of a combined deterioration factor is that it can account for an improvement in emission levels with aging. However, for engines that have service accumulation representing less than the full useful life, we believe it is not appropriate to extrapolate measured values indicating that emission levels for a particular pollutant will decrease. This is the same approach we adopted for recreational vehicles.

EPA is not proposing the values for the assigned deterioration factors for small-volume nonhandheld engine manufacturers in this proposal. In an effort to develop deterioration factors that are appropriate for Small SI engines, we plan to evaluate certification data from Phase 3 engines certified early with EPA and from engines certified under California ARB's Tier 3 standards (which begin in 2007 and 2008). Because we are not proposing new exhaust standards for handheld engines, the assigned deterioration factor provisions adopted for Phase 2 handheld engines are being retained.

Although we are not proposing new exhaust standards for handheld engines, handheld engine manufacturers noted that California ARB has approved certain durability cycles for accumulating hours on engines for the purpose of demonstrating emissions durability. The durability cycles approved by California ARB vary from a 30-second cycle for chainsaws to a 20-minute cycle for blowers, with 85 percent of the time operated at wide open throttle and 15 percent of the time operated at idle. Engine manufacturers can run the durability cycles over and over until they accumulate the hours of operation equivalent to the useful life of the engine family. Our current regulations state that “service accumulation is to be performed in a manner using good judgment to ensure that emissions are representative of production engines.” While we are not proposing to change the regulatory language regarding service accumulation, we believe the California ARB-approved durability cycles are appropriate and acceptable to EPA for accumulating hours on handheld engines for demonstrating emissions durability.

Manufacturers have pointed out that they are developing a testing protocol that would allow manufacturers to develop deterioration factors for catalysts through a bench-aging procedure. A fundamental factor in evaluating the appropriateness of any bench-aging procedure is the extent to which it simulates representative exhaust gas composition and other in-use operating parameters. We request comment on any appropriate procedures, or limitations on the use of such procedures, for certifying Small SI engines.

(2) Delegated Final Assembly

The current practice of attaching exhaust systems to engines varies. Class I engines are typically designed and produced by the engine manufacturer with complete emission control systems. Equipment manufacturers generally buy these engines and install them in their equipment, adjusting equipment designs if necessary to accommodate the mufflers and the rest of the exhaust system from the engine manufacturer.

Engine manufacturers generally produce Class II engines without exhaust systems, relying instead on installation instructions to ensure that equipment manufacturers get mufflers that fall within a specified range of backpressures that is appropriate for a given engine model. Equipment manufacturers are free to work with muffler manufacturers to design mufflers that fit into the space available for a given equipment model, paying attention to the need to stay within the design specifications from the engine manufacturers. A similar situation applies for air filters, where equipment manufacturers in some cases work with component manufacturers to use air filters that are tailored to the individual equipment model while staying within the design specifications defined by the engine manufacturer.

The existing regulations require that certified engines be in their certified configuration when they are introduced into commerce. We therefore need special provisions to address the possibility that engines will need to be produced and shipped without exhaust systems or air intake systems that are part of the certified configuration. We have adopted such provisions for heavy-duty highway engines and for other nonroad engines in 40 CFR 85.1713 and 40 CFR 1068.260, respectively. These provisions generally require that engine manufacturers establish a contractual arrangement with equipment manufacturers and take additional steps to ensure that engines are in their certified configuration before reaching the ultimate purchaser.

We are proposing to apply delegated-assembly provisions for nonhandheld engines that are similar to those adopted for heavy-duty highway engines, with a variety of adjustments to address the unique situation for Small SI engines (see § 1054.610). This would require that engine manufacturers apply for certification in the normal way, identifying all the engine parts that make up the engine configurations covered by the certification. Equipment manufacturers would be able to work with muffler manufacturers to get mufflers with installed catalysts as specified in the engine manufacturer's application for certification. If equipment manufacturers would need a muffler or catalyst that is not covered by the engine manufacturer's certification, the engine manufacturer would need to amend the application for certification. This may require new testing if the data from the original emission-data engine are not appropriate for showing that the new configuration will meet emission standards, as described in § 1054.225. (Alternatively, the equipment manufacturer may take on the responsibility for certifying the new configuration, as described in § 1054.612.) Engine manufacturers would also identify in the application for certification their plans to sell engines without emission-related components. We are proposing several provisions to ensure that engines will eventually be in their certified configuration. For example, engine manufacturers would establish contracts with affected equipment manufacturers, include installation instructions to make clear how engine assembly should be completed, keep records of the number of engines produced under these provisions, and obtain annual affidavits from affected equipment manufacturers to confirm that they are installing the proper emission-related components on the engines and that they have ordered a number of components that corresponds to the number of engines involved.

While the delegated-assembly provisions are designed for direct shipment of engines from engine manufacturers to equipment manufacturers, we are aware that distributors play an important role in providing engines to large numbers of equipment manufacturers. We are proposing that these provisions apply to distributors in one of two ways. First, engine manufacturers may have an especially close working relationship with primary distributors. In such a case, the engine manufacturer would be able to establish a contractual arrangement allowing the distributor to act as the engine manufacturer's agent for all matters related to compliance with the delegated-assembly provisions. This would allow the distributor to make arrangements with equipment manufacturers to address design needs and perform oversight functions. We would hold the engine manufacturer directly responsible if the distributor failed to meet the regulatory obligations that would otherwise apply to the engine manufacturer. Second, other distributors may receive shipment of engines without exhaust systems, but they would need to add any aftertreatment components before sending the engines on to equipment manufacturers. Engine manufacturers would treat these distributors as equipment manufacturers for the purposes of delegated assembly. Equipment manufacturers buying engines from such a distributor would not have the option of separately obtaining mufflers from muffler manufacturers. In both of these scenarios, the engine manufacturer continues to be responsible for the in-use compliance of all their engines.

Engine manufacturers would need to affix a label to the engine to clarify that it needs certain emission-related components before it is in its certified configuration. This labeling information is important for alerting assembly personnel to select mufflers with installed catalysts; the label would also give in-house inspectors or others with responsibility for quality control a tool for confirming that all engines have been properly assembled and installed. Given the large numbers of engine and equipment models and the interchangeability of mufflers with and without catalysts, we believe proper labeling will reduce the possibility that engines will be misbuilt.

This labeling may be done with any of three approaches. First, a temporary label may be applied such that it would not be removed without a deliberate action on the part of the equipment manufacturer. We believe it is not difficult to create a label that will stay on the engine until it is deliberately removed. Second, manufacturers may add the words “delegated assembly” to the engine's permanent emission control information label. Third, manufacturers may create a unique alphanumeric code to apply to the engine's permanent emission control information label. This code would be identified in the application for certification. Creating a unique code would not provide a clear enough communication to equipment manufacturers that they are responsible for bringing the engine into its certified configuration. Engine manufacturers taking this approach would therefore need to add features to the label to make this clear. For example, creating labels with a different color or shading would make it easy to identify that an engine needs to be properly assembled before it is in its certified configuration.

Any of these labeling approaches would properly identify the engines as needing emission-related components from the equipment manufacturer. We have a remaining concern that the approaches involving permanent labels do not identify that an engine is not yet in its certified configuration. Since there is no change in the label to show the engine's status, we believe these approaches may not be as effective as the temporary labels in preventing misbuilt engines. We are also concerned that imported engines with manufacturer-specific codes will lead to confusion with Customs inspectors. With no standardized approach for identifying which engines do not need catalysts, there is a significant risk that engines will be held up while inspectors confirm their status. We request comment on the best way of requiring labeling information for these engines. For example, we request comment on adding a requirement for equipment manufacturers to add some identifying mark to the permanent label to show that the engine is in its certified configuration. We also request comment on replacing the provision allowing for a manufacturer-specific code to some standardized abbreviation for “delegated assembly” that would allow for unambiguous identification of the engine's status with a minimum burden in terms of requiring larger labels.

In addition, engine manufacturers would need to perform or arrange for audits to verify that equipment manufacturers are properly assembling engines. Engine manufacturers may rely on third-party agents to perform auditing functions. Since the purpose of the audit is to verify that equipment manufacturers are properly assembling products, they may not perform audits on behalf of engine manufacturers. We are proposing to require that audits must involve at a minimum reviewing the equipment manufacturer's production records and procedures, inspecting the equipment manufacturer's production operations, or inspecting the final assembled products. Inspection of final assembled products may occur at any point in the product distribution system. For example, products may be inspected at the equipment manufacturer's assembly or storage facilities, at regional distribution centers, or at retail locations. The audit must also include confirmation that the number of aftertreatment devices shipped was sufficient for the number of engines involved. We would typically expect engine manufacturers to perform more than the minimum auditing steps identified above. For example, equipment manufacturers with low order volumes, an unclear history of compliance, or other characteristics that would cause some concern may prompt us to require a more extensive audit to ensure effective oversight in confirming that engines are always built properly. Moreover, in the early years of this program, engine manufacturers should consider nearly all participating equipment manufacturers to be unfamiliar with the regulatory requirements and the mechanics of meeting their responsibilities and obligations as contracted manufacturers of certified engines. Engine manufacturers would describe in the application for certification their plan for taking steps to ensure that all engines will be in their certified configuration when installed by the equipment manufacturer. EPA approval of a manufacturer's plan for delegated assembly would be handled as part of the overall certification process. We request comment on appropriate requirements related to specific auditing procedures that would be appropriate to address these concerns and to provide adequate assurance that engines are routinely assembled in their certified configuration.

We are proposing that engine manufacturers annually audit twelve equipment manufacturers, or fewer if they are able to audit all participating equipment manufacturers on average once every four years. These audits would be divided over different equipment manufacturers based on the number of engines sold to each equipment manufacturer. We further propose that these auditing rates may be reduced after the first eight years, or after the engine manufacturer has audited all affected equipment manufacturers. This reduced auditing rate would be based on an expectation that all participating equipment manufacturers would be audited on average once every ten years.

To facilitate auditing related to catalysts, we are proposing to require engine manufacturers to establish an alphanumeric designation to identify each unique catalyst design (including size, washcoat, precious metal loading, supplier, and any other appropriate factors) and instruct equipment manufacturers to use stamping or other means to permanently display this designation on the external surface of the exhaust system, making it readily visible as much as possible when the equipment is fully assembled, consistent with the objective of verifying the identity of the installed catalyst. This designation could be the same as the code applied to the emission control information label as described above.

We are proposing that all the same requirements apply for separate shipment related to air filters if they are part of an engine's certified configuration, except for the auditing. We would require auditing related to air filters only if engine manufacturers are already performing audits related to catalysts. We believe there is much less incentive or potential for problems with equipment manufacturers producing engines with noncompliant air filters so we believe a separate auditing requirement for air filters would be unnecessary.

The draft regulation specifies that the exemption expires when the equipment manufacturer takes possession of the engine and the engine reaches the point of final equipment assembly. We would understand the point of final equipment assembly for purposes of delegated assembly for aftertreatment components to be the point at which the equipment manufacturer attaches a muffler to the engine. Engines observed in production or inventory assembled with improper mufflers would be considered to have been built contrary to the engine manufacturer's installation instructions. Catalysts are invariably designed as part of the muffler, so we would understand that there would be no reason to install a different muffler once a given muffler has been installed using normal production procedures. If equipment manufacturers sell equipment without following these instructions, they would be considered in violation of the prohibited acts (i.e., selling uncertified engines). If there is a problem with any given equipment manufacturer, we would hold the engine manufacturer responsible for those noncompliant engines and require the engine manufacturer to discontinue the practice of delegated assembly for that equipment manufacturer. We request comment on the need to more explicitly identify the meaning of the point of final equipment assembly in the regulations, as described above.

We are aware that the proposed approach of allowing equipment manufacturers to make their own arrangements to order mufflers results in a situation in which the equipment manufacturer must spend time and money to fulfill their responsibilities under the regulations. This introduces a financial incentive to install mufflers with inferior catalysts, or to omit the catalyst altogether. To address this concern for heavy-duty highway engines, we adopted a requirement for engine manufacturers to confirm that a vehicle manufacturer has ordered the appropriate aftertreatment devices before they ship an engine. Equipment manufacturers' purchasing practices for Small SI engines, especially considering the order volumes, makes this approach impractical. We are instead proposing to require that engine manufacturers get written confirmation from each equipment manufacturer before an initial shipment of engines in a given model year for a given engine model. This confirmation would document the equipment manufacturer's understanding that they are using the appropriate aftertreatment components. The written confirmation would be due within 30 days after shipping the engines and would be required before shipping any additional engines from that engine family to that equipment manufacturer.

The shipping confirmation included in the rule for heavy-duty highway engines is a very substantial provision to address the fact that vehicle manufacturers would gain a competitive advantage by producing noncompliant products, and that engines in commerce would be labeled as if they were fully compliant even though they are not yet in their certified configuration. This is especially problematic when a muffler with no catalyst can easily be installed and can perform without indicating a problem. To address this concern for Small SI engines, we are including a requirement that equipment manufacturers include in their annual affidavits an accounting for the number of aftertreatment components they have ordered relative to the number of engines shipped without the catalysts that the mufflers would otherwise require.

Production-line testing normally involves building production engines using normal assembly procedures. For engines shipped without catalysts under the delegated-assembly provisions, it is not normally possible to do this at the engine manufacturer's facility, where such testing would normally occur. To address this, we are proposing to specify that engine manufacturers must arrange to get a randomly selected catalyst that will be used with the engine. The catalyst may come from any point in the normal distribution from the aftertreatment component manufacturer to the equipment manufacturer. The catalyst may not come from the engine manufacturer's own inventory. Engine manufacturers would keep records to show how they randomly selected catalysts.

As described above, we believe this is a very significant compliance issue since it allows manufacturers to introduce into commerce engines that are labeled as meeting current emission standards even though they are not in their certified configuration. This is especially true for Small SI engines where many high-volume products are handled by many different manufacturers such that the final assembly requires equipment manufacturers to properly install otherwise indistinguishable products to keep products in the certified configuration. Also, an equipment manufacturer may install multiple engine models in a single type of equipment, some of which may need catalyzed mufflers while others would use a conventional muffler. The appearance and function of such mufflers with and without catalysts would be virtually indistinguishable, which increases the likelihood of accidentally installing the wrong muffler.

The provisions described above are intended to minimize the risks associated with this practice. However, this concern is heightened for companies that would use the delegated-assembly provisions to import noncompliant engines with the expectation that equipment manufacturers in the United States would add catalyzed mufflers as specified in the engine manufacturer's application for certification. This raises two potential problems. First, this practice could create a loophole in EPA's enforcement program that would allow for widespread importation of noncompliant engines, with the financial incentive for equipment manufacturers to complete assembly with noncompliant mufflers. Since all engines have mufflers, and since proper catalyst installation generally can be confirmed only with an emission test or a destructive inspection, it would be very difficult to find and correct any problems that might occur. Second, engine manufacturers outside the United States may be willing to take risks with noncompliant products based on their limited exposure to EPA enforcement. As described in Section VI.F we are considering bonding requirements for imported engines to ensure that we will be able to fully resolve compliance or enforcement issues with companies that have little or no presence or selling history in the United States. We would expect to specify an increased bond payment for importation of engines using the delegated-assembly provisions. Increasing the per-engine bond value by 20 percent corresponds roughly with the value of catalyzed mufflers that would be required. We believe this would be an appropriate additional bond value to address the concerns for noncompliance from imported engines.

While this section describes the compliance provisions we believe are necessary for addressing the practice of delegating assembly of emission-related components to equipment manufacturers, providing a broader view of the context for delegated assembly is also appropriate for understanding our concern regarding the duplicative aspects of delegated assembly with other provisions in this rulemaking. Recent evaluation of a wide range of equipment models powered by Small SI engines has led to several important observations. Many equipment models have mufflers installed away from all other components such that they have no space or packaging constraints. Other equipment models with mufflers that are installed inside a cage or compartment generally include substantial space around the muffler, which is necessary to isolate the muffler's high surface temperatures and radiant heat from operators and any heat-sensitive components. Another important observation was the striking uniformity of muffler geometries, even where equipment manufacturers obtained mufflers directly from muffler manufacturers. Most mufflers on Class II engines are cylindrical models with the size varying to correspond with the size of the engines. Other Class II engine models use a box-shaped muffler design, but these mufflers also exhibited little variation across models. These observations have fundamental implications for the regulatory provisions we are proposing for ensuring a smooth transition to the Phase 3 emission standards.

For example, in situations that limit equipment manufacturers to standardized muffler configurations, they would at most need to make modest changes to their equipment to accommodate somewhat different muffler geometries. We have taken these equipment design changes into account with the Transition Program for Equipment Manufacturers described below. We are therefore concerned that the proposed provisions for delegated assembly and the Transition Program for Equipment Manufacturers may be duplicative in providing additional time and/or flexibilities for equipment manufacturers to redesign their equipment for accommodating engines that meet the Phase 3 standards. If this is the case, the proposed provisions for delegated assembly merely serve to preserve the current business arrangements for the different types of manufacturers. We request comment on the need for these delegated-assembly provisions in light of the Transition Program for Equipment Manufacturers. We also request comment on the appropriateness of adopting these delegated-assembly provisions for Class I engines since these engine manufacturers already install complete exhaust systems for the large majority of their engines. Finally, we request comment on the need to allow for the use of the more restrictive delegated-assembly provisions in § 1068.260 in the event that we do not finalize the delegated-assembly provisions described above.

(3) Transition Program for Equipment Manufacturers

Given the level of the proposed Phase 3 exhaust emission standards for Class II engines, we believe there may be situations where the use of a catalyzed muffler could require equipment manufacturers to modify their equipment. We are therefore proposing a set of provisions to provide equipment manufacturers with reasonable lead time for transition to the proposed standards. The proposed provisions are similar to the program we adopted for nonroad diesel engines (69 FR 38958, June 29, 2004).

Equipment manufacturers would not be obligated to use any of these provisions, but all equipment manufacturers that produce Class II equipment would be eligible to do so. We are also proposing that all entities under the control of a common entity would have to be considered together for the purposes of applying these allowances. Manufacturers would be eligible for the allowances described below only if they have primary responsibility for designing and manufacturing equipment, and if their manufacturing procedures include installing engines in the equipment.

(a) General Provisions

Under the proposed approach, beginning in the 2011 model year and lasting through the 2014 model year, each equipment manufacturer may install Class II engines not certified to the proposed Phase 3 emission standards in a limited number of equipment applications produced for the U.S. market (see § 1054.625). We refer to these here as “flex engines.” These flex engines would need to meet the Phase 2 standards. The maximum number of “allowances” each manufacturer could use would be based on 30 percent of an average year's production of Class II equipment. The number of “allowances” would be calculated by determining the average annual U.S.-directed production of equipment using Class II engines produced from January 1, 2007 through December 31, 2009. Thirty percent of this average annual production level would be the total number of “allowances” under this transition program over four years. Manufacturers could use these allowances for their Class II equipment over four model years from 2011 through 2014, with the usage spread over these model years as determined by the equipment manufacturer. Equipment produced under these provisions could use engines that meet the Phase 2 emission standards instead of the Phase 3 standards. If an equipment manufacturer newly enters the Class II equipment market during 2007, 2008 or 2009, the manufacturer would calculate its average annual production level based only on the years during which it actually produced Class II equipment. Equipment manufacturers newly entering the Class II equipment market after 2009 would not receive any allowances under the transition program and would need to incorporate Phase 3 compliant engines into the Class II equipment beginning in 2011.

Equipment using engines built before the effective date of the proposed Phase 3 standards would not count toward an equipment manufacturer's allowances. Equipment using engines that are exempted from the Phase 3 standards for any reason would also not count toward an equipment manufacturer's allowances. For example, we are proposing that small-volume engine manufacturers may continue to produce Phase 2 engines for two model years after the Phase 3 standards apply. All engines subject to the Phase 3 standards, including those engines that are certified to FELs at higher levels than the standard, but for which an engine manufacturer uses exhaust ABT credits to demonstrate compliance, would count as Phase 3 complying engines and would not be included in an equipment manufacturer's count of allowances.

The choice of the allowances based on 30 percent of one year's production is based on our best estimate of the degree of reasonable lead time needed by the largest equipment manufacturers to modify their equipment designs as needed to accommodate engines and exhaust systems that have changed as a result of more stringent emission standards. We believe the proposed level of allowances responds to the need for lead time to accommodate the workload related to redesigning equipment models to incorporate catalyzed mufflers while ensuring a significant level of emission reductions in the early years of the proposed program.

Equipment manufacturers may face similar challenges in transitioning to rotational-molded fuel tanks that meet the proposed permeation standards. We are therefore proposing to allow equipment manufacturers to use noncompliant rotational-molded fuel tanks with any equipment that is counted under the allowances described in this section which use engines meeting Phase 2 exhaust emission standards (see § 1054.627). As part of this expanded rotational-molded fuel tank allowance, we are requiring that equipment manufacturers first use up any available credits or allowances generated from early compliance with the fuel tank permeation requirements (see Section VI.D.4).

A similar concern applies for controlling running losses. As described in Section VI, technologies for controlling running losses may involve a significant degree of integration between engine and equipment designs. In particular, routing a vapor line from the fuel tank to the engine's intake system depends on engine modifications that would allow for this connection. As a result, we are proposing that any equipment using flex engines would not need to meet running loss standards.

(b) Coordination Between Engine and Equipment Manufacturers

We are proposing two separate paths for complying with administrative requirements related to the proposed transition program, depending on how the engine manufacturer chooses to make flex engines available under the transition program. Engine manufacturers choosing to use the delegated-assembly provisions described above would be enabling equipment manufacturers to make the decision whether to complete the engine assembly in the Phase 3 configuration or to use a noncatalyzed muffler such that the engine would meet Phase 2 standards and would therefore need to be counted as a flex engine. If engine manufacturers do not use the delegated-assembly provisions, equipment manufacturers would need to depend on engine manufacturers to produce and ship flex engines that are already in a configuration meeting Phase 2 standards and labeled accordingly. Each of these scenarios involves a different set of compliance provisions, which we describe below.

(i) Compliance based on engine manufacturers. Engine manufacturers will in many cases produce complete engines. This would be the case if the engine does not require a catalyst or if the engine manufacturer chooses to design their own exhaust systems and ship complete engine assemblies to equipment manufacturers.

Under this scenario, we propose to require that equipment manufacturers request a certain number of flex engines from the engine manufacturer. The proposed regulatory provisions would specifically allow engine manufacturers to continue to build and sell Phase 2 engines needed to meet the market demand created by the transition program for equipment manufacturers provided they receive the written assurance from the equipment manufacturer that such engines are being procured for this purpose. We are proposing to require that engine manufacturers keep copies of the written assurance from equipment manufacturers for at least five years after the final year in which allowances are available.

Engine manufacturers are currently required to label their certified engines with a variety of information. We are proposing that engine manufacturers producing complete flex engines under this program identify on the engine label that they are flex engines. In addition, equipment manufacturers would be required to apply an Equipment Flexibility Label to the engine or piece of equipment that identifies the equipment as using an engine produced under the Phase 3 transition program for equipment manufacturers. These proposed labeling requirements would allow EPA to easily identify flex engines and equipment, verify which equipment manufacturers are using these flex engines, and more easily monitor compliance with the transition provisions. Labeling of the equipment could also help U.S. Customs to quickly identify equipment being imported lawfully using the Transition Program for Equipment Manufacturers.

While manufacturers would need to meet Phase 2 standards with their flex engines, they would not need to certify them for the current model year. We are proposing instead to apply the requirements in 40 CFR 1068.260, which requires that manufacturers keep records showing that they meet emission standards without requiring submission of an application for certification. We request comment on these requirements and whether these engines should be certified annually along with the Phase 3 engines.

(ii) Compliance based on equipment manufacturers. We are proposing to set up a different set of compliance provisions for engine manufacturers that ship the engine separately from the exhaust system. Under this scenario, as discussed above, the engine manufacturers must establish a relationship with the equipment manufacturers allowing the equipment manufacturer to install catalysts to complete engine assembly for compliance with Phase 3 standards.

In this case, engine manufacturers would design and produce their Phase 3 engines and label them accordingly. The normal path for these engines covered by the delegated-assembly provisions would involve shipment of the engine without an exhaust system to the equipment manufacturer, the equipment manufacturer would then follow the engine manufacturer's instructions to add the exhaust system including the catalyst to bring the engine into a certified Phase 3 configuration. Under the proposed transition program, equipment manufacturers would choose for each of these engines to either follow the engine manufacturer's instructions to install a catalyst to make it compliant with Phase 3 standards or follow a different set of instructions to install a non-catalyzed muffler to make it compliant with Phase 2 standards. Any such engines downgraded to Phase 2 standards would count toward the equipment manufacturer's total number of allowances under the transition program.

To make this work, engine manufacturers would need to take certain steps to ensure overall compliance. First, engine manufacturers would need to include emission data in the application for certification showing that the engine would meet Phase 2 standards without any modification other than installing a non-catalyzed exhaust system. This may include a specified range of backpressures that equipment manufacturers would need to meet in procuring a non-catalyst muffler. If the Phase 3 engine without a catalyst would otherwise still be covered by the emission data from engines produced in earlier model years under the Phase 2 standards, manufacturers could rely on carryover emission data to make this showing. Second, the installation instructions we specify under the delegated-assembly provisions would need to describe the steps equipment manufacturers would need to take to make either Phase 3 engines or Phase 2 flex engines. Third, for engine families that generate positive emission credits under the exhaust ABT program, engine manufacturers must decrease the number of ABT credits generated by the engine family by 10 percent. We believe the 10 percent decrease should provide an emission adjustment commensurate with the potential use of the equipment manufacturer flexibility provisions.

Equipment manufacturers using allowances under these provisions would need to keep records that would allow EPA or engine manufacturers to confirm that equipment manufacturers followed appropriate procedures and produced an appropriate number of engines without catalysts. In addition, we are proposing to require that equipment manufacturers place a label on the engine as close as possible to the engine manufacturer's emission control information label to identify it as a flex engine. This could be the full label described above or it could be a simplified label that has only the equipment manufacturer's name and a simple statement that this is a flex engine. The location of this label is important since it effectively serves as an extension of the engine manufacturer's label, clarifying that the engine meets Phase 2 standards, not the Phase 3 standards referenced on the original label. This avoids the problematic situation of changing or replacing labels, or requiring engine manufacturers to send different labels. We request comment on an approach in which we would require the full label for equipment manufacturers to be placed on the engine adjacent to the engine manufacturer's label to prevent confusion and the risks associated with multiple labels.

Engine manufacturers might choose to produce Phase 3 engines before the 2011 model year and set up arrangements for separate shipment of catalyzed mufflers as described in Section V.E.2. We would expect any engine manufacturers producing these early Phase 3 engines to continue production of comparable engine models that meet Phase 2 standards rather than forcing all equipment manufacturers to accommodate the new engine design early. We believe it would not be appropriate for equipment manufacturers to buy Phase 3 engines in 2010 or earlier model years and downgrade them to meet Phase 2 emission standards as described above. We are therefore proposing to allow the downgrading of Phase 3 engines only for 2011 and later model years.

Because equipment manufacturers in many cases depend on engine manufacturers to supply certified engines in time to produce complying equipment, we are also proposing a hardship provision for all equipment manufacturers (see § 1068.255). An equipment manufacturer would be required to use all of its allowances under the transition program described above before being eligible to use this hardship. See Section VIII.C.9 for further discussion of this proposed hardship provision for equipment manufacturers.

As described in Section V.E.2, we are concerned that the Transition Program for Equipment Manufacturers and the provisions related to delegated assembly may be redundant approaches to address the need to design equipment models to accommodate upgraded engines. The transition program is intended to give equipment manufacturers four years to make the design changes needed to reach a point of being able to accommodate low-emission Phase 3 engines, even for the most challenging equipment models. If equipment manufacturers are able to continue to independently source their exhaust systems based on the catalyst specifications determined by the engine manufacturer, it is not clear that allowances for additional lead time would be needed. We request comment on the relative advantages of these two approaches and, more specifically, which approach we should adopt in the final rule to address equipment manufacturers' needs for designing and producing equipment with Phase 3 engines. We request comment on an alternative approach of relying on the delegated-assembly provisions in § 10654.610 and the equipment-manufacturer hardship provisions in § 1068.255. This combination of tools would still allow for substantial flexibility in helping equipment manufacturers transition to Phase 3 engines. The hardship provisions of § 1068.255 were an important element of the successful transition to new emission standards for Large SI engines.

(iii) Reporting and recordkeeping requirements. Equipment manufacturers choosing to participate in the transition program would be required to keep records of the U.S-directed production volumes of Class II equipment in 2007 through 2009 broken down by equipment model and calendar year. Equipment manufacturers would also need to keep records of the number of flex engines they use under this program.

We are also proposing some notification requirements for equipment manufacturers. Under this proposal, equipment manufacturers wishing to participate in the transition provisions would need to notify EPA by June 30, 2010 that they plan to participate. They must submit information on production of Class II equipment over the three-year period from 2007 through 2009, calculate the number of allowances available, and provide basic business information about the company. For example, we would want to know the names of related companies operating under the same parent company that would be required to count engines together under this program. This early notification will not be a significant burden to the equipment manufacturer and will greatly enhance our ability to ensure compliance. Indeed, equipment manufacturers would need to have the information required in the notification to know how to use the allowances.

We are proposing an ongoing reporting requirement for equipment manufacturers participating in the Phase 3 transition program. Under this proposal, participating equipment manufacturers would be required to submit an annual report to EPA that shows its annual number of equipment produced with flex engines under the transition provisions in the previous year. Each report would include a cumulative count of the number of equipment produced with flex engines for all years. To ease the reporting burden on equipment manufacturers, EPA intends to work with the manufacturers to develop an electronic means for submitting information to EPA.

(c) Additional Allowances for Small- and Medium-Sized Companies

We believe small-volume equipment manufacturers would need a greater degree of lead time than manufacturers that sell large volumes of equipment. The small companies are less likely to have access to prototype engines from engine manufacturers and generally have smaller engineering departments for making the necessary design changes. Allowances representing thirty percent of annual U.S.-directed production provide larger companies with substantial lead time to plan their product development for compliance but smaller companies may have a product mix that requires extensive work to redesign products in a short amount of time. We are therefore proposing to specify that small-volume equipment manufacturers may use this same transition program with allowances totaling 200 percent of the average annual U.S.-directed production of equipment using Class II engines from 2007 through 2009. For purposes of this program, a small-volume equipment manufacturer would be a manufacturer that produces fewer than 5,000 pieces of nonhandheld equipment per year subject to EPA regulations in each of the three years from 2007 through 2009 or meets the SBA definition of small business equipment manufacturer (i.e., generally fewer than 500 employees for manufacturers of most types of equipment). These allowances would be spread over the same four-year period between 2011 and 2014. For example, a small-volume equipment manufacturer could potentially use Phase 2 engines on all their Class II equipment for two years or they might sell half their Class II equipment with Phase 2 engines for four years assuming production stayed constant over the four years.

Medium-sized equipment manufacturers, i.e., companies that produce too much equipment to be considered a small-volume equipment manufacturer but produce fewer than 50,000 pieces of Class II equipment, may also face difficulties similar to that of small-volume equipment manufacturers. These companies may be like small-volume manufacturers if they have numerous product lines with varied approaches to installing engines and mufflers. Other companies may be more like bigger companies if they produce most of their equipment in a small number of high-volume models or have consistent designs related to engine and muffler installations. We are therefore proposing to create special provisions that would enable us to increase the number of transition allowances that are available to these medium-sized companies that have annual U.S.-directed production of Class II equipment of between 5,000 and 50,000 in each of the three years from 2007 through 2009. To obtain allowances greater than 30 percent of average annual production, a medium-sized manufacturer would need to notify us by January 31, 2010 if they believe the standard allowances based on 30 percent of average annual production of Class II equipment would not provide adequate lead time starting in the 2011 model year. Additional allowances could be requested only if the equipment manufacturer can show they are on track to produce a number of equipment models representing at least half of their total U.S.-directed production volume of Class II equipment in the 2011 model year compliant with all exhaust and evaporative emission standards. As part of their request, the equipment manufacturer would need to describe why more allowances are needed to accommodate anticipated changes in engine designs resulting from engine manufacturers' compliance with changing exhaust emission standards. The equipment manufacturer would also request a specific number of additional allowances needed with supporting information to show why that many allowances are needed. We may approve additional allowances up to 70 percent of the average annual U.S.-directed production of Class II equipment from 2007 through 2009. If a medium-sized company were granted the full amount of additional allowances, they would have allowances equivalent to 100 percent of the average annual production volume of Class II equipment.

As noted above, the determination of whether a company is a small- or medium-sized manufacturer will be based primarily on production data over the 2007 through 2009 period submitted to EPA during 2010. After a company's status as a small- or medium-sized company has been established based on that data, EPA is proposing that manufactures would keep that status even if a company's production volume grows during the next few years, such that the company would no longer qualify as a small- or medium-sized company. EPA believes that equipment manufacturers need to know at the beginning of the transition program (i.e., 2011) how many allowances they will receive under the program. Changing a company's size determination during the program, which could affect the number of allowances available, would make it difficult for companies to plan and could lead to situations where a company is in violation of the provisions based on the use of allowances that were previously allowed. Likewise, if a company is purchased by another company or merges with another company after the determination of small- or medium-size status is established in 2010, EPA is proposing that the combined company could, at its option, keep the status for the individual portions of the combined company. If the combined company chooses to keep the individual designations, the combined company would submit the annual reports on the use of allowances broken down for each of the previously separate companies.

(i) Requirements for foreign equipment manufacturers and importers. Under this proposal, only companies that manufacture equipment would qualify for the relief provided under the Phase 3 transition provisions. Foreign equipment manufacturers who comply with the compliance related provisions discussed below would enjoy the same transition provisions as domestic manufacturers. Foreign equipment manufacturers that do not comply with the compliance-related provisions discussed below would not receive allowances. Importers that do not manufacture equipment would not receive any transition relief directly, but could import equipment with a flex engine if it is covered by an allowance or transition provision associated with a foreign equipment manufacturer. This would allow transition provisions to be used by foreign equipment manufacturers in the same way as domestic equipment manufacturers, at the option of the foreign manufacturer, while avoiding the potential for importers to inappropriately use allowances. For the purposes of this proposal, a foreign equipment manufacturer would include any equipment manufacturer that produces equipment outside of the United States that is eventually sold in the United States.

All foreign equipment manufacturers wishing to use the transition provisions would have to comply with all requirements discussed above. Along with the equipment manufacturer's notification described earlier, a foreign equipment manufacturer would have to comply with various compliance related provisions similar to those adopted for nonroad diesel engines (see § 1054.626). (81) As part of the notification, the foreign equipment manufacturer would have to:

  • Agree to provide EPA with full, complete and immediate access to conduct inspections and audits;
  • Name an agent in the District of Columbia for service;
  • Agree that any enforcement action related to these provisions would be governed by the Clean Air Act;
  • Submit to the substantive and procedural laws of the United States;
  • Agree to additional jurisdictional provisions;
  • Agree that the foreign equipment manufacturer will not seek to detain or to impose civil or criminal remedies against EPA inspectors or auditors for actions performed within the scope of EPA employment related to the provisions of this program;
  • Agree that the foreign equipment manufacturer becomes subject to the full operation of the administrative and judicial enforcement powers and provisions of the United States without limitation based on sovereign immunity; and
  • Submit all reports or other documents in the English language, or include an English language translation.

In addition to these proposed requirements, we are proposing to require foreign equipment manufacturers that participate in the transition program to comply with a bond requirement for equipment imported into the United States. We describe a bond program below that we believe could be an important tool for ensuring that foreign equipment manufacturers are subject to the same level of enforcement as domestic equipment manufacturers. Specifically, we believe a bonding requirement for the foreign equipment manufacturer is an important enforcement tool for ensuring that EPA has the ability to collect any judgments assessed against a foreign equipment manufacturer for violations of these transition provisions. We request comments on all aspects of the specific program we describe here, but also on alternative measures that would achieve the same goal.

Under a bond program, the participating foreign equipment manufacturer would have to maintain a bond in the proper amount that is payable to satisfy judgments that result from U.S. administrative or judicial enforcement actions for conduct in violation of the Clean Air Act. The foreign equipment manufacturer would generally obtain a bond in the proper amount from a third party surety agent that has been listed with the Department of the Treasury. As discussed in Sections V.E.6.c and V.E.6.d, EPA is proposing other bond requirements as well. An equipment manufacturer required to post a bond under any of these provisions would be required to obtain only one bond of the amount specified for those sections.

In addition to the foreign equipment manufacturer requirements discussed above, EPA also proposes to require importers of equipment with flex engines from a complying foreign equipment manufacturer to comply with certain provisions. EPA believes these importer provisions are essential to EPA's ability to monitor compliance with the transition provisions. EPA proposes that the regulations would require each importer to notify EPA prior to their initial importation of equipment with flex engines. Importers would be required to submit their notification prior to the first calendar year in which they intend to import equipment with flex engines from a complying foreign equipment manufacturer. The importer's notification would need to include the following information:

  • The name and address of importer (and any parent company);
  • The name and address of the manufacturers of the equipment and engines the importer expects to import; and
  • Number of units of equipment with flex engines the importer expects to import for each year broken down by equipment manufacturer.

In addition, EPA is proposing that any importer electing to import to the United States equipment with flex engines from a complying foreign equipment manufacturer would have to submit annual reports to EPA. The annual report would include the number of units of equipment with flex engines the importer actually imported to the United States in the previous calendar year; and identify the equipment manufacturers and engine manufacturers whose equipment and engines were imported.

(4) Equipment Manufacturer Recertification

Generally, it has been engine manufacturers who certify with EPA for exhaust emissions because the standards are engine-based. However, because the Phase 3 nonhandheld standards under consideration are expected to result in the use of catalysts, a number of equipment manufacturers, especially those that make low-volume models, believe it may be necessary to produce their own unique engine/muffler designs, but using the same catalyst substrate already used in a muffler certified by the engine manufacturer. In this situation, the engine would not be covered by the engine manufacturer's certificate, as the engine/muffler design is not within the specifications for the certified engine. The equipment manufacturer is therefore producing a new distinct engine which is not certified and needs to be certified with EPA. In order to allow the possibility of an equipment manufacturer certifying an engine/muffler design with EPA, we are proposing a simplified engine certification process for nonhandheld equipment manufacturers (see § 1054.612). Under this simplified certification process, the nonhandheld equipment manufacturer would need to demonstrate that it is using the same catalyst substrate as the approved engine manufacturer's engine family, provide information on the differences between their engine/exhaust system and the engine/exhaust system certified by the engine manufacturer, and explain why the emissions deterioration data generated by the engine manufacturer would be representative for the equipment manufacturer's configuration. The equipment manufacturer would need to perform low-hour emission testing on an engine equipped with their modified exhaust system and demonstrate that it meets the emission standards after applying the engine manufacturer's deterioration factors for the certified engine family. We would not require production-line testing for these engines. The equipment manufacturer would be responsible to meet all of the other requirements of an engine manufacturer under the regulations, including labeling, warranty, defect reporting, payment of certification fees, and other things. EPA requests comments on the usefulness of such a provision. EPA also requests comments on whether such a simplified certification provision should expire after a period of time, for example, after five years. If the provision were to expire, an equipment manufacturer could continue to certify, but they would have to follow the general certification regulations at that point.

(5) Special Provisions Related to Altitude

As described in Section V.C.1, we allow manufacturers of handheld and nonhandheld engines to comply with emission standards at high altitudes using an altitude kit. We are proposing to keep the provisions that already apply in part 90 related to descriptions of these altitude kits in the application for certification. This would include a description of how engines comply with emission standards at varying atmospheric pressures, a description of the altitude kits, and the associated part numbers. The manufacturer would also identify the altitude range for which it expects proper engine performance and emission control with and without the altitude kit, state that engines will comply with applicable emission standards throughout the useful life with the altitude kit installed according to instructions, and include any supporting information. Finally, manufacturers would need to describe a plan for making information and parts available such that altitude kits would reasonably be expected to be widely used in high-altitude areas. For nonhandheld engines, this would involve all counties with elevations substantially above 4,000 feet (see Appendix III to part 1054). This includes all U.S. counties where 75 percent of the land mass and 75 percent of the population are above 4,000 feet (see 45 FR 5988, January 24, 1980 and 45 FR 14079, March 4, 1980). For handheld engines, this would involve all areas at an elevation at or above that which they identify in their application for certification for needing an altitude kit to meet emission standards.

We are also proposing to require information related to altitude kits to be on the emission control information label, unless space limitations prevent it. We believe it is important for operators to know that engines may need to be modified to run properly at high elevations.

We request comment on all aspects of this approach for compliance at high-altitude conditions. (See §§ 1054.115, 1054.135, 1054.205, and 1054.655.)

(6) Special Provisions for Compliance Assurance

EPA's experiences in recent years have highlighted the need for more effective tools for preventing the introduction into commerce of noncompliant engines. These include noncompliant engines sold without engine labels or with counterfeit engine labels. We are proposing the special provisions in the following sections to help us address these problems.

(a) Importation Form

Importation of engines is regulated both by EPA and U.S. Customs. The current regulations for U.S. Customs specify that anyone importing a nonroad engine (or equipment containing a nonroad engine) must complete a declaration form before importation. EPA has created Declaration Form 3520-21 for this purpose. Customs requires this in many cases, but there are times when they allow engines to be imported without the proper form. It would be an important advantage for EPA's own compliance efforts to be able to enforce this requirement. We are therefore proposing to modify part 90 to mirror the existing Customs requirement (and the EPA requirement in § 1068.301) for importers to complete and retain the declaration form before importing engines (see § 90.601). This would facilitate a more straightforward processing of cases in which noncompliant products are brought to a U.S. port for importation because currently no requirement exists for measuring emissions or otherwise proving that engines are noncompliant at the port facility. Since this is already a federal requirement, we are proposing to make this effective immediately with the final rule.

(b) Assurance of Warranty Coverage

Manufacturers of Small SI engines subject to the standards are required to provide an emission-related warranty so owners are able to have repairs done at no expense for emission-related defects during an initial warranty period. Established companies are able to do this with a network of authorized repair facilities that can access replacement parts and properly correct any defects. In contrast, we are aware that some manufacturers are selling certified engines in the United States without any such network for processing warranty claims. As such, owners who find that their engines have an emission-related defect are unable to properly file a warranty claim or get repairs that should be covered by the warranty. In effect, this allows companies to certify their engines and agree to provide warranty coverage without ever paying for legitimate repairs that should be covered by the warranty. We are therefore proposing to require that manufacturers demonstrate several things before we will approve certification for their engines (see § 90.1103 and § 1054.120). The following provisions would apply to manufacturers who certify engines, and would include importers who certify engines. First, we are proposing to require manufacturers to provide and monitor a toll-free telephone number and an e-mail address for owners to receive information about how to make a warranty claim and how to make arrangements for authorized repairs. Second, we are proposing to require manufacturers to provide a source of replacement parts within the United States. For imported parts, this would require at least one distributor within the United States.

Finally, we are proposing to require manufacturers to have a network of authorized repair facilities or to take one of several alternate approaches to ensure that owners will be able to get free repair work done under warranty. If warranty-related repairs are limited to authorized repair facilities, we are proposing to require that manufacturers have enough such facilities that owners do not have to go more than 100 miles for repairs. An exception would be made for remote areas where we would allow for approval of greater travel distances for getting repairs as long as the longer travel distance applies to no more than 10 percent of affected owners. For small businesses, start-up companies, or importers, it may not be realistic to maintain a national repair network. We are proposing a variety of alternative methods for such companies to meet their warranty obligations. Manufacturers would be able to meet warranty obligations by informing owners that free shipping to and from an authorized service center is available, a service technician will be provided to come to the owner to make the warranty repair, or repair costs at a local nonauthorized service center will be reimbursed.

We believe these proposed requirements are both necessary and effective for ensuring proper warranty coverage for all owners. At the same time, we are proposing a flexible approach that allows companies to choose from widely varying alternatives to provide warranty service. We therefore believe these proposed requirements are readily achievable for any company. We are therefore proposing to implement these requirements starting with the 2009 model year. This should allow time for the administrative steps necessary to arrange for any of the allowable compliance options described above. We request comment on these provisions to ensure proper warranty coverage. We also request comment on alternative means of demonstrating effective warranty coverage comparable to that described above.

(c) Bond Requirements Related to Enforcement and Compliance Assurance

Certification initially involves a variety of requirements to demonstrate that engines and equipment are designed to meet applicable emission standards. After certification is complete, however, several important obligations apply to the certifying manufacturer or importer. For example, we require ongoing testing of production engines, warranty coverage for emission-related defects, reporting of recurring defects, and payment of penalties if there is a violation. For companies operating within the United States, we are generally able to take steps to communicate clearly and insist on compliance with applicable regulations. For companies without staff or assets in the United States, this is not the case. Accordingly, we have limited ability to enforce these requirements or recover any appropriate penalties, which increases the risk of environmental problems as well as problems for owners. This creates the potential for a company to gain a competitive advantage if they do not operate in the United States by avoiding some of the costs of complying with EPA regulations.

We request comment on a requirement for importers of certified engines and equipment to post a bond to cover any potential compliance or enforcement actions under the Clean Air Act. Importers would be exempt from the bond requirement if they were able to sufficiently demonstrate an assurance that they would meet any compliance-or enforcement-related obligations. We would consider adopting provisions to waive the bonding requirement based on a variety of specific criteria. For example, importers might show that they have physical assets in the United States with a value equal to the retail value of the engines that they will import during the model year (or equipment that they will import during the model year if they import equipment). Also, we may be able to establish an objective measure for a company to demonstrate long-term compliance with applicable regulations. Another alternative might involve a showing that an importer has been certified under certain industry standards for production quality and regulatory compliance. Finally, we may be able to rely on a company's commitment to periodically perform voluntary in-use testing in the United States to show that engines comply with emission standards. In addition to these specific criteria, we would consider adopting a provision that allows an individual importer to request a waiver from bonding requirements based on that importer's particular circumstances. If we adopt a bonding requirement, we would expect to apply that starting with the 2009 model year.

We would expect the per-engine bond amount to be $25 for handheld engines and Class I engines. Class II engines cover a much wider range of applications, so we further differentiate the bond for those engines. The proposed per-engine bond amounts for Class II engines would be $50 for engines between 225 and 740 cc, $100 for engines between 740 and 1,000 cc, and $200 for engines above 1,000 cc. These values are generally scaled to be approximately 10 to 15 percent of the retail value. In the case of handheld engines, this is based on the retail value of equipment with installed engines, since these products are generally traded that way. Class II engines are very often sold as loose engines to equipment manufacturers, so the corresponding per-engine bond values are based on the retail value of the engine alone. This approach is similar to the bond requirements that apply for nonroad diesel engines (see § 1039.626).

The total bond amount would be based on the value of imported products over a one-year period. If an importer's bond would be used to satisfy a judgment, the importer would then be required to increase the amount of the bond within 90 days of the date the bond is used to cover the amount that was used. Also, we would require the bond to remain in place for five years after the importer no longer imports Small SI engines.

(d) Bond Requirements Related to Recall

Recall is another potential compliance obligation. The Clean Air Act specifies that EPA must require the manufacturer to conduct a recall if EPA determines that a substantial number of engines do not conform to the regulations. We have experience with companies that have faced compliance-related problems where it was clear that they did not have the resources to conduct a recall if that were necessary. Such companies benefit from certification without bearing the full range of associated obligations. We believe it is appropriate again to add a requirement to post a bond to ensure that a company can meet their recall obligations. The concern for being able to meet these obligations applies similarly to domestic and foreign manufacturers. The biggest indicator of a manufacturer's ability to make recall repairs relates to the presence of repair facilities in the United States. We are therefore proposing a bond requirement starting with the 2009 model year for all manufacturers (including importers) that do not have assembly facilities in the United States that are available for processing recall repairs or a repair network in the United States capable of processing recall repairs (see § 90.1007 and § 1054.685). Note that a single bond payment would be required for companies that must post bond for compliance-related obligations, as described above, in addition to the recall-related obligations. Such a repair network would need to involve at least 100 authorized repair facilities in the United States or at least one such facility for each 5,000 engines sold in the United States, whichever is less. Companies not meeting these criteria would need to post a bond as described above for compliance assurance. We would allow these companies to arrange for any applicable recall repairs to be done at independent facilities.

(e) Restrictions Related to Naming Model Years

New exhaust emission standards apply based on the date of engine assembly. We similarly require that equipment manufacturers use engines meeting emission standards in the same model year as equipment based on the equipment assembly date. For example, a manufacturer of a 2007 model year piece of equipment must generally use a 2007 model year engine. However, we allow equipment manufacturers to deplete their normal inventories of engines from the previous model year as long as there is no stockpiling of those earlier engines. We also note that this restriction does not apply if emission standards are unchanged for the current model year. We have found many instances where companies will import new engines usually installed in equipment and claim that the engine was built before emission standards took effect, even if the start date for emission standards was several years earlier. We believe many of these engines were in fact built later than the named model year, but it is difficult to prove the date of manufacture, which then makes it difficult to properly enforce these requirements. Now that emission standards have been in place for Small SI engines for almost ten years, we believe it is appropriate to implement a provision that prevents new engines manufactured several years previously to be imported when more recent emission standards have been adopted. This would prevent companies from importing noncompliant products by inappropriately declaring a manufacture date that precedes the point at which the current standards started to apply. It would also put a time limit on our existing provisions that allow for normal inventory management to use the supply of engines from previous model years when there has been a change in standards.

