FR Doc R8-7999

[Federal Register: June 30, 2008 (Volume 73, Number 126)]
[Rules and Regulations]
[Page 37095-37144]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jn08-14]

[[Page 37095]]

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

Part IV

Environmental Protection Agency

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

40 CFR Parts 9, 85, et al.

Control of Emissions of Air Pollution From Locomotive Engines and
Marine Compression-Ignition Engines Less Than 30 Liters per Cylinder;
Republication; Final Rule

[[Page 37096]]

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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 85, 86, 89, 92, 94, 1033, 1039, 1042, 1065, and
1068

[EPA-HQ-OAR-2003-0190; FRL-8545-3]
RIN 2060-AM06

Control of Emissions of Air Pollution From Locomotive Engines and
Marine Compression-Ignition Engines Less Than 30 Liters per Cylinder;
Republication

Editorial Note: FR Doc. E8-7999 was originally published at
pages 25098 to 25352 in the issue of Tuesday, May 6, 2008. This
document included numerous typographical and other errors that were
inadvertently introduced in the printing process. Because of the
number of errors, this document is being republished in its
entirety. This republication does not change the effective date of
the original document.

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: EPA is adopting a comprehensive program to dramatically reduce
pollution from locomotives and marine diesel engines. The controls will
apply to all types of locomotives, including line-haul, switch, and
passenger, and all types of marine diesel engines below 30 liters per
cylinder displacement, including commercial and recreational,
propulsion and auxiliary. The near-term emission standards for newly-
built engines will phase in starting in 2009. The near-term program
also includes new emission limits for existing locomotives and marine
diesel engines that apply when they are remanufactured, and take effect
as soon as certified remanufacture systems are available, as early as
2008. The long-term emissions standards for newly-built locomotives and
marine diesel engines are based on the application of high-efficiency
catalytic aftertreatment technology. These standards begin to take
effect in 2015 for locomotives and in 2014 for marine diesel engines.
We estimate particulate matter (PM) reductions of 90 percent and
nitrogen oxides (NOX) reductions of 80 percent from engines
meeting these standards, compared to engines meeting the current
standards.
We project that by 2030, this program will reduce annual emissions
of NOX and PM by 800,000 and 27,000 tons, respectively. EPA
projects these reductions will annually prevent up to 1,100 PM-related
premature deaths, 280 ozone-related premature deaths, 120,000 lost work
days, 120,000 school day absences, and 1.1 million minor restricted-
activity days. The annual monetized health benefits of this rule in
2030 will range from $9.2 billion to $11 billion, assuming a 3 percent
discount rate, or between $8.4 billion to $10 billion, assuming a 7%
discount rate. The estimated annual social cost of the program in 2030
is projected to be $740 million, significantly less than the estimated
benefits.

DATES: This rule is effective on July 7, 2008. The incorporation by
reference of certain publications listed in this regulation is approved
by the Director of the Federal Register as of July 7, 2008.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-2003-0190. All documents in the docket are listed on the
www.regulations.gov web site. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically through
www.regulations.gov or in hard copy at the Air 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 Air
Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: John Mueller, U.S. EPA, Office of
Transportation and Air Quality, Assessment and Standards Division
(ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann
Arbor, MI 48105; telephone number: (734) 214-4275; fax number: (734)
214-4816; e-mail address: Mueller.John@epa.gov, or Assessment and
Standards Division Hotline; telephone number: (734) 214-4636.

SUPPLEMENTARY INFORMATION:

Does This Action Apply to Me?

Locomotives

Entities potentially affected by this action are those that
manufacture, remanufacture or import locomotives or locomotive engines;
and those that own or operate locomotives. Regulated categories and
entities include:

This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your company is regulated by this action, you should carefully examine
the applicability criteria in 40 CFR 92.1, 1033.1, 1065.1, and 1068.1.
If you have questions, consult the person listed in the preceding FOR
FURTHER INFORMATION CONTACT section.
---------------------------------------------------------------------------

\1\ North American Industry Classification System (NAICS).
---------------------------------------------------------------------------

Marine Engines and Vessels

Entities potentially affected by this action are companies and
persons that manufacture, sell, or import into the United States new
marine compression-ignition engines, companies and persons that rebuild
or maintain these engines, companies and persons that make vessels that
use such engines, and the owners/operators of such vessels. Affected
categories and entities include:

[[Page 37097]]

------------------------------------------------------------------------
Examples of potentially
Category NAICS code \1\ affected entities
------------------------------------------------------------------------
Industry.............. 333618 Manufacturers of new marine
diesel engines.
Industry.............. 33661 and 346611 Ship and boat building; ship
building and repairing.
Industry.............. 811310 Engine repair, remanufacture,
and maintenance.
Industry.............. 483 Water transportation, freight
and passenger.
Industry.............. 487210 and Sightseeing
Transportation, Water.
Industry.............. 4883 Support Activities for Water
Transportation.
Industry.............. 1141 Fishing.
Industry.............. 336612 Boat building (watercraft not
built in shipyards and
typically of the type
suitable or intended for
personal use).
------------------------------------------------------------------------

This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your company is regulated by this action, you should carefully examine
the applicability criteria in 40 CFR 94.1, 1042.1, 1065.1, and 1068.1.
If you have questions, consult the person listed in the preceding FOR
FURTHER INFORMATION CONTACT section.

Outline of This Preamble

I. Overview
A. What Is EPA Finalizing and How Does It Differ From the
Proposal?
B. Why Is EPA Taking This Action?
II. Air Quality and Health Impacts
A. Overview
B. Public Health Impacts
C. Environmental Impacts
D. Other Criteria Pollutants Affected by This Final Rule
E. Emissions from Locomotive and Marine Diesel Engines
III. Emission Standards
A. What Locomotives and Marine Engines Are Covered?
B. What Standards Are We Adopting?
C. Are the Standards Feasible?
IV. Certification and Compliance Program
A. Issues Common to Locomotives and Marine Engines
B. Compliance Issues Specific to Locomotives
C. Compliance Issues Specific to Marine Engines
V. Costs and Economic Impacts
A. Engineering Costs
B. Cost Effectiveness
C. EIA
VI. Benefits
VII. Alternative Program Options
A. Summary of Alternatives
B. Summary of Results
VIII. Public Participation
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132 (Federalism)
F. Executive Order 13175 (Consultation and Coordination With
Indian Tribal Governments)
G. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
X. Statutory Provisions and Legal Authority

I. Overview

This final rule completes an important step in EPA's ongoing
National Clean Diesel Campaign (NCDC) by adding new programs for
locomotives and marine diesel engines to the clean diesel initiatives
we have already undertaken for highway, other nonroad, and stationary
diesel engines. As detailed below, it significantly strengthens the
locomotive and marine diesel programs we proposed last year (72 FR
15938, April 3, 2007), especially in controlling emissions during the
critical early years through the early introduction of advanced
technologies and the more complete coverage of existing engines. When
fully implemented, this coordinated set of new programs will reduce
harmful diesel engine emissions to a small fraction of their previous
levels.
The new programs address all types of diesel locomotives-- line-
haul, switch, and passenger rail, and all types of marine diesel
engines below 30 liters per cylinder displacement (hereafter referred
to as ``marine diesel engines'').\2\ These engines are used to power a
wide variety of vessels, from small fishing and recreational boats to
large tugs and Great Lakes freighters. They are also used to generate
auxiliary vessel power, including on ocean-going ships.
---------------------------------------------------------------------------

\2\ Marine diesel engines at or above 30 liters per cylinder,
called Category 3 engines, are typically used for propulsion power
on ocean-going ships. EPA is addressing Category 3 engines through
separate actions, including a planned rulemaking for a new tier of
federal standards (see Advance Notice of Proposed Rulemaking
published December 7, 2007 at 72 FR 69522) and participation on the
U.S. delegation to the International Maritime Organization for
negotiations of new international standards (see http://www.epa.gov/otaq/oceanvessels.com
for information on both of those actions), as well as EPA's Clean Ports USA Initiative (see
http://www.epa.gov/
cleandiesel/ports/index.htm).
---------------------------------------------------------------------------