Starting January 1, 2009, we are proposing to specify that engines and equipment will be treated as having a model year at most one year earlier than the calendar year in which the importation occurs when there is a change in emission standards (see § 90.616 and § 1054.695). For example, for new standards starting in the 2011 model year, beginning January 1, 2012, all imported new products would be considered 2011 or later model year engines and would need to comply with new 2011 standards, regardless of the actual build date of the engines or equipment. (Engines or equipment would be considered new unless the importer demonstrates that the engine or equipment had already been placed into service, as described below.) This would allow a minimum of twelve months for manufactured engines to be shipped to equipment manufacturers, installed in equipment and imported into the United States. This time interval would be substantially longer for most engines because the engine manufacturer's model year typically ends well before the end of the calendar year. Also, engines produced earlier in the model year would have that much more time to be shipped, installed, and imported.

Manufacturers have expressed concern that the one-year limitation on imported products may be too short since there are often delays related to shipping, inventory, and perhaps most significantly, unpredictable fluctuations in actual sales volumes. We do not believe it is appropriate to maintain long-term inventories of these products outside the United States for eventual importation when it is clear several years ahead that the new standards are scheduled to take effect. Companies may be able to import these products shortly after manufacturing and keep their inventories in a U.S. distribution network to avoid the situation of being unable to sell these products. We request comment on the need to extend the one-year limit to account for the business dynamics. We also request comment on any narrower provisions that would allow for exceptions in certain circumstances. For example, should we consider allowing an additional year for products if manufacturers let us know ahead of time that they have certain numbers of engines or equipment that will not be imported in time, and they can demonstrate that they are not stockpiling or circumventing regulatory requirements?

In years where the standards do not change, this proposed provision would have no practical effect because, for example, a 2004 model year engine meets the 2006 model year standards. We would treat such an engine as compliant based on its 2004 emission label, any emission credit calculations for the 2004 model year, and so on. These engines could therefore be imported anytime until the end of the calendar year in which new standards take effect. Also, because the changes do not affect importation until there is a change in the standards, we are proposing to implement these provisions starting with the Phase 3 standards.

We do not intend for these proposed provisions to delay the introduction of emission standards by one year. It is still a violation to produce an engine in the 2011 calendar year and call it a 2010 model year engine to avoid being subject to 2011 standards.

Importation of equipment that is not new is handled differently. These products would not be required to be upgraded to meet new emission standards that started to apply after the engine and equipment were manufactured. However, to avoid the situation where companies simply declare that they are importing used equipment to avoid new standards, we are proposing to require that they provide clear and convincing evidence that such engines have been placed into service prior to importation. Such evidence would generally include documentary evidence of purchase and maintenance history and visible wear that is consistent with the reported manufacture date. Importing products for resale or importing more than one engine or piece of equipment at a time would generally call for closer evaluation to determine that this degree of evidence has been met.

(f) Import-Specific Information at Certification

We are proposing to require additional information to improve our ability to oversee compliance related to imported engines (see § 90.107 and § 1054.205). In the application for certification, we are proposing to require the following additional information: (1) The port or ports at which the manufacturer intends to import the engines, (2) the names and addresses of the agents the manufacturer has authorized to import the engines, and (3) the location of the test facilities in the United States where the manufacturer would test the engines if we select them for testing under a selective enforcement audit. This information should be readily available so we propose to require it for the 2009 model year. The current regulations in part 90 do not include these specific requirements; however, we do specify already that we may select imported engines at a port of entry. In such a case, we would generally direct the manufacturer to do testing at a facility in the United States. The proposed provision allows the manufacturers to make these arrangements ahead of time rather than relying on EPA's selection of a test lab. The current regulations also state clearly in § 90.119 that EPA may conduct testing at any facility to determine whether engines meet emission standards.

(g) Counterfeit Emission Labels

We have observed that some importers attempt to import noncompliant products by creating an emission control information label that is an imitation of a valid label from another company. We are not proposing to require that certifying manufacturers take steps to prevent this, but we are proposing to include a provision that specifically allows manufacturers to add appropriate features to prevent counterfeit labels. This may include the engine's serial number, a hologram, or some other unique identifying feature. We propose to apply this provision immediately upon completion of the final rule since it is an allowance and not a requirement (see § 1054.135).

(h) Partially Complete Engines

As described in Section XI, we are proposing to clarify engine manufacturers' responsibilities for certification with respect to partially complete engines. While this is intended to establish a path for secondary engine manufacturers to get their engines from the original engine manufacturer, we are aware that this will also prevent manufacturers from selling partially complete engines as a strategy to circumvent certification requirements. If long blocks or engines without fuel systems are introduced into U.S. commerce, either the original manufacturer or the company completing engine assembly would need to hold a certificate for that engine.

(7) Using Certified Small SI Engines in Marine Applications

Manufacturers have described situations in which Small SI engines are used in marine applications. As described in Section III.E.5, we are proposing to allow certified Small SI engines to be used in outboard or personal watercraft applications without certifying to the Marine SI emission standards in part 1045. We request comment on the appropriateness of this provision. In particular, we request comment on the extent to which the proposed provisions will address the unique situations that apply for swamp boats and other unusual configurations.

(8) Other Provisions

We are also proposing a variety of changes in the provisions that make up the certification and compliance program. Most of these changes serve primarily to align with the regulations we have started to apply to other types of engines.

The proposed warranty provisions are based on the requirements that already apply under 40 CFR part 90. We are proposing to add an administrative requirement to describe the provisions of the emission-related warranty in the owners manual. We expect that many manufacturers already do this but believe it is appropriate to require this as a routine practice. (See § 1054.120.) Testing new engines requires a period of engine operation to stabilize emission levels. The regulations specify two separate figures for break-in periods for purposes of certification testing. First, engines are generally operated long enough to stabilize emission levels. Second, we establish a limit on how much an engine may operate and still be considered a “low-hour” engine. The results of testing with the low-hour engine are compared with a deteriorated value after some degree of service accumulation to establish a deterioration factor. For Marine SI engines, we are proposing that the engine can be presumed to have stabilized emission levels after 12 hours of engine operation, with a provision allowing approval for more time if needed, and we generally require that low-hour test engines have no more than 30 hours of engine operation. However, given the shorter useful life for many Small SI engines, this would not make for a meaningful process for establishing deterioration factors. For example, emission levels in Small SI engines may not stabilize before deterioration begins to affect emission levels, which would prevent the engine from ever truly having stabilized emission levels. Also, the low-hour emission test should occur early enough to adequately represent the deterioration over the engine's lifetime.

We are proposing that Small SI engines with a useful life above 300 hours can be presumed stable after 12 hours with low-hour testing generally occurring after no more than 24 hours of engine operation. For Small SI engines with useful life below 300 hours, we are proposing a combination of provisions to address this concern. First, we are proposing to allow manufacturers to establish a stabilization period that is less than 12 hours without showing that emission levels have fully stabilized (see § 1054.501). Second, we propose to specify that low-hour testing must generally occur after no more than 15 hours of engine operation (see § 1054.801). This allows some substantial time for break-in, stabilization, and running multiple tests, without approaching a significant fraction of the useful life. Third, we are proposing that manufacturers consistently test low-hour production-line engines (and emission-data engines in the case of carryover deterioration factors for certification) using the same degree of service accumulation to avoid inaccurate application of deterioration factors (see § 1054.301).

As described in Section VII.C, we are proposing to clarify the maintenance that manufacturers may perform during service accumulation as part of the certification process. The general approach is to allow any amount of maintenance that is not emission-related, but to allow emission-related maintenance only if it is a routine practice with in-use engines. In most of our emission control programs we specify that 80 percent of in-use engines should undergo a particular maintenance step before manufacturers can do that maintenance during service accumulation for certification testing. We are aware that Small SI engines are predominantly operated by homeowners with widely varying practices in servicing their lawn and garden equipment. As such, achieving a rate of 80 percent may be possible only for the most obvious maintenance steps. We are therefore proposing a more accommodating approach for Small SI engines. In particular, we are proposing to allow manufacturers to perform a maintenance step during certification based on information showing that 60 to 80 percent of in-use engines get the specified maintenance at the recommended interval. We would approve the use of such maintenance based on the relative effect on performance and emissions. For example, we may allow scheduled fuel-injector replacement if survey data show this is done at the recommended interval for 65 percent of engines and performance degradation is shown to be roughly proportional to the degradation in emission control for engines that do not have their fuel injectors replaced.

One maintenance step of particular interest will be replacement of air filters. In larger spark-ignition engines, we don't treat replacement of air filters as critical emission-related maintenance, largely because those engines have feedback controls to compensate for changes in varying pressure drop across the air filter. However, for Small SI engines varying air flow through the air filter has a direct effect on the engine's air-fuel ratio, which in turn directly affects the engine's emission rates for each of the regulated pollutants. Service accumulation generally takes place in laboratory conditions with far less debris, dust, or other ambient particles that would cause filter loading, so filter changes should be unnecessary to address this conventional concern. We are concerned that the greater affect is from fuel and oil that may deposit on the back side of the filter, especially from crankcase ventilation into the intake. If filters are changed before an emission test, this effect will go undetected. If filter changes are disallowed before emission testing, manufacturers would need to design their intake systems to prevent internal filter contamination. We request comment on the need for replacing air filters, the effect on emission levels, and on the extent of change that would be needed to prevent filter contamination from recirculating crankcase gases. We also request comment on the extent to which air filters are changed with in-use engines. While this is clearly done with many engines, it is not clear that the experience is common enough that we would consider it to be routine, and therefore appropriate for certification engines. Since the cost of equipment, the types of jobs performed, and the operating lifetime varies dramatically for Class I and Class II engines, commenters should distinguish between in-use maintenance that is done by engine class as much as possible. We may, for example, conclude that owners of riding mowers and other Class II equipment routinely replace air filters to keep their equipment operating properly, while owners of walk-behind mowers and other Class I equipment are more likely to treat their equipment as a disposable product and therefore not replace the air filter.

We are proposing to define criteria for establishing engine families that are very similar to what is currently specified in 40 CFR part 90. We are proposing to require that engines with turbochargers be in a different family than naturally aspirated engines since that would be likely to substantially change the engine's emission characteristics. Very few if any Small SI engines are turbocharged today so this change will not be disruptive. We are also specifying that engines must have the same number, arrangement, and approximate bore diameter of cylinders. This will help us avoid the situation where manufacturers argue that engines with substantially different engine blocks should be in the same engine family. We would expect to implement this provision consistent with the approach adopted by California ARB in which they limit engine families to include no more than 15 percent variation in total engine displacement. Similarly, the current regulations in part 90 do not provide a clear way of distinguishing engine families by cylinder dimensions (bore and stroke) so we are also proposing to change part 90 to limit the variation in displacement within an engine family to 15 percent. (See § 1054.230 and § 90.116.)

The test procedures for Small SI engines are designed for engines operating in constant-speed applications. This covers the large majority of affected equipment; however, we are aware that engines installed in some types of equipment, such as small utility vehicles or go carts, are not governed to operate only at a single rated speed. These engines would be certified based on their emission control over the constant-speed duty cycle even though they do not experience constant-speed operation in use. We are not prepared to propose a new duty cycle for these engines but we are proposing to require engine manufacturers to explain how their emission control strategy is not a defeat device in the application for certification. For example, if engines will routinely experience in-use operation that differs from the specified duty cycle for certification, the manufacturer should describe how the fuel-metering system responds to varying speeds and loads not represented by the duty cycle. We are also proposing to require that engine distributors and equipment manufacturers that replace installed governors must have a reasonable technical basis for believing that the effectiveness of the modified engine's emission controls over the expected range of in-use operation will be similar to that measured over the specified duty cycle (see § 1054.650). This may require test data. While this does not require a new certificate of conformity, it may require testing to confirm that the engine modification should not be considered tampering. In addition, we would require that engine distributors and equipment manufacturers notify the engine manufacturer before modifying the engine, follow any instructions from the engine manufacturer related to the emission control system, and avoid making any other changes to the engine that would remove it from its certified configuration. We request comment on these provisions.

F. Small Business Provisions

(1) Small Business Advocacy Review Panel

On August 17, 2006, we convened a Small Business Advocacy Review Panel (SBAR Panel or the Panel) under section 609(b) of the Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). The purpose of the Panel was to collect the advice and recommendations of representatives of small entities that could be affected by this proposed rule and to prepare a report containing the Panel's recommendations for small entity flexibilities based on those comments, as well as on the Panel's findings and recommendations regarding the elements of the Initial Regulatory Flexibility Analysis (IRFA) under section 603 of the RFA. Those elements of an IRFA are:

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

The report of the Panel has been placed in the rulemaking record for this proposal.

In addition to EPA's Director of the Office of Regulatory Management and Information who acted as chairperson, the Panel consisted of the Director of the EPA's Assessment and Standards Division of the Office of Transportation and Air Quality, the Administrator of the Office of Management and Budget's Office of Information and Regulatory Affairs, and the Chief Counsel for Advocacy of the Small Business Administration.

Using definitions provided by the Small Business Administration (SBA), companies that manufacture internal-combustion engines and that employ fewer than 1,000 people are considered small businesses for the SBAR Panel. Companies that manufacture equipment and that employ fewer than 500 people, or fewer than 750 people for manufacturers of construction equipment, or fewer than 1,000 people for manufacturers of generators, are considered small businesses for the SBAR Panel. Based on this information, we asked 25 companies that met the SBA small business thresholds to serve as small entity representatives for the duration of the Panel process. Of these 25 companies, 14 of them represented a cross-section of Small SI engine manufacturers, equipment manufacturers, and fuel system component manufacturers. (The rest of the companies were involved in the Marine SI market.)

With input from small entity representatives, the Panel drafted a report providing findings and recommendations to us on how to reduce the potential burden on small businesses that may occur as a result of this proposed rule. The Panel report is included in the rulemaking record for this proposal. In light of the Panel report, and where appropriate, we have identified provisions anticipated for the proposed rule. The proposed flexibility options, based on the recommendations of the Panel, are described below.

(2) Proposed Burden Reduction Approaches for Small-Volume Nonhandheld Engine Manufacturers

We are proposing several provisions for small business nonhandheld engine manufacturers. The purpose of these provisions is to reduce the burden on companies for which fixed costs cannot be distributed over a large number of engines. We request comment on the appropriateness of these provisions which are described in detail below.

Under EPA's current Phase 2 regulations, EPA provided a number of provisions for small-volume engine manufacturers. For the Phase 2 regulations, the criteria for determining if a company was a “small-volume engine manufacturer” was based on whether the company projected at time of certification to have production of no more than 10,000 nonhandheld engines per year (excluding engines sold in California that are subject to the California ARB standards). Based on past experience, EPA believes that determining the applicability of the provisions based on number of employees, as compared to volume of products, can be more problematic given the nature of the workforce in terms of full-time, part-time, contract, overseas versus domestic, and parent companies. EPA believes it can avoid these potential complications and still provide relief to nearly all small businesses by continuing to use the annual sales criteria for determining which entities qualify as a small volume engine manufacturer under the Phase 3 program. For these reasons, EPA is proposing to retain the current production-based criteria for determining who is a small-volume engine manufacturer and, as a result, eligible for the Phase 3 flexibilities described below (see § 1054.801).

Based on confidential sales data provided to EPA by engine manufacturers, the 10,000 unit cut-off for engine manufacturers would include all of the small business engine manufacturers currently identified using SBA's employee-based definition. To ensure all small businesses have access to the flexibilities described below, EPA is also proposing to allow engine manufacturers which exceed the production cut-off level noted above but have fewer than 1,000 employees to request treatment as a small-volume engine manufacturer (see § 1054.635). In such a case, the manufacturer would need to provide information to EPA demonstrating that the manufacturer has fewer employees than the 1,000 cut-off level.

If a small-volume engine manufacturer grows over time and exceeds the production volume limit of 10,000 nonhandheld engines per year, the engine manufacturer would no longer be eligible for the small volume flexibilities. However, because some of the flexibilities described below provide manufacturers with the ability to avoid certain testing such as durability testing or production line testing, it may be difficult for a manufacturer to fully comply with all of the testing requirements immediately upon losing its small-volume status. In such cases, EPA is proposing that the engine manufacturer would be able to contact EPA and request additional time, subject to EPA approval, to meet the testing requirements that generally apply to engine manufacturers.

(a) Assigned Deterioration Factors

We are proposing that small-volume engine manufacturers may rely on an assigned deterioration factor to demonstrate compliance with the standards for the purposes of certification rather than doing service accumulation and additional testing to measure deteriorated emission levels at the end of the regulatory useful life (see § 1054.240). EPA is not proposing actual levels for the assigned deterioration factors with this proposal. EPA intends to analyze emissions deterioration information that becomes available over the next few years to determine what deterioration factors would be appropriate for nonhandheld engines. This is likely to include deterioration data for engines certified to comply with California ARB's Tier 3 standards and engines certified early to EPA's Phase 3 standards. Prior to the implementation date for the Phase 3 standards, EPA will provide guidance to engine manufacturers specifying the levels of the assigned deterioration factors for small-volume engine manufacturers.

(b) Exemption From Production-Line Testing

We are proposing that small-volume engine manufacturers would be exempt from the production-line testing requirements (see § 1054.301). While we are proposing to exempt small-volume engine manufacturers from production line testing, we believe requiring limited production-line testing could be beneficial to implement the ongoing obligation to ensure that production engines are complying with the standards. Therefore, we request comment on the alternative of applying limited production-line testing to small-volume engine manufacturers with a requirement to test one production engine per year.

(c) Additional Lead Time

We are proposing that small-volume engine manufacturers could delay implementation of the Phase 3 exhaust emission standards for two years (see § 1054.145). Small-volume engine manufacturers would be required to comply with the Phase 3 exhaust emission standards beginning in model year 2014 for Class I engines and model year 2013 for Class II engines. Under this approach, manufacturers would be able to apply this delay to all of their nonhandheld engines or to just a portion of their production. For those engine families that are certified to meet the Phase 3 standards prior to these delayed dates by selecting an FEL at or below the Phase 3 standards, small volume engine manufacturers could generate early Phase 3 credits (as discussed in Section V.C.3) through the 2013 model year for Class I engines and through the 2012 model years for Class II engines. This option provides more lead time for small-volume engine manufacturers to redesign their products. They would also be able to learn from some of the hurdles overcome by larger manufacturers.

(d) Broad Engine Families

We are also proposing that small-volume engine manufacturers may use a broader definition of engine family for certification purposes. Under the existing engine family criteria specified in the regulations, manufacturers group their various engine lines into engine families that have similar design characteristics including the combustion cycle, cooling system, cylinder configuration, number of cylinders, engine class, valve location, fuel type, aftertreatment design, and useful life category. We are proposing to allow small-volume engine manufacturers to group all of their Small SI engines into a single engine family for certification by engine class and useful life category, subject to good engineering judgment (see § 1054.230).

(e) Hardship Provisions

We are also proposing two types of hardship provisions for nonhandheld engine manufacturers consistent with the Panel recommendations. The first type of hardship is an unusual circumstances hardship which would be available to all businesses, regardless of size. The second type of hardship is an economic hardship provision which would be available to small businesses only. Sections VIII.C.8 and VIII.C.9 provide a description of the proposed hardship provisions that would apply to nonhandheld engine manufacturers.

(3) Proposed Burden Reduction Approaches for Small-Volume Nonhandheld Equipment Manufacturers

We are proposing three provisions for small-volume nonhandheld equipment manufacturers. The purpose of these provisions is to reduce the burden on companies for which fixed costs cannot be distributed over large sales volumes. We are offering these provisions because equipment manufacturers may need more lead time to redesign their equipment to accommodate the new Phase 3 engine designs. We request comment on the appropriateness of the flexibilities described below.

Under EPA's current Phase 2 regulations, EPA provided a number of lead time provisions for small-volume equipment manufacturers. For the Phase 2 regulations, the criteria for determining if a company was a “small-volume equipment manufacturer” was based on whether the company produced fewer than 5,000 nonhandheld pieces of equipment per year (excluding equipment sold in California that are subject to the California ARB standards). For the same reasons noted above for engine manufacturers, EPA is proposing to retain the current production-based criteria for determining who is a small-volume equipment manufacturer and, as a result, eligible for the Phase 3 flexibilities described below (see § 1054.801). The determination of which companies qualify as small-volume equipment manufacturers for the purposes of the flexibilities described below would be based on the annual U.S.-directed production of nonhandheld equipment in each of the three years from 2007 through 2009.

Based on estimated sales data for equipment manufacturers, EPA believes the 5,000 unit cut-off for equipment manufacturers would include almost all of the small business equipment manufacturers using SBA's employee-based definition. However to ensure all small businesses have access to the flexibilities described below, EPA is also proposing to allow equipment manufacturers which exceed the production cut-off level noted above but have fewer than 500 employees for equipment manufacturers, or 750 employees for construction equipment manufacturers, or 1,000 employees for generator manufacturers, to request treatment as a small-volume equipment manufacturer (see § 1054.635). In such a case, the manufacturer would need to provide information to EPA demonstrating that the manufacturer has fewer employees than the applicable employee cut-off level.

(a) Additional Lead Time

As described in Section V.E.3., EPA is proposing a transition program for all equipment manufacturers that produce Class II equipment. Under that program, equipment manufacturers can install Phase 2 engines in limited numbers of Class II equipment over the first four years the Phase 3 standards apply (i.e., 2011 through 2014). The number of equipment that can use Phase 2 engines is based on 30 percent of an average annual production level of Class II equipment. To implement this two-year extension for small-volume equipment manufacturers within the context of the transition program for equipment manufacturers, EPA is proposing that small-volume manufacturers may use Phase 2 engines at a level of 200 percent of an average annual production level of Class II equipment. Small-volume equipment manufacturers could use these allowances over the four year period of the transition program (see § 1054.625). Therefore, a small-volume equipment manufacturer could potentially use Phase 2 engines on all their Class II equipment for two years, consistent with the SBAR Panel's recommendation, or they might, for example, sell half their Class II equipment with Phase 2 engines for four years assuming sales stay constant over time.

(b) Simplified Certification Procedure

We are proposing a simplified engine certification procedure for all equipment manufacturers, including small-volume equipment manufacturers. See Section V.E.4 for further discussion of this provision.

(c) Hardship Provisions

Because nonhandheld equipment manufacturers in many cases depend on engine manufacturers to supply certified engines in time to produce complying equipment, we are also proposing a hardship provision for all nonhandheld equipment manufacturers, regardless of size. The proposed hardship would allow the manufacturer to request more time if they are unable to obtain a certified engine and they are not at fault and would face serious economic hardship without an extension (see § 1068.255). Section VIII.C.10 provides a description of the proposed hardship provision that would apply to nonhandheld equipment manufacturers.

G. Technological Feasibility

(1) Level of Standards

We are proposing new, more stringent exhaust HC+NO X standards for Class I and II Small SI engines. We are also proposing a new CO standard for Small SI engines used in marine generator applications.

In the 2005 model year manufacturers certified over 500 Class I and II engine families to the Phase 2 standards using a variety of engine designs and emission control technology. All Class I engines were produced using carbureted air-fuel induction systems. A small number of engines used catalyst-based emission control technology. Similarly, Class II engines were predominately carbureted. A limited number of these engines used catalyst technology, electronic engine controls and fuel injection, or were water cooled. In both classes, several engine families were certified at levels that would comply with the proposed Phase 3 standards. Also, a number of families were very close to the proposed emission standards. This suggests that, even accounting for the relative increase in stringency associated with our proposed Phase 3 requirements, a number of families either will not need to do anything or will require only modest reductions in their emission performance to meet the proposed standards. However, many engine families clearly will have to do more to improve their emissions performance.

Based on our own testing of advanced technology for these engines, our engineering assessments, and statements from the affected industry, we believe the proposed requirements will require many engine manufacturers to adopt exhaust aftertreatment technology using catalyst-based systems. Other likely changes include improved engine designs and fuel delivery systems. Finally, adding electronic controls or fuel injection systems may obviate the need for catalytic aftertreatment for some engine families, with the most likely candidates being multi-cylinder engine designs.

(2) Implementation Dates

We are proposing HC+NO X exhaust emission standards of 10.0 g/kW-hr for Class I engines starting in the 2012 model year and 8.0 g/kW-hr for Class II engines starting in the 2011 model year. For both classes of nonhandheld engines, we are proposing to maintain the existing CO standard of 610 g/kW-hr. We expect manufacturers to meet these standards by improving engine combustion and adding catalysts.

For spark-ignition engines used in marine generators, we are proposing a more stringent Phase 3 CO emission standard of 5.0 g/kW-hr. This would apply equally to all sizes of engines subject to the Class I and II Small SI standards, with implementation dates as described above relative to Class I and Class II engines.

(3) Technological Approaches

Our feasibility assessment began by evaluating the emissions performance of current technology for Small SI engines and equipment. These initial efforts focused on developing a baseline for emissions and general engine performance so that we could assess the potential for new emission standards for engines and equipment in this category. This process involved laboratory and field evaluations of the current engines and equipment. We reviewed engineering information and data on existing engine designs and their emissions performance. Patents of existing catalyst/muffler designs for Class I engines were also reviewed. We engaged engine manufacturers and suppliers of emission control-related engine components in discussions regarding recent and expected advances in emissions performance beyond that required to comply with the current Phase 2 standards. Finally, we purchased catalyst/muffler units that were already in mass production by an original equipment manufacturer for use on European walk-behind lawn mowers and conducted engineering and chemical analyses on the design and materials of those units.

We used the information and experience gathered in the above effort along with the previous catalyst design experience of our engineering staff, to design and build prototype catalyst-based emission control systems that were capable of effectively and safely achieving the proposed Phase 3 requirement based on dynamometer and field testing. We also used the information and the results of our engine testing to assess the potential need for improvements to engine and fuel system designs, and the selective use of electronic engine controls and fuel injection on some engine types. A great deal of this effort was conducted in association with our more exhaustive study regarding the efficacy and safety of implementing advanced exhaust emission controls on Small SI engines, as well as new evaporative requirements for these engines. In other testing, we evaluated advanced emission controls on a multi-cylinder Class II engine with electronic fuel injection. The results of that study are also discussed in Section XII.

In our test program to assess the feasibility of achieving the proposed Phase 3 HC+NO X standard, we evaluated 15 Class I engines of varying displacements and valve-train designs. Each of these engines was equipped with a catalyst-based control system and all achieved the applicable standard at the end of their regulatory useful lives. Our work also suggests that manufacturers of Class I engines may also need to improve the durability of their basic engine designs, ignition systems, or fuel metering systems for some engines in order to comply with the emission regulations.

We tested five single-cylinder, overhead-valve Class II engines with prototype catalyst/muffler control systems. Three of the engines were carbureted and two were equipped with electronic engine and fuel controls. This latter technology improves the management of air-fuel mixtures and ignition spark timing. This itself can reduce engine-out emissions relative to a carbureted system and also allows the use of larger catalyst volumes and higher precious metal loading. Each of the engines achieved the requisite emission limit for HC+NO X (e.g., 8.0 g/kW-hr). Based on this work and information from one manufacturer of emission controls, we believe that either a catalyst-based system or electronic engine controls appear sufficient to meet the standard. Nonetheless, some applications may require the use of both technologies. Finally, similarly to Class I engines, we found that manufacturers of Class II engines may also need to improve the durability of their ignition systems or fuel metering systems for some engines in order to comply with the emission regulations.

Multi-cylinder Class II engines are very similar to their single-cylinder counterparts regarding engine design and combustion characteristics. There are no multi-cylinder Class I engines. Base on these attributes and our testing of two twin-cylinder engines, we conclude that the proposed Phase 3 HC+NO X standard is technically feasible.

Nonetheless, we also found that multi-cylinder engines may present unique concern with the application of catalytic control technology under atypical operation conditions. More specifically, the concern relates to the potential consequences of combustion misfire or a complete lack of combustion in one of the two or more cylinders when a single catalyst/muffler design is used. A single muffler is typically used in Class II applications. In a single-catalyst system, the unburned fuel and air mixture from the malfunctioning cylinder would combine with hot exhaust gases from the other, properly operating cylinder. This condition would create high temperatures within the muffler system as the unburned fuel and air charge from the misfiring cylinder combusts within the exhaust system. This could potentially destroy the catalyst.

One solution is simply to have a separate catalyst/muffler for each cylinder. Another solution is to employ electronic engine controls to monitor ignition and put the engine into “limp-mode” until necessary repairs are made. For engines using carburetors, this would effectively require the addition of electronic controls. For engines employing electronic fuel injection that may need to add a small catalyst, it would require that the electronic controls incorporate ignition misfire detection if they do not already utilize the inherent capabilities within the engine management system.

As described earlier, we also expect some engine families may use electronic fuel injection to meet the proposed Phase 3 standard without employing catalytic aftertreatment. Engine families that already use these fuel metering systems and are reasonably close to complying with the proposed requirement are likely to need only additional calibration changes to the engine management system for compliance. In addition, we expect that some engine families which currently use carbureted fuel systems will convert directly to electronic fuel injection. Manufacturers may adopt this strategy to couple achieving the standard without a catalyst and realizing other advantages of using fuel injection such as easier starting, more stable and reliable engine operation, and reduced fuel consumption.

Our evaluation of electronic fuel injection systems that could be used to attain the proposed standard found that a rather simple, low-cost system should be sufficient. We demonstrated this proof of concept as part of the engine test program we conducted for our safety study. In that program, we fitted two single-cylinder Class II engines with an electronic control unit and fuel system components developed for Asian motor-scooters and small-displacement motorcycles. The sensors for the system were minimized to include a throttle position sensor, air charge temperature sensor, oil temperature sensor, manifold absolute pressure sensor, and a crankshaft position sensor. This is in contrast to the original equipment manufacturer fuel injection systems currently used in some equipment with two-cylinder Class II engine applications that employ more sophisticated and expensive automotive-based components.

Finally, there are a number of Class II engines that use gaseous fuels (i.e., liquid propane gas or compressed natural gas). Based on our engineering evaluation of current and likely emission control technology for these engines, we conclude that there are no special concerns relative to achieving the proposed Phase 3 HC+NO X standard.

Turning to the proposed Phase 3 CO standard for Class I and II Small SI engines used in marine generator applications, these engines have several rather unique design considerations that are relevant to achieving the proposed CO standard. Marine generator engines are designed to operate for very long periods. Manufacturers generally design the engines to operate at lower loads to accommodate continuous operation. Manufacturers also design them to take advantage of the cooling available from the water in the lake or river where the boat is operating (seawater). By routing seawater through the engine block, or using a heat exchanger that transfers heat from the engine coolant to the seawater, manufacturers are able to maintain engine temperatures as well or better than automotive engines. Stable temperatures in the engine block make a very significant difference in engine operation, enabling much less distortion of the cylinders and a much more consistent combustion event. These operating characteristics make it possible to introduce advanced technology for controlling emissions. Manufacturers also use this cooling water in a jacketing system around the exhaust in order to minimize surface temperatures and reduce the risk of fires on boats.

The vast majority of gasoline marine generators are produced by two engine manufacturers. Recently, these two manufacturers have announced that they are converting their marine generator product lines to new designs which can achieve more than a 99 percent reduction in CO emissions. These manufacturers stated that this action is to reduce the risk of CO poisoning and is a result of boat builder demand. These low CO emission designs used closed-loop electronic fuel injection and catalytic control. Both of these manufacturers have certified some low CO engines and have expressed their intent to convert their full product lines in the near future. These manufacturers also make use of electronic controls to monitor catalyst function.

(4) Consideration of Regulatory Alternatives

In developing the proposed emission standards, we considered what was achievable with catalyst technology. Our technology assessment work indicated that the proposed emission standards are feasible in the context of provisions for establishing emission standards prescribed in section 213 of the Clean Air Act. We also considered what could be achieved with larger, more efficient catalysts and improved fuel induction systems. In particular, Chapter 4 of the Draft RIA presents data on Class I engines with more active catalysts and on Class II engines with closed-loop control fuel injection systems in addition to a catalyst. In both cases larger emission reductions were achieved.

Based on this work we considered HC+NO X standards which would have involved a 50 percent reduction for Class I engines and a 65-70 percent reduction for Class II engines. Chapter 11 of the Draft RIA evaluates these alternatives, including an assessment of the overall technology and costs of meeting more stringent standards. For Class I engines a 50 percent reduction standard would require base engine changes not necessarily involved with the standards we are proposing and the use of a more active catalyst. For Class II engines this would require the widespread use of closed loop control fuel injection systems rather than carburetors, some additional engine upgrades, and the use three-way catalysts. We believe it is not appropriate at this time to propose more stringent exhaust emission standards for Small SI engines. Our key concern is lead time. More stringent standards would require three to five years of lead time beyond the 2011 model year start date we are proposing for the program. We believe it would be more effective to implement the proposed Phase 3 standards to achieve near-term emission reductions needed to reduce ozone precursor emissions and to minimize growth in the Small SI exhaust emissions inventory in the post 2010 time frame. More efficient catalysts, engine improvements, and closed loop electronic fuel injection could be the basis for more stringent Phase 4 emission standards at some point in the future.

(5) Our Conclusions

We believe the proposed Phase 3 exhaust emission standards for nonhandheld Small SI engines will achieve significant emission reductions. Manufacturers will likely meet the proposed standards with a mix of three-way catalysts packaged in the mufflers and fuel-injection systems. Test data using readily available technologies have demonstrated the feasibility of achieving the proposed emission levels.

As discussed in Section X, we do not believe the proposed standards would have negative effects on energy, noise, or safety and may lead to some positive effects.

VI. Evaporative Emissions

A. Overview

Evaporative emissions refer to hydrocarbons released into the atmosphere when gasoline or other volatile fuels escape from a fuel system. The primary source of evaporative emissions from nonroad gasoline engines and equipment is known as permeation, which occurs when fuel penetrates the material used in the fuel system and reaches the ambient air. This is especially common through rubber and plastic fuel-system components such as fuel lines and fuel tanks. Diurnal emissions are another important source of evaporative emissions. Diurnal emissions occur as the fuel heats up due to increases in ambient temperature. As the fuel heats, liquid fuel evaporates into the vapor space inside the tank. In a sealed tank, these vapors would increase the pressure inside the tank; however, most tanks are vented to prevent this pressure buildup. The evaporating fuel therefore drives vapors out of the tank into the atmosphere. Diffusion emissions occur when vapor escapes the fuel tank through an opening as a result of random molecular motion, independent of changing temperature. Running loss emissions are similar to diurnal emissions except that vapors escape the fuel tank as a result of heating from the engine or some other source of heat during operation rather than from normal daily temperature changes. Refueling losses are vapors that are displaced from the fuel tank to the atmosphere when someone fills a fuel tank. Refueling spitback is the spattering of liquid fuel droplets coming out of the filler neck during a refueling event. Spillage is fuel that is spilled while refueling. Regulatory provisions to set standards for several of these types of evaporative emissions effectively define the terms for establishing the specific test procedures for measuring emissions. See the proposed regulatory text for more information.

This proposal is part of a larger effort to control evaporative emissions from all mobile sources. Motor vehicles have stringent evaporative emission controls based on SHED testing of complete vehicles. (82) As a result, motor vehicle manufacturers must control diurnal emissions, permeation through all fuel-system components, running loss emissions, refueling vapor displacement, refueling spitback, and to some extent, spillage. We recently established evaporative emission standards for recreational vehicles and Large SI engines (67 FR 68242, November 8, 2002). These standards include permeation requirements for fuel tanks and fuel lines. In addition, equipment using Large SI engines must control diurnal emissions and running losses. Fuel systems used with Small SI engines and Marine SI engines are not yet subject to evaporative emission standards.

In August 2002, we proposed permeation and diurnal emission standards for fuel systems related to Marine SI engines (67 FR 53050, August 14, 2002). We finalized other portions of that proposal but chose to delay promulgation of Marine SI evaporative standards. At the time of the earlier proposal there were still open issues regarding emission control technologies for rotational-molded fuel tanks and for pressurizing fuel tanks as a diurnal emission control strategy. Since then, EPA has continued gathering information and performing tests on new technologies that could be used to address these issues. In this notice we are updating the proposed evaporative emission standards for Marine SI fuel systems. The standards in this proposal incorporate this new information.

We are also proposing standards for controlling evaporative emissions from fuel systems used with Small SI engines. These proposed standards include requirements for controlling permeation, diffusion, and running loss emissions.

B. Fuel Systems Covered by This Rule

The proposed evaporative emission standards would apply to fuel systems for both Small SI engines and Marine SI engines. The marine standards apply to fuel systems related to both propulsion and auxiliary engines. In some cases, specific standards are proposed only for certain types of equipment, as described below. These standards would apply only to new products, as described in Section VII.A.

We are proposing to write the regulations related to evaporative emission standards in 40 CFR part 1060, which is devoted to evaporative emission controls from nonroad engines and equipment. The exhaust standard-setting part (part 1045 for Marine SI and part 1054 for Small SI) defines the emission standards, but references part 1060 for certification and testing procedures, in addition to definitions, compliance-related issues, and other special provisions. Section VII describes further how the different parts work together in the certification process. Also, as described in Section XI, we are proposing to allow component manufacturers and some equipment manufacturers to certify products under the provisions of part 1060 with respect to recreational vehicles. We also plan to clarify in a separate action that marine and land-based compression-ignition engines that operate on volatile liquid fuels (such as methanol or ethanol) are subject to evaporative requirements related to part 1060. The draft regulations in part 1060 describe how those provisions would apply for compression-ignition engines, but these regulations impose no obligations until we adopt those as requirements in a separate rulemaking.

The following definitions are important in establishing which components would be covered by the proposed standards: “evaporative,” “fuel system,” “fuel line,” “portable nonroad fuel tank,” and “installed marine fuel tank.” See the full text of these definitions in the proposed regulations at § 1060.801.

Note in particular that the proposed standards would apply to fuel lines, including hose or tubing that contains liquid fuel. This would include fuel supply lines but not vapor lines or vent lines not normally exposed to liquid fuel. We consider fuel return lines for handheld engines to be vapor lines, not fuel lines. Data in Chapter 5 of the Draft RIA suggest that permeation rates through vapor lines and vent lines are already lower than the proposed standard; this is due to the low vapor concentration in the vapor line. In contrast, permeation rates for materials that are consistently exposed to saturated fuel vapor are generally considered to be about the same as that for liquid fuel. The standards also do not apply to primer bulbs exposed to liquid fuel only for priming. This standard would apply to marine filler necks that are filled or partially filled with liquid fuel after a refueling event where the operator fills the tank as full as possible. In the case where the fuel system is designed to prevent liquid fuel from standing in the fill neck, the fill neck would be considered a vapor line and not subject to the proposed fuel line permeation standard. We request comment on the appropriateness of applying permeation standards to filler necks, vapor lines and vent lines for Small SI engines and Marine SI engines.

One special note applies to fuel systems for auxiliary marine engines. These engines must meet exhaust emission standards that apply to land-based engines. This is appropriate because these engines, typically used to power generators, operate more like land-based engines than like marine propulsion engines. For evaporative emissions, however, it is important that the fuel systems for propulsion and auxiliary engines be subject to the same standards because these engines typically draw fuel from a common fuel tank and share other fuel-system components. We are therefore proposing to apply the Marine SI evaporative emission standards and certification requirements to the fuel systems for both auxiliary and propulsion marine engines on marine vessels.

Our evaporative emission standards for automotive applications are based on a comprehensive measurement from the whole vehicle. However, the evaporative standards in this proposal are generally based on individual fuel-system components. For instance, we are proposing permeation standards for fuel lines and fuel tanks rather than for the equipment as a whole. (83) We are taking this approach for several reasons. First, most production of Small SI equipment and Marine SI vessels is not vertically integrated. In other words, the fuel line manufacturer, the engine manufacturer, the fuel tank manufacturer, and the equipment manufacturer are often separate companies. In addition, there are several hundred equipment manufacturers and boat builders, many of which are small businesses. Testing the systems as a whole would place the entire certification burden on the equipment manufacturers and boat builders. Specifying emission standards and testing for individual components allows for measurements that are narrowly focused on the source of emissions and on the technology changes for controlling emissions. This correspondingly allows for component manufacturers to certify that their products meet applicable standards. We believe it would be most appropriate for component manufacturers to certify their products since they are best positioned to apply emission control technologies and demonstrate compliance. Equipment manufacturers and boat builders would then be able to purchase certified fuel-system components rather than doing all their own testing on individual components or whole systems to demonstrate compliance with every requirement. In contrast, controlling running loss emissions cannot be done on a component basis so we are proposing to require engine or equipment manufacturers to certify that they meet the running loss standard. We would otherwise expect most equipment manufacturers to simply identify a range of certified components and install the components as directed by the component manufacturer to demonstrate compliance with the proposed emission standards.

Second, a great deal of diversity exists in fuel-system designs (hose lengths, tank sizes/shapes, number of connections, etc.). In most cases, the specific equipment types are low-volume production runs so sales would not be large enough to cover the expense of SHED-type testing. Third, there are similarities in fuel lines and tanks that allow for component data to be used broadly across products in spite of extensive variety in the geometry and design of fuel systems. Fourth, many equipment types, primarily boats, would not fit in standard-size SHEDs and would require the development of very large, very expensive test facilities if the entire vessel were tested.

Finally, by proposing separate standards for fuel line permeation, fuel tank permeation, diurnal emissions, and diffusion emissions, we are able to include simplified certification requirements without affecting the level of the standards. Specifying a comprehensive test with a single standard for all types of evaporative emissions would make it difficult or impossible to rely on design-based certification. Requiring emission tests to cover the wide range of equipment models would greatly increase the cost of compliance with little or no increase in the effectiveness of the certification program. We believe the proposed approach allows substantial opportunity for market forces to appropriately divide compliance responsibilities among affected manufacturers and accordingly results in an effective compliance program at the lowest possible cost to society.

The proposed emission standards generally apply to the particular engines and their associated fuel systems. However, for ease of reference, we may refer to evaporative standards as being related to Small SI equipment or Marine SI vessels, meaning the relevant evaporative standards for engines and fuel systems used in such equipment or vessels. (84) See Section VI.F for a more detailed description of certification responsibilities for all the proposed evaporative standards.

C. Proposed Evaporative Emission Standards

We are proposing permeation standards for Small SI equipment and Marine SI vessels, covering permeation from fuel tanks and fuel lines. We are also proposing diurnal emission standards for Marine SI vessels. We are proposing diffusion emission standards but not diurnal emission standards for nonhandheld Small SI equipment. In addition, we are proposing a running loss standard for nonhandheld Small SI equipment (except wintertime engines), with a variety of specified options for manufacturers to demonstrate compliance. Based on the current state of technology, we believe the proposed standards are a logical extension of the standards proposed for marine vessels in August 2002 and the standards finalized for recreational vehicles in November 2002.

All the proposed evaporative emission standards would apply to new equipment for a useful life period in years that matches the useful life of the corresponding engine. We propose to specify a five-year useful life for evaporative requirements for Small SI equipment (we are not proposing a year-based useful life requirement related to exhaust emissions for Small SI engines). Manufacturers have expressed concern that they will not have time to gain five years of in-use experience on low-permeation fuel tanks by the proposed dates of the tank permeation standards. Unlike barrier fuel line, which is well established technology, some fuel tanks may use barrier technologies that have not been used extensively in other applications. An example of this technology would be barrier surface treatments that must be properly matched to the fuel tank material. Therefore, we are proposing a shorter useful life of two years for Marine SI and Small SI fuel tanks through the 2013 model year to allow manufacturers to gain experience in use (see §§ 1045.145 and 1054.145). We do not expect this interim provision to affect manufacturer designs or in-use compliance efforts. We do not believe this interim provision to specify a shorter useful life period is necessary for other fuel-system components, either because there is adequate durability experience in other sectors or because the control inherently does not involve a concern over in-use deterioration.

The rest of this section summarizes the proposed standards, additional requirements, and implementation dates. Unless otherwise stated, implementation dates specified below refer to the model year. Section VI.D describes how manufacturers may use emission credits to meet fuel tank permeation standards. Section VI.E describes the test procedures corresponding to each standard. Section VI.F describes how component and equipment manufacturers certify their products and how their responsibilities overlap in some cases. Section VI.F also describes the simplified process of design-based certification for meeting many of the proposed standards.

(1) Fuel Line Permeation Standards and Dates

The proposed fuel line permeation standard applies to fuel lines intended for use in new Small SI equipment and Marine SI vessels is 15 g/m 2/day at 23 °C on a test fuel containing 10 percent ethanol (see § 1060.102 and § 1060.515). The form of the standard refers to grams of permeation over a 24-hour period divided by the inside surface area of the fuel line. This proposed standard is consistent with that adopted for fuel lines in recreational vehicles. The move toward low-permeation fuel lines in recreational vehicles—and further development work in this area since the first proposed rule for marine evaporative emissions—demonstrates that low-permeation fuel lines are available on the market today for Small SI equipment and Marine SI vessels. In addition, many manufacturers are already using low-permeation technologies in response to permeation standards in California. We are therefore proposing that this standard apply beginning with 2008 for nonhandheld Small SI equipment and 2009 for Marine SI vessels. For handheld equipment, we are proposing a fuel line permeation implementation date of 2012, except that small-volume families as defined in § 1054.801 would have until 2013. Although low-permeation fuel line technology is available, handheld equipment is not currently subject to fuel line permeation requirements in California and does not typically use low-permeation fuel lines today. In addition, much of the fuel line used on handheld equipment is not straight-run fuel line for which low-permeation replacements are readily available; thus, more lead time is required. We request comment on the proposed standard and implementation dates.

Component manufacturers would be required to certify to the proposed emission standard for fuel lines (this may involve certification to a family emission limit above the emission standard for handheld engines, as described in Section VI.D), except in certain circumstances. Equipment manufacturers may need to certify that their fuel lines meet the proposed emission standards if they use any sections or pieces of fuel line that are not already certified by the fuel line manufacturer, or if they comply using emission credits, as described in Section VI.F.

To address the short lead time associated with the 2008 requirements for Small SI equipment, we are proposing an interim arrangement in which engine manufacturers would include compliant fuel lines under their existing certification (see § 90.127). This would prevent the need for other companies to submit new applications for certification that would need to be processed immediately. This arrangement would allow for engine manufacturers to start complying well ahead of the time that the fuel line standards become mandatory. The certification requirements described above for component manufacturers would start once Small SI engines and equipment would be subject to Phase 3 standards.

By specifying standards for fuel-system components rather than the entire fuel system, we must separately address appropriate requirements for connecting pieces, such as valves, O-rings, seals, plugs, and grommets that are exposed to liquid fuel but are not part of the fuel line. We are proposing to require that these ancillary pieces meet the broad specifications described in § 1060.101(f), which generally requires that fittings and connections be designed to prevent leaks. As described in Section VI.E.1, we are also proposing to allow testing of fuel line assemblies that include connecting pieces, primer bulbs, and other fuel line components as a single item (see § 1060.102). For example, manufacturers may certify fuel lines for portable marine fuel tanks as assemblies of fuel line, primer bulbs, and self-sealing end connections. Finally, we are proposing to require that detachable fuel lines be self-sealing when they are removed from the fuel tank or the engine because this would otherwise result in high evaporative emissions (see § 1060.101). To the extent that equipment manufacturers and boat builders certify their products, they would need to describe how they meet the equipment-based requirements proposed in § 1060.101(e) and (f) in their application for certification. If boat builders rely on certified components instead of certifying, they would need to keep records describing how they meet the equipment-based requirements proposed in § 1060.101(e) and (f).

Handheld equipment manufacturers have raised concerns that fuel lines constructed of available low-permeation materials may not perform well in some handheld applications under extreme cold weather conditions such as below −30 °C. These products often use injected molded fuel lines with complex shapes and designs needed to address the unique equipment packaging issues and the high vibration and random movement of the fuel lines within the overall equipment when in use. Industry has expressed concern and the data in Chapter 5 of the Draft RIA suggest that durability issues may occur from using certain low-permeation materials in these applications when the weather is extremely cold and that these could lead to unexpected fuel line leaks. Handheld equipment types that could be considered as cold-weather products include cut-off saws, clearing saws, brush cutters over 40cc, commercial earth and wood drills, ice augers, and chainsaws.

The extreme cold temperatures needed to induce the potential fuel line failures are very rare but do occur each year in Alaska and the continental United States. EPA considered a number of different options aimed at developing special provisions for equipment most likely to be used in these extreme cold weather situations without providing relief to all of the equipment sold in the broad categories identified by industry as cold weather products. These included focusing the provisions on products used by professionals (longer useful life equipment or Class V equipment only), geographic-based retrofit kits, product segregation, and special labeling. While each of the options has some merit, none could provide the full assurance that handheld equipment using low-permeation fuel lines not compatible with extreme cold weather would not be used in such weather conditions. While very low temperature materials are available that can achieve the fuel line permeation standards discussed above, these materials come at a substantially higher cost than that for fuel lines used in non cold weather products and none have been evaluated in fuel lines on the handheld equipment at issue.

If we consider a less stringent standard, we believe there are lower cost materials available that could be used to achieve permeation reductions in equipment designed for cold weather applications without creating potential safety concerns related to fuel leaks. As discussed in the Draft RIA, rubbers with high acrylonitrile (ACN) content are used in some handheld applications. These materials have about half the permeation of lower ACN-content rubbers also used in handheld applications. To capture the capability of these materials to reduce permeation emissions without creating other issues for cold weather products, we are proposing a fuel line permeation standard of 175 g/m 2/day in 2013 for cold-weather products. We request comment on appropriateness of this standard and whether there are materials that could be used to achieve larger fuel line permeation reductions from cold-weather products.

We request comment on what products should be considered to be cold-weather products and if it would be possible to distinguish between products used in warm versus cold climates. We also request comment regarding whether the proposed ABT program discussed below for handheld equipment would provide enough flexibility to manufacturers to address cold weather issues through credit trading rather than through a differentiated standard.

Outboard engine manufacturers have expressed concern that it would be difficult for them to meet proposed 2009 date for the sections of fuel lines that are mounted on their engines under the engine cowl. While some sections of straight-run fuel line are used on the outboards, many of the smaller sections between engine mounted fuel-system components and connectors are preformed or even injection-molded parts. Outboard engine manufacturers stated that they would need additional time to redesign and perform testing on low-permeation fuel lines under the cowl. PWC and SD/I manufacturers have indicated that this is not an issue on their engines because they are dominantly straight-run pieces. Outboard engine manufacturers have also stated that, in contrast to under cowl fuel line, they would be able to facilitate the introduction of low-permeation fuel line, from the fuel tank to the engine, in 2008.

We request comment on implementing an optional program where the implementation dates for fuel line under the cowl can be delayed beyond 2009, provided low-permeation fuel line from the fuel tank to the engine is used beginning on January 1, 2008. Under this approach, permeation standards for primer bulbs on fuel lines from the tank to the engine would still begin in 2009. One specific approach would be to phase in the use of low-permeation fuel lines on outboards based on the total inside surface area of the under cowl fuel lines. For instance the following phase-in could be implemented: 30 percent in 2010, 60 percent in 2011, and 90 percent in 2012. This would allow manufacturers to transition to the use of low-permeation fuel lines in an orderly fashion. Also, it would give them some flexibility to continue to use short sections of uncontrolled fuel lines, in the longer term, that are more difficult or costly to replace with low-permeation fuel lines. At some point in the future, such as 2015, we could require the use of 100 percent low-permeation fuel lines. Manufacturers would be expected to target 100 percent use of low-permeation fuel lines in new engine designs. If the surface area percentages were weighted across a manufacturers entire product line of outboard engines (rather than on a per-engine basis), it would allow manufacturers to use 100 percent low-permeation fuel lines on new engine designs, while making less changes to engines that are planned to be phased out of production.

We also request comment on how the above program could be implemented given that the fuel line from the tank to the engine is typically installed by the boat builder while the under-cowl fuel line is installed by the engine manufacturer. One approach that has been considered is requiring the engine manufacturer to specify low-permeation fuel line in its installation instructions beginning in 2008. The engines would not be made available to boat builders who do not begin using low-permeation fuel lines in 2008.

(2) Fuel Tank Permeation Standards and Dates

Except as noted below, we are proposing a fuel tank permeation standard of 1.5 g/m 2/day for tanks intended for use in new Small SI equipment and Marine SI vessels based on the permeation rate of gasoline containing 10 percent ethanol at a test temperature of 28 °C (see § 1060.103 and § 1060.520). The emission standard is based on the inside surface area of the fuel tank rather than the volumetric capacity because permeation is a function of surface area exposed to fuel. This proposed standard is consistent with that adopted for fuel tanks in recreational vehicles.

We are proposing a fuel tank permeation standard of 2.5 g/m 2/day for handheld equipment with structurally integrated nylon fuel tanks (see § 1060.801 for the proposed definition of structurally integrated nylon fuel tanks). These fuel tanks are molded as part of the general structure of the equipment. In most cases, these fuel tanks are made of glass-reinforced nylon for strength and temperature resistance. These nylon constructions typically have significantly lower permeation rates than other plastics used for fuel tanks, such as high-density polyethylene; however, based on data in Chapter 5 of the Draft RIA the nylon constructions may not be able meet a standard of 1.5 g/m 2/day. Therefore, we believe a higher standard is necessary for these fuel tank constructions. We request comment on this separate permeation standards for structurally integrated fuel tanks.

Many Small SI equipment manufacturers are currently using low-permeation fuel tanks for products certified in California. The California tank permeation test procedures use a nominal test temperature of 40 °C with California certification gasoline while we are proposing to require testing at 28 °C with gasoline containing 10 percent ethanol. We are proposing to allow manufacturers the alternative of testing their fuel tanks at 40 °C with our test fuel. Because permeation increases as a function of temperature, we are proposing an alternative standard of 2.5 g/m2/day for fuel tanks tested at 40 °C. For structurally integrated nylon fuel tanks, the alternative standard at 40 °C would be 4.0 g/m 2/day.

We consider three distinct classes of marine fuel tanks: (1) Portable marine fuel tanks (generally used with small outboards); (2) personal watercraft (PWC) fuel tanks; and (3) other installed marine fuel tanks (generally used with SD/I and larger outboards). The fuel tank permeation standards are proposed to start in 2011 for all Small SI equipment using Class II engines and for personal watercraft and portable marine fuel tanks. For Small SI equipment using Class I engines and for other installed marine fuel tanks, we propose to apply the same standard starting in 2012. Most of the marine fuel tanks with the later standards are produced in low volumes using rotational-molded cross-link polyethylene or fiberglass construction, both of which generally present a greater design challenge. We believe the additional lead time will be necessary for these fuel tanks to allow for a smooth transition to low-permeation designs. For Small SI equipment, these dates also align with the schedule for introducing the proposed Phase 3 exhaust emission standards.

Component manufacturers would be required to certify to the proposed permeation emission standard for fuel tanks (this may involve certification to a family emission limit above the emission standard, as described in Section VI.D), except in certain circumstances. Equipment manufacturers would need to certify that their fuel tanks meet the proposed emission standards if they are not already certified by the fuel tank manufacturer, or if they comply using emission credits, as described in Section VI.F. However, we are proposing that manufacturers of portable marine fuel tanks be required to certify that their products meet the new permeation standard. This is necessary because portable fuel tanks are not sold to boat builders for installation in a vessel. There is therefore no other manufacturer who could be treated as the manufacturer and responsible for meeting emission standards that apply to portable marine fuel tanks.

For handheld equipment, we are proposing a phased-in implementation of the fuel tank permeation standards. Manufacturers would be required to meet the proposed fuel tank permeation standards in 2009 for products that they already certify in California (see § 90.129). The remaining equipment, except for structurally integrated nylon fuel tanks and small-volume families, would be subject to the proposed tank permeation standards in 2010 (see § 1054.110). Structurally integrated nylon fuel tanks would be subject to the proposed standards in 2011 and small-volume families would have to meet the proposed tank permeation standards beginning in 2013. Manufacturers would need to start using EPA-specified procedures starting in 2010, except that equipment certified using carryover data would be allowed to use data collected using procedures specified for compliance in California for model years 2010 and 2011 (see § 1054.145).

For the purpose of the proposed fuel tank permeation standards, a fuel cap mounted on the fuel tank is considered to be part of the fuel tank. We consider a fuel cap to be mounted on the fuel tank unless the fuel tank is designed to have a filler neck at least 12 inches long with the opening at least six inches above the top of the fuel tank. The fuel cap would therefore be included in the tank permeation standard and test. The cap may optionally be tested separately from the tank and the results combined to determine the total tank permeation rate (see § 1060.521). Cap manufacturers could also test their caps and certify them separately to a separate 1.5 g/m 2/day cap permeation standard. The permeation requirements apply independently of the diffusion standards described below, which address venting of fuel vapors. We are concerned that allowing certification of fuel caps could add complexity to the certification process. It would also add a measure of uncertainty in our efforts to ensure compliance with emission standards—for fuel tanks certified to permeation standards alone, it would be hard ensure that the fuel tanks in the final installation would be in a certified configuration with respect to diffusion emissions. We therefore request comment on the value to manufacturers of allowing fuel caps to be certified independently from the fuel tank. Note that a single certification fee would apply to fuel tanks that are certified to permeation and diffusion emission standards, but only if there is no optional fuel cap certification. With the option of fuel cap certification, a separate certification fee would apply to diffusion and permeation families, even if a single fuel tank manufacturer certifies to both standards.

(3) Diurnal Emission Standards and Dates

We are proposing diurnal emission standards for fuel tanks intended for use in new Marine SI vessels (see § 1045.107). We consider three distinct classes of marine fuel tanks: (1) Portable marine fuel tanks (used with small outboards); (2) personal watercraft (PWC) fuel tanks; and (3) other installed fuel tanks (used with SD/I and larger outboards). For diurnal emissions from portable fuel tanks, we are proposing a design requirement that the tank remain sealed up to a pressure of 5.0 psi, starting in the 2009 model year (see § 1060.105). We are also proposing that portable fuel tanks must continue to be self-sealing when disconnected from an engine.

We are proposing a general emission standard of 0.40 g/gal/day based on a 25.6-32.2 °C temperature profile for installed tanks. The applicable test procedures are described in Section VI.E.3. Manufacturers have expressed concerns that some very large boats stay in the water throughout the boating season and therefore will see a much smaller daily swing in fuel temperatures, which corresponds with a smaller degree of diurnal emissions. We are proposing to address this concern with an alternative standard and test procedure that would apply only for nontrailerable boats. Using available measurements related to fuel temperatures and emission models to relate temperatures to projected diurnal emission levels, we are proposing an alternative standard of 0.16 g/gal/day based on a 27.6-30.2 °C temperature cycle for fuel tanks installed in nontrailerable boats. For the purposes of this rule, we are proposing to define a nontrailerable boat as 26 feet or more in length, which is consistent with the U.S. Fish and Wildlife Service definition for “nontrailerable recreational vessels” in 50 CFR 86.12. The diurnal emission standards would apply starting in 2009 for PWC fuel tanks and in 2010 for other installed fuel tanks.

Component manufacturers would be required to certify to the proposed diurnal emission standard for fuel tanks, except in certain circumstances. Equipment manufacturers would need to certify that their fuel tanks meet the proposed emission standards if they are not already certified by the fuel tank manufacturer, as described in Section VI.F. As described above for permeation standards, we are proposing to require manufacturers of portable marine fuel tanks to certify that they meet the proposed diurnal emission standards since there is no “equipment manufacturer” to assume certification responsibility for those tanks.

We believe the proposed requirements would achieve at least a 50 percent reduction in diurnal emissions from PWC and other installed marine fuel tanks and nearly a 100 percent reduction from portable marine tanks. We request comment on the proposed diurnal emission standards for Marine SI vessels.

It is common today for portable marine fuel tanks to maintain an airtight seal when the engine is not operating. These tanks typically have caps that are fitted with a valve that can be manually opened during engine operation and closed when the fuel tank is stored. Although this technology could be used to control diurnal emissions effectively, it depends on user intervention. We are proposing that portable fuel tanks be required to be fitted with a self-sealing vent rather than a manually-controlled vent. For instance, a one-way diaphragm valve could be used to allow air in when fuel is drawn from the tank (to prevent vacuum conditions), but otherwise seal the fuel tank. Current portable marine fuel tanks are small and designed to hold pressure when the manual valve is closed. We are proposing to require that portable marine fuel tanks be designed to maintain a seal to allow for pressure buildup resulting from normal temperature swings. These tanks should include valves that prevent a vacuum in the tank during engine operation which could restrict fuel flow to the engine and potentially stall the engine. We believe portable marine fuel tanks with valves that seal automatically will control diurnal emissions without relying on user operation. We are proposing to implement this design standard beginning with the 2009 model year. We request comment on this approach.

Manufacturers will likely control emissions from installed marine fuel tanks either by sealing the fuel system up to 1.0 psi or by using a carbon canister in the vent line. As discussed below, we believe PWC manufacturers will likely seal the fuel tank with a pressure-relief valve while manufacturers of other boats with installed fuel tanks are more likely to use carbon canisters. However, either technology would be acceptable for either kind of installed marine fuel tank as long as every system meets the numerical standard applicable to the specific tank.

Personal watercraft currently use sealed fuel systems for preventing fuel from exiting, or water from entering, the fuel tank during typical operation. These vessels use pressure-relief valves for preventing excessive positive pressure in the fuel system; the pressure to trigger the valve may range from 0.5 to 4.0 psi. Such fuel systems would also need a low-pressure vacuum relief valve to allow the engine to draw fuel from the tank during operation. In the 2002 proposal, we discussed a diurnal emission standard largely based on the use of a sealed system with a 1.0 psi pressure-relief valve. The Personal Watercraft Industry Association (PWIA) expressed support in their comments for this proposal. We estimate that diurnal emissions from a sealed system with a 1.0 psi pressure-relief valve would be about half that of the same system on a PWC with an open vent. For personal watercraft, we are proposing an implementation date of 2009 because the anticipated technology is widely used today.

The National Marine Manufacturers Association (NMMA) expressed concern in their comments on the 2002 proposal that pressurized fuel tanks could lead to safety issues for larger installed fuel tanks. NMMA commented that these tanks would deform under pressure and that pressure could lead to fuel leaks. Manufacturers also commented that bladder fuel systems, which would not be pressurized, would be too expensive. At the time of the 2002 proposal, we considered the use of carbon canisters to control diurnal emissions, but were concerned that active purging would occur infrequently due to the low hours of operation per year seen by many boats. However, we have since collected data on carbon canisters showing that canisters can reduce emissions by more than 50 percent with passive purge that occurs during the normal breathing process without creating any significant pressure in the fuel tank. For installed marine fuel tanks, other than PWC, we are therefore proposing an implementation date of 2010 to allow additional lead time for designing and producing canisters for marine vessels.

During the SBREFA process described in Section VI.I, NMMA expressed general support of the feasibility of using carbon canisters on boats. However, they commented that there are many small boat builders that may need additional time to become familiar with and install carbon canisters in their boats. We request comment on either a three-year phase-in (say 33/66/100 percent over the 2010 through 2012 model years) or an extra year of lead time for small businesses to comply with the proposed diurnal emission standards. We also request comment on which small business companies would be eligible for this flexibility. One option would be to use the SBA definition of a small boat builder which is based on having fewer than 500 employees. Another option would be to base the flexibility on the annual boat sales of the company. One issue with the latter approach would be the wide range of boat sizes and sales prices in the marine industry. With a given number of employees, many more small than large boats can be manufactured in a year.

If a manufacturer uses a canister-based system to comply with the standard applicable to the specific tank, we are also proposing to require that manufacturers design their systems not to allow liquid gasoline to reach the canister during refueling or from fuel sloshing (see § 1060.105). Liquid gasoline would significantly degrade the carbon's ability to capture hydrocarbon vapors. One example of an approach to protect the canister from exposure to liquid gasoline is a design in which the canister is mounted higher than the fuel level and a small orifice or a float valve is installed in the vent line to stop the flow of liquid gasoline to the canister.

Several manufacturers have stated that it is common for users to fill their fuel tank until they see fuel coming out of the vent line. In addition to being a source of hydrocarbon emissions, if liquid fuel were to reach a carbon canister, it would significantly reduce the effectiveness of the canister. Solutions for this problem are relatively straightforward and have been used in automotive applications for many years. We are therefore proposing to require that boat builders use good engineering judgment in designing fuel systems that address diurnal emission control in a way that does not increase the occurrence of fuel spitback or spillage during refueling beginning in the years specified in Table VI-1. While this provision is not detailed or prescriptive, it communicates a requirement that manufacturers appropriately take refueling design into account, and it allows EPA to make enforcement decisions as the industry establishes sound practices in this area. In addition, we are proposing that manufacturers would have to meet certain specifications with their fuel tank caps, including requirements to tether the cap to the equipment and designing the cap to provide physical or audible feedback when the vapor seal is established. Also, adding vents to a fuel tank would generally not be allowed. To the extent that boat builders certify their vessels to meet emission standards, they would need to describe how they meet these refueling-related requirements in their application for certification. If boat builders rely on certified components instead of applying for certification, they would need to keep records describing how they meet these refueling-related requirements; Section VI.F describes how such companies can meet certification requirements without applying for a certificate.

Any increase in fuel temperature resulting from engine operation would cause a potential for emissions that is very similar to diurnal emissions. We are therefore proposing to disallow manufacturers from disabling their approaches for controlling diurnal emissions during engine operation (see § 1060.105). This would ensure that any running loss emissions that would otherwise occur will be controlled to a comparable degree as diurnal emissions.

We are not proposing diurnal emission standards for Small SI equipment. However, we request comment on such a requirement. We believe passively purging carbon canisters could reduce diurnal emissions by 50 to 60 percent from Small SI equipment. Active purging would result in even greater reductions. However, we believe some important issues would need to be resolved, such as cost, packaging, and vibration. The cost sensitivity is especially noteworthy given the relatively low emissions levels (on a per-equipment basis) from such small fuel tanks. We request comment on the appropriate level of such a standard and when it could be implemented.

There are some small outboard marine engines that have fuel tanks directly mounted on the engine. In these cases, the fuel tank could be considered to be more similar to those on Small SI equipment than other marine fuel tanks. Typically, these outboard engines have fuel tanks on the order of 1-2 liters in size. Manufacturers have expressed concern about the practicality of using carbon canisters for these applications due to space constraints and durability impacts of engine handling. We request comment on excluding fuel tanks less than 2 liters in size that are mounted on outboard engines from the proposed diurnal emission requirements. Since it may be a viable alternative, comments should address the feasibility of using sealed fuel tanks with pressure relief in these applications. Similar to Small SI equipment, marine fuel tanks mounted on the engine are directly exposed to heat from the engine during operation. In the case where diurnal standards were not applied to these fuel tanks, we request comment on applying the proposed diffusion and running loss standards, described below, to these fuel tanks.

(4) Diffusion Standards and Dates

As described above, diffusion emissions occur when vapor escapes the fuel tank through an opening as a result of random molecular motion, independent of changing temperature. Diffusion emissions can be easily controlled by venting fuel tanks in a way that forces fuel vapors to go through a long, narrow path to escape. We are proposing that manufacturers may choose between certifying to a performance standard or a design standard. Under a performance standard, we specify a test procedure and a maximum emission rate. Under a design standard, we specify certain designs that a manufacturer may use to comply with the standard. This standard would take effect at the same time as the exhaust emission standards—2011 for Class II engines and 2012 for Class I engines.

We are proposing a performance standard of 0.80 g/day for diffusion emissions for fuel tanks intended for use in new nonhandheld Small SI equipment (§ 1060.105). This standard would not apply to a manufacturer who certifies using one of the four alternative design standards described below.

1. We are proposing a design standard for diffusion in which the tank must be sealed except for a single vent line. This vent line would need to be at least 180 mm long and have a ratio of length to the square of the diameter of at least 5.0 mm -1 (127 inches -1). For example, a vent line with 6 mm inside diameter would have to be at least 180 mm long to meet this design standard.

2. We are proposing a second alternative design standard for diffusion in which vapors from a fuel tank are vented solely through a tortuous path through the fuel cap. Many fuel cap manufacturers use this cap design today to prevent fuel from splashing out through the vent during operation. As described in Chapter 5 of the Draft RIA, we tested three low-diffusion fuel caps used on Class I equipment with high annual sales. Based on these designs, we proposing to define a tortuous path fuel cap as one that is vented through a small path in the gasket and then around the threads where the cap screws onto the fuel tank. Specifically, we are proposing an average path length to total cross sectional area in the gasket pathways of greater than 1 mm -1 and a vent path through at least 360° of the threads.

3. We are proposing a third alternative design standard for diffusion in which the fuel tank is sealed except for a vent through a carbon canister. Carbon canisters are one technology that manufacturers may use to meet diurnal emission standards in California.

4. We are proposing a fourth alternative design standard for diffusion in which a fuel tank is sealed so that vapors may not exit the fuel tank. Under this design standard, it would be acceptable to have a pressure relief valve with an opening pressure of at least 0.5 psi.

We request comment on the appropriateness of setting a design standard for diffusion and on the designs described above. We also request comment on any additional diffusion data from fuel caps that are capable of meeting the proposed performance-based diffusion standard and on the design of these fuel caps. Even without the alternative of a design standard, we anticipate that fuel cap manufacturers, with a small number of designs covering a large number of equipment models, would be able to perform the necessary testing for a performance-standard without being unreasonably burdened.

Fuel tank manufacturers would be required to certify that their products limit venting sufficiently to meet the proposed diffusion emission standard, except in certain circumstances. Fuel cap manufacturers may optionally certify their fuel caps to the diffusion emission standard, in which case they would become subject to all the compliance requirements related to the standards, including certification. Equipment manufacturers would need to certify that their fuel tanks meet the proposed emission standards if they are not already certified by the fuel tank manufacturer, as described in Section VI.F.

We are also proposing that equipment manufacturers subject to diffusion emission standards must ensure that the fuel cap is tethered to the fuel tank or the equipment to prevent it from being accidentally misplaced (see § 1060.101). A missing fuel tank cap would bypass any design intended to control these losses and could lead to very high emission rates. Fuel cap or fuel tank manufacturers could address this as part of their component certification. If this is not part of the component certification, an equipment manufacturer would need to describe how it meets the tethering requirement in its application for certification.

We are not proposing diffusion standards for handheld equipment. Handheld equipment use fuel caps that are either sealed or have tortuous venting pathways to prevent fuel from spilling during operation. We believe these fuel cap designs limit diffusion emissions sufficiently that handheld equipment already meet the proposed standard. In addition, we are not proposing diffusion standards for Marine SI vessels. The diurnal emission standard for Marine SI vessels will lead manufacturers to adopt technologies that automatically limit diffusion losses, so there is no need to propose a separate diffusion standard for those systems. Similarly, we would not finalize the proposed diffusion standard if we adopt a diurnal emission standard for Small SI equipment. We request comment on the proposed diffusion standard for nonhandheld equipment and whether it should apply to handheld equipment and marine vessels as well.

(5) Running Loss Emission Standards and Dates

We are proposing standards to control running loss emissions from nonhandheld Small SI equipment beginning in the same year as the proposed Phase 3 exhaust emission standards—2012 for Class I engines and 2011 for Class II engines (see § 1060.104). Equipment manufacturers would need to certify that their equipment models meet the proposed running loss requirements since component certification is not practical.

We have measured fuel temperatures and found that some types of equipment experience significant fuel heating during engine operation. This was especially true for fuel tanks mounted on or near the engine. This occurs in many types of Small SI equipment.

It would be very difficult to define a measurement procedure to consistently and accurately quantify running losses. Also, a performance standard with such a procedure would introduce a challenging testing requirement for hundreds of small-volume equipment manufacturers. Moreover, we believe there are several different design approaches that will reliably and effectively control running losses. We are therefore not proposing to control running losses using the conventional approach of establishing a procedure to measure running losses and adopting a corresponding emission standard. Manufacturers could choose from one of the following approaches to meet this requirement:

  • Vent running loss fuel vapors from the fuel tank to the engine's intake manifold in a way that burns the fuel vapors in the engine instead of venting them to the atmosphere. The use of an actively purged carbon canister would qualify under this approach.
  • Use a bladder to minimize fuel vapor volume in a sealed fuel tank.
  • Design the equipment so that fuel temperature does not rise more than 8 °C during normal operation. Such a design may use insulation or forced cooling to minimize temperature increases. This would require measuring fuel temperatures to show that each covered equipment configuration does not exceed the temperature threshold (see § 1060.535).
  • Show that the equipment qualifies as wintertime equipment.

We believe any of these approaches will ensure that manufacturers will be substantially controlling running losses, either by preventing or managing running loss vapors. While none of these approaches are expected to require extensive design changes or lead time, any manufacturer choosing the option to vent running loss fuel vapors into the engine's intake manifold would need to make this change in coordination with the engine design. As a result, we believe it is appropriate to align the timing of the running loss standards with the introduction of the proposed Phase 3 standards.

We request comment on the proposed running loss requirement for nonhandheld Small SI equipment. We also request comment on any other design approaches that will reliably and effectively control running losses. Examples of other approaches may be to seal the fuel tank for pressures up to 3.5 psi or, for equipment that does not include fuel recirculation, locate the fuel tank at least 12 inches away from the engine and other heat sources (such as exhaust pipes, hydraulic lines, etc.).

We are not proposing to apply the running loss requirements to handheld Small SI engines. We believe running loss emission standards should not apply to handheld engines at this time because the likely approach to controlling running losses could require that manufacturers revisit their design for controlling exhaust emissions. As described above, we are not proposing to change the exhaust emission standards for handheld engines in this rulemaking. In addition, there are some technical challenges that would require further investigation. For example, the compact nature of the equipment makes it harder to isolate the fuel tank from the engine and the multi-positional nature of the operation may prevent a reliable means of venting fuel vapors into the intake manifold while the engine is running. We request comment on the appropriateness of requiring manufacturers to address running loss emissions from handheld engines.

Furthermore, we are not proposing to apply running loss requirements to Marine SI engines. Installed marine fuel tanks are generally not mounted near the engine or other heat sources so running losses should be very low. A possible exception to this is personal watercraft since they are designed with the fuel tank closer to the engine. However, under the proposed standard for controlling diurnal emissions, we expect that manufacturers will design their fuel tanks to stay pressurized up to 1 psi. This would also help control running loss emissions. We request comment on applying running loss controls to Marine SI engines. In particular, we request comment on the possibility that other design configurations would have higher running loss emissions. One example may be outboard applications in which a fuel tank is mounted directly on the engine.

(6) Requirements Related to Refueling

Refueling spitback and spillage emissions represent a substantial additional amount of fuel evaporation that contributes to overall emissions from equipment with gasoline-fueled engines. We are not proposing measurement procedures with corresponding emission standards to address these emission sources. However, we believe equipment manufacturers can take significant steps to address these refueling issues by incorporating sound practices into their equipment designs. For example, designing a marine filler neck with a horizontal segment near the fuel inlet will almost inevitably lead to high levels of spillage since fuel flow will invariably reach the nozzle, leading to substantial fuel flow out of the fuel system. In contrast, designing for automatic shutoff would prevent this. Also, maintaining a vertical orientation of the filler neck would allow the fuel to flow back into the filler neck and into the tank after the nozzle shuts off.

For Small SI equipment, designing fuel inlets that are readily accessible and large enough to see the rising fuel level (either through the tank wall or the fuel inlet) will substantially reduce accidental spillage during refueling. We are therefore proposing to require that equipment manufacturers design and build their equipment such that operators could reasonably be expected to fill the fuel tank without spitback or spillage during the refueling event (see § 1060.101). This proposed requirement mirrors the following requirement recently adopted with respect to portable fuel containers (72 FR 8428, February 26, 2007):

You are required to design your portable fuel containers to minimize spillage during refueling to the extent practical. This requires that you use good engineering judgment to avoid designs that will make it difficult to refuel typical vehicle and equipment designs without spillage. (40 CFR 59.611(c)(3))

While the proposed requirement is not as objective and quantifiable as the other standards and requirements we are proposing, we believe this is important, both to set a requirement for manufacturers in designing their products and to give EPA the ability to require manufacturers to select designs that are consistent with good engineering practice regarding effective refueling strategies. To the extent that equipment manufacturers and boat builders certify their products to emission standards, they would need to describe how they meet this refueling-related requirement in their application for certification. If boat builders rely on certified components instead of applying for certification, they would need to keep records describing how they meet this refueling-related requirement; Section VI.F describes how such companies can meet certification requirements without applying for a certificate. We request comment on this approach to addressing refueling emissions from nonroad spark-ignition engines. We also request comment on the possibility of relying on current or future published industry standards to establish designs for equipment and fueling containers that minimize refueling emissions under normal in-use conditions.

Spitback and spillage are a particular concern for gasoline-fueled boats. Marine operators have reported that relatively large quantities of gasoline are released into the marina environment during refueling events. The American Boat and Yacht Council (ABYC) has a procedure in place to define a standard practice to address refueling. However, this procedure calls for testing by refueling up to a 75 percent fill level at a nominal flow rate of 5 gallons per minute. This procedure is clearly not consistent with prevailing practices and is not effective in preventing spills. We believe the most effective means of addressing this problem is for ABYC to revise their test procedure to reflect current practices. Specifically, we would recommend a procedure in which the marine fuel tank is filled at flow rates between 5 and 20 gallons per minute until automatic shutoff occurs.

A variety of technological solutions are available to address spitback and spillage from marine vessels. The simplest would be a system much like is used on cars. A small-diameter tube could run along the filler neck from the top of the tank to a point near the top of the filler neck. Once liquid fuel would reach the opening of the filler neck and the extra tube, the fuel would go faster up the small-diameter tube and trigger automatic shutoff before the fuel climbs up the filler neck. This design would depend on the user to use the equipment properly and may not be fully effective, for example, with long filler necks and low refueling rates. An alternative design would involve a snug fit between the nozzle's spout and the filler neck, which would allow for a tube to run from a point inside the tank (at any predetermined level) directly to the shutoff venturi on the spout. The pressure change from the liquid fuel in the tank reaching the tube's opening would trigger automatic shutoff of the nozzle. This system would prevent overflowing fuel without depending on the user. These are just two of several possible configurations that would address fuel spillage from marine vessels.

We request comment on the degree of fuel spillage with current technologies and practices with marine vessels. We request comment on the potential for ABYC standards to address fuel spillage or on the need for EPA to adopt such procedures and standards. We request comment on the specific procedures that would be appropriate for measuring spitback and spillage. Finally, we request comment on adopting provisions such as those in 40 CFR 80.22 to regulate the dimensions of refueling nozzles for marine applications, including a specification of a nominal nozzle diameter of 1.187±0.010 inches and nominal venturi placement 5/8 inch from the terminal end of the nozzle.

(7) Summary Table of Proposed Evaporative Emission Standards

Table VI-1 summarizes the proposed standards and implementation dates discussed above for evaporative emissions from Small SI equipment and Marine SI vessels. Where a standard does not apply to a given class of equipment, “NA” is used in the table to indicate “not applicable.”

Table VI.-1.—Proposed Evaporative Emission Standards and Model Year Dates
Standard/categoryHose permeationTank permeationDiurnalDiffusionRunning loss
Proposed Standards     
Standard level15 g/m 2 /day1.5 g/m 2 /day0.40 g/gal/day0.80 g/dayDesign standard.
Implementation Dates: Small SI Equipment     
Handheld 2012 a b 2009-2013 c d NA NANA.
Class I 2008 2012 NA 2012 g 2012.
Class II 2008 2011 NA 2011 g 2011.
Implementation Dates: Marine Vessels     
Portable tanks 200920112009 e NANA.
PWC 20092011 2009NANA.
Other installed tanks200920122010 f NANA.

D. Emission Credit Programs

A common feature of mobile source emission requirements is an emission credit program that allows manufacturers to generate emission credits based on certified emission levels for engine families that are more stringent than the standard. See Section VII for background information and general provisions related to emission credit programs.

We believe it is appropriate to consider compliance based on emission credits relative to permeation standards for fuel lines used with handheld engines and for fuel tanks used in all applications. As described above, the emission standards apply to the fuel tanks and fuel lines directly, such that we would generally expect component manufacturers to certify their products. However, we believe it is best to avoid placing the responsibility for demonstrating a proper emission credit balance on component manufacturers for three main reasons. First, it is in many cases not clear whether these components will be produced for one type of application or another. Component manufacturers might therefore be selling similar products into different applications that are subject to different standards—or no standards at all. Component manufacturers may or may not know in which application their products will be used. Second, there will be situations in which equipment manufacturers and boat builders take on the responsibility for certifying components. This may be the result of an arrangement with the component manufacturer, or equipment manufacturers and boat builders might build their own fuel tanks. We believe it would be much more difficult to manage an emission credit program in which manufacturers at different places in the manufacturing chain would be keeping credit balances. There would also be a significant risk of double-counting of emission credits. Third, most component manufacturers would be in a position to use credits or generate credits, but not both. Equipment manufacturers and boat builders are more likely to be in a position where they would keep an internal balance of generating and using credits to meet applicable requirements. Our experience with other programs leads us to believe that an emission credit program that depends on trading is not likely to be successful.

We are therefore proposing emission credit provisions in which equipment manufacturers and boat builders keep a balance of credits for their product line. Equipment manufacturers and boat builders choosing to comply based on emission credits would need to certify all their products that either generate or use emission credits. Component manufacturers would be able to produce their products with emission levels above or below applicable emission standards but would not be able to generate emission credits and would not need to maintain an accounting to demonstrate a balance of emission credits.

We are aware that some component manufacturers would be making products that generate emission credits that would belong to equipment manufacturers or boat builders. Equipment manufacturers or boat builders could in turn use those emission credits to enable them to buy components from different competing component manufacturers. This would potentially put fuel tank manufacturers producing low-FEL products at a competitive disadvantage with other manufacturers producing high-FEL fuel tanks. We request comment on the best approach to setting up an ABT program. We specifically request comment on special provisions that may be appropriate to address these competitiveness issues for component manufacturers.

(1) Averaging, Banking, and Trading for Nonhandheld Equipment and Marine Vessels

We are proposing averaging, banking, and trading (ABT) provisions for fuel tank permeation from nonhandheld Small SI equipment and Marine SI vessels (see subpart H in parts 1045 and 1054). See the following section for similar provisions for handheld Small SI equipment.

We are aware of certain control technologies that would allow manufacturers to produce fuel tanks that reduce emissions more effectively than we would require. These technologies may not be feasible or practical in all applications, but we are proposing to allow equipment manufacturers using such low-emission technologies to generate emission credits. In other cases, an equipment manufacturer may want to or need to use emission credits that would allow for fuel tanks with permeation rates above the applicable standards. Equipment manufacturers would quantify positive or negative emission credits by establishing a Family Emission Limit (FEL) to define the applicable emission level, then factoring in sales volumes and useful life to calculate a credit total. This FEL could be based on testing done either by the component manufacturer or the equipment manufacturer. Through averaging, these emission credits could be used by the same equipment manufacturer to offset other fuel tanks in the same model year that do not have control technologies that control emissions to the level of the standard. Through banking, such an equipment manufacturer could use the emission credits in later model years to offset high-emitting fuel tanks. The emission credits could also be traded to another equipment manufacturer to offset that company's high-emitting fuel tanks.

We believe an ABT program is potentially very advantageous for fuel tanks because of the wide variety of tank designs. The geometry, materials, production volumes, and market dynamics for some fuel tanks are well suited to applying emission controls but other fuel tanks pose a bigger challenge. The proposed emission credit program allows us to set a single standard that applies broadly without dictating that all fuel tanks be converted to use low-permeation technology at the same time.

We are requesting comment on one particular issue. We are not proposing to limit the life of evaporative emission credits under the proposed banking program. However, we are concerned that this could result in a situation where credits generated by a fuel tank sold in a model year are not used until many years later when the fuel tanks generating the credits have been scrapped and are no longer part of the fleet. EPA believes there may be value to limiting the use of credits to the period that the credit-generating fuel tanks exist in the fleet. For this reason, EPA requests comment on limiting the lifetime of the credits generated under the proposed evaporative emission ABT program to five years. The five-year period is consistent with the proposed useful life for fuel tank evaporative emissions.

We are proposing not to allow manufacturers to generate emission credits by using metal fuel tanks. These tanks would have permeation rates well below the standard, but there is extensive use of metal tanks today, so it would be difficult to allow these emission credits without undercutting the stringency of the standard and the expected emission reductions from the standard.

Emission control technologies and marketing related to portable marine fuel tanks are quite different than for installed tanks. Since these fuel tanks are not installed in vessels that are subject to emission standards, the fuel tank manufacturer would need to take on the responsibility for certification. As a result, we would treat these companies as both component manufacturer and equipment manufacturer with respect to their portable fuel tanks. As described above, we are proposing that component manufacturers not be responsible for compliance as part of an emission credit program. We would expect all portable fuel tank manufacturers to also make nonportable fuel tanks, which would again lead to a confusing combination of manufacturers maintaining credit balances to demonstrate compliance. In addition, most if not all portable fuel tanks are made using high-density polyethylene in a blow-molding process. The control technologies for these tanks are relatively straightforward and readily available so we do not anticipate that these companies will need emission credits to meet the proposed standards. We are therefore proposing to require portable marine fuel tanks to meet emission standards without an emission credit program.

We are proposing not to allow cross-trading of emission credits between Small SI equipment and Marine SI vessels. The proposed standards are intended to be technology-forcing for each equipment category. We are concerned that cross-trading may allow marginal credits in one area to hamper technological advances in another area. We are also proposing not to allow credit exchanges with Small SI equipment certified in California because California has its own emission standards for these products. Similarly, if California ARB adopts different evaporative requirements or separate ABT provisions for Marine SI vessels, we would not allow credit exchanges with marine vessels certified in California. These restrictions are consistent with our existing ABT programs. We also would not allow credit exchanges between handheld and nonhandheld equipment or between Class I and Class II equipment. We are concerned that cross trading between these equipment types could give an unfair competitive advantage to equipment manufacturers with broader product lines. We request comment regarding whether the competitive nature of the market warrants such a restriction in cross-trading between Class I and Class II equipment.

In the early years of the ABT program we are proposing not to have an FEL cap. This would give manufacturers additional time to use uncontrolled fuel tanks, primarily in small-volume applications, until they could convert their full product lines to having fuel tanks with permeation control. After an initial period of three years after the implementation date of the fuel tank standards, we are proposing an FEL cap of 5.0 g/m 2 /day (8.3 g/m 2 /day if tested at 40 °C). For Class II equipment, portable marine fuel tanks, and personal watercraft, the FEL cap would begin in 2014. For Class I equipment, handheld equipment, and other installed marine fuel tanks, the FEL cap would begin in 2015. See § 1045.107 and § 1054.110. For small volume, Small SI equipment families, we are proposing an FEL cap of 8.0 g/m 2 /day (13.3 g/m 2 /day if tested at 40 °C). The purpose of the FEL cap would be to prevent the long-term production of fuel tanks without permeation control, while still providing regulatory flexibility. We request comment on the level of the FEL that would be necessary to achieve this goal.

While the FEL cap is intended to require manufacturers to move toward widespread use of emission control technologies, we are aware of technologies that have measured emission levels between the proposed standard and the proposed FEL cap. As a result, the effect of an FEL cap may be that there will be little or no use of emission credits as a compliance strategy once the FEL cap applies. We request comment on the usefulness of maintaining an ABT program after we implement an FEL cap.

We are proposing that emission credits under the tank permeation standards would be calculated using the following equation: Credits [grams] = (Standard − FEL) × useful life [years] × 365 days/year × inside surface area [m 2]. Both the standard and the FEL are in units of g/m 2 /day based on testing at 28 °C.

As discussed earlier, we are proposing an alternative standard for tank permeation testing performed at 40 °C. Because permeation is higher at this temperature than the primary test temperature, emissions credits and debits calculated at this test temperature would be expected to be higher as well. An FEL 10 percent below the standard would generate 0.15 grams of credit for the primary standard and 0.25 grams of credit for the alternative standard. Therefore, we are proposing that credits and debits that are calculated based on the alternative standard be adjusted using a multiplicative factor of 0.6 (1.5/2.5 = 0.6).

We request comment on the need for averaging, banking and trading for fuel tanks and on the specific provisions proposed above.

(2) Averaging, Banking, and Trading Program for Handheld Equipment

We are proposing an ABT program for handheld equipment that would include fuel tanks and fuel lines. Under this program, a manufacturer would be able to use credits from fuel tanks to offset debits from fuel lines, or vice versa. This category of equipment generally involves very short sections of fuel lines, which are often made using complex, injection-molded designs. We believe an ABT program would help handheld equipment manufacturers meet fuel line permeation standards sooner than would otherwise be possible.

As discussed earlier, we are proposing a higher standard level of 2.5 g/m 2 /day for structurally integrated handheld fuel tanks. This standard is intended to reflect the measured permeation rates and characteristics of materials used in these fuel tanks and manufacturer concerns regarding uncertainty about the permeation rates from tanks used in the wider range of products and the lack of definitive control strategies to reduce emissions while meeting other product requirements. A similar issue exists for cold-weather fuel lines, for which we are proposing a less stringent permeation standard of 175 g/m 2 /day to address uncertainty associated with the availability of appropriate low-permeation cold-weather materials in the time frame of the new standards. We are concerned that windfall credits that may be generated for these applications if products are produced that are below the adjusted standards, but do not meet the primary standards for fuel tanks and fuel lines. To address this issue, we are proposing that credits would only be earned below 1.5 g/m 2 /day for fuel tanks and below 15 g/m 2 /day for fuel lines on handheld equipment. To promote early introduction of low-permeation products, we are proposing to allow manufacturers to be able to earn credits on this basis even before the permeation standards go into effect. Credit use would be calculated based on the applicable standards. Emission credits would otherwise be calculated using the same equation described in Section VI.D.1 above.

Both the fuel line and fuel tank standards are in units of g/m 2 /day. However, fuel line testing is performed at 23 °C while tank testing is performed at 28 °C. Because permeation tends to increase with increases in temperature, we request comment regarding whether the credits should be adjusted to account for temperature. This adjustment would be smaller than the adjustment described above for a 28 °C versus 40 °C test.

For non-structurally integrated fuel tanks, we are proposing to apply an FEL cap of 5.0 g/m 2 /day (8.3 g/m 2 /day if tested at 40°C) beginning in 2015. For structurally integrated fuel tanks we are proposing an FEL cap of 3.0 g/m 2 /day (5.0 g/m 2 /day if tested at 40 °C) in 2015. We believe this cap gives adequate flexibility for manufacturers to address variability in the permeation rates of these fuel tanks. For small volume, Small SI equipment families (including handheld and nonhandheld equipment), we are proposing a long term FEL cap of 8.0 g/m 2 /day (13.3 g/m 2 /day if tested at 40°C) to provide additional regulatory flexibility where costs cannot be spread over high production volumes. We request comment on the need for continuing an ABT program once there is an FEL cap, as described for nonhandheld equipment above.

(3) Other Evaporative Sources

We are not proposing an emission credit program for other evaporative sources. We believe technologies are readily available to meet the applicable standards for fuel line permeation, diurnal emissions and diffusion emissions (see Section VI.H.). The exception to this is for fuel lines on handheld equipment as discussed above. In addition, the diurnal emission standards for portable marine fuel tanks and PWC fuel tanks are largely based on existing technology so any meaningful emission credit program with the proposed standards would result in windfall credits. The running loss standard is not based on emission measurements and refueling-related requirements are based on design specifications only, so it is not appropriate or even possible to calculate emission credits.

(4) Early-Allowance Programs

Manufacturers may in some cases be able to meet the proposed emission standards earlier than we would require. We are proposing provisions for equipment manufacturers using low-emission evaporative systems early to generate allowances before the standards apply. These early allowances could be used, for a limited time, after the implementation date of the standards to sell equipment or fuel tanks that have emissions above the standards. We are proposing two types of allowances. The first is for Small SI equipment as a whole where for every year that a piece of equipment is certified early, another piece of equipment could delay complying with the proposed standards by an equal time period beyond the proposed implementation date. The second is similar but would be just for the fuel tank rather than the whole equipment (Small SI or Marine SI). Equipment or fuel tanks certified for the purposes of generating early allowances would be subject to all applicable requirements. These allowances are similar to the emission credit program elements described above but they are based on counting compliant products rather than calculating emission credits. Establishing appropriate credit calculations would be difficult because the early compliance is in some cases based on products meeting different standards using different procedures.

(a) Nonhandheld Small SI Equipment

Many Small SI equipment manufacturers are currently certifying products to evaporative emission standards in California. The purpose of the proposed early-allowance program is to provide an incentive for manufacturers to begin selling low-emission products nationwide. We are proposing to give allowances to manufacturers for equipment meeting the California evaporative emission standards that are sold in the United States outside of California and are therefore not subject to California's emission standards. Manufacturers would need to have California certificates for these equipment types. See § 1054.145.

Allowances could be earned in any year before 2012 for Class I equipment and before 2011 for Class II equipment. We are proposing that the allowances may be used through the 2014 model year for Class I and through the 2013 model year for Class II equipment. We are proposing not to allow trading of allowances between Class I and Class II. To keep this program simpler, we are not proposing to adjust the allowances based on the anticipated emission rates from the equipment. Therefore, we believe it is necessary to at least distinguish between Class I and Class II equipment. We request comment on the early allowance program described above for nonhandheld Small SI equipment.

(b) Fuel Tanks

We are also proposing an early-allowance program for nonhandheld Small SI equipment for fuel tanks (see § 1054.145). This program would be similar to the program described above for equipment allowances, except that it would be for fuel tanks only. We would accept California-certified configurations. Allowances could be earned prior to 2011 for Class II equipment and prior to 2012 for Class II equipment; allowances could be used through 2013 for Class II equipment and through 2014 for Class II equipment. Allowances would not be exchangeable between Class I and Class II equipment. See Section V.E.3 for a description of how this provision would interact with the proposed transition program for equipment manufacturers.

The proposed early-allowance program for marine fuel tanks would be similar except that there are no California standards for these tanks (see § 1045.145). Manufacturers certifying early to the proposed fuel tank permeation standards would be able to earn allowances that they could use to offset high-emitting fuel tanks after the proposed standards go into place. We are proposing not to allow cross-trading of allowances between portable fuel tanks, personal watercraft, and other installed fuel tanks. Each of these categories includes significantly different tank sizes and installed tanks have different implementation dates and are expected to use different permeation control technology. For portable fuel tanks and personal watercraft, allowances could be earned prior to 2011 and used through the 2013 model year. For other installed tanks, allowances could be earned prior to 2012 and used through the 2014 model year.

E. Testing Requirements

Compliance with the emission standards is determined by following specific testing procedures. This section describes the proposed test procedures for measuring fuel line permeation, fuel tank permeation, diurnal emissions, and diffusion emissions. We also describe measurement procedures related to running loss emissions. As discussed in Section VI.H, we are proposing design-based certification as an alternative to testing for certain standards.

(1) Fuel Line Permeation Testing Procedures

We are proposing that fuel line permeation be measured at a temperature of 23 ± 2 °C using a weight-loss method similar to that specified in SAE J30  (85) and J1527  (86) recommended practices (see § 1060.515). We are proposing two modifications to the SAE recommended practice. The first modification is for the test fuel to contain ethanol; the second modification is to require preconditioning of the fuel line through a fuel soak. These modifications are described below and are consistent with our current requirements for recreational vehicles.

(a) Test Fuel

The recommended practice in SAE J30 and J1527 is to use ASTM Fuel C (defined in ASTM D471-98) as a test fuel. We are proposing to use a test fuel containing 10 percent ethanol. We believe the test fuel must contain ethanol because it is commonly blended into in-use gasoline and because ethanol substantially increases the permeation rates for many materials.

Specifically, we are proposing to use a test fuel of ASTM Fuel C blended with 10 percent ethanol by volume (CE10). (87) Manufacturers have expressed support of this test fuel because it is a consistent test fluid compared to gasoline and because it is widely used today by industry for permeation testing. In addition, most of the data used to develop the proposed fuel line permeation standards were collected on this test fuel. This fuel is allowed today as one of two test fuels for measuring permeation from fuel lines under the recreational vehicle standards.

We request comment on allowing permeation testing using EPA certification gasoline (known as indolene and specified in 40 CFR 1065.710) blended with 10 percent ethanol as the test fuel (IE10). This test fuel is also specified in the recreational vehicle standards and has the advantage of being more similar to in-use fuel than CE10. Based on data contained in Chapter 5 of the Draft RIA, most materials used in fuel line constructions have lower permeation rates on IE10 than CE10. Because the proposed standards are based primarily on data collected using CE10 as a test fuel, we also request comment on how the level of the standard would need to be adjusted for testing performed on IE10.

(b) Preconditioning Soak

The second difference from weight-loss procedures in SAE practices is in fuel line preconditioning. We believe the fuel line should be preconditioned with an initial fuel fill followed by a long enough soak to ensure that the permeation rate has stabilized. We are proposing a soak period of four to eight weeks at 23 ± 5 °C. Manufacturers should use the longer soak period as necessary to achieve a stabilized permeation rate for a given fuel line design, consistent with good engineering judgment. For instance, thick-walled marine fuel line may take longer to reach a stable permeation rate than the fuel line used in Small SI equipment. After this fuel soak, the fuel reservoir and fuel line would be drained and immediately refilled with fresh test fuel prior to the weight-loss test. We request comment on the need to require a longer fuel soak, especially for marine lines.

(c) Alternative Approaches

We also propose to allow permeation measurements using alternative equipment and procedures that provide equivalent results (see § 1060.505). To use these alternative methods, manufacturers would first need to get our approval. Examples of alternative approaches that we anticipate manufacturers may use are the recirculation technique described in SAE J1737 or enclosure-type testing such as in 40 CFR part 86. (88) Note that the proposed test fuel, test temperatures, and preconditioning soak described above would still apply. Because permeation increases with temperature we would accept data collected at higher temperatures (greater than 23 °C) for a demonstration of compliance.

For portable marine fuel tanks, the fuel line assembly from the engine to the fuel tank typically includes two sections of fuel line with a primer bulb in-between and quick-connect assemblies on either end. We are proposing a provision to allow manufacturers to test the full assembly as a single fuel line to simplify testing for these fuel line assemblies (see § 1060.102). This gives the manufacturer the flexibility to use a variety of materials as needed for performance reasons while meeting the fuel line permeation standard for the fully assembled product. Measured values would be based on the total measured permeation divided by the total internal surface area of the fuel line assembly. However, where it is impractical to calculate the internal surface area of individual parts of the assembly, such as a primer bulb, we would allow a simplified calculation that treats the full assembly as a straight fuel line. This small inaccuracy would cause reported emission levels (in g/m 2/day) to be slightly higher so it would not jeopardize a manufacturer's effort to demonstrate compliance with the applicable standard.

We request comment on the above approaches for fuel line permeation testing and on the proposed test fuel.

(2) Fuel Tank Permeation Testing Procedures

The proposed test procedure for fuel tank permeation includes preconditioning, durability simulation, and a weight-loss permeation test (see § 1060.520). The preconditioning and the durability testing may be conducted simultaneously; manufacturers would put the tank through durability testing while the tank is undergoing its preconditioning fuel soak to reach a stabilized permeation level. We request comment on the proposed tank permeation test procedures and options.

(a) Test Fuel

Similar to the proposed fuel line testing procedures, we are proposing to use a test fuel containing 10 percent ethanol to help ensure in-use emission reductions with the full range of in-use fuels. We are proposing to specify IE10 as the test fuel; this is made up of 90 percent certification gasoline and 10 percent ethanol (see 40 CFR 1065.710). This is the same test fuel specified for testing fuel tanks for recreational vehicles. In addition, IE10 is representative of in-use test fuels. We are proposing that Fuel CE10 may be used as an alternative test fuel. Data in Chapter 5 of the Draft RIA suggest that permeation tends to be somewhat higher on CE10 than IE10, so testing on CE10 should be an acceptable demonstration of compliance. We request comment on the proposed test fuels.

We included a provision allowing recreational vehicle manufacturers to perform emission measurements after preconditioning using IE10. This allowance has created substantial confusion and necessitated including additional provisions to prevent manufacturers from exercising the test option in a way that undermines the objective of maintaining a procedure that accounts for the effect of ethanol. As a result, we believe it is appropriate to propose a test procedure for Small SI equipment and Marine SI vessels that maintains a consistent approach by including ethanol in the test fuel for both preconditioning and emission measurements. We request comment on this approach.

(b) Preconditioning Fuel Soak

Before testing fuel tanks for permeation, the fuel tank must be preconditioned by allowing it to sit with fuel inside until the hydrocarbon permeation rate has stabilized. Under this step, we are proposing that the fuel tank be filled with test fuel and soaked—either for 20 weeks at 28 ± 5 °C or for 10 weeks at 43 ± 5 °C. The manufacturer may need to use a longer soak period if necessary to achieve a stabilized permeation rate for a given fuel tank, consistent with good engineering judgment.

The tank would have to be sealed during this fuel soak and we are proposing that any components that are directly mounted to the fuel tank, such as a fuel cap, must be attached. Other openings, such as fittings for fuel lines or petcocks, would be sealed with impermeable plugs. In addition, if there is a vent path through the fuel cap, that vent path may be sealed. Alternatively, we are proposing that the opening could be sealed for testing and the fuel cap tested separately for permeation (discussed below). If the fuel tank is designed to have a separate fill neck between the fuel cap and the tank that is at least 12 inches long and at least 6 inches above the top of the fuel tank, the tank may be sealed with something other than a production fuel cap.

Manufacturers may do the durability testing described below during the time period specified for preconditioning. The time spent in durability testing may count as preconditioning time as long as the fuel tank has fuel inside the entire time. During the slosh testing, a fuel fill level of 40 percent would be considered acceptable for the fuel soak. Otherwise, we are proposing to require that the fuel tank be filled to nominal capacity during the fuel soak.

(c) Durability Tests

We are proposing three tests to evaluate the durability of fuel tank permeation controls: (1) Fuel sloshing; (2) pressure-vacuum cycling; and (3) ultraviolet exposure. The purpose of these deterioration tests would be to help ensure that the technology is durable under the wide range of in-use operating conditions. For sloshing, the fuel tank would be filled to 40 percent capacity with E10 fuel and rocked for one million cycles. The pressure-vacuum testing would consist of 10,000 cycles from −0.5 to 2.0 psi. These two proposed durability tests are based on draft recommended SAE practice. (89) The third durability test would be intended to assess potential impacts of ultraviolet sunlight (i.e., light with wavelength ranging from 300 to 400 nanometers) on the durability of surface treatment. In this test, the tank would be exposed to ultraviolet light with an intensity of at least 0.40 W-hr/m 2/min on the tank surface for 450 hours. Alternatively, we are proposing the tank could be exposed to direct natural sunlight for an equivalent period of time.

We are proposing to include a provision that would allow manufacturers to omit one or more of the durability tests if it is not appropriate for a certain tank design. For example, coextruded plastic tanks rely on a thin layer of material within the wall of the tank. This material is never exposed to sunlight or liquid fuel so the sloshing, pressure, and ultraviolet-exposure tests would not be necessary. At the same time, we request comment on whether other durability tests would be necessary to ensure that the fuel tank would not be compromised for safety due to changes to address permeation. Examples may be temperature cycling or impact testing.

(d) Weight-Loss Test

Following the fuel soak, we are proposing that the fuel tank must be drained and refilled with fresh fuel immediately after to prevent the fuel tank from drying out. The tank would have to be sealed within eight hours after refreshing the fuel at the end of the soak period. The permeation rate from fuel tanks would be measured by comparing mass measurements of the tank before and after a soaking period of at least two weeks at a temperature of 28 ± 2 °C. In the case of fuel tanks with very low permeation, the weight loss of the fuel tank over two week period could be too small to obtain an accurate measurement. We are proposing that manufacturers may extend the test period by two weeks to obtain an accurate measurement for fuel tanks with low permeation rates, consistent with good engineering judgment.

A change in atmospheric pressure over the weeks of testing can affect the accuracy of measured weights for testing due to the buoyancy of the fuel tank. The buoyancy effect on emission measurements is proportional to the volume of the fuel tank, so this procedure is appropriate even for testing very small fuel tanks. To address this we are proposing a procedure in which a reference fuel tank filled with sand or some other inert material to the approximate total weight of the test tank be used to zero the scale used for measuring the test tank. This would result in measured and reported values representing the change in mass from permeation losses rather than a comparison of absolute masses. This is similar to an approach in which weighing would determine absolute masses with a mathematical correction to account for the effects of buoyancy. We believe the proposed approach is better because it minimizes the possibility of introducing or propagating error.

We propose to allow permeation measurements for certification using alternative equipment and procedures that provide equivalent results. To use these alternative methods, manufacturers would first need to get our approval. An example of an alternative weight-loss measurement procedure would be to test the fuel tank in a SHED and determine the permeation by measuring the concentration of hydrocarbons in the enclosure.

(e) Fuel Cap Permeation Testing

As discussed above, we are proposing that manufacturers would have the option to test the fuel cap separately from the tank and combine the results to determine the total tank permeation rate. In this case, the permeation test would be performed as described above except that the fuel cap would be mounted on an impermeable reservoir such as a metal or glass tank. The volume of the test reservoir would have to be at least one liter to ensure sufficient fuel vapor exposure. We are proposing that the “tank” surface area for calculating the results would be the smallest inside cross sectional area of the opening on which the cap is mounted. The fuel cap would need to be tested in conjunction with a representative gasket. In the case where the vent path is through grooves in the gasket, another gasket of the same material and dimensions, without the vent grooves, may be used. In the case where the vent is through the cap, that vent would be sealed for testing.

(3) Diurnal Emission Testing Procedures

The proposed test procedure for diurnal emissions from installed marine fuel tanks involves placing the fuel tank in a SHED, varying the temperature over a prescribed profile, and measuring the hydrocarbons escaping from the fuel tank (see § 1060.525). The final result would be reported in grams per gallon where the grams are the mass of hydrocarbons escaping from the fuel tank over 24 hours and the gallons are the nominal fuel tank capacity. The proposed test procedure is derived from the automotive evaporative emission test with modifications specific to marine applications. (90) We request comment on the proposed diurnal test procedures described below.

(a) Temperature Profile

We believe it is appropriate to base diurnal measurements on a summer day with ambient temperatures ranging from 72 to 96 °F (22.2 to 35.6 °C). This temperature profile, which is also used for automotive testing, represents a hot summer day when ground-level ozone formation is most likely. Due to the thermal mass of the fuel and, in some cases, the inherent insulation provided by the boat hull, the fuel temperatures would cover a narrower range. Data presented in Chapter 5 of the Draft RIA suggest that the fuel temperature in an installed marine fuel tank would see a total change of about half the ambient temperature swing. We are therefore proposing a test temperature range of 78 to 90 °F (25.6 to 32.2 °C) for installed marine fuel tanks. This testing would be based on fuel temperature instead of ambient temperature.

We are proposing an alternative, narrower temperature range for fuel tanks installed in nontrailerable boats (≥26 ft.). Data presented in Chapter 5 of the Draft RIA suggest that the fuel temperature swing in a boat stored in the water would be about 20 percent of the ambient temperature swing. Based on this relationship, we are proposing an alternative temperature cycle for tanks installed in nontrailerable boats of 81.6 to 86.4 °F (27.6 to 30.2 °C). This alternative temperature cycle would be associated with an alternative standard as discussed earlier. See the proposed regulations at § 1060.525 for further detail. We request comment on the proposed test temperatures, especially on the appropriateness of the alternative test procedure and standard for tanks installed in nontrailerable boats.

The automotive diurnal test procedure includes a three-day temperature cycle to ensure that the carbon canister can hold at least three days of diurnal emissions without vapors breaking through to the atmosphere. For marine vessels using carbon canisters as a strategy for controlling evaporative emissions, we are proposing a three-day cycle here for the same reason. In the automotive test, the canister is loaded and then purged by the engine during a warm-up drive before the first day of testing. Here, we are proposing a different approach because we anticipate that canisters on marine applications will be passively purged. Before the first day of testing, the canister would be loaded to full working capacity and then run over the diurnal test temperature cycle, starting and ending at the lowest temperature, to allow one day of passive purging. The test result would then be based on the highest recorded value during the following three days.

For fuel systems using a sealed system (including those that rely on pressure-relief valves with no canister), we believe a three-day test would not be necessary. Before the first day of testing, the fuel would be stabilized at the initial test temperature. Following this stabilization, the SHED would be purged, followed by a single run through the diurnal temperature cycle. Because this technology does not depend on purging or storage capacity of a canister, multiple days of testing should not be necessary. We are therefore proposing a one-day test for the following technologies: Sealed systems, sealed systems with a pressure-relief valve, bladder fuel tanks, and sealed fuel tanks with a volume-compensating air bag. We request comment on this simplified approach.

(b) Test Fuel

Consistent with the automotive test procedures, we are proposing to specify a gasoline test fuel with a volatility of 9 psi. (91) We are not proposing that the fuel used in diurnal emission testing include ethanol for two reasons. First, we do not believe that ethanol in the fuel affects the diurnal emissions or control effectiveness other than the effect that ethanol in the fuel may have on fuel volatility. Second, in-use fuels containing ethanol are generally blended in such a way as to control for ethanol effects in order to meet fuel volatility requirements. We request comment on the proposed test fuel and whether it would be appropriate to specify a test fuel blended with ethanol either as the primary test fuel or as an optional test fuel. If so, we request comment regarding whether the volatility of the test fuel should be controlled to 9 psi or if ethanol should be blended into certification gasoline. We also request comment on the effect of ethanol in the fuel on controlled diurnal emissions and if the standard would need to be adjusted to account for ethanol in the test fuel.

Diurnal emissions are not only a function of temperature and fuel volatility, but of the size of the vapor space in the fuel tank. Consistent with the automotive procedures, we are proposing that the fill level at the start of the test be 40 percent of the nominal capacity of the fuel tank. Nominal capacity of the fuel tank would be defined as the a fuel tank's volume as specified by the fuel tank manufacturer, using at least two significant figures, based on the maximum volume of fuel the tank can hold with standard refueling techniques. The “permanent” vapor space above a fuel tank that has been filled to capacity would not be considered in the nominal capacity of the fuel tank.

(c) Fuel Tank Configuration

The majority of marine fuel tanks are made of plastic. Even plastic fuel tanks designed to meet our proposed standards would be expected to have some amount of permeation. However, over the length of the diurnal test, if it were performed on a new tank that had not been previously exposed to fuel, the effect of permeation on the test results should be insignificant. For fuel tanks that have reached their stabilized permeation rate (such as testing on in-use tanks), we believe it would be appropriate to correct for permeation. In such a case, we propose that the permeation rate be measured from the fuel tank and subtracted from the final diurnal test result. The fuel tank permeation rate would be measured with the established procedure for measuring permeation emissions, except that the test fuel would be the same as that used for diurnal emission testing. This test measurement would have to be made just before the diurnal emission test to ensure that the permeation rate does not change when measuring diurnal emissions. In no case would we allow a permeation correction higher than that corresponding to the applicable permeation standard for a tank with a given inside surface area. Because not correcting for permeation represents the worst-case test result, we would accept data from manufacturers in which no permeation correction was applied. We request comment on this approach.

(4) Diffusion Testing Procedures

The proposed procedure for measuring diffusion emissions is very similar to that for diurnal emissions, with three primary differences (see § 1060.530). First, the fuel tank should be filled to 90 percent of its nominal capacity. Second, the fuel tank is held in a controlled environment to stabilize at test temperatures. Third, the test run is proposed to be six hours in length. Testing has shown that diffusion occurs at a steady rate, so we would want manufacturers to be able to run a full test in a single day's shift rather than running a test for a full 24 hours. Measured emissions are then adjusted mathematically for comparison to the gram-per-day standard.

There is some concern that fluctuating temperatures during this test could cause small diurnal effects that would result in higher measured emissions. Filling the fuel tank to 90 percent would help minimize the potential for diurnal effects by increasing the thermal mass of the fuel and by reducing the volume of the vapor space. In addition, the proposed diffusion standard is based on data collected from testing in this manner.

As described above, we are proposing to allow fuel cap manufacturers to voluntarily certify their fuel caps to diffusion standard. This would require a separate test with a fuel cap mounted on a test tank with a representative sealing configuration of production tanks.

As described for diurnal measurements, we are proposing that manufacturers would be able to separately quantify permeation emissions occurring during the diffusion test and subtract the permeation contribution so the reported result isolates the test to quantifying diffusion emissions.

(5) Measurement Procedures Related to Running Loss Emissions

We do not specify a procedure for measuring running loss emissions, but we are proposing to allow manufacturers to demonstrate control of running losses by showing that fuel temperatures will not increase by more than 8 °C during normal operation (see § 1060.104 and § 1060.535). This requires testing to measure fuel temperatures on each equipment configuration. We are proposing a fuel temperature test that includes filling the fuel tank with commercially available gasoline and operating the equipment for one hour over a normal in-use duty cycle with a load factor approximately the same as the specified test cycle. If the equipment consumes 80 percent of the fuel capacity in one hour of operation, a shorter period may be used based on time until the fuel tank is drained to 20 percent capacity. We are proposing that manufacturers would be required to document a description of the operation and include grass height or equivalent variables affecting load.

We are proposing that the testing must occur outdoors with a beginning ambient temperature ranging from 20 to 30 °C with no precipitation and with average wind speeds below fifteen miles per hour. The ambient temperature would have to be steady or increasing during the test and it must be during a mostly sunny time period with a maximum cloud cover of 25 percent as reported by the nearest local airport making hourly meteorological observations.

We are proposing that the temperature of the fuel in the tank must be within 2 °C of (but not exceeding) the ambient temperature at the beginning of the test. Fuel temperature would be measured with a thermocouple positioned in the fuel but not touching the inside walls or bottom of the tank. Ambient temperature would be measured on-site in the shade. The equipment configuration meets the requirement to control running losses if measured minimum and maximum fuel temperatures throughout the period of operation do not differ by more than 8 °C. In the case were the equipment has multiple fuel tanks, the temperature would have to be measured on each fuel tank. We request comment on this procedure for measuring fuel temperatures.

We are also proposing to allow manufacturers to use an alternative procedure in a laboratory with prior EPA approval. The alternative test procedure would need to simulate outdoor conditions and consider engine operation, solar load, temperature, and wind speed. The manufacturer would be required to make a demonstration of equivalency.

F. Certification and Compliance Provisions

Sections VII and VIII describe several general provisions related to certifying emission families and meeting other regulatory requirements. This section notes several particulars related to applying these general provisions to evaporative emissions.

Marine vessels do not always include installed fuel systems. Manufacturers of vessels without installed fuel systems do not have the ability to control engine or fuel system design parameters. We are therefore proposing that vessels without an installed fuel system would not be subject to the proposed standards (see § 1045.5). As a result, it is necessary for us to treat manufacturers of uninstalled fuel-system components as the equipment manufacturer with respect to evaporative emission standards. This includes manufacturers of outboard engines (including any fuel lines or fuel tanks produced with the engine), portable fuel tanks, and the fuel line system (including fuel line, primer bulb, and connectors).

For ease of reference, Small SI equipment manufacturers, Marine SI boat builders, and manufacturers of portable marine fuel tanks (and associated fuel-system components) are all referred to as equipment manufacturers in this section.

(1) Liability for Certification and Compliance

The proposed standards for fuel lines and fuel tanks apply to any such components that are used with or intended to be used with Small SI engines or Marine SI engines (see § 1060.1 and § 1060.601). Section VI.C describes for each standard which manufacturer is expected to certify. Engine manufacturers would describe these fuel-system components in the same certification application in which they document their compliance with exhaust emission standards (see § 1045.201 and § 1054.201).

In most cases, nonroad standards apply to the manufacturer of the engine or the manufacturer of the nonroad equipment. Here, the products subject to the standards (fuel lines and fuel tanks) are typically manufactured by a different manufacturer. In most cases the engine manufacturers do not produce complete fuel systems and would therefore not be in a position to do all the testing and certification work necessary to cover the whole range of products that will be used. We are therefore proposing an arrangement in which manufacturers of fuel-system components are in most cases subject to the standards and are subject to certification and other compliance requirements associated with the applicable standards. We are proposing to prohibit the introduction into commerce of noncompliant fuel-system components that are intended for installation in Small SI equipment or Marine SI vessels unless the component manufacturer either certifies the component or has a contractual arrangement for each equipment manufacturers using their products to certify those components. As a matter of good practice, any components not intended for installation in Small SI equipment or Marine SI vessels should be labeled accordingly to prevent the possibility of improper installation to prevent confusion in this regard.

As described in Section VI.D, component manufacturers may certify with measured emission levels showing that the components meet the emission standard, or they may certify to an FEL above or below the standard. If any component manufacturer certifies using an FEL, the FEL becomes the emission standard for that emission family for all practical purposes. The component manufacturer however would not be required to meet any overall average for their products, but would have the option to certify to an FEL above or below the standard. This is to facilitate the use of ABT by equipment manufacturers, as discussed below.

Equipment manufacturers would be subject to all the proposed evaporative standards. This applies for the general standards described above with respect to fuel caps, miscellaneous fuel-system components, and refueling. These standards generally depend on design specifications rather than emission measurements, so we believe it is appropriate to simply deem these products to be certified if they are designed and produced to meet the standards we specify. The vessel manufacturer would also need to keep records of the components used (see § 1060.210). This would allow us, by operation of the regulation, to have certified products without requiring the paperwork burden associated with demonstrating compliance with these relatively straightforward specifications. Manufacturers could optionally apply for and receive a certificate of conformity with respect to these general standards, but this would not be necessary and we would expect this to be a rare occurrence.

Equipment manufacturers would also be subject to all the proposed emission standards. Equipment manufacturers may comply with requirements related to evaporative emission standards in three different situations. First, equipment manufacturers might install only components certified by the component manufacturer, without using emission credits. In this case all the components must meet the proposed emission standard or have an FEL below the standard. Such an equipment manufacturer would be subject to the fuel line and fuel tank standards, but would be able to satisfy their requirements by using certified components. They would need to apply for certification only with respect to the remaining emission standards they are subject to, such as running loss emissions (if applicable). Equipment manufacturers must also design and produce their equipment to meet the requirements specified in § 1060.101(f), though this would not necessarily involve an application for certification. Such an equipment manufacturer would generally need only to use certified components, add an emission label, and follow any applicable emission-related installation instructions to ensure that certified components are properly installed. This is similar to an equipment manufacturer that is required to properly install certified engines in its equipment, except that the equipment manufacturer must meet general design standards and shares the liability for meeting emission standards.

Second, equipment manufacturers may be required to certify certain components based on contractual arrangements with the manufacturer of those components. In this case, the equipment manufacturer's certification causes the component manufacturer to no longer be subject to the standard. This approach might involve the equipment manufacturer relying on test data from the component manufacturer. The equipment manufacturer might also be producing its own fuel tanks for installation in its equipment, in which case it would be subject to the standards and all requirements related to certification and compliance. In either case, the equipment manufacturer would take on all the responsibilities associated with certification and compliance with respect to those components.

Third, equipment manufacturers may comply with evaporative emission requirements by using certified components, some of which are certified to an FEL above the standard. The equipment manufacturer would then comply based on emission credits. In this case, the equipment manufacturer would take on all the certification and compliance responsibilities with respect to any components that are part of the equipment manufacturer's emission credit calculations. Equipment manufacturers would generally use only certified components for meeting evaporative emission requirements, but they might also hold the certificate for such components. For purposes of certification, equipment manufacturers would not need to submit new test data if they use certified components. Equipment manufacturers would make an annual accounting to demonstrate a net balance of credits for the model year. Under this approach, the component manufacturer would continue to be subject to the standards for its products and be required to meet the certification and compliance responsibilities related to the standard. However, as in the first option, the component manufacturer would not be required to meet any averaging requirements or be required to use emissions credits. Where equipment manufacturers use ABT with components that have already been certified by the component manufacturer, there will be overlapping certifications between the two parties. We propose to address this by specifying that all parties are responsible for meeting applicable requirements associated with the standards to which they have certified, but if any specific requirement is met by one company, we will consider the requirement to be met for all companies (see § 1060.5). For example, either the component manufacturer or the equipment manufacturer could honor warranty claims, but we may hold both companies responsible for the violation if there is a failure to meet warranty obligations.

Similarly, if we find that new equipment is sold without a valid certificate of conformity for the fuel lines or fuel tanks, then the equipment manufacturer and all the affected fuel-system manufacturers subject to the standards would be liable for the noncompliance (see § 1060.601).

Liability for recall of noncompliant products would similarly fall to any manufacturer whose product is subject to the standard, as described above. If more than one manufacturer is subject to the standards for a noncompliant product, we would have the discretion to assign recall liability to any one of those manufacturers. In assigning this liability, we would generally consider factors such as which manufacturer has substantial manufacturing responsibility and which manufacturer holds the certificate (see § 1060.5). However, we may hold equipment manufacturers liable for recall even if they don't manufacture or certify the defective product. This would generally be limited to cases where the component manufacturer is unavailable to execute any remedial action. For example, if a foreign component manufacturer discontinues their participation in the U.S. market or a component manufacturer goes out of business, we would turn to the equipment manufacturer.

The proposed running loss standards for nonhandheld Small SI engines are not geared toward component certification, which necessitates some special provisions. If engine manufacturers sell their engines with a complete fuel system, which is typical for Class I engines, they would also be subject to and need to comply with running loss standards as part of their overall certification. Of the available alternatives for demonstrating compliance with the running loss standard, we would expect the only practical approach for these companies would be to route vapors from the fuel tank into the engine's air intake system for combustion. Any engine manufacturer certifying its engines this way would need to test for exhaust emissions with an installed running loss vent (see § 1054.501). If equipment manufacturers use only fuel-system components that have been certified by component manufacturers (without using emission credits) and engines that are certified by the engine manufacturer to meet both exhaust and running loss standards, they would have no responsibility to certify. However, if the engine manufacturer does not sell its engine with a complete fuel system that has been certified for running loss control, the equipment manufacturer would need to certify with respect to the running loss standard.

The running loss standard is not a typical standard based on emission measurements using established procedures. Some of the available compliance demonstrations involve straightforward design specifications that involve no measurement at all. The approach of keeping fuel temperatures from increasing above a specified threshold involves a test procedure with a performance standard, but does not involve emission measurements. As described above, it may be possible to identify design specifications that would replace the need for the proposed temperature measurements. In this case running loss control would be a straightforward design standard that we could treat like the general standards above, in which equipment manufacturers are deemed to be certified by operation of the regulations, rather than submitting an application for certification. The regulations would prohibit the sale of equipment without the specified running loss controls.

(2) Regulatory Requirements Related to Certification

The established provisions for implementing exhaust emission standards apply similarly for evaporative emission standards; however, because the control technologies are very different, these requirements require further clarification. For example, scheduled maintenance is an important part of certifying engines to exhaust emission standards. There is little or no maintenance involved for the expected technologies for controlling evaporative emissions. The regulations still require manufacturers to identify specified maintenance procedures, if there are any, but there are no specific limitations on the maintenance intervals and no distinction for emission-related maintenance. Manufacturers may not do any maintenance during testing for certification. (See § 1060.125 and § 1060.235.) We also do not expect that emission-related warranty claims would be common, but we are proposing a two-year period for emission-related warranties with respect to evaporative emission controls.

Similarly, we do not expect manufacturers to use evaporative emission control technologies that involve adjustable parameters or auxiliary emission control devices. Technologies that control evaporative emissions are generally passive designs that prevent vapors from escaping, in contrast to the active systems engines use to control exhaust emissions. The regulations state the basic expectation that systems must comply with standards throughout any adjustable range without auxiliary emission control devices, but it is clear that these provisions will not apply to most evaporative systems. We also do not allow emission control strategies that cause or contribute to an unreasonable risk to public health or welfare or that involve defeat devices. While these are additional statutory provisions that are meaningful primarily in the context of controlling exhaust emissions, we are proposing to include them for addressing evaporative emissions (see § 1045.101). This also addresses the possibility that future technologies may be different in a way that makes these provisions more meaningful. We request comment on this approach. In particular we request comment on best way of adapting these provisions to evaporative emission controls.

The testing specified for certifying fuel systems to the evaporative emission standards includes measurements for evaluating the durability of emission control technologies where appropriate. While we adopted evaporative requirements for recreational vehicles relying on a testing approach that used deterioration factors, we believe it is more appropriate to incorporate the durability testing for each family directly. Therefore, no requirement exists for generating deterioration factors for any evaporative emission standard. We request comment on the best approach to incorporate durability testing for evaporative emission standards

We are proposing to require that Small SI engine or equipment manufacturers add an emission control information label if they certify with respect to running losses or if they certify based on the use of emission credits. We are proposing to require that Marine SI engine or vessel manufacturers add an emission control information label for evaporative emission only if they certify based on the use of emission credits. (See § 1060.135.) If engine, equipment, or vessel manufacturers also certify fuel-system components separately, they may include that additional information in a combined label. If the equipment is produced by the same company that certifies the engine for exhaust standards, the emission control information label for the engine may include all the appropriate information related to evaporative emissions.

In addition, we are proposing a simplified labeling requirement for fuel lines (see § 1060.136). This would involve only the fuel line manufacturer's name, EPA's standardized designation for an emission family, and the family emission limit (FEL), if applicable. This labeling information would need to be repeated continuously, with not more than 12 inches before repeating. There is some concern that if short sections of fuel lines are used, that sections of the fuel line may be found on equipment without sufficient markings on them. We request comment regarding whether the length of the repeated labeling information should be shorter than 12 inches. We are proposing simplified labeling requirements for fuel filters, primer bulbs, or short preformed fuel lines (less than 12 inches long) (see § 1060.138).

Fuel tanks that are certified separately would need to include an emission control information label (see § 1060.137). This would involve fuel tank manufacturer's name, EPA's standardized designation for an emission family, the FEL (if applicable), a simple compliance statement, and a description of the method of controlling emissions. For example, a label on a certified marine fuel tank would need to describe how it meets permeation emission standards and identify the part numbers of any associated components for meeting diurnal emission standards.

Including the fuel tank's family emission limit is important, not only for EPA oversight, but also to communicate this information to equipment manufacturers and end users. Unlike the situation for exhaust emissions, the certifying manufacturer establishes the FEL, but does not maintain a balance of emission credits. Equipment manufacturers may buy fuel tanks and fuel lines that have an FEL, which would be the basis for calculating emission credits for the equipment manufacturer. Any other approach would require equipment manufacturers to be vigilant about verifying FEL values with EPA or the component manufacturer, or both. Also, as described in Section VI.F.6, we are proposing to require that owners find replacement fuel tanks and fuel lines with FELs that match or exceed the emission control performance represented by the original parts. This is an unrealistic expectation unless the FEL is readily available on the original equipment.

Other fuel-system components would need to be labeled with the manufacturer's name and part number, if space allows, and EPA's standardized designation for an emission family (see § 1060.138). This would apply for carbon canisters, fuel tanks that are not certified separately, and any other fuel-system components (such as fuel caps) that are certified separately. Equipment manufacturers could meet the requirement to label fuel tanks by placing the overall equipment label on the fuel tank, as long as the fuel tank and label are positioned such that the label can be read easily.

Manufacturers have expressed concern that it would be very difficult to properly label very small fuel tanks and fuel lines. To the extent that engine manufacturers are certifying their products with respect to evaporative emissions, this problem can be addressed in part by putting the information related to evaporative emissions on the engine label already required for exhaust emissions. This is most likely to be the case for the smallest products. We request comment on any additional provisions we would need to specify to address space limitations on very small fuel-system components.

While we are proposing no requirement for manufacturers to test production-line or in-use products, we may pursue testing of certified products to evaluate compliance with evaporative emission standards (see § 1060.301).

(3) Emission Families

To certify equipment or components, manufacturers would first define their emission families. This is generally based on selecting groups of products that have similar emission characteristics throughout the useful life (see § 1060.230). For example, fuel tanks could be grouped together if they were made of the same material (including consideration of additives such as pigments, plasticizers, and UV inhibitors that may affect emissions) and the same control technology. For running loss control for nonhandheld Small SI engines and equipment, emission families are based on the selected compliance demonstration. For example, certifying manufacturers would have one emission family for all their products that vent fuel vapors to the engine's air intake system, and another emission family for all their products that comply based on keeping fuel temperatures below the specified threshold.

The manufacturer would then select a single product from the emission family for certification testing. This product would be the one that is most likely to exceed the applicable emission standard. For instance, the “worst-case” fuel tank in a family of monolayer tanks would likely be the tank with the thinnest average wall thickness. For fuel lines or co-extruded fuel tanks with a permeation barrier layer, the worst-case configuration may be the thinnest barrier thickness.

Testing with those products, as specified above, would need to show compliance with emission standards. The manufacturers would then send us an application for certification. After reviewing the information in the application, we would issue a certificate of conformity allowing equipment manufacturers to introduce into commerce certified equipment from the covered emission family, or alternatively, equipment with the components from certified emission families.

(4) Compliance Provisions From

As described in Section VIII, we are proposing to apply the provisions of 40 CFR part 1068 to Small SI and Marine SI engines, equipment, and vessels. This section describes how some of the provisions of part 1068 apply specifically with respect to evaporative emissions.

The provisions of § 1068.101 prohibit introducing into commerce new nonroad engines and equipment unless they are covered by a certificate of conformity and labeled appropriately. Section VI.F.1 describes the responsibilities for engine manufacturers, equipment manufacturers, and manufacturers of fuel-system components with respect to the prohibition against introducing uncertified products into commerce. In the case of portable marine fuel tanks and outboard engines, there is no equipment manufacturer so we are proposing to treat manufacturers of these items as equipment manufacturers relative to this prohibition.

While engine rebuilding or extensive engine maintenance is commonplace in the context of exhaust emission controls, there is very little analogous servicing related to evaporative emission controls. Nevertheless, it can be expected that individual components, such as fuel lines, fuel tanks, or other fuel-system components, may be replaced periodically. While the detailed rebuilding provisions of § 1068.120 have no meaning for evaporative emission controls, the underlying requirement applies generally. Specifically, if someone is servicing a certified system, there must be a reasonable basis to believe that the modified emission control system will perform at least as well as the original system. We are not proposing any recordkeeping requirements related to maintenance of evaporative emission control systems.

There are many instances where we specify in 40 CFR part 1068, subparts C and D, that engines (and the associated equipment) are exempt from emission standards under certain circumstances, such as for testing, national security, or export. Our principle objective in applying these provisions to evaporative emission standards is to avoid confusion. We are therefore proposing that an exemption from exhaust emission standards, automatically triggers a corresponding exemption from evaporative emission standards for the same products. We believe it is unlikely that an equipment manufacturer will need a separate exemption from evaporative emission standards, but the exemptions related to national security, testing, and economic hardship would apply if such a situation were to occur. We believe these are the only three reasons that would ever call for evaporative systems to be exempt when the engines have not already been exempted for some reason. We request comment on this approach to addressing exemptions and importation provisions for evaporative requirements.

Given the extended times required to precondition fuel-system components, we have no plans to require evaporative testing of units from the production line. This means that evaporative measurements are not part of the production-line testing program or selective enforcement audits. On the other hand, we may require certifying manufacturers to supply us with production equipment or components as needed for our own testing or we may find our own source of products for testing.

The defect-reporting requirements of § 1068.501 apply to certified evaporative systems. This requires the certifying manufacturer to maintain information, such as warranty claims, that may indicate an emission-related defect. The regulations describe when manufacturers must pursue an investigation of apparent defects and when to report defects to EPA. These provisions apply to every certifying manufacturer and their certified products, including component manufacturers.

(5) Interim Compliance Flexibility for Small SI Equipment

Most Small SI equipment manufacturers are currently certifying products to evaporative emission requirements in California. However, these standards and their associated test procedures differ somewhat from those proposed in this document. Although the standards are different, we believe evaporative emission control technologies are available to meet the California ARB's standards and our proposed emission standards. To help manufacturers transition to selling low-emission equipment nationwide, we are proposing to accept California ARB certification of equipment and components in the early years of the proposed federal program.

As discussed above, we are proposing to accept California ARB certification for nonhandheld equipment and fuel tanks for the purposes of the proposed early-allowance program (see §§ 1045.145 and 1054.145). We are also proposing to accept California ARB certification of handheld fuel tanks through the 2011 model year (see § 90.129).

We are proposing to accept Class I/Class II fuel lines meeting California ARB certification or certain SAE specifications through the 2011/2010 model years (see § 90.127). These SAE specifications include SAE J30 R11A, SAE J30 R12, and SAE J2260 Category 1. Such fuel lines would need to be labeled accordingly. As described in Section VI.C.1, we are proposing to require that engine manufacturers certify fuel lines used with their engines until the proposed Phase 3 standards are in place. The purpose of this provision is to give Small SI equipment manufacturers additional lead time before they have to certify to the proposed standards. For any fuel lines installed on the equipment, but not supplied with the engine, we are proposing that the engine manufacturer would be required to supply low-permeation fuel line specifications in its installation instructions (see § 90.128). Equipment manufacturers would be required, under the prohibited acts specified in the regulations, to use the fuel line specified by the engine manufacturer.

We are proposing to allow certification of walk-behind mowers under § 90.127 as an alternative to the proposed fuel line permeation standards if manufacturers rely on SHED-based certification to meet the California standards that apply to the overall equipment (diurnal, tank permeation, and fuel line permeation). While this might allow for use of fuel lines that exceed the proposed standards, we believe the overall emission control will be at least as great from systems that have been tested and certified using SHED-based procedures. The Phase 3 standards described above do not rely on diurnal emission control, so we do not intend to continue the provision for SHED-based testing and certification. However, we request comment on the possible administrative advantages or emission control advantages of continuing this alternative approach in the Phase 3 time frame.

(6) Replacement Parts

We are proposing to apply the tampering prohibition in § 1068.101(b)(1) for evaporative systems. This means that it would be a violation to replace compliant fuel tanks or fuel lines with noncompliant products. This would effectively disable the applicable emission controls. To address the concern that low-cost replacement products will be easy to make available and difficult to prevent, we are proposing several new noncompliance-related provisions. In § 1060.610 we clarify the meaning of tampering for evaporative systems and propose two requirements. First, for the period from January 1, 2012 to December 31, 2019, we propose to require that manufacturers, distributors, retailers, and importers of these replacement parts clearly label their products with respect to the applicable requirements. For example, a package might be labeled as compliant with the requirements in 40 CFR part 1060 or it might be labeled as noncompliant and appropriate only for use in applications not covered by EPA standards. Unless the packaging clearly states otherwise, the product is presumed to be intended for applications that are subject to EPA standards. Second, starting in 2020 we are proposing a provision stating that it is presumed that all replacement parts intended for applications covered by EPA standards will be installed in such equipment. This presumption significantly enhances our ability to enforce the tampering prohibition because the replacement part is then noncompliant before it is installed in a vessel or a piece of equipment. We believe shifting to a blanket presumption in 2020 is appropriate since in-use vessels and equipment will be almost universally subject to EPA's evaporative emission standards by that time.

We are aware that producing low-permeation fuel tanks in very low production volumes can be costly. In particular, some equipment owners may need to replace a fuel tank that has been certified to a Family Emission Limit (FEL) that is lower than the emission standard. The owner would need to find and install a replacement fuel tank that is certified with an FEL that is the same as or lower than that of the replaced fuel tank. However, we are concerned that such replacement fuel tanks may in some cases not be available. We are proposing to allow equipment owners to ask for an exemption from the tampering prohibition if there is no low-FEL tank available. The replacement tank would still need to meet applicable standards, but would not need to meet the more stringent emission levels reflected by the old tank's FEL. We request comment on the need for this provision. In particular, we request comment on the likelihood that owners would be unable to find replacement tanks that match the emission level of the fuel tanks being replaced.

(7) Certification Fees

Under our current certification program, manufacturers pay a fee to cover the costs associated with various certification and other compliance activities associated with an EPA issued certificate of conformity. These fees are based on the projected costs to EPA per emission family. For the fees rule published May 11, 2004, we conducted a cost study to assess EPA's costs associated with conducting programs for the industries that we certify (69 FR 26222). A copy of the cost study worksheets that were used to assess the fees per category may be found on EPA's fees Web site at . We are proposing to establish a new fees category for certification related to the proposed evaporative emission standards. The costs for this category will be determined using the same method used in conducting the previous cost study.

As under the current program, this depends on an assessment of the anticipated number of emission families and the corresponding EPA staffing necessary to perform this work. At this time, EPA plans to perform a basic level of certification review of information and data submitted to issue certificates of conformity for the evaporative emission standards, as well as conducting some testing to measure evaporative emissions. This is especially the case for equipment manufacturers that use only certified components for meeting applicable emission standards. We are proposing a fee of $241 based on Agency costs for half of a federal employee's time and three employees hired through the National Senior Citizens Education and Research Center dedicated to the administration of the evaporative certification program, including the administrative, testing, and overhead costs associated with these people. The total cost to administer the program is estimated to be $362,225. We divided this cost by the estimated number of certificates, 1503, to calculate the proposed fee.

We will update the fees related to evaporative emission certificates each year when we update the fees for all categories. The actual fee in 2015 and later model years will depend on these annual calculations. The fees update will be based upon EPA's costs of implementing the evaporative category multiplied by the consumer price index (CPI), then divided by the average of the number of certificates received in the two years prior to the update. The CPI will be applied to all of EPA's costs except overhead. This is a departure from EPA's current fees program wherein the CPI is applied only to EPA's labor costs. In the most recent fees rulemaking, commenters objected to applying the CPI to EPA's fixed costs. In the proposed fee program for the evaporative category, however, there are no fixed costs. EPA expects all its costs to increase with inflation and we therefore think it is appropriate to apply the inflation adjustment to all of the program costs.

Where a manufacturer holds the certificates for compliance with exhaust emission standards and includes certification for evaporative emissions in that same certificate, we would assess an additional charge related to compliance with evaporative emission standards to that for the exhaust emission certification.

EPA believes it appropriate to charge less for a certificate related to evaporative emissions relative to the existing charge for certificates of conformity for exhaust emissions from the engines in these same vessels and equipment. The amount of time and level of effort associated with reviewing the latter certificates is higher than that projected for the certificates for evaporative emissions.

(8) Engineering Design-Based Certification

Certification of equipment or components that are subject to performance-based emission standards depends on test data showing that products meet the applicable standards. We are proposing a variety of approaches that reduce the level of testing needed to show compliance. As described above, we allow manufacturers to group their products into emission families so that a test on a single worst-case configuration can be used to show that all products in the emission family are compliant. Also, test data from a given year could be “carried over” for later years for a given emission control design (see § 1060.235). These steps help reduce the overall cost of testing.

Design-based certification is an additional step that may be available to reduce testing requirements (see § 1060.240). To certify their products using design-based certification, certifying manufacturers would describe, from an engineering perspective, how their fuel systems meet the applicable design specifications. These manufacturers could then forego the testing described in Section VI.E. We believe there are several emission control designs that use established technologies that are well understood to have certain emission characteristics. At the same time, while engineering design-based certification is a useful tool for reducing the test burden associated with certification, this does not remove a manufacturer's liability for meeting the emission standard throughout the useful life.

The following sections describe how we propose to implement engineering design-based certification for each of the different performance standards. We are proposing that we may establish additional engineering design-based certification options where we find that new test data demonstrate that the use of other technology designs will ensure compliance with the applicable emission standards. These designs would need to produce emission levels comfortably below the proposed emission standards when variability in the emission control performance is considered.

(a) Fuel Line Permeation

In our program for recreational vehicles, we specified that fuel lines meeting certain SAE specifications could be certified by design. However, we are not proposing to allow this for Small SI equipment or marine vessels. That decision was appropriate for recreational vehicles, because that program did not include provisions for component certification. Fuel line manufacturers will need to conduct testing anyway to qualify their fuel lines as meeting the various industry ratings so any testing burden to demonstrate compliance with EPA standards should be minimal. We would allow test data used to meet industry standards to be used to certify to the proposed standards provided that the data were collected in a manner consistent with this proposal and that the data were made available to EPA if required.

(b) Fuel Tank Permeation

We are proposing to consider that a metal fuel tank meets the design criteria for a design-based certification as a low-permeation fuel tank. There is also a body of existing test data showing that co-extruded fuel tanks from automotive applications have permeation rates that are well below the proposed standard. We are proposing to allow design-based certification for co-extruded high-density polyethylene fuel tanks with a continuous ethylene vinyl alcohol barrier layer. The EVOH barrier layer would be required to be at least 2 percent of the wall thickness of the fuel tank.

To address the permeability of the fuel cap, seals, and gaskets used on metal and co-extruded tanks, we are proposing that the design criteria include a specification that seals and gaskets that are not made of low-permeation materials must have a total exposed surface area smaller than 1000 mm 2. A metal or co-extruded fuel tank with seals that meet this design criterion would reliably pass the standard. However, we believe it is not appropriate to assign an emission level to fuel tanks using a design-based certification option that would allow them to generate emission credits. Given the uncertainty of emission rates from the seals and gaskets, we would not consider these tanks to be any more effective than other fuel tanks meeting emission standards.

(c) Diurnal Emissions

For portable marine fuel tanks, we are proposing a design standard based on automatically sealing the tank to prevent fuel venting while fuel temperatures are rising. The options described below for design-based certification therefore deal only with installed marine fuel tanks (including personal watercraft).

We are proposing that fuel systems sealed to 1.0 psi would meet the criteria for engineering design-based certification to the proposed diurnal emission standards. Systems that remain sealed up to positive pressures of 1.0 psi have a predictable relationship to changing fuel temperatures that ensure that total diurnal emissions over the specified test procedure will be below the proposed standard. This type of system would allow venting of fuel vapors only when pressures exceed 1.0 psi or when the fuel cap is removed for refueling. Note that systems with anti-siphon valves would have to be designed to prevent fuel releases when the system is under pressure to meet Coast Guard requirements.

Bladder fuel tanks and tanks with a volume-compensating air bag are specialized versions of tanks that may meet the specifications for systems that remain sealed up to positive pressures of 1.0 psi. In each of these designs, volume changes within a sealed system prevent pressure buildup. As long as these designs meet basic specifications for system integrity they would also qualify for design-based certification.

We are proposing that fuel tanks equipped with a passively purged carbon canister to control diurnal emissions may be certified by design, subject to several technical specifications. To ensure that there is enough carbon to collect a sufficient mass of hydrocarbon vapors, we propose to specify a minimum butane working capacity of 9 g/dL based on the test procedures specified in ASTM D5228-92. The carbon canister would need a minimum carbon volume of 0.040 liters per gallon of fuel tank capacity. For fuel tanks certified to the optional standards for tanks in nontrailerable boats ( 26 ft. in length), we are proposing a minimum carbon volume of 0.016 liters per gallon of fuel tank capacity.

We are proposing two additional specifications for the quality of the carbon. We believe these specifications are necessary to ensure that the canister will continue to function effectively over the full useful life of a marine vessel. First, the carbon would need to meet a moisture adsorption capacity maximum of 0.5 grams of water per gram of carbon at 90 percent relative humidity and a temperature of 25 ± 5 °C. Second, the carbon would need to pass a dust attrition test similar to that in ASTM D3802-79. The moisture adsorption and dust attrition tests are described in more detail in Chapter 5 of the Draft RIA. We are also proposing that the carbon canister must be properly designed to ensure the in-use effectiveness of the carbon.

The canisters would need to be designed using good engineering judgment to ensure structural integrity. They must include a volume compensator or other device to hold the carbon pellets in place under vibration and changing temperatures and the vapor flow would need to be directed so that it reaches the whole carbon bed rather than just passing through part of the carbon. We are proposing that the geometry of the carbon canister must have a length to diameter ratio of at least 3.5.

The emission data we used to develop these proposed engineering design-based certification options are presented in Chapter 5 of the Draft RIA. Manufacturers wanting to use designs other than those we discuss here would have to perform the applicable testing. However, once an additional technology is proven, we may consider adding it to the list as one that qualifies for engineering design-based certification. For example, if several manufacturers were to pool resources to test a diurnal emission control strategy and submit this data to EPA, we could consider this particular technology, with any appropriate design specifications, as one that qualifies to be considered compliant under engineering design-based certification. We would intend to revise the regulations to include any additional technologies we decide are suitable for design-based certification, but we would be able to approve the use of additional engineering design-based certification with these technologies before changing the regulations. We request comment on this approach to design-based certification for diurnal emission control technologies and on the specific technologies discussed above. Section IV.H presents a more detailed description of these technologies and how they can be used to reduce evaporative emissions.

G. Small-Business Provisions

(1) Small Business Advocacy Review Panel

On May 3, 2001, we convened a Small Business Advocacy Review Panel under section 609(b) of the Regulatory Flexibility Act as amended by the Small Business Regulatory Enforcement Fairness Act of 1996. The purpose of the Panel was to collect the advice and recommendations of representatives of small entities that could be affected by this proposed rule and to report on those comments and the Panel's findings and recommendations as to issues related to the key elements of the Initial Regulatory Flexibility Analysis under section 603 of the Regulatory Flexibility Act. We convened a Panel again on August 17, 2006 to update our findings for this new proposal. The Panel reports have been placed in the rulemaking record for this proposal. Section 609(b) of the Regulatory Flexibility Act directs the review Panel to report on the comments of small entity representatives and make findings as to issues related to identified elements of an initial regulatory flexibility analysis (IRFA) under RFA section 603. Those elements of an IRFA are:

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

In addition to the EPA's Small Business Advocacy Chairperson, the Panel consisted of the Director of the Assessment and Standards Division of the Office of Transportation and Air Quality, the Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget, and the Chief Counsel for Advocacy of the Small Business Administration.

Using definitions provided by the Small Business Administration (SBA), companies that manufacture internal-combustion engines and that employ fewer than 1000 people are considered small businesses for a Small Business Advocacy Review (SBAR) Panel. Equipment manufacturers, boat builders, and fuel-system component manufacturers that employ fewer than 500 people are considered small businesses for the SBAR Panel. Based on this information, we asked 25 companies that met the SBA small business thresholds to serve as small entity representatives for the duration of the Panel process. These companies represented a cross-section of engine manufacturers, equipment manufacturers, and fuel-system component manufacturers.

With input from small-entity representatives, the Panel drafted a report providing findings and recommendations to us on how to reduce potential burden on small businesses that may occur as a result of this proposed rule. The Panel Report is included in the rulemaking record for this proposal. We are proposing all of the recommendations as presented in the Panel Report. The proposed flexibility options recommended to us by the Panel, and any updated assessments, are described below.

(2) Proposed Burden Reduction Approaches for Small Businesses Subject to the Proposed Evaporative Emission Standards

The SBAR Panel Report includes six general recommendations for regulatory flexibility for small businesses affected by the proposed evaporative emission standards. This section discusses the provisions being proposed based on each of these recommendations. In this industry sector, we believe the burden reduction approaches presented in the Panel Report should be applied to all businesses with the exception of one general economic hardship provision described below which is designed specifically for small businesses. The majority of fuel tanks produced for the Small SI equipment and Marine SI vessel market are made by small businesses or by companies producing small volumes of these products. The purpose of these options is to reduce the potential burden on companies for which fixed costs cannot be distributed over a large product line. For this reason, we often also consider the production volume when making decisions regarding burden reduction options.

(a) Consideration of Appropriate Lead Time

Small businesses commented that they would need to make significant changes to their plastic fuel tank designs and molding practices to meet the proposed fuel tank permeation standards. For blow-molded tank designs with a molded-in permeation barrier, new blow-molding machines would be needed that could produce multi-layer fuel tanks. One small business commented that, due to the lead time needed to install a new machine and to perform quality checks on the tanks, they would not be ready to sell multi-layer blow-molded fuel tanks until 2011 for the Small SI and Marine SI markets.

Small businesses that rotational-mold fuel tanks were divided in their opinion of when they would be ready to produce low-permeation fuel tanks. One manufacturer stated that it is already producing fuel tanks with a low-permeation inner layer that are used in Small SI applications. This company also sells marine fuel tanks, but not with the low-permeation characteristics. However, they have performed Coast Guard durability testing on a prototype 40 gallon marine tank using their technology which passed the tests. Two other small businesses, that rotationally mold fuel tanks, stated that they have not been able to identify and demonstrate a low-permeation technology that would meet their cost and performance needs. They commented that developing and demonstrating low-permeation technology is especially an issue for the marine industry because of the many different tank designs and Coast Guard durability requirements.

Consistent with the Panel recommendations in response to the above comments, we are proposing to provide sufficient lead time for blow-molded and marine rotational molded fuel tanks. We are proposing tank permeation implementation dates of 2011 for Class II equipment and 2012 for Class I equipment. For marine fuel tanks, we are proposing to implement the tank permeation standards in 2011 with an additional year (2012) for installed fuel tanks which are typically rotational-molded marine fuel tanks (see § 1054.110 and § 1045.107).

There was no disagreement on the technological feasibility of the Marine SI diurnal emission standard EPA is considering. Small businesses commented that they would like additional time to install carbon canisters in their vessels. They stated that some boat designs would require deck and hull changes to assist in packaging the canisters and they would like to make these changes in the normal turnover cycle of their boat molds. Small businesses commented that they would consider asking EPA to allow the use of low-permeation fuel line prior to 2009 as a method of creating an emission neutral option for providing extra time for canisters. We are requesting comment on phase-in schemes or other burden reduction approaches which would provide small businesses additional lead time to meet these requirements without losing overall emission reductions.

The majority of large equipment manufacturers have indicated that they will be using low-permeation fuel lines in the near term as part of their current product plans. As a result, we are proposing an implementation date of 2008 for Small SI fuel line permeation standards for nonhandheld equipment (see § 90.127). The Panel expressed concern that small equipment manufacturers who do not sell products in California may not necessarily be planning on using low-permeation fuel line in 2008. Therefore, we are proposing a 2009 implementation date for low-permeation fuel line for small businesses producing Small SI nonhandheld equipment.

(b) Fuel Tank ABT and Early-Incentive Program

The Panel recommended that we propose an ABT program for fuel tank permeation and an early-allowance program for fuel tank permeation. Our proposed ABT and early-allowance programs are described above. We are requesting comment on including service tanks in the ABT program. These are tanks that are sold as replacement parts for in-use equipment.

(c) Broad Definition of Emission Family

The Panel recommended that we propose broad emission families for fuel tank emission families similar to the existing provisions for recreational vehicles. As described above, we are proposing permeation emission families be based on type of material (including additives such as pigments, plasticizers, and UV inhibitors), emission control strategy, and production methods. Fuel tanks of different sizes, shapes, and wall thicknesses would be grouped into the same emission family (see § 1045.230 and § 1054.230). Manufacturers therefore would be able to broadly group similar fuel tanks into the same emission family and then only test the configuration most likely to exceed the emission standard. Although Small SI and Marine SI fuel tanks would not be allowed in the same emission family, it could be possible to carry-across certification test data from one category to another.

(d) Compliance Progress Review for Marine Fuel Tanks

One manufacturer of rotational-molded fuel tanks has stated that they are already selling low-permeation tanks into the Small SI market and they have plans to sell them into marine applications. However, other manufacturers of rotational-molded marine fuel tanks have expressed concern that they do not have significant in-use experience to demonstrate the durability of low-permeation rotational-molded fuel tanks in boats. To address this uncertainty, EPA intends to continue to engage on a technical level with rotational-molded marine fuel tank manufacturers and material suppliers to assess the progress of low-permeation fuel tank development and compliance. If systematic problems are identified across the industry, this would give EPA the opportunity to address the problem. If problems were identified only for individual businesses, this would give EPA early notice of the issues that may need to be addressed through the proposed hardship relief provisions.

(e) Engineering Design-Based Certification

In the existing evaporative emission program for recreational vehicles, manufacturers using metal fuel tanks may certify by design to the tank permeation standards. Tanks using design-based certification provisions are not included in the ABT program because they are assigned a certification emission level equal to the standard. The Panel recommended that we propose to allow design-based certification for metal tanks and plastic fuel tanks with a continuous EVOH barrier. The Panel also recommended that we propose design-based certification for carbon canisters. A detailed description of the proposed design-based certification options that are consistent with the Panel recommendations is presented earlier in this document.

The National Marine Manufacturers Association (NMMA) the American Boat and Yacht Council (ABYC) and the Society of Automotive Engineers (SAE) have industry recommended practices for boat designs that must be met as a condition of NMMA membership. NMMA stated that they are working to update these recommended practices to include carbon canister installation instructions and low-permeation fuel line design. The Panel recommended that EPA accept data used for meeting the voluntary requirements as part of the EPA certification. We are proposing that this data could be used as part of EPA certification as long as it is collected consistent with the test procedures and other requirements described in this proposal.

(f) Hardship Provisions

We are proposing two types of hardship provisions consistent with the Panel recommendations. The first type of hardship is an unusual circumstances hardship which would be available to all businesses, regardless of size. The second type of hardship is an economic hardship provision which would be available to small businesses only. Sections VIII.C.8 and VIII.C.9 provide a description of the proposed hardship provisions that would apply to the range of manufacturers subject to the proposed Marine SI and Small SI evaporative emission requirements. This would include Marine SI engine manufacturers, nonhandheld engine manufacturers, nonhandheld equipment manufacturers, handheld equipment manufacturers, boat builders, and fuel-system component manufacturers.

The proposed criteria for small businesses are presented earlier in Sections III.F.2 and IV.G for Marine SI engine manufacturers, Section V.F.2 for nonhandheld engine manufacturers, and Section V.F.3 for nonhandheld equipment manufacturers. For handheld equipment manufacturers, EPA is proposing to use the existing small-volume manufacturer criteria which relies on a production cut-off of 25,000 pieces of handheld equipment per year. For boat builders and fuel-system component manufacturers, EPA is proposing to base the determination of whether a company is a small business based on the SBA definition. The SBA small business definition for companies manufacturing boats subject to the proposed standards is fewer than 500 employees. Likewise, the SBA small business definition for companies manufacturing fuel-system components such as fuel tanks and fuel lines is fewer than 500 employees.

Because many boat builders, nonhandheld equipment manufacturers, and handheld equipment manufacturers will depend on fuel tank manufacturers and fuel line manufacturers to supply certified products in time to produce complying vessels and equipment, we are also proposing a hardship provision for all boat builders and Small SI equipment manufacturers, regardless of size. The proposed hardship would allow the boat builder or equipment manufacturer to request more time if they are unable to obtain a certified fuel system component and they are not at fault and would face serious economic hardship without an extension (see § 1068.255). Section VIII.C.10 provides a description of the proposed hardship provisions that would apply to boat builders and Small SI equipment manufacturers.

H. Technological Feasibility

We believe there are several strategies that manufacturers can use to meet the proposed evaporative emission standards. We have collected and will continue to collect emission test data on a wide range of technologies for controlling evaporative emissions. The design-based certification levels discussed above are based on this test data and we may amend the list of approved designs and emission levels as more data become available.

In the following sections we briefly describe how we decided to propose specific emission standards and implementation dates, followed by a more extensive discussion of the expected emission control technologies. A more detailed discussion of the feasibility of the proposed evaporative requirements, including all the underlying test data, is included in Chapter 5 of the Draft RIA. See Table VI-1 for a summary of the proposed evaporative emission standards.

(1) Level of Standards

The proposed fuel line and fuel tank permeation standards for Small SI equipment and Marine SI vessels are based on the standards already adopted for recreational vehicles. These applications use similar technology in their fuel systems. In cases where the fuel systems differ we have identified technological approaches that could be used to meet these same emission levels. The control strategies are discussed below. For structurally integrated nylon fuel tanks and for fuel lines used with cold-weather equipment, we are proposing slightly relaxed standards based on available permeation data. In addition, we have proposed higher numerical standards for fuel tank permeation for tests performed at higher temperature (40 °C vs. 28 °C). These higher numerical standards are based on data described in Chapter 5 of the Draft RIA.

For fuel tanks installed in personal watercraft and for portable marine fuel tanks, we are proposing diurnal emission standards based on the current capabilities of these systems. We are basing the proposed standard for other installed marine fuel tanks on the capabilities of passive systems that store emitted vapors in a carbon canister. The Draft RIA describes the test results on passively purged canisters, and other technologies, that led us to the proposed level of the diurnal emission standard.

Control of diffusion emissions from Small SI equipment requires application of a simple technological approach that is widely used today. The Draft RIA describes the testing we conducted on fuel caps with tortuous vent paths and short vent lines on which we based the diffusion emission standard.

We have measured running loss emissions and found that some Small SI products have very high emission levels. The large variety of manufacturers and equipment types makes it impractical to design a measurement procedure, which means that we are unable to specify a performance standard. We are proposing a design standard for running losses from Small SI equipment by specifying that manufacturers may use any of a variety of specified design solutions, as described in Section VI.C.6. Several of these design options are already in common use today.

We are proposing to require that equipment and vessel manufacturers use good engineering judgment in their designs to minimize refueling spitback and spillage. In general, it would simply require manufacturers to use system designs that are commonly used today. Several refueling spitback and spillage control strategies are discussed in Chapter 5 of the Draft RIA.

(2) Implementation Dates

Low-permeation fuel line is available today. Many Small SI equipment manufacturers certifying to permeation standards in California are selling products with low-permeation fuel line nationwide. In addition, many boat builders have begun using low-permeation marine fuel lines to feed fuel from the fuel tank to the engine. For this reason, we are proposing to implement the fuel line permeation standards in 2008 for nonhandheld Small SI equipment and in 2009 for Marine SI vessels. This date is the same as for recreational vehicles and is two years later than the California requirements for Small SI equipment. For handheld equipment, there are no fuel line permeation requirements in California. In addition, injection molded fuel lines are common in many applications rather than straight-run extruded fuel line. For this reason we are proposing to delay implementation of fuel line permeation standards for handheld equipment until 2012 (or 2013 for small volume emission families). We request comment on the proposed implementation dates for fuel line permeation standards.

Similar to fuel line technology, low-permeation fuel tank constructions are used today in automotive and portable fuel tank applications. This technology is also being developed for use in recreational vehicles and for Small SI equipment sold in California. The available technology options include surface treatment and multi-layer constructions, though rotational molding presents some unique design challenges. Based on discussions with fuel tank manufacturers, and on our own assessment of the lead time necessary to change current industry practices, we believe low-permeation fuel tank technology can be applied in the 2011-2012 model years for Small SI and Marine SI fuel tanks. We are proposing to implement the fuel tank permeation standards in 2011 for Class II equipment and portable and PWC marine fuel tanks. For Class I equipment and installed marine fuel tanks, we are proposing an implementation date of 2012. We are proposing to phase-in the handheld fuel tank standards on the following schedule: 2009 for equipment models certifying in California, 2013 for small-volume families, and 2010 for the remaining fuel tanks on handheld equipment. We believe this will facilitate an orderly transition from current fuel tank designs to low-permeation fuel tanks.

We are proposing the additional year of lead time for the large fuel tanks installed in marine vessels largely due to concerns raised over the application of low-permeation rotational-molded fuel tank technology to marine applications. The majority of these fuel tanks are typically rotational-molded by small businesses. Although low-permeation technology has emerged for these applications, we believe additional lead time will be necessary for all manufacturers to be ready to implement this technology. This will give these manufacturers additional time to make changes to their production processes to comply with the standards and to make any tooling changes that may be necessary. We are similarly proposing the implementation of fuel tank permeation standards for Class I fuel tanks installed in Small SI equipment in 2012, mostly to align with the implementation date for the Phase 3 exhaust emission standards. This is especially important for Class I engines where most of the engine manufacturers will also be responsible for meeting all evaporative emission standards. We request comment on the proposed implementation dates for the proposed fuel tank permeation standards.

We are proposing to implement the running loss standards for nonhandheld Small SI equipment in the same year as the exhaust emission standards. We believe this is appropriate because the running loss vapor will in some cases be routed to the intake manifold for combustion in the engine. Manufacturers would need to account for the effect of the additional running loss vapor in their engine calibrations. We request comment on this approach.

We are proposing to implement the proposed diurnal standards for portable marine fuel tanks and personal watercraft in 2009. We believe these requirements will not result in a significant change from current practice so this date will provide sufficient lead time for manufacturers to comply with standards. For other installed fuel tanks, however, we are proposing a later implementation date of 2010. The development of canisters as an approach to control diurnal emissions without pressurizing the tanks has substantially reduced the expected level of effort to redesign and retool for making fuel tanks. However, canister technology has not yet been applied commercially to marine applications and additional lead time may be necessary to work out various technical parameters, such as design standards and installation procedures to ensure component durability and system integrity. We request comment on the proposed diurnal implementation dates.

(3) Technological Approaches

We believe several emission control technologies can be used to reduce evaporative emissions from Small SI equipment and Marine SI vessels. These emission control strategies are discussed below. Chapter 5 of the Draft RIA presents more detail on these technologies and Chapter 6 provides information on the estimated costs. We request comment on these or other technological approaches for reducing evaporative emissions from these engines and equipment.

(a) Fuel Line Permeation

Fuel lines produced for use in Small SI equipment and Marine SI applications are generally extruded nitrile rubber with a cover for abrasion resistance. Fuel lines used in Small SI applications often meet SAE J30 R7 recommendations, including a permeation limit of 550 g/m 2/day at 23 °C on ASTM Fuel C. Fuel lines for personal watercraft are typically designed to meet SAE J2046, which includes a permeation limit of 300 g/m 2/day at 23 °C on ASTM Fuel C. (92) Marine fuel lines subject to Coast Guard requirements under 33 CFR part 183 are designated as either Type A or Type B and either Class 1 or Class 2. SAE J1527 provides detail on these fuel line designs. Type A fuel lines pass the U.S. Coast Guard fire test while Type B designates fuel lines that have not passed this test. Class 1 fuel lines are intended for fuel-feed lines where the fuel line is normally in contact with liquid fuel and has a permeation limit of 100 g/m 2/day at 23 °C. Class 2 fuel lines are intended for vent lines and fuel fill necks where liquid fuel is not continuously in contact with the fuel line; it has a permeation limit of 300 g/m 2/day at 23 °C. In general practice, most boat builders use Class 1 fuel lines for both vent lines and fuel-feed lines to avoid carrying two types of fuel lines. Most fuel fill necks, which have a much larger diameter and are constructed differently, use materials meeting specifications for Class 2 fuel lines. The marine industry is currently in the process of revising SAE J1527 to include a permeation rating of 15 g/m 2/day at 23 °C on fuel CE10 for marine fuel lines.

Low-permeability fuel lines are in production today. One fuel line design, already used in some marine applications, uses a thermoplastic layer between two rubber layers to control permeation. This thermoplastic barrier may either be nylon or ethyl vinyl acetate. Barrier approaches in automotive applications include fuel lines with fluoroelastomers such as FKM and fluoroplastics such as Teflon and THV. In addition to presenting data on low-permeation fuel lines, Chapter 5 of the Draft RIA lists several fuel-system materials and their permeation rates. Molded rubber fuel line components, such as primer bulbs and some handheld fuel lines, could meet the standard by using a fluoroelastomer such as FKM. The Draft RIA also discusses low-permeation materials that retain their flexibility at very low temperatures.

Automotive fuel lines made of low-permeation plastic tubing are generally made from fluoroplastics. An added benefit of these low-permeability fuel lines is that some fluoropolymers can be made to conduct electricity and therefore prevent the buildup of static charges. This type of fuel line can reduce permeation by more than an order of magnitude below the level associated with barrier-type fuel lines, but it is relatively inflexible and would need to be molded in specific shapes for each equipment or vessel design. Manufacturers have commented that they need flexible fuel lines to fit their many designs, resist vibration, prevent kinking, and simplify connections and fittings. An alternative to custom molding is to manufacture fuel lines with a corrugated profile (like a vacuum hose). Producing flexible fluoropolymer fuel lines is somewhat more expensive but the result is a product that meets emission standards without compromising in-use performance or ease of installation.

(b) Fuel Tank Permeation

Blow-molding is widely used for the manufacture of Small SI, portable marine, and PWC fuel tanks. Typically, blow-molding is performed by creating a hollow tube, known as a parison, by pushing high-density polyethylene (HDPE) through an extruder with a screw. The parison is then pinched in a mold and inflated with an inert gas. In highway applications, nonpermeable plastic fuel tanks are produced by blow molding a layer of ethylene vinyl alcohol (EVOH) or nylon between two layers of polyethylene. This process is called coextrusion and requires at least five layers: the barrier layer, adhesive layers on either side of the barrier layer, and two outside layers of HDPE that make up most of the thickness of the fuel tank walls. However, multi-layer construction requires additional extruder screws, which significantly increases the cost of the blow-molding process. One manufacturer has developed a two-layer barrier approach using a polyarylamide inner liner. This technology is not in production yet but appears to be capable of permeation levels similar to the traditional EVOH barrier designs. This approach would enable blow-molding of low-permeation fuel tanks with only one additional extruder screw.

Multi-layer fuel tanks can also be formed using injection molding. In this method a low-viscosity polymer is forced into a thin mold to create the two sides of the fuel tank (e.g., top and bottom), which are then fused together. To add a barrier layer, a thin sheet of the barrier material is placed inside the mold before injecting the poleythylene. The polyethylene, which generally has a much lower melting point than the barrier material, bonds with the barrier material to create a shell with an inner liner.

A less expensive alternative to coextrusion is to blend a low-permeable resin with the HDPE and extrude it with a single screw to create barrier platelets. The trade name typically used for this permeation control strategy is Selar. The low-permeability resin, typically EVOH or nylon, creates noncontinuous platelets in the HDPE fuel tank to reduce permeation by creating long, tortuous pathways that the hydrocarbon molecules must navigate to escape through the fuel tank walls. Although the barrier is not continuous, this strategy can still achieve greater than a 90 percent reduction in permeation of gasoline. EVOH has much higher permeation resistance to alcohol than nylon so it would likely be the preferred material for meeting the proposed standard based on testing with a 10 percent ethanol fuel.

Many fuel tanks for Small SI equipment are injection-molded out of either HDPE or nylon. Injection-molding can be used with lower production volumes than blow-molding due to lower tooling costs. In this method, a low-viscosity polymer is forced into a thin mold to create the two sides of the fuel tank; these are then fused together using vibration, hot plate or sonic welding. A strategy such as Selar has not been demonstrated to work with injection-molding due to high shear forces.

An alternative to injection-molding is thermoforming which is also cost-effective for lower production volumes. In this process, sheet material is heated and then drawn into two vacuum dies. The two halves are then fused while the plastic is still molten to form the fuel tank. Low-permeation fuel tanks can be constructed using this process by using multi-layer sheet material. This multi-layer sheet material can be extruded using similar materials to multi-layer blow-molded fuel tank designs. A typical barrier construction would include a thin EVOH barrier, adhesion layers on both sides, a layer of HDPE regrind, and outside layers of pure virgin HDPE.

Regardless of the molding process, another type of low-permeation technology for HDPE fuel tanks would be to treat the surfaces with a barrier layer. Two ways of achieving this are known as fluorination and sulfonation. The fluorination process causes a chemical reaction where exposed hydrogen atoms are replaced by larger fluorine atoms, which creates a barrier on the surface of the fuel tank. In this process, batches of fuel tanks are generally processed post-production by stacking them in a steel container. The container is then voided of air and flooded with fluorine gas. By pulling a vacuum in the container, the fluorine gas is forced into every crevice in the fuel tanks. Fluorinating with this process would treat both the inside and outside surfaces of the fuel tank, thereby improving the reliability and durability of the permeation-resistance. As an alternative, fuel tanks can be fluorinated during production by exposing the inside surface of the fuel tank to fluorine during the blow-molding process. However, this method may not prove as effective as post-production fluorination.

Sulfonation is another surface treatment technology where sulfur trioxide is used to create the barrier by reacting with the exposed polyethylene to form sulfonic acid groups on the surface. Current practices for sulfonation are to place fuel tanks on a small assembly line and expose the inner surfaces to sulfur trioxide, then rinse with a neutralizing agent. However, sulfonation can also be performed using a batch method. Either of these sulfonation processes can be used to reduce gasoline permeation by more than 95 percent.

Over the first month or so of use, polyethylene fuel tanks can experience a material expansion of as much as three percent due to saturation of the plastic with fuel. Manufacturers have raised the concern that this hydrocarbon expansion could degrade the effectiveness of surface treatments like fluorination or sulfonation. However, we believe this will not significantly affect these surface treatments. California ARB has performed extensive permeation testing on portable fuel containers with and without these surface treatments. Prior to the permeation testing, the tanks were prepared by performing a durability procedure where the fuel container cycled a minimum of 1,000 times between—1 psi and 5 psi. In addition, the fuel containers were soaked with fuel for a minimum of four weeks before testing. Their test data, presented in Chapter 5 of the Draft RIA, show that fluorination and sulfonation are still effective after this durability testing. We have conducted our own permeation testing on fluorinated fuel tanks that have been exposed to fuel for more than a year with excellent results. These results are presented in the Draft RIA.

Manufacturers have also commented that fuel sloshing in the tank under normal in-use operation could wear off the surface treatments. However, we believe this is unlikely to occur. These surface treatments actually result in an atomic change in the structure of the surface of the fuel tank. To wear off the treatment, the plastic itself would need to be worn away. In addition, testing by California ARB shows that the fuel tank permeation standard can be met by fuel tanks that have undergone 1.2 million slosh cycles. Test data on a sulfonated automotive HDPE fuel tank after five years of use showed no deterioration in the permeation barrier. These data are presented in Chapter 5 of the Draft RIA.

A fourth method for molding plastic fuel tanks is called rotational-molding. Rotational-molding is a lower-cost alternative for smaller production volumes. In this method, a mold is filled with a powder form of polyethylene with a catalyst material. While the mold is rotated in an oven, the heat melts the plastic. When cross-link polyethylene (XLPE) is used, this heat activates a catalyst in the plastic, which causes a strong cross-link material structure to form. This method is often used for relatively large fuel tanks in Small SI equipment and for installed marine fuel tanks. The advantages of this method are low tooling costs, which allow for smaller production volumes, and increased strength and flame resistance. Flame resistance is especially important for installed marine fuel tanks subject to 33 CFR part 183. At this time, the barrier treatment approaches discussed above for HDPE have not been demonstrated to be effective for XLPE.

We have evaluated two permeation control approaches for rotational-molded fuel tanks. The first is to form an inner layer during the molding process. Historically, the primary approach for this is to use a drop-box that opens after the XLPE tank begins to form. However, processes have been developed that eliminate the need for a drop box. With this construction a low-permeation inner liner can be molded into the fuel tank. Manufacturers are currently developing acetyl copolymer, nylon, and polybutylene terephthalate inner liners for this application. In fact, one fuel tank manufacturer is already selling tanks with a nylon inner liner into Class II Small SI equipment applications. Initial testing suggests that these barrier layers could be used to achieve the proposed standards.

The second approach to creating a barrier layer on XLPE rotational-molded fuel tanks is to use an epoxy barrier coating. One manufacturer has demonstrated that a low-permeation barrier coating can be adhered to an XLPE fuel tank that results in a permeation rate below the proposed standard. In this case, the manufacturer used a low level of fluorination to increase the surface energy of the XLPE so the epoxy would adhere properly.

Marine fuel tanks are also fabricated out of either metal or fiberglass. Metal does not permeate so tanks that are constructed and installed properly to prevent corrosion should meet the proposed standards throughout their full service life. For fiberglass fuel tanks, one manufacturer has developed a composite that has been demonstrated to meet the proposed fuel tank permeation standard. Permeation control is achieved by incorporating fillers into a resin system and coating the assembled tank interior and exterior. This filler is made up of nanocomposites (very small particles of treated volcanic ash) which are dispersed into a carrier matrix. These particles act like the barrier platelets discussed above by creating a tortuous pathway for hydrocarbon migration through the walls of the fuel tank.

(c) Diurnal

Portable marine fuel tanks are currently equipped with a valve that can be closed by the user when the tank is stored to hold vapor in the fuel tank. These fuel tanks are designed to hold the pressure that builds up when a sealed fuel tank undergoes normal daily warming. This valve must be opened when the engine is operating to prevent a vacuum from forming in the fuel tank as the fuel level in the tank decreases. A vacuum in the fuel tank could prevent fuel from being drawn into the engine. Because the valve is user-controlled, any emission control is dependent on user behavior. This can be corrected by replacing the user-controlled valve with a simple one-way valve in the fuel cap. For instance, a diaphragm valve that is common in many automotive applications seals when under pressure but opens at low-vacuum conditions.

Personal watercraft currently use sealed systems with pressure-relief valves that start venting vapors when pressures reach a threshold that ranges from 0.5 to 4.0 psi. We believe the proposed standard can be met through the use of a sealed fuel system with a 1.0 psi pressure-relief valve. Personal watercraft should therefore be able to meet the proposed standard with little or no change to current designs.

For other vessels with installed fuel tanks, manufacturers have commented that even 1.0 psi of pressure would be too high for their applications. They expressed concern that their fuel tanks had large, flat surfaces that would deform or leak at pressures of 0.5 psi or higher. This concern led us to consider several technologies for controlling diurnal emissions without pressurizing the tank, including carbon canisters, volume-compensating air bags, and bladder fuel tanks.

The primary evaporative emission control device used in automotive applications is a carbon canister. With this technology, vapor generated in the tank is vented to a canister containing activated carbon. The fuel tank must be sealed such that the only venting that occurs is through the carbon canister. This prevents more than a minimal amount of positive or negative pressure in the tank. The activated carbon collects and stores the hydrocarbons. The activated carbon bed in the canister is refreshed by purging.

In a marine application, an engine purge is not practical; therefore, canisters were not originally considered to be a practical technology for controlling diurnal vapor from boats. Since that time, however, we have collected information showing that the canister is purged sufficiently during cooling periods to reduce diurnal emissions effectively. When the fuel in the tank cools, fresh air is drawn back through the canister into the fuel tank. This fresh air partially purges the canister and returns hydrocarbons to the fuel tank. This creates open sites in the carbon so the canister can again collect vapor during the next heating event. Test data presented in Chapter 5 of the Draft RIA show that a canister starting from empty is more than 90 percent effective until it reaches the point of saturation. Once it reaches saturation, a canister is still capable of reducing diurnal emissions by more than 60 percent due to the normal airflow across the canister bed during cooling periods. Adding active purging during engine operation would improve the level of control somewhat depending on how often the engine is operated.

Manufacturers have raised the concern that it is common for fuel to pass out the vent line during refueling. If there were a canister in the vent line it would become saturated with fuel. While this would not likely cause permanent damage to the canister, we believe marine fuel systems should prevent liquid fuel from exiting the vent line for both environmental and safety reasons. A float valve or small orifice in the entrance to the vent line from the fuel tank would prevent liquid fuel from reaching the canister or escaping from the tank. Any pressure build-up from such a valve would cause fuel to back up the fill neck and shut off the fuel dispensing nozzle. Manufacturers have also expressed concerns for canister durability in marine applications due to vibration, shock, and humidity. However, there are now marine grades of activated carbon that are harder and more moisture-resistant than typical automotive carbon. Industry installed canisters equipped with the marine grade carbon on 14 boats in a pilot program and no problems were encountered. This is discussed in more detail in Chapter 5 of the Draft RIA.

Another concept for minimizing pressure in a sealed fuel tank is through the use of a volume-compensating air bag. The purpose of the bag is to fill up the vapor space above the liquid fuel. By minimizing the vapor space, the equilibrium concentration of fuel vapors occupies a smaller volume, resulting in a smaller mass of vapors. As the equilibrium vapor concentration increases with increasing temperature, the vapor space expands, which forces air out of the bag through the vent to atmosphere. Because the bag volume decreases to compensate for the expanding vapor space, total pressure inside the fuel tank stays very close to atmospheric pressure. Once the fuel tank cools in response to cooling ambient temperatures the resulting vacuum in the fuel tank will make the bag expand again by drawing air from the surrounding environment. Our test results show that pressure could be kept below 0.8 psi using a bag with a capacity equal to 25 percent of the fuel tank capacity. The use of a volume-compensating air bag, in conjunction with a pressure-relief valve, would be very effective in controlling diurnal emissions.

Probably the most effective technology for reducing diurnal emissions from marine fuel tanks is through the use of a collapsible fuel bladder. In this concept, a low-permeation bladder is installed in the fuel tank to hold the fuel. As fuel is drawn from the bladder the vacuum created collapses the bladder. There is, therefore, no vapor space and no pressure build-up from fuel heating. No vapors would be vented to the atmosphere since the bladder is sealed. This option could also significantly reduce emissions during refueling that would normally result from dispensed fuel displacing vapor in the fuel tank. We have received comments that this would be cost-prohibitive because it could increase costs from 30 to 100 percent, depending on tank size. However, bladder fuel tanks have safety advantages and they are already sold by at least one manufacturer to meet market demand in niche applications.

(d) Running Loss

Running loss emissions can be controlled by sealing the fuel cap and routing vapors from the fuel tank to the engine intake. In doing so, vapors generated by heat from the engine will be burned in the engine's combustion chamber. It may be necessary to use a valve or limited-flow orifice in the purge line to prevent too much fuel vapor from reaching the engine and to prevent liquid fuel from entering the line if the equipment flips over. Depending on the configuration of the fuel system and purge line, a one-way valve in the fuel cap may be desired to prevent a vacuum in the fuel tank during engine operation. We anticipate that a system like this would eliminate running loss emissions. However, higher temperatures during operation and the additional length of vapor line would slightly increase permeation. Considering these effects, we still believe that the system described here would reduce running losses from Small SI equipment by more than 90 percent. Other approaches would be to move the fuel tank away from heat sources or to use heat protection such as a shield or directed air flow.

We are not considering running loss controls for marine vessels. For portable fuel tanks and installed fuel tanks on larger vessels we would expect the significant distance from the engine and the cooling effect of operating the vessel in water to prevent significant heating of the fuel tanks during engine operation. For personal watercraft, fuel tanks have a sealed system with pressure relief that should help contain running loss emissions. For other installed fuel tanks, we would expect the system for controlling diurnal emissions would capture about half of any running losses that would occur.

(e) Diffusion

Many manufacturers today use fuel caps that effectively limit the diffusion of gasoline from fuel tanks. In fact, the proposed diffusion emission standard for Small SI equipment is based to a large degree on the diffusion control capabilities of these fuel caps. As discussed in Chapter 5 of the Draft RIA, venting a fuel tank through a tube (rather than through an open orifice) also greatly reduces diffusion. We have conducted additional testing with short, narrow-diameter vent lines that provide enough resistance to diffusion to meet the proposed emission standards.

A secondary benefit of the running loss control described above for Small SI equipment relates to diffusion emissions. In a system that vents running loss vapors to the engine, venting losses would occur through the vapor line to the engine intake, rather than through open vents in the fuel cap. This approach should therefore eliminate diffusion emissions.

(4) Regulatory Alternatives

We considered both less and more stringent evaporative emission control alternatives for fuel systems used in Small SI equipment and Marine SI vessels. Chapter 11 of the Draft RIA presents details on this analysis of regulatory alternatives. The results of this analysis are summarized below. We believe the proposed permeation standards are reflective of available technology and represent a step change in emissions performance. Therefore, we consider the same permeation control scenario in the less stringent and more stringent regulatory alternatives.

For Small SI equipment, we considered a less stringent alternative without running loss emission standards Small SI engines. However, we believe controlling running loss and diffusion emissions from nonhandheld equipment is feasible at a relatively low cost. Running loss emissions can be controlled by sealing the fuel cap and routing vapors from the fuel tank to the engine intake. Other approaches would be to move the fuel tank away from heat sources or to use heat protection such as a shield or directed air flow. Diffusion can be controlled by simply using a tortuous tank vent path, which is commonly used today on Small SI equipment to prevent fuel splashing or spilling. These emission control technologies are relatively straight-forward, inexpensive, and achievable in the near term. Not requiring these controls would be inconsistent with section 213 of the Clean Air Act. For a more stringent alternative, we considered applying a diurnal emission standard for all Small SI equipment. We believe passively purging carbon canisters could reduce diurnal emissions by 50 to 60 percent from Small SI equipment. However, we believe some important issues would need to be resolved for diurnal emission control, such as cost, packaging, and vibration. The cost sensitivity is especially noteworthy given the relatively low emissions levels (on a per-equipment basis) from such small fuel tanks.

For marine vessels, we considered a less stringent alternative, where there would be no diurnal emission standard for vessels with installed fuel tanks. However, installed fuel tanks on marine vessels are much larger in capacity than those used in Small SI applications. Our analysis indicates that traditional carbon canisters are feasible for boats at relatively low cost. While packaging and vibration are also issues with marine applications, we believe these issues have been addressed. Carbon canisters were installed on fourteen boats by industry in a pilot program. The results demonstrated the feasibility of this technology. The proposed standards would be achievable through engineering design-based certification with canisters that are very much smaller than the fuel tanks. In addition, sealed systems, with pressure control strategies would be accepted under the proposed engineering design-based certification. For a more stringent scenario, we consider a standard that would require boat builders to use an actively purged carbon canister. This means that, when the engine is operating, it would draw air through the canister to purge the canister of stored hydrocarbons. However, we rejected this option because active purge occurs infrequently due to the low hours of operation per year seen by many boats. The gain in overall efficiency would be quite small relative to the complexity active purge adds into the system in that the engine must be integrated into a vessel-based control strategy. The additional benefit of an actively purged diurnal control system is small in comparison to the cost and complexity of such a system.

(5) Our Conclusions

We believe the proposed evaporative emission standards reflect what manufacturers can achieve through the application of available technology. We believe the proposed lead time is necessary and adequate for fuel tank manufacturers, equipment manufacturers, and boat builders to select, design, and produce evaporative emission control strategies that will work best for their product lines. We expect that meeting these requirements will pose a challenge, but one that is feasible when taking into consideration the availability and cost of technology, lead time, noise, energy, and safety. The role of these factors is presented in detail in Chapters 5 and 6 of the Draft RIA. As discussed in Section X, we do not believe the proposed standards would have negative effects on energy, noise, or safety and may lead to some positive effects.

VII. General Concepts Related to Certification and Other Requirements

This section describes general concepts concerning the proposed emission standards and various requirements related to these standards. There is a variety of proposed requirements that serve to ensure effective implementation of the emission standards, such as applying for certification, labeling engines, and meeting warranty requirements. The following discussion reviews these requirements for Small SI engines and outboard and personal-watercraft engines that have already been subject to exhaust emission standards, explains a variety of changes, and describes how these provisions apply to evaporative emissions. Sterndrive and inboard marine engines will be subject to emission standards for the first time so all these requirements are new for those engines.

Rather than making changes to existing regulations, we have drafted new regulatory text describing the new emission standards and related requirements and included that text in this proposal. The proposed regulations are written in plain-language format. In addition to the improved clarity of the regulatory text, this allows us to harmonize the regulations with our other programs requiring control of engine emissions. (93)

The proposed regulatory text migrates the existing requirements for Small SI engines, including all the emission standards and other requirements related to getting and keeping a valid certificate of conformity, from 40 CFR part 90 to 40 CFR part 1054. For nonhandheld engines, manufacturers must comply with all the provisions in part 1054 once the Phase 3 standards begin to apply in 2011 or 2012. For handheld engines, manufacturers must comply with the provisions in part 1054 starting in 2010. Similarly, we are proposing to migrate the existing requirements for Marine SI engines from 40 CFR part 91 to 40 CFR part 1045. Manufacturers must comply with the provisions in part 1045 for an engine once the proposed exhaust emission standards begin to apply in 2009.

The proposed requirements for evaporative emissions are described in 40 CFR part 1060, with some category-specific provisions in 40 CFR parts 1045 and 1054, which are referred to as the exhaust standard-setting parts for each type of engine. Adopting the provisions related to evaporative emissions in a broadly applicable part has two main advantages. First, we anticipate that in many cases boat builders, equipment manufacturers, and manufacturers of fuel-system components will need to certify their products only to the standards for evaporative emissions, with no corresponding responsibility for exhaust emissions. These companies will not need to focus on the exhaust standard-setting part except to read the short section defining the evaporative emission standards and requirements. Second, manufacturers of fuel-system components make products that are not necessarily unique to a specific category of engines. The regulations in 40 CFR parts 1045 and 1054 will highlight the standards that apply and provide any specific directions in applying the general provisions in part 1060. The standards, test procedures, and certification provisions are almost completely uniform across our programs so this combined set of evaporative-related provisions will make it much easier for companies to certify their products if they are not subject to the exhaust emission standards. In Section XI we describe how we might apply the provisions of part 1060 to recreational vehicles regulated under 40 CFR part 1051.

Other provisions describing general testing procedures, including detailed laboratory and equipment specifications and procedures for equipment calibration and emission measurements, are written in 40 CFR part 1065. The exhaust standard-setting parts also include testing specifications that are specific to each type of engine, including duty cycles, test-fuel specifications, and procedures to establish deterioration factors. See Section IX for further discussion of these test procedures. Engines, equipment, and vessels subject to the new standard-setting parts (parts 1045, 1054, and 1060) will also be subject to the general compliance provisions in 40 CFR part 1068. These include prohibited acts and penalties, exemptions and importation provisions, selective enforcement audits, defect reporting and recall, and hearing procedures. See Section VIII for further discussion of these general compliance provisions. Both part 1065 and part 1068 already apply to various other engine categories. We are therefore publishing in this proposal only the changes needed to apply the existing regulations to the engines, equipment, and vessels covered by this rulemaking.

A. Scope of Application

This proposal covers spark-ignition propulsion marine engines and vessels powered by those engines introduced into commerce in the United States. The proposal also covers other nonroad spark-ignition engines rated at or below 19 kW and the corresponding equipment. The following sections describe generally when emission standards apply to these products. Refer to the specific program discussion in Sections III through VI for more information about the scope of application and timing of the proposed standards.

(1) Do the standards apply to all engines, equipment, and vessels or only to new products?

The scope of this proposal is broadly set by Clean Air Act section 213(a)(3), which instructs us to set emission standards for new nonroad engines and new nonroad vehicles. Generally speaking, the proposed rule is intended to cover all new engines and vehicles in the identified categories (including any associated vehicles, vessels, or other equipment). Once the emission standards apply to an engine, piece of equipment, or fuel-system component manufacturers must get a certificate of conformity from us before selling them or otherwise introducing them into commerce in the United States. Note that the term “manufacturer” includes any individual or company introducing into commerce in the United States engines, equipment, vessels, or components that are subject to emission standards. These Clean Air Act requirements relate to importation and any other means of introducing covered products into commerce. In addition to any applicable evaporative requirements, we also require equipment manufacturers that install engines from other companies to install only certified engines once emission standards apply. The certificate of conformity (and corresponding emission control information label) provides assurance that manufacturers have met their obligation to make engines, equipment, and vessels that meet emission standards over the useful life we specify in the regulations.

(2) How do I know if my engine or equipment is new?

We are proposing to define “new” consistent with previous rulemakings. Under the proposed definition, a nonroad engine (or nonroad equipment) is considered new until its title has been transferred to the ultimate purchaser or the engine has been placed into service. This proposed definition would apply to engines, equipment, and vessels so the nonroad equipment using these engines would be considered new until their title has been transferred to an ultimate buyer. In Section VII.B.1 we describe how to determine the model year of individual engines, equipment, and vessels.

To further clarify the proposed definition of new nonroad engine, we are proposing to specify that a nonroad engine, equipment, or vessel is placed into service when it is used for its intended purpose. We are therefore proposing that an engine subject to the proposed standards is used for its intended purpose when it is installed in a vessel or other piece of nonroad equipment. We need to make this clarification because some engines are made by modifying a highway or land-based nonroad engine that has already been installed on a vessel or other piece of equipment, so without this clarification, these engines may escape regulation. For example, an engine installed in a marine vessel after it has been used for its intended purpose as a land-based highway or nonroad engine is considered “new” under this definition. We believe this is a reasonable approach because the practice of adapting used highway or land-based nonroad engines may become more common if these engines are not subject to the standards in this proposal.

In summary, an engine would be subject to the proposed standards if it is:

  • Freshly manufactured, whether domestic or imported; this may include engines produced from engine block cores;
  • Installed for the first time in nonroad equipment after having powered a car, a truck, or a category of nonroad equipment subject to different emission standards;
  • Installed in new nonroad equipment, regardless of the age of the engine; or
  • Imported—whether new or used, as long as the engine was not built before the initial emission standards started to apply.
(3) When do imported engines, equipment, and vessels need to meet emission standards?

The proposed emission standards would apply to all new engines, equipment, and vessels that are used in the United States. According to Clean Air Act section 216 “new” includes engines or equipment that are imported by any person, whether freshly manufactured or used. Thus, the proposed program would include engines that are imported for use in the United States whether they are imported as loose engines or are already installed on a vessel or other piece of nonroad equipment built elsewhere. All imported engines would need an EPA-issued certificate of conformity to clear customs, with limited exemptions (as described in Section VIII).

If an engine or piece of nonroad equipment that was built after emission standards take effect is imported without a currently valid certificate of conformity, we would still consider it to be a new engine, equipment, or vessel. This means it would need to comply with the emission standards that apply based on its model year. Thus, for example, a marine vessel manufactured in a foreign country in 2009, then imported into the United States in 2010, would be considered “new.” The engines on that piece of equipment would have to comply with the requirements for the 2009 model year, assuming that the engine has not been modified and no other exemptions apply. This provision is important to prevent manufacturers from avoiding emission standards by building products abroad, transferring their title, and then importing them as used products. Note that if an imported engine has been modified it must meet emission standards based on the year of modification rather than the year of manufacture. See Section V.E.6 and Section XI.C for proposed and contemplated restrictions related model years for importation of new engines and equipment.

(4) Do the standards apply to exported engines, equipment, or vessels?

Engines, equipment, or vessels intended for export would generally not be subject to the requirements of the proposed emission control program, except that we would not exempt engines exported to countries having standards identical to the United States. However, engines, equipment, or vessels that are exported and subsequently re-imported into the United States must be certified. For example, this would be the case when a foreign company purchases engines manufactured in the United States for installation in nonroad equipment for export back to the United States. Those engines would be subject to the emission standards that apply on the date the engine was originally manufactured. If the engine is later modified and certified (or recertified), the engine is subject to emission standards that apply on the date of the modification. So, for example, foreign equipment manufacturers buying U.S.-made engines without recertifying the engines will need to make sure they purchase complying engines for the products they sell in the United States.

(5) Are there any new products that would be exempt from the emission standards?

We are proposing to extend our basic nonroad exemptions to the engines, equipment, and vessels covered by this proposal. These include the testing exemption, the manufacturer-owned exemption, the display exemption, and the national security exemption. These exemptions are described in more detail in Section VIII.C.

In addition, the Clean Air Act does not consider engines used solely for competition to be nonroad engines so the proposed emission standards do not apply to them. The Clean Air Act similarly does not consider engines used in stationary applications to be nonroad engines; however, EPA has proposed to apply emission standards for stationary spark-ignition engines that are comparable to the standards that apply to nonroad engines (71 FR 33804, June 12, 2006). As described in Section V, we are proposing in this notice to apply the Phase 3 standards for Small SI engines equally to stationary spark-ignition engines at or below 19 kW. Refer to the program discussions in Sections III through VI for a discussion of how the various exclusions apply for different categories of engines.

B. Emission Standards and Testing

(1) How is the model year determined?

The proposed emission standards are effective on a model-year basis. We are proposing to define model year much like we do for passenger cars. It would generally mean either the calendar year or some other annual production period based on the manufacturer's production practices. For example, manufacturers could start selling 2006 model year engines as early as January 2, 2005 as long as the production period extends until at least January 1, 2006. All of a manufacturer's engines from a given model year would have to meet emission standards for that model year. For example, manufacturers producing new engines in the 2006 model year would need to comply with the 2006 standards.

(2) How do adjustable engine parameters affect emission testing?

Many engines are designed with components that can be adjusted for optimum performance under changing conditions, such as varying fuel quality, high altitude, or engine wear. Examples of adjustable parameters include spark timing, idle speed setting, and fuel injection timing. While we recognize the need for this practice, we are also concerned that engines maintain a consistent level of emission control for the whole range of adjustability. We are therefore proposing to require that engines meet emission standards over the full adjustment range.

Manufacturers would have to provide a physical stop to prevent adjustment outside the established range. Operators would then be prohibited from adjusting engines outside this range. Refer to the proposed regulatory text for more information about adjustable engine parameters. See especially the proposed sections 40 CFR 1045.115 for Marine SI engines and 40 CFR 1054.115 for Small SI engines.

(3) Alternate Fuels

The emission standards apply to all spark-ignition engines regardless of the fuel they use. Almost all Marine SI engines and Small SI engines operate on gasoline, but these engines may also operate on other fuels, such as natural gas, liquefied petroleum gas, ethanol, or methanol. The test procedures in 40 CFR part 1065 describe adjustments needed for operating test engines with oxygenated fuels.

In some special cases, a single engine is designed to alternately run on different fuels. For example, some engines can switch back and forth between natural gas and LPG. We request comment on the best way of certifying such engines so they can be in a single engine family, even though we would normally require engines operating on different fuels to be in separate engine families. We could require such manufacturers to conduct emission testing with emission-data engines operating on both fuels to establish the worst-case configuration. In particular, we request comment on the appropriate data for demonstrating compliance at the end of the service-accumulation period for durability testing.

Once an engine is placed into service, someone might want to convert it to operate on a different fuel. This would take the engine out of its certified configuration, so we are proposing to require that someone performing such a fuel conversion go through a certification process. We would expect to allow certification of the complete engine using normal certification procedures, or the aftermarket conversion kit could be certified using the provisions of 40 CFR part 85, subpart V. This contrasts with the existing provisions that allow for fuel conversions that can be demonstrated not to increase emission levels above the applicable standard. We propose to apply this requirement starting January 1, 2010. (See § 90.1003 and § 1054.635.)

C. Demonstrating Compliance

We are proposing a compliance program to accompany emission standards. This consists first of a process for certifying engine models and fuel systems (either as a part of or independently from the vessel or equipment). In addition to certification, we are proposing several provisions to ensure that emission control systems continue to function over long-term operation in the field. Most of these certification and durability provisions are consistent with previous rulemakings for these and other nonroad engines, equipment, and vessels. Refer to the discussion of the specific programs in Sections III through VI for additional information about these requirements for each engine category.

(1) How would I certify my engines, equipment, or vessels?

Sections III through VI describe the proposed emission standards for new engines, equipment, and vessels. Section VI in particular describes which companies are responsible for certifying to the new standards. This section describes the general certification process.

We are proposing a certification process similar to that already adopted for these and other engines and equipment. Certifying manufacturers generally test representative prototype engines or fuel system components and submit the emission data along with other information to EPA in an application for a Certificate of Conformity. If we approve the application, then the manufacturer's Certificate of Conformity allows the manufacturer to sell the engines, equipment, or vessels described in the application in the United States. We are proposing to include clarifying language to specify that the certificate is valid starting with the indicated effective date, but that it is not valid for any production after December 31 of the model year for which it is issued. We are also proposing a provision to preclude issuance of certificates after December 31 of a given model year. This would avoid a situation in which a manufacturer receives certification after it is no longer valid for further production.

We are proposing that manufacturers certify their engine models by grouping them into emission families. Under this approach, engines expected to have similar emission characteristics would be classified in the same emission family. The emission family definition is fundamental to the certification process and to a large degree determines the amount of testing required for certification. The proposed regulations include specific engine characteristics for grouping emission families for each category of products. To address a manufacturer's unique product mix, we may approve using broader or narrower emission families as long as the manufacturer can show that all the engines in an engine family will have similar emission control characteristics over the engines' useful life.

The useful life period specified in the regulations defines the period over which manufacturers are responsible for meeting emission standards. The useful life values included in our regulations are intended to reflect the period during which engines are designed to properly function without being remanufactured. Useful life values are unique for each category of engines. As proposed, for purposes of certification, manufacturers would be required to use test data to estimate the rate of deterioration for each emission family over its useful life. Manufacturers would show that each emission family meets the emission standards after incorporating the estimated deterioration in emission control.

The emission-data engine is the engine from an emission family that will be used for certification testing. To ensure that all engines in the family meet the standards, we are proposing that manufacturers select for certification testing the engine from the family that is most likely to exceed emission standards. In selecting this “worst-case” engine, the manufacturer uses good engineering judgment. Manufacturers would consider, for example, all engine configurations and power ratings within the emission family and the range of allowed options. Requiring the worst-case engine to be tested ensures that all engines within the emission family are complying with emission standards. A similar approach would be used for evaporative emission control systems in emission families.

We are proposing to require manufacturers to include in their application for certification the results of all emission tests from their emission-data units (engines, fuel tanks, etc.), including any diagnostic-type measurements (such as ppm testing) and invalidated tests. This complete set of test data ensures that the valid tests forming the basis of the manufacturer's application are a robust indicator of emission control performance rather than a spurious or incidental test result.

Clean Air Act section 206(h) specifies that test procedures for certification (including the test fuel) should adequately represent in-use operation. We are proposing test fuel specifications intended to represent in-use fuels. Engines would have to meet the standards on fuels with properties anywhere in the range of proposed test fuel specifications. The test fuel is generally to be used for all testing associated with the regulations proposed in this document, including certification, production-line testing, and in-use testing.

We are proposing to require that engine manufacturers give engine operators instructions for properly maintaining their engines. We are including limitations on the frequency of scheduled maintenance that a manufacturer may specify for emission-related components to help ensure that emission control systems do not depend on an unreasonable expectation of maintenance in the field. These maintenance limits would also apply during any service accumulation that a manufacturer may do to establish deterioration factors. This approach is common to all our engine programs. We are proposing new regulatory language to clarify that engine manufacturers may perform emission-related maintenance during service accumulation only to the extent that they can demonstrate that such maintenance will be done with in-use engines. It is important to note, however, that these provisions would not limit the maintenance an operator could perform. It would merely limit the maintenance that operators would be expected to perform on a regularly scheduled basis. Some of these requirements are new for engines that are already subject to standards. We believe it is important to define limits to these maintenance parameters, especially with the expectation that engines will begin to incorporate aftertreatment technologies. See § 1045.125 and § 1054.125 of the proposed regulations for more information.

(2) What emission labels are required?

Once an emission family is certified every product a manufacturer produces from that emission family would need an emission label with basic identifying information. We request comment on the proposed requirements for the design and content of engine labels, which are detailed in § 1045.135 and § 1054.135 of the proposed regulation text.

The current regulations require equipment manufacturers to put a duplicate label on the equipment if the engine is installed in a way that obscures the label on the engine. We are proposing to clarify this requirement for duplicate labels to ensure that labels are accessible without creating a supply of duplicate labels that are not authentic or are not used appropriately. Specifically, we are proposing to require engine manufacturers to supply duplicate labels to equipment manufacturers that request them and keep records to show how many labels they supply. Similarly, we are proposing that equipment manufacturers must request from engine manufacturers a specific number of duplicate labels, with a description of which engine and equipment models are involved and why the duplicate labels are necessary. Equipment manufacturers would need to destroy any excess labels and keep records to show the disposition of all the labels they receive. This would make it easier for us to verify that engines are meeting requirements and it would be easier for U.S. Customs to clear imported equipment with certified engines.

(3) What requirements apply to auxiliary emission control devices?

Clean Air Act section 203(a) and existing regulations prohibit the use of a defeat device (see 40 CFR 90.111 and 91.111). The defeat device prohibition is intended to ensure that engine manufacturers do not use auxiliary emission control devices (AECD) in a regulatory test procedure that reduce the effectiveness of the emission control system during operation that is not substantially included in the regulatory test procedure. (94) We are proposing to require manufacturers to describe their AECDs and explain why these are not defeat devices.

Under the current regulations, there has been limited use of AECDs. However, with the proposed new emission standards and the corresponding engine technologies, we expect manufacturers to increase their use of engine designs that rely on AECDs. Disclosure of the presence and purpose of an AECD is essential in allowing us to evaluate the AECD and determine whether it represents a defeat device.

(4) What warranty requirements apply to engines or other products that are subject to emission standards?

Consistent with our current emission control programs, we are proposing that manufacturers provide a design and defect warranty covering emission-related components. If the manufacturer offers a longer mechanical warranty for the engine or any of its components without an additional charge, the proposed regulations would require that the emission-related warranty period must be at least as long as the commercial warranty for the engine or the applicable components. Extended warranties that are available for an extra price would not trigger a need for a longer emission-related warranty. See the proposed regulation language for a description of which components are emission-related.

If an operator makes a valid warranty claim for an emission-related component during the warranty period, the engine manufacturer is generally obligated to replace the component at no charge to the operator. The engine manufacturer may deny warranty claims if the operator failed to do prescribed maintenance that contributed to the warranty claim.

We are also proposing a defect reporting requirement that applies separately from the emission-related warranty (see Section VIII.F). In general, defect reporting applies when a manufacturer discovers a pattern of component failures whether that information comes from warranty claims, voluntary investigation of product quality, or other sources.

(5) Can I meet standards with emission credits?

We are proposing a new emission-credit program for sterndrive and inboard marine engines and for evaporative emissions. We are also proposing to revise the existing emission-credit provisions for outboard and personal-watercraft engines and for Small SI engines. An emission-credit program is an important factor we take into consideration in setting emission standards that are appropriate under Clean Air Act section 213. An emission-credit program can reduce the cost and improve the technological feasibility of achieving standards, helping to ensure the standards achieve the greatest achievable reductions, considering cost and other relevant factors, in a time frame that is earlier than might 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. Emission-credit programs also create an incentive for the early introduction of new technology, which allows certain emission families to act as trailblazers for new technology. This can help provide valuable information to manufacturers on the technology before they 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.

Emission-credit programs generally involve averaging, banking, or trading. Averaging would allow a manufacturer to certify one or more emission families at emission levels above the applicable emission standards as long as the increased emissions are offset by one or more emission families certified below the applicable standards. The over-complying families generate credits that are used by the under-complying families. Compliance is determined on a total mass emissions basis to account for differences in production volume, power, and useful life among emission families. The average of all emissions for a particular manufacturer's production must be at or below the level of the applicable emission standards. This calculation generally factors in sales-weighted average power, production volume, useful life, and load factor. Banking and trading would allow a manufacturer to generate emission credits and bank them for future use in its own averaging program in later years or sell them to another company.

A manufacturer choosing to participate in an emission-credit program would certify each participating emission family to a Family Emission Limit (FEL). In its certification application, a manufacturer would determine a separate FEL for each pollutant included in the emission-credit program. The FEL selected by the manufacturer becomes the emission standard for that emission family. Emission credits are based on the difference between the emission standard that applies and the FEL. The engines have to meet the FEL for all emission testing. At the end of the model year, manufacturers would generally need to show that the net effect of all their emission families participating in the emission-credit program is a zero balance or a net positive balance of credits. A manufacturer could generally choose to include only a single pollutant from an emission family in the emission-credit program or, alternatively, to establish an FEL for each of the regulated pollutants.

Refer to the program discussions in Sections III through VI for more information about emission-credit provisions for individual engine or equipment categories. We request comment on all aspects of the emission-credit programs discussed in this proposal. In particular, we request comment on the structure of the proposed emission-credit programs and how the various provisions may affect manufacturers' ability to utilize averaging, banking, or trading to achieve the desired emission-reductions in the most efficient and economical way.

(6) How does EPA define maximum engine power?

Maximum engine power is used to calculate the value of emission credits. For Small SI engines, it is also used to determine whether the standards apply; for example engines above 1000 cc are subject to Small SI standards only if maximum engine power is at or below 19 kW. For Marine SI engines, maximum engine power is also used to determine the emission standard that applies to a particular engine and to calculate emission credits. The regulations give no specific direction for defining maximum power for determining whether part 90 applies. Marine SI engine manufactures declare a rated power based on a procedure specified in a voluntary consensus standard, while credit calculations are based on sales-weighted average power for an engine family. We are concerned that these terms and specifications are not objective enough to ensure consistent application of regulatory requirements to all manufacturers. To the extent that manufacturers can determine different values of rated power or maximum engine power, they could be subject to different emission standards and calculate emission credits differently for otherwise identical engines. We believe it is important that a single power value be determined objectively according to a specific regulatory definition. Note that maximum engine power is not used during engine testing.

We are proposing to standardize the determination of maximum engine power by relying primarily on the manufacturer's design specifications and the maximum torque curve that the manufacturer expects will represent the actual production engines. Under this approach the manufacturer would take the torque curve that is projected for an engine configuration, based on the manufacturer's design and production specifications, and convert it into a “nominal power curve” that would relate the maximum expected power to engine speed when a production engine is mapped according to our specified mapping procedures. The maximum engine power is the maximum power point on that nominal power curve. This has become the standard approach for all our emission control programs.

Manufacturers would report the maximum engine power of each configuration in the application for certification. As with other engine parameters, manufacturers would ensure that the engines they produce under the certificate have maximum engine power consistent with those described in their applications. However, since we recognize that variability is a normal part of engine production, we allow a tolerance around the nominal value. We would instead require only that the power specified in the application be within the normal power range for production engines (see § 1045.140 and § 1054.140). We would typically expect the specified power to be within one standard deviation of the mean power of the production engines. If a manufacturer determines that the specified power is outside of the normal range for production engines, we may require the manufacturer to amend the application for certification. Manufacturer could alternatively change their engines to conform to the parameters detailed in the application for certification. In deciding whether to require a change to the application for certification, we would consider the degree to which the specified power differed from that of the production engines, the normal power variability for those engines, whether the engine used or generated emission credits, and whether the error affects which standards apply to the engine.

(7) What are the proposed production-line testing requirements?

We are proposing to modify production-line testing requirements for engines already subject to exhaust emission standards and to extend these requirements to sterndrive and inboard marine engines. According to these requirements, manufacturers would routinely test production-line engines to help ensure that newly assembled engines control emissions at least as well as the emission-data engines tested for certification. Production-line testing serves as a quality-control step, providing information to allow early detection of any problems with the design or assembly of freshly manufactured engines. This is different than selective enforcement auditing where we would give a test order for more rigorous testing for production-line engines in a particular emission family (see Section VIII.E).

If an engine fails to meet an emission standard, the manufacturer must modify it to bring that specific engine into compliance. If too many engines exceed emission standards, the manufacturer will need to correct the problem for the engine family. This correction may involve changes to assembly procedures or engine design, but the manufacturer must, in any case, do sufficient testing to show that the emission family complies with emission standards.

The proposed production-line testing programs would depend on the Cumulative Sum (CumSum) statistical process for determining the number of engines a manufacturer needs to test. We have used CumSum procedures for production-line testing with several other engine categories. Each manufacturer selects engines randomly at the beginning of a new sampling period. If engines must be tested at a facility where final assembly is not yet completed, manufacturers must randomly select engine components and assemble the test engine according to their established assembly instructions. The sampling period is a calendar quarter for engine families over 1,600 units. The minimum testing rate for these families is five engines per year. For engine families with projected sales at or below 1,600 units, the sampling period is a calendar year and the minimum testing rate is two engines. We may waive testing requirements for Marine SI engine families with projected sales below 150 units per year and for Small SI engine families with projected sales below 5,000 units per year. The CumSum program uses the emission results to calculate the number of tests required for the remainder of the sampling period to reach a pass or fail determination. If tested engines have relatively high emissions, the statistical sampling method calls for an increased number of tests to show that the emission family meets emission standards. The remaining number of tests is recalculated after the manufacturer tests each engine. Engines selected should cover the broadest range of production configurations possible. Tests should also be distributed evenly throughout the sampling period to the extent possible.

Under the CumSum approach, a limited number of individual engines can exceed the emission standards before the Action Limit is met and the engine family itself fails under the production-line testing program. If an engine family fails, we may suspend the certificate. The manufacturer would then need to take steps to address the nonconformity, which may involve amending the application for certification. This could involve corrected production procedures, a modified engine design. This may also involve changing the Family Emission Limit if there is no defect and the original Family Emission Limit was established using good engineering judgment. Note, however, that we propose to require manufacturers to adjust or repair every failing engine and retest it to show that it meets the emission standards. Note also that all production-line emission measurements must be included in the periodic reports to us. This includes any type of screening or surveillance tests (including ppm measurements), all data points for evaluating whether an engine controls emissions “off-cycle,” and any engine tests that exceed the minimum required level of testing.

While the proposed requirements may involve somewhat more testing than is currently required under 40 CFR part 90 or 91, there are several factors that limit the additional burden. First, the testing regulations in 40 CFR part 1065 specify that manufacturers may use field-testing equipment and procedures to measure emissions from production-line engines. This may substantially reduce the cost of testing individual engines by allowing much lower-cost equipment for measuring engines following assembly.

Second, we are proposing to reduce the testing requirements for emission families that consistently meet emission standards. The manufacturer may request a reduced testing rate for emission families with no production-line tests exceeding emission standards for two consecutive years. The minimum testing rate is one test per emission family for one year. Our approval for a reduced testing rate would apply for a single model year.

Third, as we have concluded in other engine programs, some manufacturers may have unique circumstances that call for different methods to show that production engines comply with emission standards. We therefore propose to allow a manufacturer to suggest an alternate plan for testing production-line engines as long as the alternate program is as effective at ensuring that the engines will comply. A manufacturer's petition to use an alternate plan should address the need for the alternative and should justify any changes from the regular testing program. The petition must also describe in detail the equivalent thresholds and failure rates for the alternate plan. If we approve the plan, we would use these criteria to determine when an emission family would become noncompliant. It is important to note that this allowance is intended only to provide flexibility and is not intended to affect the stringency of the standards or the production-line testing program.

Refer to the specific program discussions in Sections III, IV, and V for additional information about production-line testing for different types of engines.

D. Other Concepts

(1) What are the proposed emission-related installation instructions?

For manufacturers selling loose engines to equipment manufacturers, we are proposing to require that the engine manufacturer develop a set of emission-related installation instructions. This would include anything that the installer would need to know to ensure that the engine operates within its certified design configuration. For example, the installation instructions could specify a total capacity needed from the engine cooling system, placement of catalysts after final assembly, or specification of parts needed to control evaporative emissions. If equipment manufacturers fail to follow the established emission-related installation instructions, we would consider this tampering, which could subject them to significant civil penalties. Refer to the proposed regulations for more information about specific provisions related to installation instructions (see § 1045.130 and § 1054.130).

(2) What is an agent for service?

We are proposing to require that manufacturers identify an agent for service in the United States in their application for certification. The named person should generally be available within a reasonable time to respond to our attempts to make contact, either by telephone, e-mail, or in person. The person should also be capable of communicating about matters related to emission program requirements in English. (See § 1045.205 and § 1054.205).

(3) Are there special provisions for small manufacturers of these engines, equipment, and vessels?

The scope of this proposal includes many engine, equipment, and vessel manufacturers that have not been subject to our regulations or certification process. Many of these manufacturers are small businesses. The sections describing the proposed emission control program include discussion of proposed special compliance provisions designed to address small business issues for the different types of engines and other products covered by the rule. Section XIV.B gives an overview of the inter-agency process in which we developed these small-volume provisions.

VIII. General Nonroad Compliance Provisions

This section describes a wide range of compliance provisions that apply generally to all the engines and equipment that would be subject to the proposed standards. Several of these provisions apply not only to engine manufacturers but also to equipment manufacturers installing certified engines, remanufacturing facilities, operators, and others.

For standards that apply to equipment or fuel-system components, the provisions generally applicable to engine manufacturers would also apply to the equipment or component manufacturers. While this preamble section is written as if it would apply to engine exhaust standards, the same provisions would apply for equipment or component evaporative standards. We are proposing extensive revisions to the regulations to more carefully make these distinctions.

As described in Section VII, we are proposing to migrate these general compliance provisions from 40 CFR parts 90 and 91 to the established regulatory text in 40 CFR part 1068. The provisions in part 1068 already apply to other engine categories and we believe they can be applied to Small SI engines and Marine SI engines with minimal modification. Note that Section XI.C describes a variety of proposed changes and updates to the regulatory provisions in part 1068. We request comment on all aspects of part 1068 for these engines. The following discussion follows the sequence of the existing regulatory text in part 1068. (95)

A. Miscellaneous Provisions (Part 1068, Subpart A)

This regulation contains some general provisions, including general applicability and the definitions that apply to part 1068. Other provisions concern good engineering judgment, how we would handle confidential information, how the EPA Administrator delegates decision-making authority, and when we may inspect facilities, engines, or records.

The process of testing engines and preparing an application for certification requires the manufacturer to make a variety of judgments. This includes, for example, selecting test engines, operating engines between tests, and developing deterioration factors. EPA has the authority to evaluate whether a manufacturer's use of engineering judgment is reasonable. The regulations describe the methodology we use to address any concerns related to a manufacturer's use of good engineering judgment in cases where the manufacturer has such discretion (see 40 CFR 1068.5). We will take into account the degree to which any error in judgment was deliberate or in bad faith. This subpart is consistent with provisions already adopted for light-duty highway vehicles and various other nonroad engines.

B. Prohibited Acts and Related Requirements (Part 1068, Subpart B)

The proposed provisions in this subpart lay out a set of prohibitions for engine manufacturers, equipment manufacturers, operators, and engine rebuilders to ensure that engines comply with the emission standards. These provisions are summarized below but readers are encouraged to review the regulatory text. These provisions are intended to help ensure that each new engine sold or otherwise entered into commerce in the United States is certified to the relevant standards, that it remains in its certified configuration throughout its lifetime, and that only certified engines are used in the appropriate nonroad equipment.

(1) General Prohibitions (§ 1068.101)

This proposed regulation contains several prohibitions consistent with the Clean Air Act. We generally prohibit selling a new engine in the United States without a valid certificate of conformity issued by EPA, deny us access to relevant records, or keep us from entering a facility to test or inspect engines. In addition, no one may manufacture any device that will make emission controls ineffective or remove or disable a device or design element that may affect an engine's emission levels, which we would consider tampering. We have generally applied the existing policies developed for tampering with highway engines and vehicles to nonroad engines. (96) Other prohibitions reinforce manufacturers' obligations to meet various certification requirements. We also prohibit selling engine parts that prevent emission control systems from working properly. Finally, for engines that are excluded from regulation based on their use in certain applications, we generally prohibit using these engines in applications for which emission standards apply.

Each prohibited act has a corresponding maximum penalty as specified in Clean Air Act section 205. As provided for in the Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L. 10-410, these maximum penalties are in 1970 dollars and should be periodically adjusted by regulation to account for inflation. The current penalty amount for most violations is $32,500. (97)

(2) Equipment Manufacturer Provisions (§ 1068.105)

The provisions of § 1068.105 require equipment manufacturers to use certified engines in their new equipment once the emission standards begin to apply. We would allow a grace period for equipment manufacturers to deplete their supply of uncertified engines if they follow their normal inventory practices for buying engines, rather than stockpiling noncompliant (or previous-tier) engines to circumvent the new standards.

We require equipment manufacturers to observe the engine manufacturers' emission-related installation instructions to ensure that the engines remain consistent with the application for certification. This may include such things as radiator specifications, diagnostic signals and interfaces, and placement of catalytic converters.

If equipment manufacturers install a certified engine in a way that obscures the engine label, we propose to require that they add a duplicate label on the equipment. The equipment manufacturer would need to request from the engine manufacturer a specific number of duplicate labels, describe which engine and equipment models are involved, and explain why the duplicate labels are necessary. Equipment manufacturers would need to destroy any excess labels and keep records to show the disposition of all the labels they receive. This would make it easier for us to verify that engines are meeting requirements and it would be easier for U.S. Customs to clear imported equipment with certified engines.

Equipment manufacturers not fulfilling the responsibilities we describe in this section would be in violation of one or more of the prohibited acts described above.

(3) In-Service Engines (§ 1068.110)

The regulations generally prevent manufacturers from requiring owners to use any certain brand of aftermarket parts as well as give the manufacturers responsibility for engine servicing for emission-related warranty issues, leaving the responsibility for all other maintenance with the owner. This proposed regulation would also reserve our right to do testing (or require testing), for example, to investigate potential defeat devices or in-use noncompliance, as authorized by the Clean Air Act.

(4) Engine Rebuilding (§ 1068.120)

We are proposing to apply rebuild provisions for all the nonroad engines subject to the proposed emission standards. This approach is similar to what applies to heavy-duty highway engines and most other nonroad engines. This is necessary to prevent an engine rebuilder from rebuilding engines in a way that disables the engine's emission controls or compromises the effectiveness of the emission control system. We are proposing minimal recordkeeping requirements for businesses involved in commercial engine rebuilding to show that they comply with the regulations.

In general, anyone who rebuilds a certified engine must restore it to its original (or a lower-emitting) configuration. Rebuilders must also replace some critical emission control components such as fuel injectors and oxygen sensors in all rebuilds for engines that use those technologies. Rebuilders must replace an existing catalyst if there is evidence that it is not functional; for example, if rattling pieces inside a catalyst show that it has lost its physical integrity, it would need to be replaced. See § 1068.120 for more detailed information.

These rebuilding provisions define good maintenance and rebuilding practices to help someone avoid violating the prohibition on “removing or disabling” emission control systems. These provisions therefore apply also to individuals who rebuild their own engines. However, we do not require such individuals to keep records to document compliance.

We request comment on applying these proposed requirements for engine rebuilding and maintenance to the engines and vehicles subject to this rulemaking. In addition, we request comment on the associated recordkeeping requirements.

C. Exemptions (Part 1068, Subpart C)

We are proposing to apply several exemptions for certain specific situations, consistent with previous rulemakings. In general, exempted engines would need to comply with the requirements only in the sections related to the exemption. Note that additional restrictions could apply to importing exempted engines (see Section VIII.D). We may also require manufacturers (or importers) to add a permanent label describing that the engine is exempt from emission standards for a specific purpose. In addition to helping us enforce emission standards, this would help ensure that imported engines clear Customs without difficulty.

(1) Testing

Anyone would be allowed to request an exemption for engines used only for research or other investigative purposes.

(2) Manufacturer-Owned Engines

Engines that are used by engine manufacturers for development or marketing purposes could be exempted from regulation if they are maintained in the manufacturers' possession and are not used for any revenue-generating service. In contrast with the testing exemption, only certificate holders would be able to use this exemption.

(3) Display Engines

Anyone may request an exemption for an engine if it is for display only.

(4) National Security

Engine manufacturers could receive an exemption for engines they can show are needed by an agency of the federal government responsible for national defense. For cases where the engines will not be used on combat applications, the manufacturer would have to request the exemption with the endorsement of the procuring government agency.

(5) Exported Engines

Engines that will be exported to countries that do not have the same emission standards as those that apply in the United States would be exempted without need for a request. This exemption would not be available if the destination country has the same emission standards as those in the United States.

(6) Competition Engines

New engines that are used solely for competition are excluded from regulations applicable to nonroad engines. For purposes of our certification requirements, a manufacturer would receive an exemption if it can show that it produces the engine specifically for use solely in competition (see Sections III through V for specific provisions). In addition, engines that have been modified for use in competition would be exempt from the prohibition against tampering described above (without need for request). The literal meaning of the term “used solely for competition” would apply for these modifications. We would therefore not allow the engine to be used for anything other than competition once it has been modified. This also applies to someone who would later buy the engine, so we would require the person modifying the engine to remove or deface the original engine label and inform a subsequent buyer in writing of the conditions of the exemption.

(7) Replacement Engines

An exemption would be available to engine manufacturers without request if that is the only way to replace an engine from the field that was produced before the current emission standards took effect. If less stringent standards applied to the old engine when it was new, the replacement engine would also have to meet those standards.

(8) Unusual Circumstance Hardship Provision

Under the unusual circumstances hardship provision, any manufacturer subject to the proposed standards would be able to apply for hardship relief if circumstances outside their control cause the failure to comply and if failure to sell the subject engines or equipment or fuel system component would have a major impact on the company's solvency (see § 1068.245). An example of an unusual circumstance outside a manufacturer's control may be an “Act of God,” a fire at the manufacturing plant, or the unforeseen shutdown of a supplier with no alternative available. The terms and time frame of the relief would depend on the specific circumstances of the company and the situation involved. As part of its application for hardship, a company would be required to provide a compliance plan detailing when and how it would achieve compliance with the standards. This hardship provision would be available to all manufacturers of engines, equipment, boats, and fuel system components subject to the proposed standards, regardless of business size.

(9) Economic Hardship Provision for Small Businesses

An economic hardship provision would allow small businesses subject to the proposed standards to petition EPA for limited additional lead time to comply with the standards (see § 1068.250). A small business would have to make the case that it has taken all possible business, technical, and economic steps to comply, but the burden of compliance costs would have a significant impact on the company's solvency. Hardship relief could include requirements for interim emission reductions and/or the purchase and use of emission credits. The length of the hardship relief decided during review of the hardship application would be up to one year, with the potential to extend the relief as needed. We anticipate that one to two years would normally be sufficient. As part of its application for hardship, a company would be required to provide a compliance plan detailing when and how it would achieve compliance with the standards. This hardship provision would be available only to small manufacturers of engines, equipment, boats, and fuel system components subject to the standards. For the purpose of determining which manufacturers qualify as a small business, EPA is proposing criteria based on either a production cut-off or the number of employees. The proposed criteria for determining which companies qualify as a small business are contained in Section III.F.2 for SD/I engines, Section IV.G for OB/PWC engines, Sections V.F.2 for nonhandheld engines, V.F.3 for nonhandheld equipment, and Section VI.G.2.f for handheld equipment, boats, and fuel system components.

(10) Hardship for Equipment Manufacturers, Vessel Manufacturers, and Secondary Engine Manufacturers

Equipment manufacturers and boat builders in many cases will depend on engine manufacturers and fuel system component manufacturers to supply certified engines and fuel system components in time to produce complying equipment or boats by the date emission standards begin to apply. We are aware of other regulatory control programs where certified engines have been available too late for equipment manufacturers to adequately accommodate changing engine size or performance characteristics. To address this concern, we are proposing to allow Small SI equipment manufacturers and Marine SI boat builders to request up to one extra year before using certified engines or fuel system components if they are unable to obtain certified product and they are not at fault and would face serious economic hardship without an extension. See § 1068.255 for the proposed regulatory text related to this hardship.

In addition, we are aware that some manufacturers of nonroad engines are dependent on another engine manufacturer to supply base engines that are then modified for the final application. Similar to equipment or vessel manufacturers, these “secondary engine manufacturers” may face difficulty in producing certified engines if the manufacturer selling the base engine makes an engine model unavailable with short notice. These secondary engine manufacturers generally each buy a relatively small number of engines and would therefore not necessarily be able to influence the marketing or sales practices of the engine manufacturer selling the base engine. As a result, we are proposing that secondary engine manufacturers could apply for this hardship as well. However, because these secondary engine manufacturers control the final design of their modified engine and could benefit in the market if they are allowed to produce a product certified to less stringent standards than their competitors, we would generally not approve an exemption unless the secondary engine manufacturer committed to a plan to make for any calculated loss in environmental benefit. Provisions similar to this hardship were already adopted for Large SI engines and recreational vehicles. See the existing regulatory text in § 1068.255(c).

(11) Delegated Final Assembly

The regulations in 40 CFR 1068.260 allow for flexible manufacturing for companies that produce engines that rely on aftertreatment. These regulations allow for equipment manufacturers to receive separate shipment of aftertreatment devices with the obligation resting on the equipment manufacturer to correctly install the aftertreatment on the engine when installing the engine in the equipment. Allowing for this practice requires an exemption from provisions which prohibit an engine from being introduced into commerce in its uncertified configuration. The provisions in § 1068.260 to prevent improper use of this exemption include requirements to (1) Have contractual arrangements with equipment manufacturers; (2) submit affidavits to EPA regarding the use of the exemption; (3) include the price of the aftertreatment in the cost of the engine (to avoid giving equipment manufacturers an incentive to reduce costs inappropriately); and (4) periodically audit the affected equipment manufacturers.

These provisions are not likely to be necessary for most Marine SI engine manufacturers. We do not expect outboard or personal watercraft engine manufacturers to use aftertreatment technology. For sterndrive/inboard engines, we expect catalyst designs generally to be so integral to the exhaust manifold that engine manufacturers will include them with their engines. However, their may be some less common designs, such as engines on large vessels or airboats, where engine manufacturers may want to use the provisions allowing for separate shipment of aftertreatment. We are therefore proposing to adopt the provisions of § 1068.260 without change for Marine SI engines.

Manufacturers of handheld Small SI engines typically build both the engine and the equipment so we are proposing not to allow for delegated assembly with these engines.

In contrast, nonhandheld engines (especially Class II) are built by engine manufacturers and sold to equipment manufacturers, often without complete fuel or exhaust systems. Ensuring that consumers get only engines that are in a certified configuration therefore requires a carefully crafted program. As described in Section V.E.2, we are proposing special provisions to accommodate the unique circumstances related to nonhandheld Small SI engines.

(12) Uncertified Engines Subject to Emission Standards

In some cases we require manufacturers to meet certain emission standards without requiring certification, most commonly for replacement engines. In 40 CFR 1068.265 we spell out manufacturers obligations for these compliant but uncertified engines. Manufacturers must have test data showing that their engines meet the applicable emission standards and are liable for the emission performance of their engines, much like for certified engines, but are not required to submit an application for certification and get EPA approval before selling the engine. We propose to apply these provisions without modification for Small SI engines and Marine SI engines.

D. Imports (Part 1068, Subpart D)

In general, the same certification requirements would apply to engines and equipment whether they are produced in the United States or are imported. The regulations in part 1068 also include some additional provisions that would apply if someone wants to import an exempted or excluded engine.

All the proposed exemptions described above for new engines would also apply to importation, though some of these exemptions apply only on a temporary basis. An approved temporary exemption would be available only for a defined period. We could require the importer to post bond while the engine is in the United States. There are several additional proposed exemptions that would apply only to imported engines.

  • Identical configuration: This is a permanent exemption to allow individuals to import engines that were designed and produced to meet applicable emission standards. These engines may be different than certified engines only in the fact that the emission label is missing because they were not intended for sale in the United States.
  • Ancient engines: We would generally treat used engines as new if they are imported without a certificate of conformity. However, this permanent exemption would allow for importation of uncertified engines if they are more than 20 years old and remain in their original configuration.
  • Repairs or alterations: This is a temporary exemption to allow companies to repair or modify engines. This exemption does not allow for operating the engine except as needed to do the intended work. This exemption would also apply for the practice for retiring bigger engines; noncompliant engines may be imported under this exemption for the purpose of recovering the engine block.
  • Diplomatic or military: This is a temporary exemption to allow diplomatic or military personnel to use uncertified engines during their term of service in the U.S.

We request comment on all these exemptions for domestically produced and imported engines and vehicles.

E. Selective Enforcement Audit (Part 1068, Subpart E)

Clean Air Act section 206(b) gives us the discretion in any program with vehicle or engine emission standards to do selective enforcement auditing of production engines. We would do a selective enforcement audit by choosing an engine family and giving the manufacturer a test order that details a testing program to show that production-line engines meet emission standards. The regulation text describes the audit procedures in greater detail.

We intend generally to rely on manufacturers' testing of production-line engines to show that they are consistently building products that conform to the standards. However, we reserve our right to do selective enforcement auditing if we have reason to question the emission testing conducted and reported by the manufacturer or for other reasons.

F. Defect Reporting and Recall (Part 1068, Subpart F)

We are proposing to apply the defect reporting requirements of § 1068.501 to replace the provisions of 40 CFR part 85 for nonroad engines. The requirements obligate manufacturers to tell us when they learn that emission control components or systems are defective and to conduct investigations under certain circumstances to determine if an emission-related defect is present. We are also proposing a requirement that manufacturers initiate these investigations when warranty claims and other available information indicate that a defect investigation may be fruitful. For this purpose, we consider defective any part or system that does not function as originally designed for the regulatory useful life of the engine or the scheduled replacement interval specified in the manufacturer's maintenance instructions.

We believe the investigation requirement proposed in this rule will allow both EPA and the engine manufacturers to fully understand the significance of any unusually high rates of warranty claims that may have an impact on emissions. We believe prudent engine manufacturers already conduct a thorough investigation when available data indicate recurring parts failures as part of their normal practice to ensure product quality. Such data are valuable and readily available to most manufacturers and, under this proposal, must be considered to determine whether or not there is a possible defect of an emission-related part.

Defect reports submitted in compliance with the current regulations are based on a single threshold applicable to engine families of all production volumes. No affirmative requirement for gathering information about the full extent of the problem applies. Many Small SI engine families have very high sales volumes. The proposed approach may therefore result in fewer total defect reports that should be submitted compared with the traditional approach because the number of defects triggering the submission requirement generally rises in proportion to the engine family size. Under the existing regulations, very small engine families would likely never report even a prominent defect because a relatively high proportion of such engines would have to be known to be defective before reporting is required under a scheme with fixed thresholds. The proposed threshold for reporting for the smallest engine families is therefore lower than under the current regulations.

We are aware that accumulation of warranty claims will likely include many claims and parts that do not represent defects, so we are establishing a relatively high threshold for triggering the manufacturer's responsibility to investigate whether there is, in fact, a real occurrence of an emission-related defect.

This proposal is intended to require manufacturers to use information we would expect them to keep in the normal course of business. We believe in most cases manufacturers would not be required to institute new programs or activities to monitor product quality or performance. A manufacturer that does not keep warranty information may ask for our approval to use an alternate defect-reporting methodology that is at least as effective in identifying and tracking potential emission-related defects as the proposed requirements. However, until we approve such a request, the proposed thresholds and procedures continue to apply.

The proposed investigation thresholds are ten percent of total production to date up to a total production of 50,000 engines, but never fewer than 50 for any single engine family in one model year. For production between 50,000 and 550,000 units, the investigation threshold would increase at a marginal rate of four percent. For all production above 550,000 an investigation threshold of 25,000 engines would apply. For example, for an engine family with a sales volume of 20,000 units in a given model year, the manufacturer would have to investigate potential emission-related defects after identifying 2,000 possible defects. For an engine family with a sales volume of 450,000 units in a given model year, the manufacturer would have to investigate potential emission-related defects after identifying 21,000 possible defects. These thresholds reflect the relevant characteristics of nonroad engines, such as the varying sales volumes, engine technologies, and warranty and maintenance practices.

To carry out an investigation to determine if there is an emission-related defect, manufacturers would have to use available information such as preexisting assessments of warranted parts. Manufacturers would also have to gather information by assessing previously unexamined parts submitted with warranty claims and replacement parts which are available or become available for examination and analysis. If available parts are deemed too voluminous to conduct a timely investigation, manufacturers would be permitted to employ appropriate statistical analyses of representative data to help draw timely conclusions regarding the existence of a defect. These investigative activities should be summarized in the periodic reports of recently opened or closed investigations, as discussed below. It is important to note that EPA does not regard having reached the investigation thresholds as conclusive proof of the existence of a defect, only that initiation of an appropriate investigation is merited to determine whether a defect exists.

The second threshold in this proposal specifies when a manufacturer must report that an emission-related defect exists. This threshold involves a smaller number of engines because each potential defect has been screened to confirm that it is an emission-related defect. In counting engines to compare with the defect-reporting threshold, the manufacturer would consider a single engine family and model year. However, when a defect report is required, the manufacturer would report all occurrences of the same defect in all engine families and all model years that use the same part. The threshold for reporting a defect is two percent of total production for any single engine family for production up to 50,000 units, but never fewer than 20 for any single engine family in one model year. For production between 50,000 and 550,000 units, the investigation threshold would increase at a marginal rate of one percent. For all production above 550,000 an investigation threshold of 6,000 engines would apply.

It is important to note that while EPA regards occurrence of the defect threshold as proof of the existence of a reportable defect, it does not regard that occurrence as conclusive proof that recall or other action is merited.

If the number of engines with a specific defect is found to be less than the threshold for submitting a defect report, but warranty claims or other information later indicate additional potentially defective engines, under this proposal the information must be aggregated for the purpose of determining whether the threshold for submitting a defect report has been met. If a manufacturer has knowledge from any source that the threshold for submitting a defect report has been met, a defect report would have to be submitted even if the trigger for investigating has not yet been met. For example, if manufacturers receive information from their dealers, technical staff, or other field personnel showing conclusively that a recurring emission-related defect exists, they would have to submit a defect report if the submission threshold is reached.

At specified times, the manufacturer would have to report open investigations as well as recently closed investigations that did not require a defect report. We are not proposing a fixed time limit for manufacturers to complete their investigations. However, the periodic reports required by the regulations will allow us to monitor these investigations and determine if it is necessary or appropriate for us to take further action.

We request comment on all aspects of this approach to defect reporting. We also request comment on whether these reporting requirements should also apply to the current Phase 2 compliance program and if so, when these provisions should be applied.

Under Clean Air Act section 207, if we determine that a substantial number of engines within an engine family, although properly used and maintained, do not conform to the appropriate emission standards, the manufacturer must remedy the problem and conduct a recall of the noncomplying engine family. However, we recognize that in some cases recalling noncomplying nonroad engines may not achieve sufficient environmental protection, so instead of making a determination of a substantial number of nonconforming engines (and thereby triggering a recall responsibility), we may allow manufacturers in some cases to nominate alternative remedial measures to address most potential noncompliance situations.

G. Hearings (Part 1068, Subpart G)

According to this regulation, manufacturers would have the opportunity to challenge our decision to deny an application for certification or to suspend, revoke, or void an engine family's certificate. This also applies to our decision to reject the manufacturer's use of good engineering judgment (see § 1068.5), and to our decisions related to emission-credit programs. Part 1068, subpart G, references the proposed procedures for a hearing to resolve such disputes.

IX. General Test Procedures

The regulatory text in part 1065 is written with the intent to apply broadly to EPA engine programs. Part 1065 was originally adopted on November 8, 2002 (67 FR 68242) and currently applies for nonroad diesel engines, large nonroad spark-ignition engines and recreational vehicles under 40 CFR parts 1039, 1048 and 1051, respectively. The regulatory text was substantially revised in a recent rulemaking to make a variety of corrections and improvements (70 FR 40420, July 13, 2005).

This proposal applies to anyone who tests engines to show that they meet the emission standards for Small SI engines or Marine SI engines. This includes certification testing as well as all production-line and in-use testing. See the program descriptions above for testing provisions that are unique to each category of engines.

We are proposing to apply the existing test provisions in part 1065 for all Small SI engines and Marine SI engines. See Sections III through V for testing issues that are specific to the particular engine categories. In addition, we are proposing to allow manufacturers to use the provisions of part 1065 even before the proposed new standards take effect. This would allow manufacturers to migrate to the new test procedures sooner. This may involve upgrading to different types of analyzers that are specified in part 1065 but not in part 90 or part 91. It may also involve recoding computers to do modal calculations specified in part 1065 instead of the weight-based calculations in part 90 or part 91. At the same time, this would allow EPA to do confirmatory testing using the upgraded procedures without waiting for the proposed new standards to apply. This is important because EPA testing facilities are used for many different programs and the conversion to testing according to part 1065 specifications is well underway. We are aware that the new test specifications regarding engine mapping, generating duty cycles, and applying cycle-validation criteria would affect the emission measurements so we would follow the manufacturers' methods for these parameters in any case. For any other parameters, we would understand any differences between test procedures specified in parts 90, 91, and 1065 either to have no effect on emission measurements or to improve the accuracy of the measurement.

We have identified various provisions in part 90 and part 91 that may need correction or adjustment. We request comment on the following possible changes:

  • Changing the standard temperature condition for volume-related calculations in § 90.311(a)(2) and § 91.311(a)(2) from 25 °C to 20 °C. This would be consistent with EPA's test regulations, including the specifications in § 1065.640.
  • Removing the requirement to derive calibration and span gas concentrations from NIST Standard Reference Materials in § 90.312(c) and § 91.312(c). This goes beyond the traceability requirements of other EPA test regulations and standard lab practices. We could instead refer to § 1065.750 for calibration and span gas concentrations.
  • Changing the direction for specifying gas concentrations in § 90.312(c)(3) and § 91.312(c)(3) from a volumetric basis to a molar basis.
  • Correcting inconsistent requirements related to gas dividers. The regulations at § 90.312(c)(4) and § 91.312(c)(4) specify an accuracy of ±2 percent, while § 90.314(c) and § 91.314(c) specify an accuracy of ±1.5 percent. We could select one of these values, or we could refer to the gas divider specifications in § 1065.248 and § 1065.307.
  • Correcting inconsistent specifications related to the timing of CO interference checks. The regulations at § 90.317(b) and § 91.317(b) specify that interference checks occur as part of annual maintenance, § 90.325(a) and § 91.325(a) specify that interference checks occur after any major repairs that could affect analyzer performance. We believe it would be most appropriate to make these consistent based on the specification in § 1065.303, which calls for interference checks to occur after major maintenance.

As we have done in previous programs, we are proposing specific test procedures to define how measurements are to be made but would allow the use of alternate procedures if they are shown to be equivalent to our specified procedures. (98) The test procedures proposed in part 1065 are derived from our test procedures in 40 CFR part 86 for highway heavy-duty gasoline engines and light-duty vehicles. The procedures have been simplified (and to some extent generalized) to better fit nonroad engines. The procedures in part 1065 currently apply to recreational vehicles and to nonroad spark-ignition engines above 19 kW. We request comment on all aspects of these proposed test procedures. We also request comment regarding whether any additional parts of the test procedures contained in 40 CFR part 86 (for highway vehicles and engines), in other parts that apply to nonroad engines, or in ISO 8178 should be incorporated into the final test procedures.

A. Overview

Part 1065 is organized by subparts as shown below:

  • Subpart A: General provisions; global information on applicability, alternate procedures, units of measure, etc.
  • Subpart B: Equipment specifications; required hardware for testing
  • Subpart C: Measurement instruments
  • Subpart D: Calibration and verifications; for measurement systems
  • Subpart E: Engine selection, preparation, and maintenance
  • Subpart F: Test protocols; step-by-step sequences for laboratory testing and test validation
  • Subpart G: Calculations and required information
  • Subpart H: Fuels, fluids, and analytical gases
  • Subpart I: Oxygenated fuels; special test procedures
  • Subpart J: Field testing and portable emissions measurement systems
  • Subpart K: Definitions, references, and symbols

The regulations prescribe scaled specifications for test equipment and measurement instruments by parameters such as engine power, engine speed and the emission standards to which an engine must comply. That way this single set of specifications will cover the full range of engine sizes and our full range of emission standards. Manufacturers will be able to use these specifications to determine what range of engines and emission standards may be tested using a given laboratory or field testing system.

The content already adopted in part 1065 is mostly a combination of material from our most recent updates to other test procedures and from test procedures specified by the International Organization for Standardization (ISO). There are also some provisions we created specifically for part 1065, generally to address very recent advances such as measuring very low concentrations of emissions, using new measurement technology, using portable emissions measurement systems, and performing field testing.

The content in part 1065 also reflects a shift in our approach for specifying measurement performance. In the past we specified numerous calibration accuracies for individual measurement instruments, and we specified some verifications for individual components such as NO 2-to-NO converters. We have shifted our focus away from individual instruments and toward the overall performance of complete measurement systems. We did this for several reasons. First, some of what we specified in the past precluded the implementation of new measurement technologies. These new technologies, sometimes called “smart analyzers,” combine signals from multiple instruments to compensate for interferences that were previously tolerable at higher emissions levels. These analyzers are useful for detecting low concentrations of emissions. They are also useful for detecting emissions from raw exhaust, which can contain high concentrations of interferences, such as water vapor. This is particularly important for field testing, which will most likely rely upon raw exhaust measurements. Second, this new “systems approach” requires periodic verifications for complete measurement systems, which we feel will provide a more robust assurance that a measurement system as a whole is operating properly. Third, the systems approach provides a direct pathway to demonstrate that a field test system performs similarly to a laboratory system. Finally, we feel that our systems approach will lead to a more efficient way of ensuring measurement performance in the laboratory and in the field. We believe this efficiency will stem from less frequent calibrations of individual instruments and higher confidence that a complete measurement system is operating properly.

Below is a brief description of the content of each subpart. The discussion highlights some recent changes to part 1065. We are not proposing any changes to part 1065 as part of this proposal, but we intend to make various changes to part 1065 as part of a concurrent rulemaking to set new emission standards for marine diesel and locomotive engines. Manufacturers of engines that are the subject of this proposal are encouraged to stay abreast of testing changes that we propose in this other rulemaking.

(1) Subpart A General Provisions

In Subpart A we identify the applicability of part 1065 and describe how procedures other than those in part 1065 may be used to comply with a standard-setting part. In § 1065.10(c)(1) we specify that testing must be conducted in a way that represents in-use engine operation, such that in the rare case where provisions in part 1065 result in unrepresentative testing, we may cooperate with manufacturers to work out alternative testing approaches for demonstrating compliance with emission standards. Another aspect of representative testing relates to the desire to maintain consistency between certification testing and in-use testing. If we or manufacturers test in-use engines, we would expect the engine to be removed from the equipment and installed on an engine dynamometer for testing with no changes to the engine (including the governor, fuel system, exhaust system and other components).

In § 1065.10(c)(7) and § 1065.12 we describe a process by which we may approve alternative test procedures that we determine to be equivalent to (or more accurate than) the specified procedures. Given the new testing specifications in part 1065 and the standard-setting parts, and this more detailed approach to approving alternative test procedures, we will not allow manufacturers to continue testing based on any earlier approvals for alternative testing under part 90 or part 91. Any manufacturer wishing to continue testing with any method, device, or specification that departs from that included in this proposal would need to request approval for such testing under § 1065.10(c)(7).

Other information in this subpart includes a description of the conventions we use regarding units and certain measurements and we discuss recordkeeping. We also provide an overview of how emissions and other information are used for determining final emission results. The regulations in § 1065.15 include a figure illustrating the different ways we allow brake-specific emissions to be calculated.

In this same subpart, we describe how continuous and batch sampling may be used to determine total emissions. We also describe the two ways of determining total work that we approve. Note that the figure indicates our default procedures and those procedures that require additional approval before we will allow them.

(2) Subpart B Equipment Specifications

Subpart B first describes engine and dynamometer related systems. Many of these specifications are scaled to an engine's size, speed, torque, exhaust flow rate, etc. We specify the use of in-use engine subsystems such as air intake systems wherever possible to best represent in-use operation when an engine is tested in a laboratory.

Subpart B also describes sampling dilution systems. These include specifications for the allowable components, materials, pressures, and temperatures. We describe how to sample crankcase emissions.

The regulations in § 1065.101 include a diagram illustrating all the available equipment for measuring emissions.

(3) Subpart C Measurement Instruments

Subpart C specifies the requirements for the measurement instruments used for testing. These specifications apply to both laboratory and field testing. In subpart C we recommend accuracy, repeatability, noise, and response time specifications for individual measurement instruments, but note that we require that overall measurement systems meet the calibrations and verifications in Subpart D.

In some cases we allow new instrument types to be used where we previously did not allow them. For example, we now allow the use of a nonmethane cutter for NMHC measurement, a nondispersive ultraviolet analyzers for NO X measurement, zirconia sensors for O 2 measurement, various raw-exhaust flow meters for laboratory and field testing measurement, and an ultrasonic flow meter for CVS systems.

(4) Subpart D Calibrations and Verifications
Subpart D describes what we mean when we specify accuracy, repeatability and other parameters in Subpart C. These specifications apply to both laboratory and field testing. We are adopting calibrations and verifications that scale with engine size and with the emission standards to which an engine is certified. We are replacing some of what we have called “calibrations” in the past with a series of verifications, such as a linearity verification, which essentially verifies the calibration of an instrument without specifying how the instrument must be initially calibrated. Because new instruments have built-in routines that linearize signals and compensate for various interferences, our existing calibration specifications sometimes conflicted with an instrument manufacturer's instructions. In addition, there are new verifications in subpart D to ensure that the new instruments we specify in Subpart C are used correctly.
(5) Subpart E Engine Selection, Preparation, and Maintenance

Subpart E describes how to select, prepare, and maintain a test engine. We updated these provisions to include both gasoline and diesel engines.

(6) Subpart F Test Protocols

Subpart F describes the step-by-step protocols for engine mapping, test cycle generation, test cycle validation, pre-test preconditioning, engine starting, emission sampling, and post-test validations. We adopted an improved way to map and generate cycles for constant-speed engines that would better represent in-use engine operation. We adopted a more streamlined set of test cycle and validation criteria. We allow modest corrections for drift of emission analyzer signals within a certain range.

(7) Subpart G Calculations and Required Information

Subpart G includes all the calculations required in part 1065. We adopted definitions of statistical quantities such as mean, standard deviation, slope, intercept, t-test, F-test, etc. By defining these quantities mathematically we intend to resolve any potential ambiguity when we discuss these quantities in other subparts. We have written all calculations for calibrations and emission calculations in international units to comply with 15 CFR part 1170, which removes the voluntary aspect of the conversion to international units for federal agencies. Furthermore, Executive Order 12770 (56 FR 35801, July 29, 1991) reinforces this policy by providing Presidential authority and direction for the use of the metric system of measurement by Federal agencies and departments. For our standards that are not completely in international units (i.e., grams/horsepower-hour, grams/mile), we specify in part 1065 the correct use of internationally recognized conversion factors.

We also specify emission calculations based on molar quantities for flow rates instead of volume or mass. This change eliminates the frequent confusion caused by using different reference points for standard pressure and standard temperature. Instead of declaring standard densities at standard pressure and standard temperature to convert volumetric concentration measurements to mass-based units, we declare molar masses for individual elements and compounds. Since these values are independent of all other parameters, they are known to be universally constant.

(8) Subpart H Fuels, Fluids, and Analytical Gases

Subpart H specifies test fuels, lubricating oils and coolants, and analytical gases for testing. We are not identifying any detailed specification for service accumulation fuel. Instead, we specify that service accumulation fuel must be either a test fuel or a commercially available in-use fuel. This helps ensure that testing is representative of in-use engine operation. We are adding a list of ASTM specifications for in-use fuels as examples of appropriate service accumulation fuels. Compared to the proposed regulatory language, we have clarified that § 1065.10(c)(1) does not require test fuels to be more representative than the specified test fuels. We have added an allowance to use similar test fuels that do not meet all of the specifications provided they do not compromise the manufacturer's ability to demonstrate compliance. We also now allow the use of ASTM test methods specified in 40 CFR part 80 in lieu of those specified in part 1065. We did this because we may more frequently review and update the ASTM methods in part 80 versus those in part 1065.

Proper testing requires the use of good engineering judgment to maintain the stability of analytical gases.

(9) Subpart I Oxygenated Fuels

Subpart I describes special procedures for measuring certain hydrocarbons whenever oxygenated fuels are used. We updated the calculations for these procedures in Subpart G. We have made some revisions to the proposed text to make it consistent with the original content of the comparable provisions in part 86. We have also added an allowance to use the California NMOG test procedures to measure alcohols and carbonyls.

(10) Subpart J Field Testing and Portable Emissions Measurement Systems

Portable Emissions Measurement Systems (PEMS) for field testing for marine spark-ignition engines must generally meet the same specifications and verifications that laboratory instruments must meet according to subparts B, C, and D. However, we allow some deviations from laboratory specifications. In addition to meeting many of the laboratory system requirements, a PEMS must meet an overall verification relative to laboratory measurements. This verification involves repeating a duty cycle several times. The duty cycle itself must have several individual field-test intervals (e.g., NTE events) against which a PEMS is compared to the laboratory system. This is a comprehensive verification of a PEMS. We also adopted a procedure for preparing and conducting a field test and adopted drift corrections for emission analyzers. Given the evolving state of PEMS technology, the field-testing procedures provide for a number of known measurement techniques. We have added provisions and conditions for using PEMS in an engine dynamometer laboratory to conduct laboratory testing.

(11) Subpart K Definitions, References, and Symbols

Subpart K includes all the defined terms, identification of reference materials, and lists of acronyms and abbreviations used throughout part 1065.

B. Special Provisions for Nonroad Spark-Ignition Engines

While part 1065 defines a wide range of specifications to define appropriate test procedures, several parameters are unique to each program. For example, each category of engines has one or more duty cycles that describe exactly how to operate each engine during the test. These category-specific provisions are described in part 1045, subpart F, for Marine SI engines and in part 1054, subpart F, for Small SI engines.

Manufacturers may run the specified steady-state duty cycle either as a series of discrete modes or as a ramped-modal cycle. The ramped-modal cycle specifies the same engine speeds and loads as in conventional discrete-mode testing, but the modes are connected by gradual ramps in engine speed and torque for a single, continuous emission-sampling period. The different modes are connected with twenty-second linear speed and torque transitions during which emissions are measured. Emission sampling therefore starts at the beginning of a ramped-modal cycle and does not stop until its last mode is completed.

Ramped-modal cycles involve a different sequence of modes than is specified for discrete-mode testing. For example, the first mode, which is engine idle, is split so that half the idle mode occurs at the beginning of the test and half occurs at the end of the test. This helps facilitate certain technical aspects of emission sampling. Instead of using weighting factors for each steady-state mode, a ramped-modal cycle specifies different time durations for each mode. Time durations of the modes and transitions are proportioned to the established modal weighting factors for the specified cycle.

There are several advantages to ramped-modal testing. Using discrete-mode testing, manufacturers sample emissions for an unspecified time duration near the end of each individual mode. The result is several separate measurements that must be combined mathematically to yield an overall emission result in g/kW-hr. The ramped-modal cycle has a single emission-sampling period. This decreases testing variability and reduces the overall cost of running tests. Ramped-modal testing also enables the use of batch sampling systems such as bag samplers.

X. Energy, Noise, and Safety

Section 213 of the Clean Air Act directs us to consider the potential impacts on safety, noise, and energy when establishing the feasibility of emission standards for nonroad engines. Furthermore, section 205 of EPA's 2006 Appropriations Act requires us to assess potential safety issues, including the risk of fire and burn to consumers in use, associated with the proposed emission standards for nonroad spark-ignition engines below 50 horsepower. (99) As further detailed in the following sections, we expect that the proposed exhaust and evaporative emission standards will either have no adverse affect on safety, noise, and energy or will improve certain aspects of these important characteristics. A more in depth discussion of these topics relative to the proposed exhaust and evaporative emission standards is contained in Chapters 4 and 5 of the Draft RIA, respectively. Also, our conclusions relative to safety are fully documented in our comprehensive safety study which is discussed in the next section.

A. Safety

We conducted a comprehensive, multi-year safety study of spark-ignition engines that focused on the four areas where we are proposing new emission standards. (100) These areas are:

  • New catalyst-based HC+NO X exhaust emission standards for Class I and Class II nonhandheld spark-ignition engines;
  • New fuel evaporative emission standards for nonhandheld and handheld equipment;
  • New HC+NO X exhaust emission standards for outboard and personal watercraft engines and vessels, and a new CO exhaust emission standard for nonhandheld engines used in marine auxiliary applications; and
  • New fuel evaporative emission standards for outboard and personal watercraft engines and vessels.

Each of these four areas is discussed in greater detail in the next sections.

(1) Exhaust Emission Standards for Small Spark-Ignition Engines

The technology approaches that we assessed for achieving the proposed Small SI engine standards included exhaust catalyst aftertreatment and improvements to engine and fuel system designs. In addition to our own testing and development effort, we also met with engine and equipment manufacturers to better understand their designs and technology and to determine the state of technological progress beyond EPA's Phase 2 emission standards.

The scope of our safety study included Class I and Class II engine systems that are used in residential walk-behind and ride-on lawn mower applications, respectively. Residential lawn mower equipment was chosen for the following reasons.

  • Lawn mowers and the closely-related category of lawn tractors overwhelmingly represent the largest categories of equipment using Class I and Class II engines.
  • Consumer Product Safety Commission (CPSC) data indicate that more thermal burn injuries are associated with lawn mowers than occur with other nonhandheld equipment; lawn mowers therefore represent the largest thermal burn risk for these classes of engines.
  • General findings regarding advanced emission control technologies for residential lawn and garden equipment carry over to commercial lawn and turf care equipment as well as to other nonhandheld equipment using Class I and Class II engines.

We conducted the technical study of the incremental risk on several fronts. First, working with CPSC, we evaluated their reports and databases and other outside sources to identify those in-use situations which create fire and burn risk for consumers. The outside sources included meetings, workshops, and discussions with engine and equipment manufacturers. From this information, we identified ten scenarios for evaluation that covered a comprehensive variety of in-use conditions or circumstances which potentially could lead to an increased risk in burns or fires.

Second, we conducted extensive laboratory and field testing of both current technology (Phase 2) and prototype catalyst-equipped advanced-technology engines and equipment (Phase 3) to assess the emission control performance and thermal characteristics of the engines and equipment. This testing included a comparison of exhaust system, engine, and equipment surface temperatures using still and full motion video thermal imaging equipment.

Third, we conducted a design and process Failure Mode and Effects Analyses (FMEA) comparing current Phase 2 and Phase 3 compliant engines and equipment to evaluate incremental changes in risk probability as a way of evaluating the incremental risk of upgrading Phase 2 engines to meet Phase 3 emission standards. (101) This is an engineering analysis tool to help engineers and other professional staff to identify and manage risk. In an FMEA, potential failure modes, causes of failure, and failure effects are identified and a resulting risk probability is calculated from these results. This risk probability is used by the FMEA team to rank problems for potential action to reduce or eliminate the causal factors. Identifying these causal factors is important because they are the elements that a manufacturer can consider to reduce the adverse effects that might result from a particular failure mode.

Our technical work and subsequent analysis of all of the data and information strongly indicate that effective catalyst-based standards can be implemented without an incremental increase in the risk of fire or burn to the consumer either during or after using the equipment. Similarly, we did not find any increase in the risk of fire during refueling or in storage near typical combustible materials. For example, our testing program demonstrated that properly designed catalyst-mufflers could, in some cases, actually result in systems that were significantly cooler than many current original equipment mufflers. A number of design elements appear useful to properly managing heat loads including: (1) The use of catalyst designs that minimize CO oxidation through careful selection of catalyst size, washcoat composition, and precious metal loading; (2) positioning the catalyst within the cooling air flow of the engine fan or redirecting some cooling air over the catalyst area with a steel shroud; (3) redirecting exhaust flow through multiple chambers or baffles within the catalyst-muffler; and (4) larger catalyst-muffler volumes than the original equipment muffler.

(2) Fuel Evaporative Emission Standards for Nonhandheld and Handheld Engines and Equipment

We reviewed the fuel line and fuel tank characteristics for nonhandheld and handheld equipment and evaluated control technology which could be used to reduce evaporative emissions from these two subcategories. The available technology is capable of achieving reductions in fuel tank and fuel line permeation without an adverse incremental impact on safety. For fuel lines and fuel tanks, the applicable consensus safety standards, manufacturer specific test procedures and EPA requirements are sufficient to ensure that there will be no increase in the types of fuel leaks that lead to fire and burn risk during in-use operation. Instead, these standards will reduce vapor emissions both during operation and in storage. That reduction, coupled with some expected equipment redesign, is expected to lead to reductions in the risk of fire or burn without affecting component durability.

The Failure Mode and Effects Analyses, which was described in the previous section, also evaluated permeation and running loss controls on nonhandheld engines. We found that these controls would not increase the probability of fire and burn risk from those expected with current fuel systems, but could in fact lead to directionally improved systems from a safety perspective. Finally, the running loss control program being proposed for nonhandheld equipment will lead to changes that are expected to reduce risk of fire during in-use operation. Moving fuel tanks away from heat sources, improving cap designs to limit leakage on tip over, and requiring a tethered cap will all help to eliminate conditions which lead to in-use problems related to fuel leaks and spillage. Therefore, we believe the application of emission control technology to reduce evaporative emissions from these fuel lines and fuel tanks will not lead to an increase in incremental risk of fires or burns and in some cases is likely to at least directionally reduce such risks.

(3) Exhaust Emission Standards for Outboard and Personal Watercraft Marine Engines and Vessels and Marine Auxiliary Engines

Our analysis of exhaust emission standards for OB/PWC engines and marine auxiliary engines found that the U. S. Coast Guard (USCG) has comprehensive safety standards that apply to engines and fuel systems used in these vessels. Additionally, organizations such as the Society of Automotive Engineers, Underwriters Laboratories, and the American Boat and Yacht Council (ABYC) also have safety standards that apply in this area. We also found that the four-stroke and two-stroke direct injection engine technologies which are likely to be used to meet the exhaust emission standards contemplated for OB/PWC engines are in widespread use in the vessel fleet today. These more sophisticated engine technologies are replacing the traditional two-stroke carbureted engines. The four-stroke and two-stroke direct injection engines meet applicable USCG and ABYC safety standards and future products will do so as well. The proposed emission standards must be complementary to existing safety standards and our analysis indicates that this will be the case. There are no known safety issues with the advanced technologies compared with two-stroke carbureted engines. The newer-technology engines arguably provide safety benefits due to improved engine reliability and range in-use. Based on the applicability of USCG and ABYC safety standards and the good in-use experience with advanced-technology engines in the current vessel fleet, we believe new emission standards would not create an incremental increase in the risk of fire or burn to the consumer.

(4) Fuel Evaporative Emission Standards for Outboard and Personal Watercraft Engines and Vessels

We reviewed the fuel line and fuel tank characteristics for marine vessels and evaluated control technology which could be used to reduce evaporative emissions from boats. With regard to fuel lines, fuel tanks, and diurnal controls, there are rigorous USCG, ABYC, United Laboratories, and Society of Automotive Engineers standards which manufacturers will continue to meet for fuel system components. All of these standards are designed to address the in-use performance of fuel systems, with the goal of eliminating fuel leaks. The low-permeation fuel lines and tanks needed to meet the Phase 3 requirements would need to pass these standards and every indication is that they would pass. (102)

Furthermore, the EPA permeation certification requirements related to emissions durability will add an additional layer of assurance. Low-permeation fuel lines are used safely today in many marine vessels. Low-permeation fuel tanks and diurnal emission controls have been demonstrated in various applications for many years without an increase in safety risk. Furthermore, a properly designed fuel system with fuel tank and fuel line permeation controls and diurnal emission controls would reduce the fuel vapor in the boat, thereby reducing the opportunities for fuel related fires. In addition, using improved low-permeation materials coupled with designs meeting USCG and ABYC requirements should reduce the risk of fuel leaks into the vessel. We believe the application of emission control technologies on marine engines and vessels for meeting the proposed fuel evaporative emission standards would not lead to an increase in incremental risk of fires or burns, and in many cases may incrementally decrease safety risk in certain situations.

B. Noise

As automotive technology demonstrates, achieving low emissions from spark-ignition engines can correspond with greatly reduced noise levels. Direct-injection two-stroke and four-stroke OB/PWC have been reported to be much quieter than traditional carbureted two-stroke engines. Catalysts in the exhaust act as mufflers which can reduce noise. Additionally, adding a properly designed catalyst to the existing muffler found on all Small SI engines can offer the opportunity to incrementally reduce noise.

C. Energy

(1) Exhaust Emission Standards

Adopting new technologies for controlling fuel metering and air-fuel mixing, particularly the conversion of some carbureted engines to advanced fuel injection technologies, will lead to improvements in fuel consumption. This is especially true for OB/PWC engines where we expect the proposed standards to result in the replacement of old technology carbureted two-stroke engines with more fuel-efficient technologies such as two-stroke direct injection or four-stroke engines. Carbureted crankcase-scavenged two-stroke engines are inefficient in that 25 percent or more of the fuel entering the engine may leave the engine unburned. EPA estimates that conversion to more fuel efficient recreational marine engines would save 61 million gallons of gasoline per year in 2030. The conversion of some carbureted Small SI engines to fuel injection technologies is also expected to improve fuel economy. We estimate approximately 18 percent of the Class II engines will be converted to fuel injection and that this will result in a fuel savings of about 10 percent for each converted engine. This translates to a fuel savings of about 56 million gallons of gasoline in 2030 when all of the Class II engines used in the U.S. will comply with the proposed Phase 3 standards. By contrast, the use of catalyst-based control systems on Small SI engines is not expected to change their fuel consumption characteristics.

(2) Fuel Evaporative Emission Standards

We anticipate that the proposed fuel evaporative emission standards will have a positive impact on energy. By capturing or preventing the loss of fuel due to evaporation, we estimate that the lifetime average fuel savings would be about 1.6 gallons for an average piece of Small SI equipment and 32 gallons for an average boat. This translates to a fuel savings of about 41 million gallons for Small SI equipment and 30 million gallons for Marine SI vessels in 2030 when most of the affected equipment used in the U.S. would be expected to have evaporative emission controls.

XI. Proposals Affecting Other Engine and Vehicle Categories

We are proposing to make several regulatory changes that would affect engines, equipment, and vessels other than Small SI and Marine SI. These changes are described in the following sections. We request comment on all aspects of these proposed changes.

A. State Preemption

Section 209(e) of the Clean Air Act prohibits states and their political subdivisions from adopting or enforcing standards and other requirements relating to the control of emissions from nonroad engines or vehicles. Section 209(e) authorizes EPA to waive this preemption for California for standards and other requirements for nonroad engines and vehicles, excluding new engines that are smaller than 175 horsepower used in farm or construction equipment or vehicles and new locomotives or new engines used in locomotives. States other than California may adopt and enforce standards identical to California standards authorized by EPA.

EPA promulgated regulations implementing section 209(e) on July 20, 1994 (59 FR 36987). EPA subsequently promulgated revised regulations implementing section 209(e) on December 30, 1997 (62 FR 67733). See 40 CFR part 85, subpart Q. We are proposing to create a new part 1074 that would describe the federal preemption of state and local emission requirements. This is being done as part of EPA's ongoing effort to write its regulations in plain language format in subchapter U of title 40 of the CFR. The proposed regulations are based directly on the existing regulations in 40 CFR part 85, subpart Q. With the exception of the simplification of the language and specific changes described in this section, we are not changing the meaning of these regulations.

Pursuant to section 428 of the 2004 Consolidated Appropriations Act, we are proposing to add regulatory language to implement the legislative restriction on states other than California adopting, after September 1, 2003, standards or other requirements applicable to spark-ignition engines smaller than 50 horsepower. We are also proposing to add, pursuant to that legislation, criteria for EPA's consideration in authorizing California to adopt and enforce standards applicable to such engines. (103)

On July 12, 2002, the American Road and Transportation Builders Association (ARTBA) petitioned EPA to amend EPA's rules implementing section 209(e) of the Act. (104) In particular, ARTBA petitioned EPA to amend its regulations and interpretive rule regarding preemption of state and local requirements “that impose in-use and operational controls or fleet-wide purchase, sale or use standards on nonroad engines.” (105)

ARTBA believes such controls should be preempted. As we are already revising the preemption provisions to a certain extent in this rule, we believe it is appropriate to respond to ARTBA's petition in the context of this rule, while giving the public the ability to respond to provide comments regarding ARTBA's petition. EPA is not proposing to adopt the explicit changes requested by ARTBA in its petition; however, EPA will continue to review the arguments raised by ARTBA's petition, as well as all further arguments provided by ARTBA and other commenters during the period for notice and comment on this issue. We will respond to the petition, and if appropriate, make any changes to the regulations to conform our response to ARTBA and other commenters in the final rule. We request comment from the public regarding issues related to ARTBA's petition and how we should respond.

B. Certification Fees

Under our current certification program, manufacturers pay a fee to cover the costs associated with various certification and other compliance activities associated with an EPA issued certificate of conformity. These fees are based on the actual and/or projected cost to EPA per emission family. We are proposing to establish a new fees category for certification related to the proposed evaporative emission standards. Sections III and VI describe how these fees would apply to sterndrive/inboard marine engines and equipment and vessels subject to evaporative emission standards since these products are not currently required to pay certification fees.

In addition, we are proposing to create a new part 1027 in title 40 that would incorporate the new and existing fee requirements under a single part in the regulations. This is being done as part of EPA's ongoing effort to write its regulations in plain language format in subchapter U of title 40 of the CFR. The proposed regulations are based directly on the existing regulations in 40 CFR part 85, subpart Y. Aside from a variety of specific changes, moving this language to part 1027 is not intended to affect the substance of the existing fee provisions. We are proposing the following adjustments and clarifications to the existing regulations:

  • Establishing a new fees category for new evaporative emission standards.
  • Eliminating one of the paths for applying for a reduced fee. The existing regulations specify that applications covering fewer than six vehicles or engines, each with an estimated retail sales price below $75,000, shall receive a certificate for five vehicles or engines. Holders of these certificates are required to submit an annual model year reduced fee payment report adjusting the fees paid. We are proposing to eliminate this pathway and the associated report, as they are complex and have been rarely used.
  • Clarifying the obligation to make additional payment on a reduced fee certificate if the actual final sales price is more than the projected retail sales price for a reduced fee vehicle or engine. As before, the final fee payment must also reflect the actual number of vehicles.
  • Applying the calculated fee changes for later years, which are based on the Consumer Price Index and the total number of certificates, only after the change in the fee's value since the last reported change has reached $50. The fee change for the “Other” category for calendar year 2005 to 2006 changed from $826 to $839 and for non-road compression-ignition engines from $1822 to $1831. Under the proposal, the fee would not change until such time as the fee increase would be $50.00 or greater. This might not occur after one year, but after two or more years the calculated increase in a fee based on the change in the Consumer Price Index might be more than $50.00. The same applies if the price goes both up and down. For example, if the fee published in EPA guidance for a category of engine was $1,000 in 2011 and the calculated fee for 2012 is $990 and in 2013 is $1040, the fee in 2013 would remain at $1,000 since the change from the 2011 fee is only $40. This would minimize confusion related to changing fees where the calculated fee is very close to that already established for the previous year. It will also lessen paperwork and administrative burdens for manufacturers and EPA in making adjustments for small fees changes for applications that are completed around the change in a calendar year. The number of certificates may go up or down in any given year, while the Consumer Price Index would generally increase annually. As a result, this change would be revenue-neutral or would perhaps slightly decrease overall revenues.
  • Clarifying that all fee-related records need to be kept, not just those related to the “final reduced fee calculation and adjustment.”
  • Adding or other methods specified in guidance as acceptable alternative methods for payment and filing of fee forms. We anticipate several changes in administration of the fees program in coming months. It is likely that future payment of fees by electronic funds transfers (other than wire payments through the Federal Reserve) will be available only through online payments via . We are also receiving an increasing number of fee forms through e-mail submissions, which has proved to be a reliable and convenient method. We will be establishing a specific e-mail address for these submissions.
  • Establishing a single deadline for all types of refunds: total, partial for reduced fees, and partial for corrections. In all cases, refund requests must be received within six months of the end of the model year. A common type of request is due to an error in the fee amount paid as a result of changed fees for a new calendar year. We frequently apply these overpayments to other pending certification applications. This is less burdensome than applying for a simple refund, both for EPA and for most manufacturers. Applications to apply such refunds to other certification applications must also be received within six months of the end of the model year of the original engine family or test group.
  • Emphasizing with additional cross references that the same reduced fee provisions that apply to Independent Commercial Importers also apply to modification and test vehicle certificates under 40 CFR 85.1509 and 89.609: the number of vehicles covered is listed on the certificate, a revision of the certificate must be applied for and additional reduced fee payments made if additional vehicles are to be covered, and the certificate must be revised to show the new total number of vehicles to be covered.

C. Amendments to General Compliance Provisions in

The provisions of part 1068 currently apply for nonroad diesel engines regulated under 40 CFR part 1039, Large SI engines regulated under 40 CFR part 1048, and recreational vehicles regulated under 40 CFR part 1051. We are proposing to apply these provisions also for Small SI and Marine SI engines, equipment, and vessels. Any changes we make to part 1068 will apply equally for these other types of engines and vehicles. We therefore encourage comment from any affected companies for any of these proposed changes.

The most significant change we are proposing for part 1068 is to clarify the language throughout to make necessary distinctions between engines, equipment, and fuel-system components—and particularly between equipment using certified engines and equipment that has been certified to meet equipment-based standards. This becomes necessary because the evaporative emission standards proposed in this document apply in some cases to equipment manufacturers and boat builders, while the exhaust emission standards apply only to engine manufacturers. Some provisions in part 1068 apply to equipment manufacturers differently if they hold a certificate of conformity rather than merely installing certified engines (or certified fuel-system components). The proposed changes in regulatory language are intended to help make those distinctions. See § 1068.2 for a description of the proposed terminology that we intend to use throughout part 1068.

We are aware that in some cases manufacturers produce nonroad engines by starting with a complete or partially complete engine from another manufacturer and modifying it as needed for the particular application. This is especially common for Marine SI and Large SI engines and equipment, but it may also occur for other types of nonroad engines and equipment. We are concerned that an interpretation of the prohibited acts in § 1068.101 would disallow this practice because the original engine manufacturer is arguably selling an engine that is not covered by a certificate of conformity even though emission standards apply. We are addressing this first by proposing to define “engine” for the purposes of the regulations (see § 1068.30). To do this, we differentiate between complete engines and partially complete engines, both of which need to be covered by a certificate. Partially complete engines would include any engine, consisting of the engine block plus at least one attached component such that the engine is not yet in its final, certified configuration. We are also proposing to allow for a path by which the original engine manufacturer would not need to certify partially complete engines or request approval for an exemption (see § 1068.262). To do this though, the original engine manufacturer would need a written request from a secondary engine manufacturer who already holds a valid certificate of conformity for the engine based on its final configuration and application. These proposed provisions are intended generally to be clarifications of the existing regulatory provisions, particularly those in § 1068.330 for imported engines.

One situation involving partially complete engines involves the engine block as a replacement part where the original engine had major structural damage. In this case the engine manufacturer will typically sell an engine block with piston, crankshaft, and other internal components to allow the user to repower with many of the components from the original engine. Under the proposed definitions, these short blocks or three-quarter blocks would be new engines subject to emission standards. We believe it would be appropriate to address this situation in the regulations with the replacement engine provisions in § 1068.240, which provides a path for making new engines that are exempt from current emission standards. We request comment on applying these replacement-engine provisions to engine blocks as replacement parts.

We are proposing to further clarify the requirement for engine manufacturers to sell engines in their certified configuration. The existing provisions in § 1068.260 describe how manufacturers may use delegated assembly to arrange for equipment manufacturers to separately source aftertreatment components for engines that depend on aftertreatment to meet emission standards. We are proposing to include language to clarify that we will consider an engine to be in its certified configuration in certain circumstances even if emission-related components are not assembled to the engine. This is intended to reflect common practice that has developed over the years. We are also proposing to clarify that engines may be shipped without radiators or other components that are unrelated to emission controls, and that we may approve requests to ship engines without emission-related components in some circumstances. This would generally be limited to equipment-related components such as vehicle-speed sensors. We could specify conditions that we determine are needed to ensure that shipping the engine without such components will not result in the engine being operated outside of its certified configuration.

We adopted a definition of “nonroad engine” that continues to apply today (see § 1068.30). This definition distinguishes between portable or transportable engines that may be considered either nonroad or stationary, depending on the way they will be used. The distinction between nonroad and stationary engines is most often relevant for new engines in determining which emission standards apply. However, we have received numerous questions related to equipment whose usage has changed so that the original designation no longer applies. The definition does not address these situations. We are therefore proposing to adopt provisions that would apply when an engine previously used in a nonroad application is subsequently used in an application other than a nonroad application, or when an engine previous used in a stationary application is moved (see § 1068.31).

In addition, we are proposing several amendments to part 1068 to clarify various items. These include:

  • § 1068.101(a)(1): Revising the prohibited act to specify that engines must be “covered by” a certificate rather than “having” a certificate. The revised language is more descriptive and consistent with the Clean Air Act.
  • § 1068.101(a)(1)(i): Clarifying that engines or equipment are considered to be uncertified if they are not in a configuration that is included in the applicable certificate of conformity. This would apply even if the product had an emission label stating that it complies with emission standards.
  • § 1068.101(a)(2): Clarifying the prohibition on recordkeeping to apply also to submission of records to the Agency.
  • § 1068.101(b)(2): Adding a prohibition against using engines in a way that renders emission controls inoperative, such as misfueling or failing to use additives that the manufacturer specifies as part of the engine's certified configuration. This is more likely to apply for compression-ignition engines than spark-ignition engines.
  • § 1068.101(b)(7): Clarifying the prohibitions related to warranty to require the submission of specified information in the application for certification; adding language to identify obligations related to recall; and preventing the manufacturer from communicating to users that warranty coverage is conditioned on using authorized parts or service facilities. These provisions are consistent with requirements that apply in other EPA programs.
  • § 1068.105(a): Revising the regulation to allow equipment manufacturers to use up normal inventories of previous model year engines only if it is a continuation of ongoing production with existing inventories. These provisions would not apply for an equipment manufacturer starting to produce a new equipment model.
  • § 1068.105: Eliminating paragraph (b) related to using highway certification for nonroad engines or equipment, since these provisions are spelled out specifically for each nonroad program where appropriate.
  • § 1068.105(b): Clarifying the requirement to follow emission-related installation instructions to include installation instructions from manufacturers that certify components to evaporative emission standards.
  • § 1068.120: Clarifying the rebuilding provisions to apply to maintenance related to evaporative emissions.
  • § 1068.240: Clarifying that the scope of the exemption for new replacement engines is limited to certain engines; also clarifying that the replacement engine provisions apply for replacing engines that meet alternate emission standards (such as those produced under the Transition Program for Equipment Manufacturers).
  • § 1068.250: Revising the applicability of the hardship provisions to small businesses more broadly by referring to a term that is defined in § 1068.30; this would include small businesses as identified in the standard-setting part, or any companies that meet the criteria established by the Small Business Administration.
  • § 1068.250: Clarifying the timing related to hardship approvals, and the ability to get extensions under appropriate circumstances.
  • § 1068.260: Revising the provisions related to delegated assembly as described in Section XI.F and clarifying that reduced auditing rates as specified in paragraph (a)(6) should be based on the number of equipment manufacturers involved rather than the number of engines; also specifying that manufacturers may itemize invoices to ensure that the Customs valuation for assessment of import duties is based on the price of the imported engine without the aftertreatment components that are being shipped separately. We request comment on adding a provision allowing for a separate invoice for aftertreatment components that are shipped separately.
  • § 1068.305: Clarifying that the requirement to submit importation forms applies to all engines, not just nonconforming engines; also adding a requirement to keep these records for five years. Both of these changes are consistent with the Customs regulations at 19 CFR 12.74.
  • Part 1068, Appendix I: Clarifying that the fuel system includes evaporative-related components and that the parts comprising the engine's combustion chamber are emission-related components.

Manufacturers have also expressed a concern that the engine rebuilding provisions in § 1068.120 do not clearly address the situation in which rebuilt engines are used to repower equipment where the engine being replaced meets alternate emission standards (such as those produced under the Transition Program for Equipment Manufacturers). These engines are not certified to the emission standards that would otherwise apply for the given model year, so there may be some confusion regarding the appropriate way of applying these regulatory requirements.

In Section V.E.6 we describe several proposed special compliance provisions that are intended to improve our ability to oversee our emission control program for Small SI engines. For example, we are proposing that manufacturers take steps to ensure that they will be able to honor emission-related warranty claims, meet any compliance- or enforcement-related obligations that may arise, and import new engines and equipment in a timely manner after we adopt new standards. We request comment on the appropriateness of adopting any or all of those provisions under part 1068 such that they would apply to all engines and equipment subject to part 1068. We also request comment on any adjustments to those provisions that would be appropriate for other categories of engines and equipment, whether we choose to adopt these provisions in this proposal or in a separate rulemaking.

In addition, we request comment on early application of the provisions of part 1068 before the standards proposed in this notice take effect. For example, for any provisions not directly related to the emission standards, we could revise the regulations in part 90 and part 91 to reference the corresponding provisions in part 1068. We similarly request comment on making these changes for diesel engines regulated under part 89 (land-based) and part 94 (marine). This would allow us to accelerate the transition to plain-language regulations and prevent confusion from maintaining multiple versions of similar provisions for several years. We would also be able to substantially decrease printing costs. The provisions most appropriately considered for early transition to part 1068 include: (1) Selective enforcement audits, (2) exemptions, (3) importation provisions, (4) defect reporting and recall, (5) hearing procedures, and (6) treatment of confidential information.

We are also seeking comment on revisions to 40 CFR 1068.101. Section 203 of the Act (42 U.S.C. 7522) states that performing certain acts, “and causing thereof,” constitutes a prohibited act. We are interested in revising the regulations to specifically include this prohibition on the “causing” of any of the prohibited acts listed in the statute and the regulations. Adding this clarification would help people who are subject to the regulations to more fully understand what actions are prohibited and may potentially subject them to enforcement proceedings under the Act. The revisions themselves would not be intended to add new enforcement authorities beyond what is already specified in the statute.

If we consider it a violation to cause someone to commit a prohibited act, then persons causing any prohibited act would also be subject to the full administrative and judicial enforcement actions allowable under the Act and the regulations. The prohibition on “causing” a prohibited act would apply to all persons and would not be limited to manufacturers or importers of regulated engines or equipment.

If this provision is adopted, EPA would interpret the “causation” aspect of section 203 broadly. In assessing whether a person has caused a prohibited act, EPA would evaluate the totality of circumstances. For example, in certain circumstances EPA believes a retailer may be responsible for causing the importation of engines or equipment not covered by a valid certificate of conformity or otherwise in violation of our regulations, such as the labeling requirements. In addition to the prohibitions that apply to manufacturers and importers generally under section 203, EPA will also consider many factors in assessing whether a manufacturer, importer, retailer, distributor or other person has caused a prohibited act, including, but not limited to, the following: (1) The contractual or otherwise established business relationship of those persons involved in producing and/or selling new engines and equipment; (2) the particular efforts or influence of the alleged violator contributing to, leading to or resulting in the prohibited act; and (3) the efforts, or lack thereof, of the person to prevent such a violation. EPA will evaluate the entire circumstances in determining whether a person caused another person to commit a prohibited act such as importing engines or equipment in violation of our regulations.

D. Amendments Related to Large SI Engines (

Manufacturers of Large SI engines are encouraged to review the proposed changes described in Section XI.C related to 40 CFR part 1068.

Some of the issues related to Marine SI engines described in Section III relate to Large SI engines. In particular, the uncertain availability of certain base engine models from General Motors for use in nonroad applications poses a challenge for efforts to certify the engines to the Large SI standards. In particular, the uncertain lead time associated with getting the new engines and the level of effort expected for certifying the existing engine models that are planned for obsolescence make it difficult for companies, especially small businesses, to go through the certification process and recover costs for repeated testing. Of greatest concern are requirements related to developing deterioration factors for these engines. The existing regulations allow for assigned deterioration factors for small businesses, but these apply only to companies with fewer than 200 employees. We are therefore proposing to expand the definition of small-volume engine manufacturer to also include companies with annual U.S. sales of no more than 2000 Large SI engines. This would align with the provisions already adopted by California ARB. Similarly, we are proposing a provision allowing for assigned deterioration factors for small-volume engine families for Small SI engines (see Section V). A similar dynamic applies for Large SI engines. Any such allowance would apply to engine families with projected sales up to 300 or 500 units to reflect to different production volumes. We request comment on allowing assigned deterioration factors for small-volume engine families for Large SI engines, and on the appropriate threshold for this provision.

We are also proposing to revise the provisions related to competition engines to align with the proposal for Small SI engines. Any Small SI engine that is produced under the competition exemption will very likely exceed 19 kW. As a result, we believe it is appropriate to make these provisions identical to avoid confusion.

Manufacturers have notified us that the transient test for constant-speed engines does not represent in-use operation in a way that significantly affects measured emission levels. This notification is required by § 1065.10(c)(1). In particular, manufacturers have pointed out that the specified operation involves light engine loads such that combustion and exhaust temperatures do not rise enough to reach catalyst light-off temperatures. As a result, meeting the standard using the constant-speed transient test would require the use of significantly oversized catalysts, which would add significant costs without a commensurate improvement for in-use emission control. We faced a similar dilemma in the effort to adopt transient standards for nonroad diesel engines, concluding that the transient standards should not apply until we develop a more suitable duty cycle that more appropriately reflects in-use operation. We are proposing to take this same approach for Large SI engines, waiving the requirement constant speed engines to meet the transient standards until we are able to develop a more appropriate duty cycle. Manufacturers must continue to meet the standards for steady-state testing and the field-testing standards continue to apply. We are also proposing to clarify that manufacturers certifying constant-speed engines should describe their approach to controlling emissions during transient operation in their application for certification.

Manufacturers have also pointed out that a multiplicative deterioration factor is problematic for engines with very low emission levels. While the HC+NO X emissions may be as high as 2.7 g/kW-hr, manufacturers are certifying some engine families with deteriorated emission levels below 0.1 g/kW-hr. These very low emission levels are well below the standard, but the measurement systems are challenged to produce a precisely repeatable emission level at that point. As a result, measurement variability and minor engine-to-engine variability can lead to small absolute differences in emission levels that become magnified by a deterioration factor that reflects the extremely small low-hour measurement. We are therefore proposing to specify that manufacturers use an additive deterioration factor if their low-hour emission levels are below 0.3 g/kW-hr. This change would accommodate the mathematical and analyzer effects of very low emission levels without changing the current practice for the majority of engines that are certified with emission levels closer to the standard. This change would remove the incentive for manufacturers to increase their engine's emission levels to avoid an artificially large deterioration factor. The only exception would be for cases in which good engineering judgment dictates that a multiplicative deterioration factor would nevertheless be appropriate for engines with very low emissions. This may be the case if an engine's deterioration can be attributed, even at very low emission levels, to proportionally decreased catalyst conversion of emissions from an aged engine. It is important to note that Large SI engine manufacturers are subject to in-use testing to demonstrate that they meet emission standards throughout the useful life. Should such testing indicate that an additive deterioration factor does not appropriately reflect actual performance, we would require manufacturers to revise their deterioration factors appropriately, as required under the current regulations. If such discrepancies appear for multiple manufacturers, we would revise the regulation to again require multiplicative deterioration factors for all aftertreatment-based systems. We also request comment on a further refinement of the form of the deterioration factor to more closely reflect the degradation in catalyst conversion efficiency. For example, measuring engine-out emissions would allow for calculating catalyst conversion efficiency, such that changes in this parameter over an engine's useful life could be factored into a calculation to characterize an engine's actual rate of deterioration.

Most Large SI engines are installed in equipment that has metal fuel tanks. This formed the basis of the regulatory approach to set evaporative emission standards and certification requirements. Manufacturers have raised questions about the appropriate steps to take for systems that rely on plastic fuel tanks. These tanks are able to meet standards, but questions have been raised about the engine manufacturer's role in certifying a range of fuel tanks with their engines. We request comment on the extent to which the current regulatory requirements might limit the range of fuel tank designs.

The current permeation standards for Large SI equipment references Category 1 fuel lines as defined in the version of SAE J2260 that was issued in November, 1996. In 2004, the Society of Automotive Engineers (SAE) updated SAE J2260. Manufacturers have asked whether we will approve fuel lines based on the updated procedures. The new procedures have two primary differences related to fuel line permeation. First, the test fuel was changed from CM15 to CE10. (106) Second, the associated limits for the different categories of fuel line permeation were revised. Data presented in Chapter 5 of the Draft RIA suggest that permeation from low-permeation fuel line materials can be less than half on CE10 than on CM15. The permeation specification for Category 1 fuel line was revised by SAE from 0-25 g/m 2/day to 3-10 g/m 2/day. (A new Category 0 was added at 0-3 g/m 2/day.) Directionally, the new Category 1 permeation limits seem to account for the change in the test fuel. In addition, ethanol fuel blends are commonly used in-use while methanol fuel blends are less common. We request comment on updating the regulations for Large SI equipment to reference the Category 1 fuel line specifications in the updated version of SAE J2260 (revised November 2004). We also request comment on whether this new specification would affect the stringency of the standard or the choice of fuel line constructions for this equipment.

We are also proposing several technical amendments to part 1048. Many of these simply correct typographical errors or add references to the proposed regulatory cites in part 1054. Several changes are intended merely to align regulatory language with that of other programs, including those that would be subject to the standards proposed in this notice. In addition, we are proposing the following changes:

  • § 1048.5: Clarifying that locomotive propulsion engines are not subject to Large SI emission standards, even if they use spark-ignition engines. This is based on the separate provisions that apply to locomotives in Clean Air Act section 213.
  • § 1048.101: Clarifying manufacturer's responsibility to meet emission standards for different types of testing, especially to differentiate between field-testing standards and duty-cycle standards.
  • § 1048.105: Clarifying that only the permeation standards of SAE J2260 apply to fuel lines used with Large SI engines.
  • § 1048.105: Clarifying that the requirement to prevent fuel boiling is affected by the pressure in the fuel tank. The regulation currently characterizes the boiling point of fuel only at atmospheric pressure. Pressurizing the fuel tank increases the boiling point of the fuel.
  • § 1048.105: Reorganizing the regulatory provisions to align with the new language in 40 CFR part 1060. This is not intended to change any of the applicable requirements.
  • § 1048.110: Clarifying that “malfunctions” relate to engines failing to maintain emission control and not to diagnostic systems that fail to report signals; and clarifying that the malfunction indicator light needs to stay illuminated for malfunctions or for system errors.
  • § 1048.120: Clarifying that the emission-related warranty covers only those components from 40 CFR part 1068, Appendix I, whose failure will increase emissions.
  • § 1048.125: Clarifying the provisions related to noncritical emission-related maintenance.
  • § 1048.135: Revising the engine labeling requirements to allow omission of the manufacturing date only if the date is stamped or engraved on the engine, rather than allowing manufacturers to keep records of engine build dates. This is important for verifying that engines comply with standards based on their build date.
  • § 1048.205: Removing detailed specifications for describing auxiliary emission control devices in the application for certification. This responds to the concern expressed by manufacturers that the existing, very prescriptive approach requires much more information than is needed to adequately describe emission control systems. We are proposing to leave in place a broad requirement to describe emission control systems and parameters in sufficient detail to allow EPA to confirm that no defeat devices are employed. Manufacturers should be motivated to include substantial information to make such determinations in the certification process, rather than being subject to this type of investigation for emission control approaches that are found to be outside of the scope of the application for certification.
  • § 1048.205: Adding requirement to align projected sales volumes with actual sales from previous years. This does not imply additional reporting or recordkeeping requirements. It is intended simply to avoid situations where manufacturers intentionally mis-state their projected sales volume to gain some advantage under the regulations.
  • § 1048.205: Specifying that manufacturers must submit modal emission results rather than just submitting a weighted average. Since this information is already part of the demonstration related to the field-testing standards, this should already be common practice.
  • § 1048.220: Clarifying that if manufacturers change their maintenance instructions after starting production for an engine family, they may not disqualify engines for in-use testing or warranty claims based on the fact that operators did not follow the revised maintenance instructions.
  • § 1048.225: Clarifying the terminology to refer to “new or modified engine configurations” rather than “new or modified nonroad engines.” This is necessary to avoid using the term “new nonroad engine” in a way that differs from the definitions in § 1048.801.
  • § 1048.230: Clarifying that engine families relate fundamentally to emission certification and that we would expect manufacturers to suggest a tailored approach to specifying engine families under § 1048.230(d) to occur only in unusual circumstances.
  • 1048.240: Adding a requirement for design-based certification for the diurnal standards that fuel tanks need to use low-permeation materials.
  • 1048.245: Adding the provision to allow for component certification for plastic fuel tanks. The revised language clarifies the requirement related to allowing pressure relief for vacuum pressures and for controlling permeation rates from plastic fuel tanks.
  • § 1048.250: Adding a requirement for manufacturers to report their sales volumes for an engine family if they are using a provision that depends on production volumes.
  • § 1048.301: Clarifying that engine families with projected sales volumes below 150 units may have reduced testing rates for production-line testing. This level of production does not allow for adequate testing to use the statistical techniques before exceeding specified maximum testing rates.
  • § 1048.305: Clarifying that (1) Tested engines should be built in a way that represents production engines; (2) the field-testing standards apply for any testing conducted (this may involve simply comparing modal results to the field-testing standards); and (3) we may review a decision to use emission results from a retested engine instead of the original results.
  • § 1048.310: Clarifying the relationship between quarterly testing and compliance with the annual testing requirements.
  • § 1048.315: Correcting the equation for the CumSum statistic to prevent negative values.
  • § 1048.410: Clarifying that repeat tests with an in-use test engine are acceptable, as long as the same number of repeat tests are performed for all engines.
  • § 1048.415: Clarifying that the provisions related to defect reporting in 40 CFR 1068.501 apply for in-use testing.
  • § 1048.501: Removing specified mapping procedures, since these are addressed in 40 CFR part 1065.
  • § 1048.505: Removing redundant text and removing sampling times specified in Table 1, since these are addressed in § 1048.505(a)(1).
  • § 1048.505: Correcting the mode sequence listed in the table for the ramped-modal testing.
  • § 1048.505: Clarifying that cycle statistics for discrete-mode testing must be calculated separately for each mode.
  • §§ 1048.605 and 1048.610: Requiring some demonstration that the sales restrictions that apply for these sections are met, and clarifying the provisions related to emission credits for vehicles that generate or use emission credits under 40 CFR part 86.
  • § 1048.801: Revising several definitions to align with updated definitions adopted (or proposed) for other programs.

We request comment on changing § 1048.220 to prevent manufacturers from distributing revised emission-related maintenance instructions until we have approved them. We are taking this approach for Small SI and Marine SI engines in this proposal (see §§ 1045.220 and 1054.220) because we believe it would be inappropriate for manufacturers to specify increased or decreased emission-related maintenance without EPA approval of those changes. The same concern applies equally to all nonroad spark-ignition engines and vehicles, so we would expect to apply the same policy to all these engines.

For Small SI and Marine SI engines we are proposing to require manufacturers of imported engines to include basic information in the application for certification, including identification of associated importers, specific ports intended for importation, and testing facilities where testing could be done in the United States. We request comment on extending these provisions to Large SI engines. See § 1054.205.

E. Amendments Related To Recreational Vehicles (

Manufacturers of recreational vehicles are encouraged to review the proposed changes described in Section XI.C related to 40 CFR part 1068.

We are proposing in this notice to establish a process by which manufacturers of fuel system components certify that their products meet emission standards. For recreational vehicles we adopted a program in which the exhaust and evaporative emission standards apply to the vehicle so we did not set up a process for certifying fuel-system components. We continue to believe that evaporative emission standards should apply to the vehicle. However, we are proposing to allow manufacturers of fuel-system components to opt in to this program by certifying their fuel tanks or fuel lines to the applicable standards. While this would be a voluntary step, any manufacturer opting into the program in this way would be subject to all the requirements that apply to certificate holders. While manufacturers of recreational vehicles would continue to be responsible for meeting standards and certifying their vehicles, it may be appropriate to simplify their compliance effort by allowing them to rely on the certification of the fuel-line manufacturer or fuel-tank manufacturer.

We also request comment on specifying that vehicle manufacturers use the certification and testing procedures proposed in 40 CFR part 1060 to meet the evaporative emission standards included in part 1051. This would not be intended to affect the stringency of current requirements. This would simply allow us to maintain consistent requirements across programs and avoid publishing redundant specifications.

We are also proposing several technical amendments to part 1051. Many of these simply correct typographical errors or add references to the proposed regulatory cites in part 1054. Several changes are intended merely to align regulatory language with that of other programs, including those that would be subject to the standards proposed in this notice.

In addition, we are proposing the following changes:

  • § 1051.1: Revising the speed threshold for offroad utility vehicles to be subject to part 1051. Changing from “25 miles per hour or higher” to “higher than 25 miles per hour” aligns this provision with the similar threshold for qualifying as a motor vehicle in 40 CFR 85.1703.
  • § 1051.5: Clarifying the status of very small recreational vehicles to reflect the provisions in the current regulations in 40 CFR part 90 to treat such vehicles with a dry weight under 20 kilograms as Small SI engines.
  • § 1051.25: Clarifying that manufacturers of recreational vehicles that use engines certified to meet exhaust emission standards must still certify the vehicle with respect to the evaporative emission standards.
  • § 1051.120: Clarifying that the emission-related warranty covers only those components from 40 CFR part 1068, Appendix I, whose failure will increase emissions.
  • § 1051.125: Clarifying the provisions related to noncritical emission-related maintenance.
  • § 1051.135: Revising the labeling requirements to allow omission of the manufacturing date only if the date is stamped or engraved on the vehicle, rather than allowing manufacturers to keep records of vehicle build dates. This is important for verifying that vehicles comply with standards based on their build date.
  • § 1051.135: Adding a requirement to include family emission limits related to evaporative emissions to the emission control information label. Since this change may involve some time for manufacturers to comply, we are proposing to apply this starting with the 2009 model year.
  • § 1051.137: Clarifying how the labeling requirements apply with respect to the averaging program and selected family emission limits.
  • § 1051.205: Removing detailed specifications for describing auxiliary emission control devices in the application for certification. This responds to the concern expressed by manufacturers that the existing, very prescriptive approach requires much more information that is needed to adequately describe emission control systems. We are proposing to leave in place a broad requirement to describe emission control systems and parameters in sufficient detail to allow EPA to confirm that no defeat devices are employed. Manufacturers should be motivated to include substantial information to make such determinations in the certification process, rather than being subject to this type of investigation for emission control approaches that are found to be outside of the scope of the application for certification.
  • § 1051.205: Requirements to align projected sales volumes with actual sales from previous years. This does not imply additional reporting or recordkeeping requirements. It is intended simply to avoid situations where manufacturers intentionally mis-state their projected sales volume to gain some advantage under the regulations.
  • § 1051.220: Clarifying that if manufacturers change their maintenance instructions after starting production for an engine family, they may not disqualify vehicles for warranty claims based on the fact that operators did not follow the revised maintenance instructions.
  • § 1051.225: Clarifying the terminology to refer to “new or modified vehicle configurations” rather than “new or modified vehicles.” This is necessary to avoid confusion with the term “new vehicle” as it relates to introduction into commerce.
  • § 1051.225: Clarifying the provisions related to changing an engine family's Family Emission Limit after the start of production.
  • § 1051.255: Adopting a different SAE standard for specifying low-permeability materials to allow for design-based certification of metal fuel tanks with gaskets made of polymer materials. The existing language does not adequately characterize the necessary testing and material specifications.
  • § 1051.230: Clarifying that engine families relate fundamentally to emission certification and that we would expect manufacturers to suggest a tailored approach to specifying engine families under § 1051.230(e) to occur only in unusual circumstances.
  • § 1051.250: Adding a requirement for manufacturers to report their sales volumes for an engine family if they are using a provision that depends on production volumes.
  • § 1051.301: Clarifying that engine families with projected sales volumes below 150 units may be exempted from production-line testing. This level of production does not allow for adequate testing to use the statistical techniques before exceeding specified maximum testing rates.
  • § 1051.305: Clarifying that tested vehicles should be built in a way that represents production vehicles.
  • § 1051.310: Clarifying the relationship between quarterly testing and compliance with the annual testing requirements; and clarifying the testing provisions that apply for engine families where the production period is substantially less than a full year.
  • § 1051.315: Correcting the equation for the CumSum statistic to prevent negative values.
  • § 1051.325: Clarifying the basis on which we would approve retroactive changes to the Family Emission Limit for an engine family that has failed under production-line testing.
  • § 1051.505: Clarifying that cycle statistics for discrete-mode testing must be calculated separately for each mode.
  • §§ 1051.605 and 1051.610: Requiring some demonstration that the sales restrictions that apply for these sections are met.
  • § 1051.650: Add a requirement to certify vehicles that are converted to run on a different fuel. We expect this is a rare occurrence, but one that we should make subject to certification requirements (see Section VII.B.3).
  • § 1051.701: Clarifying that manufacturers using emission credits to meet emission standards must base their credit calculations on their full product line-up, rather than considering only those engine families with Family Emission Limits above or below the emission standard. We are also clarifying that a single family may not generate emission credits for one pollutant while using emission credits for another pollutant, which is common to all our emission control programs.
  • § 1051.735: Adding a requirement to keep records related to banked emission credits for as long as a manufacturer intends for those credits to be valid. This is necessary for us to verify the appropriateness of credits used for demonstrating compliance with emission standards in later model years.
  • § 1051.801: Revising several definitions to align with updated definitions adopted (or proposed) for other programs.

We request comment on changing § 1051.220 to prevent manufacturers from distributing revised emission-related maintenance instructions until we have approved them. We are taking this approach for Small SI and Marine SI engines in this proposal (see §§ 1045.220 and 1054.220) because we believe it would be inappropriate for manufacturers to specify increased or decreased emission-related maintenance without EPA approval of those changes. The same concern applies equally to all nonroad spark-ignition engines and vehicles, so we would expect to apply the same policy to all these engines.

For Small SI and Marine SI engines we are proposing to require manufacturers of imported engines to include basic information in the application for certification, including identification of associated importers, specific ports intended for importation, and testing facilities where testing could be done in the United States. We request comment on extending these provisions to recreational vehicles. See § 1054.205.

F. Amendments Related to Heavy-Duty Highway Engines (

We are proposing to make several adjustments to the provisions related to delegated assembly specified in § 85.1713. These adjustments include:

  • Removing the provision related to auditing outside the United States since equipment manufactured in other countries would not be subject to these provisions
  • Clarifying that the exemption expires when the equipment manufacturer takes possession of the engine, but not before it reaches the point of final assembly
  • Clarifying the prohibition related to following installation instructions to ensure that engines will be in their certified configuration when installed in a piece of equipment.

We believe all these amendments are straightforward adjustments that are appropriate for maintaining a program that allows for appropriate oversight and implementation.

G. Amendments Related to Stationary Spark-Ignition Engines (

On June 12, 2006 we proposed emission standards for stationary spark-ignition engines (71 FR 33804). The June 2006 proposal specified that stationary spark-ignition engines at or below 19 kW would be subject to all the same emission standards and certification requirements that apply to Small SI engines. If we would include the new Phase 3 standards for Small SI engines in 40 CFR part 90, these requirements would apply automatically to those stationary engines. However, since the Phase 3 standards will be in 40 CFR part 1054, as described in Section V, we are proposing to revise the regulatory language for stationary spark-ignition engines in 40 CFR part 60, subpart JJJJ, to directly reference the Phase 3 standards part 1054.

XII. Projected Impacts

A. Emissions from Small Nonroad and Marine Spark-Ignition Engines

As discussed in previous sections, this proposal will reduce exhaust emissions from specific sizes of nonhandheld Small SI and Marine SI engines. It will also reduce evaporative emissions from the fuel systems used on nonhandheld and handheld Small SI equipment and Marine SI vessels (for simplicity we collectively include the evaporative emission requirements from equipment or vessels when referring to Small SI or Marine SI engines in the remainder of this section). The proposed exhaust and evaporative emission standards will directly affect volatile organic hydrocarbon compounds (VOC), oxides of nitrogen (NO X), and to a lesser extent carbon monoxide (CO). Also, we anticipate that the emission control technology which is likely to be used to meet the exhaust emission standards will affect directly emitted particulate matter, most importantly particles with diameters of 2.5 micrometers or less (PM 2.5). It will also incrementally reduce air toxic emissions. A detailed analysis of the effects of this proposal on emissions and emission inventories can be found in Chapter 3 of the Draft RIA.

The contribution of exhaust and evaporative emissions from Small SI and Marine SI engines to total 50-state emission inventories is significant and will remain so into the future. Table XII-1 presents the nationwide inventory for these engines for both 2001 and 2020. (The inventories cover all Small SI and Marine SI engines including the portion of Small SI engines regulated by the California ARB.) Table XII-1 shows that for the primary pollutants affected by this proposal, these engines contribute about 25 to 30 percent of the nationwide VOC emissions from all mobile sources. The nationwide contribution to the total mobile source NO X inventory is about 5 percent or less. Finally, for PM 2.5, the contribution ranges from about 25 to 30 percent.

Table XII-1.—Contribution of Small Nonroad and Marine SI Engines to National (50-State) Mobile Source Emission Inventories
Pollutant 2001 Small SI/marine SI inventory, tonsPercent of mobile source inventory2020Small SI/marine SI inventory, tonsPercent of mobile source inventory
VOC 2,239,056 28 1,351,739 27
NO X 159,051 1 201,789 4
PM 2.5 42,294 9 39,271 16
CO 20,867,436 24 16,373,518 31
(1) VOC

Table XII-2 shows the VOC emissions and emission reductions we expect both with and without the proposed standards for engines, equipment, and vessels affected by the proposal. In 2001, Small SI and Marine SI emitted approximately 1,081,000 and 961,000 tons of VOC, respectively. Without the proposed standards, these emissions will decrease because of the effect of the existing emission control requirements to about 1,005,000 and 490,000 tons by 2040, respectively. With the proposed controls, this pollutant will be further reduced by 34 percent for Small SI engines and 74 percent for Marine SI engines by 2040. The VOC emission inventory trends over time for both categories of engines that are subject to the proposal are shown in Figure XII-1.

Table XII-2.—National (50-State) VOC Emissions and Emission Reductions for Small SI and Marine SI Engines
Year Category Without proposed rule With proposed rule Reduction Percent reduction
2001 Small Engine1,080,898 1,080,898  
Marine 961,240 961,240  
Both 2,042,138 2,042,138  
2015 Small Engine708,331 510,617 197,71428
Marine 513,105 372,020 141,08627
Both 1,221,436 882,637 338,79928
2020 Small Engine764,453 508,677 255,77633
Marine 466,624 232,697 233,92750
Both 1,231,078 741,375 489,70340
2030 Small Engine884,188 581,766 302,42234
Marine 464,490 135,956 328,53371
Both 1,348,678 717,723 630,95547
2040 Small Engine1,005,403 659,976 345,42734
Marine 490,052 127,158 362,89374
Both 1,495,455 787,135 708,32047

Image #EP18MY07.001

(2) NO

Table XII-3 shows the NO X emissions and emission reductions we expect both with and without the proposed standards for engines affected by the proposal. In 2001, Small SI and Marine SI emitted approximately 102,000 and 41,500 tons of NO X, respectively. Without the proposed standards, these emissions will increase to about 135,000, and 95,400 tons by 2040, respectively. With the proposed controls, this pollutant will be reduced by 47 percent for Small SI engines and 51 percent for Marine SI engines by 2040. The NO X emission inventory trends over time for both categories of engines that are subject to the proposal are shown in Figure XII-2.

Table XII-3.—National (50-State) NO X Emissions and Emission Reductions for Small SI and Marine SI Engines
Year Category Without proposed ruleWith proposed rule Reduction Percent reduction
2001 Small Engine101,928 101,928   
Marine 41,514 41,514   
Both 143,442 143,442   
2015 Small Engine94,432 58,117 36,31538
Marine 73,583 59,024 14,55820
Both 168,015 117,141 50,87430
2020 Small Engine102,310 55,241 47,06946
Marine 80,655 55,656 24,99931
Both 182,965 110,896 72,06939
2030 Small Engine118,615 62,778 55,83747
Marine 89,225 46,859 42,36647
Both 207,840 109,637 98,20347
2040 Small Engine135,136 71,361 63,77547
Marine 95,440 46,874 48,56751
Both 230,577 118,235 112,34249

Image #EP18MY07.002

(3) PM2.5

Table XII-4 shows the PM2.5 emissions and emission reductions we expect both with and without the proposed standards for engines affected by the proposal. In 2001, Small SI and Marine SI emitted 23,200 and 15,600 tons of PM2.5, respectively. Without the proposed standards, the PM2.5 emissions from Small SI engines will increase to 39,100 by 2040, while those from Marine SI will decrease to about 6,000 tons in that year due to the effects of the existing emission control requirements for certain types of recreational marine engines, e.g, outboards. With the proposed controls, this pollutant will be reduced by 5 percent for Small SI engines and a further 84 percent for Marine SI engines by 2040. The PM2.5 emission inventory trends over time for both categories of engines that are subject to the proposal are shown in Figure XII-3.

Table XII-4.—National (50-State) PM2.5 Emissions and Emission Reductions for Small SI and Marine SI Engines
Year Category Without proposed rule With proposed rule Reduction Percent reduction
2001 Small Engine23,163 23,163   
Marine 15,625 15,625   
Both 38,789 38,789   
2015 Small Engine27,747 26,647 1,1004
Marine 6,823 4,666 2,15732
Both 34,570 31,313 3,2569
2020 Small Engine30,009 28,574 1,4355
Marine 5,908 2,448 3,46159
Both 35,917 31,022 4,89614
2030 Small Engine34,535 32,849 1,6865
Marine 5,719 1,107 4,61381
Both 40,255 33,956 6,29916
2040 Small Engine39,079 37,153 1,9265
Marine 6,016 985 5,03184
Both 45,095 38,138 6,95715

Image #EP18MY07.003

(4) CO

Table XII.-5 shows the CO emissions and emission reductions we expect both with and without the proposed standards for engines affected by the proposal. In 2001, Small SI and Marine SI emitted 16,108,000 and 2,585,000 tons of PM2.5, respectively. Without the proposed standards, these emissions will increase slightly for Small SI engines to 16,727,000 and decrease slightly for Marine SI engines to 2,122,000 tons by 2040, respectively. With the proposed controls, this pollutant will be reduced by 16 percent for Small SI engines and a further 22 percent for Marine SI engines by 2040. The CO emission inventory trends over time for both categories of engines that are subject to the proposal are shown in Figure XII-4.

Table XII-5.—National (50-State) CO Emissions and Emission Reductions for Small SI and Marine SI Engines
Year Category Without proposed ruleWith proposed ruleReduction Percent reduction
2001 Small Engine 16,108,103 16,108,103
Marine 2,584,786 2,584,786
Both 18,692,890 18,692,890
2015 Small Engine 11,797,078 10,317,051 1,480,02713
Marine 2,031,684 1,883,241 148,4437
Both 13,828,762 12,200,291 1,628,47112
2020 Small Engine 12,712,775 10,782,258 1,930,51815
Marine 1,968,663 1,718,956 249,70713
Both 14,681,439 12,501,214 2,180,22515
2030Small Engine 14,700,521 12,411,661 2,288,86016
Marine 2,009,248 1,607,678 401,57020
Both 16,709,768 14,019,339 2,690,42916
2040Small Engine 16,726,708 14,113,517 2,613,19116
Marine 2,122,336 1,665,392 456,94322
Both 18,849,044 15,778,910 3,070,13416

Image #EP18MY07.004

B. Estimated Costs

In assessing the economic impact of setting emission standards, we have made a best estimate of the costs associated with the technologies we anticipate manufacturers will use in meeting the standards. In making our estimates for the proposed rule, we have relied on our own technology assessment, which includes information developed by EPA's National Vehicle and Fuel Emissions Laboratory (NVFEL). Estimated costs include variable costs (e.g. hardware and assembly time) and fixed costs (e.g. research and development, retooling, engine certification and test cell upgrades to 40 CFR 1065 requirements). We projected that manufacturers will recover the fixed costs over five years of production and used an amortization rate of 7 percent in our analysis. The analysis also considers total operating costs, including maintenance and fuel consumption. Cost estimates based on the projected technologies represent an expected change in the cost of engines as they begin to comply with new emission standards. All costs are presented in 2005 dollars. Full details of our cost analysis can be found in Chapter 6 of the Draft RIA. Estimated costs related to exhaust emissions were also subject to peer review, as described in a set of peer review reports that are available in the docket for this rulemaking.

Cost estimates based on the current projected costs for our estimated technology packages represent an expected incremental cost of equipment in the near term. For the longer term we have identified factors that would cause cost impacts to decrease over time. First, as noted above, we project that manufacturers will spread their fixed costs over the first five years of production. After the fifth year of production, we project that the fixed costs would be retired and the unit costs could be reduced as a result.

The cost analysis considers both long-term and short-term costs. We expect that over time, manufacturers will undergo a learning process that will lead to lower variable costs. For instance, the analysis incorporates the expectation that Small SI engine manufacturers will optimize the catalyst muffler offerings available and thereby streamline their production and reduce costs. The cost analysis generally incorporates this learning effect by decreasing estimated variable costs by 20 percent starting in the sixth year of production. Long-term impacts on costs are expected to decrease as manufacturers fully amortize their fixed costs and learn to optimize their designs and production processes to meet the standards more efficiently. The learning curve has not been applied to Small SI EFI systems due to the fact that the technologies are currently well established on similar sized engines in other applications.

We project average costs to comply with the proposed exhaust emission standards for Small SI engines and equipment to range from $9-$15 per Class I equipment to meet the Phase 3 standards. We anticipate the manufacturers will meet the emission standard with several technologies including engine improvements and catalysts. For Class II equipment, we project average costs to range from $22-$47 per equipment to meet the proposed emission standards. We anticipate the manufacturers of Class II engines would meet the proposed exhaust emission standards by engine improvements and adding catalysts and/or electronic fuel injection to their engines.

For Small SI equipment, we have also estimated a per-unit cost for the proposed evaporative emission standards. The average short-term costs without fuel savings are projected to be $0.82 for handheld equipment, $3.16 for Class I equipment, and $6.90 for Class II equipment. These costs are based on fuel tank and fuel line permeation control, and for non-handheld equipment, running loss and diffusion control. Because evaporative emissions are composed of otherwise usable fuel that is lost to the atmosphere, measures that reduce evaporative emissions will result in fuel savings. We estimate that the average fuel savings, due to permeation control, be about 1.2 gallons over the 5-year average operating lifetime. This translates to a discounted lifetime savings of more than $2 at an average fuel price of $1.81 per gallon.

For marine engines, we estimated per-engine costs for OB, PWC, and SD/I engines for meeting the proposed exhaust emission standards. The short-term cost estimates without fuel savings are $280 for OB, $360 for PWC, and $360 for SD/I engines. For OB/PWC engines, we anticipate that manufacturers would meet the standards through the expanded production of existing low-emission technologies such as four-stroke and direct-injection two-stroke engines. For SD/I engines, we anticipate that manufacturers would use catalytic control to meet the proposed standards.

For marine vessels, we have also estimated a per-unit cost for the proposed evaporative emission standards. The average short-term costs without fuel savings are projected to be $12 for boats with portable fuel tanks, $17 for PWC, and $74 for boats with installed fuel tanks. These costs are based on fuel tank and fuel line permeation control and diurnal emission control. For portable fuel tanks, diurnal emission control is based on an automatic sealing vent, for PWC we estimate that changes will not be necessary from current designs, and for other boats with installed fuel tanks, the estimated costs are based on the use of a passively-purged carbon canister. Because evaporative emissions are composed of otherwise usable fuel that is lost to the atmosphere, measures that reduce evaporative emissions will result in fuel savings. We estimate that the average fuel savings, due to permeation control, be about 31 gallons over the 15-year average operating lifetime. This translates to a discounted lifetime savings of about $36 at an average fuel price of $1.81 per gallon.

C. Cost per Ton

We have calculated the cost per ton of the Phase 3 standards contained in this proposal by estimating costs and emission benefits for these engines. We made our best estimates of the combination of technologies that engine manufacturers might use to meet the new standards, best estimates of resultant changes to equipment design, engine manufacturer compliance program costs, and fuel savings in order to assess the expected economic impact of the proposed Phase 3 emission standards for Small SI engines and Marine SI engines. Emission reduction benefits are taken from the results of the Inventory chapter of the RIA (Chapter 3).

A summary of the annualized costs to Small SI and Marine SI engine manufacturers is presented in Table XII-6. These annualized costs are over a 30-year period and presented both with a 3-percent and a 7-percent discount rate. The annualized fuel savings for Small SI engines are due to reduced fuel costs from the use of electronic fuel injection on Class II engines as well as fuel savings from evaporative measures on all Small SI engines. The annualized fuel savings for Marine SI engines are due to reduced fuel costs from the expected elimination of 2-stroke outboard motors from the new engine fleet as well as fuel savings from evaporative emission controls on all vessels.

Table XII-6.—Estimated Annualized Cost to Manufacturers and Annualized Fuel Savings over 30 Years Due to the Phase 3 Small SI and Marine SI Engine Standards
Engine categoryEmissions categoryAnnualized cost to manufactuers (millions/yr)3%7%Annualized fuel savings (millions/yr)3%7%
Small SI Engines Exhaust $281 $267 $71 $63
Evaporative 70 67 58 52
Aggregate 350 334 129 114
Marine SI Engines Exhaust 134 141 76 67
Evaporative 26 26 29 25
Aggregate 160 167 105 92

We have estimated the Small SI and Marine SI engine cost per ton of the Phase 3 HC+NO X standards over the typical lifetime of the equipment that are covered by this proposal. We have examined the cost per ton by performing a nationwide cost per ton analysis in which the net present value of the cost of compliance per year is divided by the net present value of the HC+NO X benefits over 30 years. The resultant discounted cost per ton is presented in Table XII-7. The total (exhaust and evaporative) cost per ton, using a 7 percent discount rate, with fuel savings is $950 for Small SI equipment and $350 for marine vessels. For the proposal as a whole, the cost per ton of HC+NO X reduction is $660. Reduced operating costs offset a portion of the increased cost of producing the cleaner Small SI and Marine SI engines. Reduced fuel consumption also offsets the costs of permeation control. Chapter 7 of the RIA contains a more detailed discussion of the cost per ton analysis.

Table XII-7.—Estimated Cost Per Ton of the HC+NO X Emission Standards
Category Implementation datesDiscounted cost per ton Without fuel savings (3%/7%) With fuel savings (3%/7%)
Small SI Exhaust 2011-2012 $1700/$1860 $1270/$1420
Small SI Evaporative 2008-2013 720/770 120/170
Marine SI Exhaust 2009-2013 690/820 300/430
Marine SI Evaporative 2009-2012 530/630 (70)/35
Aggregate 2008-2013 660/1120 226/660

As is discussed above, we are also expecting some reduction in direct PM emissions and carbon monoxide. These reductions will come primarily as product of the technology being used to meet HC and NO X standards and not directly as a result of the implementation of specific technology to achieve these gains. Thus, we have elected to focus our cost per ton analysis on HC+NO X.

One useful purpose of cost per ton analysis is to compare this program to other programs designed to achieve similar air quality objectives. Toward that end, we made a comparison between the HC+NO X cost per ton values presented in Table C-2 and the HC+NO X cost per ton of other recent mobile source programs. Table XII-8 summarizes the HC+NO X cost per ton of several recent EPA actions for controlled emissions from mobile sources. While the analyses for each rule were not completely identical, it is clear that the Small SI and Marine SI values compare favorably with the other recent actions.

Table XII-8.—Cost Per Ton of Previously Implemented HC+NO X Mobile Source Programs
Program Discounted cost per ton
2002 HH engines Phase 2 840
2001 NHH engines Phase 2 * neg
1998 Marine SI engines 1900
2004 Comm Marine CI 200
2007 Large SI exhaust 80
2006 ATV exhaust 300
2006 Off-highway motorcycle 290
2006 Recreational marine CI 700
2010 Snowmobile 1430
2006 <50cc highway motorcycle 1860
2010 Class 3 highway motorcycle 1650

D. Air Quality Impact

Information on the air quality impacts of this proposed action can be found in Section II of this preamble. Section II includes health effect information on ozone, PM, CO and air toxics. It also includes modeled projections of future ozone concentrations with and without the controls detailed in this proposal. The proposed emission reductions would lead to reductions in ambient concentrations of ozone, PM, CO and air toxics.

E. Benefits

This section presents our analysis of the health and environmental benefits that can be expected to occur as a result of the proposed Small SI and Marine SI engine standards throughout the period from initial implementation through 2030. Nationwide, the engines that are subject to the proposed emission standards in this rule are a significant source of mobile source air pollution. The proposed standards would reduce exposure to hydrocarbon, CO and NO X emissions and help avoid a range of adverse health effects associated with ambient ozone and PM 2.5 levels. In addition, the proposed standards would help reduce exposure to CO, air toxics, and PM 2.5 for persons who operate or who work with or are otherwise active in close proximity to these engines.

EPA typically quantifies PM- and ozone-related benefits in its regulatory impact analyses (RIAs) when possible. In the analysis of past air quality regulations, ozone-related benefits have included morbidity endpoints and welfare effects such as damage to commercial crops. EPA has not recently included a separate and additive mortality effect for ozone, independent of the effect associated with fine particulate matter. For a number of reasons, including (1) Advice from the Science Advisory Board (SAB) Health and Ecological Effects Subcommittee (HEES) that EPA consider the plausibility and viability of including an estimate of premature mortality associated with short-term ozone exposure in its benefits analyses and (2) conclusions regarding the scientific support for such relationships in EPA's 2006 Air Quality Criteria for Ozone and Related Photochemical Oxidants (the CD), EPA is in the process of determining how to appropriately characterize ozone-related mortality benefits within the context of benefits analyses for air quality regulations. As part of this process, we are seeking advice from the National Academy of Sciences (NAS) regarding how the ozone-mortality literature should be used to quantify the reduction in premature mortality due to diminished exposure to ozone, the amount of life expectancy to be added and the monetary value of this increased life expectancy in the context of health benefits analyses associated with regulatory assessments. In addition, the agency has sought advice on characterizing and communicating the uncertainty associated with each of these aspects in health benefit analyses.

Since the NAS effort is not expected to conclude until 2008, the agency is currently deliberating how best to characterize ozone-related mortality benefits in its rulemaking analyses in the interim. For the analysis of the proposed standards, we do not quantify an ozone mortality benefit. So that we do not provide an incomplete picture of all of the benefits associated with reductions in emissions of ozone precursors, we have chosen not to include an estimate of total ozone benefits in the proposed RIA. By omitting ozone benefits in this proposal, we acknowledge that this analysis underestimates the benefits associated with the proposed standards. Our analysis, however, indicates that the rule's monetized PM 2.5 benefits alone substantially exceed our estimate of the costs.

The PM 2.5 benefits are scaled based on relative changes in PM 2.5 precursor emissions (direct PM and NO X) between this rule and the proposed Clean Air Nonroad Diesel (CAND) rule. As explained in Section 8.2.1 of the RIA for this rule, the PM 2.5 benefits scaling approach is limited to those studies, health impacts, and assumptions that were used in the proposed CAND analysis. As a result, PM-related premature mortality is based on the updated analysis of the American Cancer Society cohort (ACS; Pope et al., 2002). (107) However, it is important to note that since the CAND rule, EPA's Office of Air and Radiation (OAR) has adopted a different format for its benefits analyses in which characterization of the uncertainty in the concentration-response function is integrated into the main benefits analysis. This new approach follows the recommendation of NRC's 2002 report “Estimating the Public Health Benefits of Proposed Air Pollution Regulations” to begin moving the assessment of uncertainties from its ancillary analyses into its main benefits presentation through the conduct of probabilistic analyses. (108) Within this context, additional data sources are available, including a recent expert elicitation and updated analysis of the Six-Cities Study cohort (Laden et al., 2006). (109) Please see the PM NAAQS RIA for an indication of the sensitivity of our results to use of alternative concentration-response functions. The PM 2.5-related benefits associated with the proposed standards are presented in table XII-9.

It should be noted that since the CAND rule, EPA's Office of Air and Radiation (OAR) has adopted a different format for its benefits analysis in which characterization of uncertainty is integrated into the main benefits analysis. The benefits scaling approach used in the analysis of the proposed standards limits our ability to integrate uncertainty into the main analysis. For the benefits analysis of the final standards, we will adopt this integrated uncertainty approach. Please see the PM NAAQS RIA for an indication of the uncertainty present in the base estimate of benefits and the sensitivity of our results to the use of alternative concentration-response functions.

Table XII-9.—Estimated Monetized PM-Related Health Benefits of the Proposed Standards
Total Benefits a, b, c (billions 2005$) 2020 2030
Using a 3% discount rate$2.1 + B$3.4 + B
Using a 7% discount rate$1.9 + B$3.1 + B
(1) Quantified Human Health and Environmental Effects of the Proposed

In this section we discuss the PM 2.5 benefits of the proposed standards. To estimate PM 2.5 benefits, we rely on a benefits transfer technique. The benefits transfer approach uses as its foundation the relationship between reductions in precursors to PM 2.5 (NO X and direct PM 2.5 emissions) and ambient PM 2.5 concentrations modeled across the contiguous 48 states (and DC) for the Clean Air Nonroad Diesel (CAND) proposal. (112) For a given future year, we first calculate the ratio between CAND direct PM 2.5 emission reductions and direct PM 2.5 emission reductions associated with the proposed control standards (proposed emission reductions/CAND emission reductions). We calculate a similar ratio for NO X. We then multiply these ratios by the percent that direct PM 2.5 and NO X emissions, respectively, contribute towards population-weighted reductions in ambient PM 2.5 due to the CAND standards. This calculation results in a “benefits apportionment factor” for the relationship between direct PM emissions and ambient PM 2.5 and NO X emissions and ambient PM 2.5, which are then applied to the incidence and monetized benefits from the CAND proposal. In this way, we apportion the results of the proposed CAND analysis to its underlying PM precursor emission reductions and scale the apportioned benefits to reflect differences in emission reductions between the two rules. (113) This benefits transfer method is consistent with the approach used in other recent mobile and stationary source rules. (114)

Table XII-10 presents the primary estimates of reduced incidence of PM-related health effects for the years 2020 and 2030 for the proposed emission control strategy. (115) In 2030, we estimate that PM-related annual benefits include approximately 450 fewer premature fatalities, 290 fewer cases of chronic bronchitis, 800 fewer non-fatal heart attacks, 460 fewer hospitalizations (for respiratory and cardiovascular disease combined), 310,000 days of restricted activity due to respiratory illness and approximately 52,000 fewer work-loss days. We also estimate substantial health improvements for children from reduced upper and lower respiratory illness, acute bronchitis, and asthma attacks.

Table XII-10.—Estimated Annual Reductions in Incidence of Health Effects a
Health effect2020 annual incidence reduction2030 annual incidence reduction
PM-Related Endpoints:  
Premature Mortality b  
Adult, age 30 and over plus Infant, age < 1 year 290450
Chronic bronchitis (adult, age 26 and over) 200290
Non-fatal myocardial infarction (adult, age 18 and over) 490800
Hospital admissions—respiratory (all ages) c 160270
Hospital admissions—cardiovascular (adults, age > 18) d 130200
Emergency room visits for asthma (age 18 years and younger)210310
Acute bronchitis, (children, age 8-12) 470700
Lower respiratory symptoms (children, age 7-14) 5,6008,300
Upper respiratory symptoms (asthmatic children, age 9-18)4,3006,300
Asthma exacerbation (asthmatic children, age 6-18) 7,00010,000
Work loss days 38,00052,000
Minor restricted activity days (adults age 18-65) 220,000310,000
(2) Monetized Benefits

Table XII-11 presents the estimated monetary value of reductions in the incidence of health and welfare effects. Annual PM-related health benefits are approximately $3.4 billion in 2030, assuming a 3 percent discount rate (or $3.1 billion assuming a 7 percent discount rate). All monetized estimates are stated in 2005 dollars. These estimates account for growth in real gross domestic product (GDP) per capita between the present and the years 2020 and 2030. As the table indicates, total benefits are driven primarily by the reduction in premature fatalities each year, which accounts for well over 90 percent of total benefits.

Table XII-11 indicates with a “B” those additional health and environmental benefits of the rule that we were unable to quantify or monetize. These effects are additive to the estimate of total benefits, and are related to the following sources:

  • There are many human health and welfare effects associated with ozone, PM, and toxic air pollutant reductions that remain unquantified because of current limitations in the methods or available data. A full appreciation of the overall economic consequences of the proposed standards requires consideration of all benefits and costs expected to result from the new standards, not just those benefits and costs which could be expressed here in dollar terms. A listing of the benefit categories that could not be quantified or monetized in our benefit estimates are provided in Table XII-12.
  • The PM air quality model only captures the benefits of air quality improvements in the 48 states and DC; PM benefits for Alaska and Hawaii are not reflected in the estimate of benefits.
Table XII-11.—Estimated Annual Monetary Value of Reductions in Incidence of Health and Welfare Effects (2005$) a, b
Health effect Pollutant 2020 estimated value of reductions (millions)2030 estimated value of reductions(millions)
PM-Related Premature mortality c, d    
Adult >30 years PM 2.5   
3 percent discount rate $2,000 $3,100
7 percent discount rate 1,800 2,800
Child <1 year5 6
Chronic bronchitis (adults, 26 and over)PM 2.5 90140
Non-fatal acute myocardial infarctions    
3 percent discount rate 50 77
7 percent discount ratePM 2.5 4875
Hospital admissions for respiratory causesPM 2.5 2.95.0
Hospital admissions for cardiovascular causesPM 2.5 3.14.7
Emergency room visits for asthmaPM 2.5 0.070.11
Acute bronchitis (children, age 8-12)PM 2.5 0.200.30
Lower respiratory symptoms (children, age 7-14)PM 2.5 0.110.16
Upper respiratory symptoms (asthma, age 9-11)PM 2.5 0.130.19
Asthma exacerbations PM 2.5 0.360.54
Work loss days PM 2.5 5.87.0
Minor restricted activity days (MRADs)PM 2.5 1419
Monetized Total e    
Base estimate:    
3 percent discount rate PM 2.5 2,100 + B 3,400 + B
7 percent discount rate1,900 + B3,100 + B
Table XII-12.—Unquantified and Non-Monetized Effects of the Proposed Small Spark Ignition/Recreational Marine Engine Rule
Pollutant/effects Effects not included in primary estimates—changes in:
Ozone Health a Premature mortality: short-term exposures b.
Hospital admissions: respiratory.
Emergency room visits for asthma.
Minor restricted-activity days.
School loss days.
Asthma attacks.
Cardiovascular emergency room visits.
Acute respiratory symptoms.
Chronic respiratory damage.
Premature aging of the lungs.
Non-asthma respiratory emergency room visits.
Increased exposure to UVb.
Ozone Welfare Yields for
—commercial forests.
—some fruits and vegetables.
—non-commercial crops.
Damage to urban ornamental plants.
Impacts on recreational demand from damaged forest aesthetics.
Ecosystem functions.
Increased exposure to UVb.
PM Health c Premature mortality—short term exposures d.
Low birth weight.
Pulmonary function.
Chronic respiratory diseases other than chronic bronchitis.
Non-asthma respiratory emergency room visits.
Exposure to UVb (±) e.
PM Welfare Visibility in Class I areas.
Residential and recreational visibility in non-Class I areas.
Soiling and materials damage.
Damage to ecosystem functions.
Exposure to UVb (±) e.
Nitrogen and Sulfate Deposition Welfare Commercial forests due to acidic sulfate and nitrate deposition.
Commercial freshwater fishing due to acidic deposition.
Recreation in terrestrial ecosystems due to acidic deposition.
Existence values for currently healthy ecosystems.
Commercial fishing, agriculture, and forests due to nitrogen deposition.
Recreation in estuarine ecosystems due to nitrogen deposition.
Ecosystem functions.
Passive fertilization.
CO Health Behavioral effects.
HC Health f Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde).
Anemia (benzene).
Disruption of production of blood components (benzene).
Reduction in the number of blood platelets (benzene).
Excessive bone marrow formation (benzene).
Depression of lymphocyte counts (benzene).
Reproductive and developmental effects (1,3-butadiene).
Irritation of eyes and mucus membranes (formaldehyde).
Respiratory irritation (formaldehyde).
Asthma attacks in asthmatics (formaldehyde).
Asthma-like symptoms in non-asthmatics (formaldehyde).
Irritation of the eyes, skin, and respiratory tract (acetaldehyde).
Upper respiratory tract irritation and congestion (acrolein).
HC Welfare Direct toxic effects to animals.
Bioaccumulation in the food chain.
Damage to ecosystem function.
Odor.
(3) What Are the Significant Limitations of the Benefits Analysis?

Every benefit-cost analysis examining the potential effects of a change in environmental protection requirements is limited to some extent by data gaps, limitations in model capabilities (such as geographic coverage), and uncertainties in the underlying scientific and economic studies used to configure the benefit and cost models. Deficiencies in the scientific literature often result in the inability to estimate quantitative changes in health and environmental effects, such as potential increases in premature mortality associated with increased exposure to carbon monoxide. Deficiencies in the economics literature often result in the inability to assign economic values even to those health and environmental outcomes which can be quantified. These general uncertainties in the underlying scientific and economics literature, which can cause the valuations to be higher or lower, are discussed in detail in the RIA and its supporting references. Key uncertainties that have a bearing on the results of the benefit-cost analysis of the proposed standards include the following:

  • The exclusion of potentially significant and unquantified benefit categories (such as health, odor, and ecological benefits of reduction in ozone, air toxics, and PM);
  • Errors in measurement and projection for variables such as population growth;
  • Uncertainties in the estimation of future year emissions inventories and air quality, especially regarding the discrepancy between the modeled and proposed suite of standards and their impact on emissions inventories;
  • Uncertainties associated with the scaling of the PM results of the modeled benefits analysis to the proposed standards, especially regarding the assumption of similarity in geographic distribution between emissions and human populations and years of analysis;
  • Uncertainty in the estimated relationships of health and welfare effects to changes in pollutant concentrations including the shape of the concentration-response function, the size of the effect estimates, and the relative toxicity of the many components of the PM mixture;
  • Uncertainties in exposure estimation; and
  • Uncertainties associated with the effect of potential future actions to limit emissions.

As Table XII-11 indicates, total benefits are driven primarily by the reduction in premature fatalities each year. Elaborating on the list of uncertainties above, some key assumptions underlying the primary estimate for the premature mortality category include the following:

  • Inhalation of fine particles is causally associated with premature death at concentrations near those experienced by most Americans on a daily basis. Although biological mechanisms for this effect have not yet been completely established, the weight of the available epidemiological, toxicological, and experimental evidence supports an assumption of causality. The impacts of including a probabilistic representation of causality were explored in the expert elicitation-based results of the recently published PM NAAQS RIA. Because the analysis of the proposed standards is constrained to the studies included in the CAND PM benefits scaling approach, we are unable to conduct the same analysis of expert elicitation-based mortality incidence for the proposed standards. (120) However, we qualitatively describe the expert elicitation-based mortality results associated with the final PM NAAQS to provide an indication of the sensitivity of our PM-related premature mortality results to use of alternative concentration-response functions. We present this discussion in the RIA.
  • Since the publication of CAIR, a follow up to the Harvard six-city study on premature mortality was published (Laden et al., 2006 based on Dockery et al., 1993), (121 122) which both confirmed the effect size from the first study and provided additional evidence that reductions in PM 2.5 directly result in reductions in the risk of premature death. The impacts of including this study in the primary analysis were explored in the results of the recently published PM NAAQS RIA. Because the analysis of the proposed standards is constrained to the studies included in the CAND PM benefits scaling approach, we are unable to characterize PM-related mortality based on Laden et al. However, we discuss the implications of these results in the RIA for the proposed standards.
  • All fine particles, regardless of their chemical composition, are equally potent in causing premature mortality. This is an important assumption, because PM produced via transported precursors emitted from Small SI and Marine SI engines may differ significantly from PM precursors released from electric generating units and other industrial sources. However, no clear scientific grounds exist for supporting differential effects estimates by particle type.
  • The concentration-response function for fine particles is approximately linear within the range of ambient concentrations under consideration. Thus, the estimates include health benefits from reducing fine particles in areas with varied concentrations of PM, including both regions that may be in attainment with PM 2.5 standards and those that are at risk of not meeting the standards.

Taking into account these uncertainties, we believe this benefit-cost analysis provides a conservative estimate of the expected economic benefits of the proposed standards in future years because of the exclusion of potentially significant benefit categories. Acknowledging benefits omissions and uncertainties, we present a best estimate of the total benefits based on our interpretation of the best available scientific literature and methods. Furthermore, our analysis reflects many methodological improvements that were incorporated into the analysis of the final Clean Air Interstate Rule (CAIR), including a revised value of a statistical life, a revised baseline rate of future mortality, and a revised mortality lag assumption. Details of these improvements can be found in the RIA for this rule and in the final CAIR rule RIA. (123) Once again, however, it should be noted that since the CAIR rule, EPA's Office of Air and Radiation (OAR) has adopted a different format for its benefits analysis in which characterization of uncertainty is integrated into the main benefits analysis. Please see the PM NAAQS RIA for an indication of the uncertainty present in the base estimate of benefits and the sensitivity of our results to the use of alternative concentration-response functions.

(4) How Do the Benefits Compare to the Costs of the Proposed Standards?

The proposed rule establishes separate standards that reduce the evaporative and exhaust emissions from Small SI and Marine SI engines. A full appreciation of the overall economic consequences of these provisions requires consideration of the benefits and costs expected to result from each standard. Due to limitations in data availability and analytical methods, however, we are only able to present the benefits of the entire proposed rule in the aggregate for both PM 2.5 and ozone. There are also a number of health and environmental effects associated with the proposed standards that we were unable to quantify or monetize (see Table XII-12).

Table XII-13 contains the estimates of monetized PM 2.5-related benefits of the proposed standards and estimated social welfare costs for each of the proposed control programs. The annual social welfare costs of all provisions of this proposed rule are described more fully in the next section. The results in Table XII-13 suggest that the 2020 and 2030 monetized benefits of the proposed standards are much greater than the expected social welfare costs. Specifically, the annual benefits of the program would be approximately $2.1 + B billion annually in 2020 using a three percent discount rate (or $1.9 + B billion using a seven percent discount rate), compared to estimated social welfare costs of approximately $252 million in that same year. The net benefits are expected to increase to $3.4 + B billion annually in 2030 using a three percent discount rate (or $3.1 + B billion using a seven percent discount rate), even as the social welfare costs of that program fall to $241 million.

In Table XII-13, we present the costs and PM-related benefits related to each of the two broad engine classes regulated by the proposed standards: Small SI and Marine SI engines. Table XII-13 also presents the costs and PM-related benefits related to the specific engine classes regulated by the proposed standards: Small SI—Class I, Class II, and Handheld (HH); Marine SI—Sterndrive/Inboard (SD/I), and Outboard/Personal Water Craft (OB/PWC). Using the same PM scaling approach described in Chapter 8.2 of the RIA, we are able to split out the estimated PM benefits related to the different Small SI and Marine SI engine classes. One can see that in all cases, the PM benefits accrued by the engine classes are greater than the costs, even when fuel savings is not factored into the cost estimate. The benefit-to-cost ratio would be even greater if we estimated the ozone benefits related to the proposed standards.

Table XII-13.—Summary of Annual Benefits, Costs, and Net Benefits of the Proposed Small SI and Marine SI Engine Rule a
Description 2020 (Millions of 2005 dollars) 2030 (Millions of 2005 dollars)
Estimated Social Welfare Costs b c   
Small SI $351 $404
Class I 145 167
Class II 199 229
HH d 7 8
Marine SI 154 164
SD/I 41 44
OB/PWC 113 120
Total 505 569
Fuel Savings (253) (327)
Total Social Welfare Costs 252 241
Estimated Benefits e f   
PM-Only Small SI Benefits   
3 percent discount rate 861 1,280
7 percent discount rate 782 1,160
Class I   
3 percent discount rate 478 647
7 percent discount rate 434 587
Class II   
3 percent discount rate 383 627
7 percent discount rate 348 570
PM-Only Marine SI Benefits   
3 percent discount rate 1,280 2,110
7 percent discount rate 1,160 1,190
SD/I   
3 percent discount rate 209 487
7 percent discount rate 190 442
OB/PWC   
3 percent discount rate 1,070 1,620
7 percent discount rate 969 1,470
Total PM-Only Benefits g   
3 percent discount rate 2,140+B 3,380+B
7 percent discount rate 1,940+B 3,070+B
Annual Net PM-Only Benefits (Total Benefits-Total Costs) g   
3 percent discount rate 1,890+B 3,140+B
7 percent discount rate 1,690+B 2,830+B

F. Economic

We prepared an Economic Impact Analysis (EIA) to estimate the economic impacts of the proposed emission control program on the Small SI and Marine SI engine and equipment markets. In this section we briefly describe the Economic Impact Model (EIM) we developed to estimate the market-level changes in price and outputs for affected markets, the social costs of the program, and the expected distribution of those costs across affected stakeholders. We also present the results of our analysis. We request comment on all aspects of the analysis, including the model and the model inputs.

We estimate the net social costs of the proposed program to be about $241 million in 2030. (126, 127) This estimate reflects the estimated compliance costs associated with the Small SI and Marine SI engine standards and the expected fuel savings from improved evaporative controls. When the fuel savings are not taken into account, the results of the economic impact modeling suggest that the social costs of these programs are expected to be about $569 million in 2030. Consumers of Small SI and Marine products are expected to bear about 75 percent of these costs. Small SI engine and equipment manufacturers are expected to bear 6 percent and 19 percent, respectively. We estimate fuel savings of about $327 million in 2030, which will accrue to consumers.

With regard to market-level impacts in 2030, the average price increase for Small SI engines is expected to be about 9.1 percent ($17 per unit). The average price increase for Marine SI engines is expected to be about 1.7 percent ($195 per unit). The largest average price increase for Small SI equipment is expected to be about 5.6 percent ($15 per unit) for Class I equipment. The largest average price increase for Marine SI vessels is expected to be about 2.1 percent ($178 per unit) for Personal Watercraft.

(1) What is an Economic Impact Analysis?

An Economic Impact Analysis (EIA) is prepared to inform decision makers about the potential economic consequences of a regulatory action. The analysis consists of estimating the social costs of a regulatory program and the distribution of these costs across stakeholders. These estimated social costs can then be compared with estimated social benefits (as presented in Section XII.E). As defined in EPA's Guidelines for Preparing Economic Analyses, social costs are the value of the goods and services lost by society resulting from (a) The use of resources to comply with and implement a regulation and (b) reductions in output. (128) In this analysis, social costs are explored in two steps. In the market analysis, we estimate how prices and quantities of goods affected by the proposed emission control program can be expected to change once the program goes into effect. In the economic welfare analysis, we look at the total social costs associated with the program and their distribution across stakeholders.

(2) What Is the Economic Impact Model?

The EIM is a behavioral model developed for this proposal to estimate price and quantity changes and total social costs associated with the emission controls under consideration. The EIM simulates how producers and consumers of affected products can be expected to respond to an increase in production costs as a result of the proposed emission control program. In this EIM, compliance costs are directly borne by producers of affected goods. Depending on the producers' and consumers' sensitivity to price changes, producers of affected products will try to pass some or all of the increased production costs on to the consumers of these goods through price increases. In response to the price increases, consumers will decrease their demand for the affected good. Producers will react to the decrease in quantity demanded by decreasing the quantity they produce; the market will react by setting a higher price for those fewer units. These interactions continue until a new market equilibrium quantity and price combination is achieved. The amount of the compliance costs that can be passed on to the consumers is ultimately limited by the price sensitivity of consumers and producers in the relevant market (represented by the price elasticity of demand or supply). The EIM explicitly models these behavioral responses and estimates the new equilibrium prices and output and the resulting distribution of social costs across these stakeholders (producers and consumers).

(3) What Economic Sectors Are Included in This Economic Impact Analysis?

There are two broad economic sectors affected by the emission control program described in this proposal: (1) Small SI engines and equipment, and (2) Marine SI engines and equipment. For Small SI engines and equipment we distinguish between handheld and nonhandheld sectors. For handheld, we model one integrated handheld engine and equipment category. On the nonhandheld side, we model 6 engine categories, depending on engine class and useful life (Class I: UL125, UL250, and UL500; Class II: UL250, UL500, UL1000), and 8 equipment categories (agriculture/construction/general industrial; utility and recreational vehicles; lawn mowers; tractors; other lawn and garden; generator sets/welders; pumps/compressors/pressure washers; and snowblowers). For Marine SI engines and equipment, we distinguish between sterndrives and inboards (SD/I), outboards (OB), and personal watercraft (PWC). SD/I and OB are further categorized by whether they are luxury or not. All of these markets are described in more detail in Chapter 9 of the RIA and in the industry characterizations prepared for this proposal.

This analysis assumes that all of these products are purchased and used by residential households. This means that to model the behavior change associated with the proposed standards we model all uses as residential lawn and garden care or power generation (Small SI) or personal recreation (Marine SI). We do not explicitly model commercial uses (how the costs of complying with the proposed programs may affect the production of goods and services that use Small SI or Marine SI engines or equipment as production inputs); we treat all commercial uses as if they were residential uses. We believe this approach is reasonable because the commercial share of the end use markets for both Small SI and Marine SI equipment is very small. (129) In addition, for any commercial uses of these products the share of the cost of these products to total production costs is also small (e.g., the cost of a Small SI generator is only a very small part of the total production costs for a construction firm). Therefore, a price increase of the magnitude anticipated for this control program is not expected to have a noticeable impact on prices or quantities of goods or services produced using Small SI or Marine SI equipment as inputs (e.g., commercial turf care, construction, or fishing).

In the EIM the Small SI and Marine SI markets are not linked (there is no feedback mechanism between the Small SI and Marine SI market segments). This is appropriate because the affected equipment is not interchangeable and because there is very little overlap between the engine producers in each market. These two sectors represent different aspects of economic activity (lawn and garden care and power generation as opposed to recreational marine) and production and consumption of one product is not affected by the other. In other words, an increase in the price of lawnmowers is not expected to have an impact on the production and supply of personal watercraft, and vice versa. Production and consumption of each of these products are the results of other factors that have little cross-over impacts (the need for residential garden upkeep or power generation; the desire for personal recreation).

(4) What A