Emissions of fine particulate matter (PM2.5) and
nitrogen oxides (NOX) from these diesel engines contribute
to nonattainment of the National Ambient Air Quality Standards (NAAQS)
for PM2.5 and ozone. Today, locomotives and marine diesel
engines account for about 20 percent of mobile source NOX
emissions and 25 percent of mobile source diesel PM2.5
emissions in the U.S. Absent this final action, by 2030 the relative
contributions of NOX and PM2.5 from these engines
would have grown to 35 and 65 percent, respectively.
We are finalizing a comprehensive three-part program to address
this problem. First, we are adopting stringent emission standards for
existing locomotives and for existing commercial marine diesel engines
above 600 kilowatt (kW) (800 horsepower (hp)). These standards apply
when the engines are remanufactured. This part of the program will take
effect as soon as certified remanufacture systems are available, for
some engines as early as a few months from now. Under our existing
program, locomotives have been certified to one of three tiers of
standards: Tier 0 for locomotives originally built between 1973 and
2001, Tier 1 for those built between 2002 and 2004, and Tier 2 for
those built in or after 2005. Under this new program, certified
locomotive remanufacture systems must be made available by 2010 for
Tier 0 and Tier 1 locomotives, and by 2013 for Tier 2 locomotives.
Remanufacture systems that are certified for use in marine engine
remanufactures are likewise required to be used. We are not, however,
setting a specific compliance date for certified marine diesel
remanufacture systems because we expect that engine manufacturers will
be well motivated by the market opportunity to certify emissions-
compliant systems.
Second, we are adopting a set of near-term emission standards,
referred to as Tier 3, for newly-built locomotives and

[[Page 37098]]

marine engines. The Tier 3 standards reflect the application of
technologies to reduce engine-out particulate matter (PM) and
NOX.
Third, we are adopting longer-term standards, referred to as Tier
4, for newly-built locomotives and marine engines. Tier 4 standards
reflect the application of high-efficiency catalytic aftertreatment
technology enabled by the availability of ultra-low sulfur diesel fuel
(ULSD). These standards take effect in 2015 for locomotives, and phase
in over time for marine engines, beginning in 2014. Finally, we are
adopting provisions in all three parts of the program to eliminate
emissions from unnecessary locomotive idling.
Locomotives and marine diesel engines designed to these Tier 4
standards will achieve PM reductions of 90 percent and NOX
reductions of 80 percent, compared to engines meeting the current Tier
2 standards. The new standards will also yield sizeable reductions in
emissions of nonmethane hydrocarbons (NMHC), carbon monoxide (CO), and
hazardous compounds known as air toxics. Table I-1 summarizes the PM
and NOX emission reductions for the new standards compared
to today's (Tier 2) emission standards; for remanufactured engines, the
comparison is to the current standards for each tier of locomotives
covered, and to typical unregulated levels for marine engines.

Table I-1.--Reductions From Levels of Existing Standards
----------------------------------------------------------------------------------------------------------------
PM
Sector Standards tier (percent) NOX (percent)
----------------------------------------------------------------------------------------------------------------
Locomotives............................. Remanufactured Tier 0.......... 60 15-20.
Remanufactured Tier 1.......... 50 ........................
Remanufactured Tier 2.......... 50 ........................
Tier 3......................... 50 ........................
Tier 4......................... 90 80.
All tiers--idle emissions...... 50 50.
Marine Diesel Engines \a\............... Remanufactured Engines......... 25-60 Up to 20.
Tier 3......................... 50 20.
Tier 4......................... 90 80.
----------------------------------------------------------------------------------------------------------------
Note: (a) Standards vary by displacement and within power categories. Reductions indicated are typical.

On a nationwide annual basis, these reductions will amount to
800,000 tons of NOX and 27,000 tons of PM by 2030, resulting
annually in the prevention of up to 1,100 PM-related premature deaths,
280 ozone-related premature deaths, 120,000 lost work days, 120,000
school day absences, and 1.1 million minor restricted-activity days. We
estimate the annual monetized health benefits of this rule in 2030 will
range from $9.2 billion to $11 billion, assuming a 3 percent discount
rate, or between $8.4 billion to $10 billion, assuming a 7% discount
rate.\3\ The estimated annual social cost of the program in 2030 is
projected to be $740 million, significantly less than the estimated
benefits.
---------------------------------------------------------------------------

\3\ Low and high benefits estimates are derived from a range of
ozone-related premature mortality studies (including an assumption
of no causality) and PM2.5-related premature mortality
based on the ACS study (Pope et al., 2002). Benefits also include
PM2.5- and ozone-related morbidity benefits. See section
VI for a complete discussion and analysis of benefits associated
with the final rule.
---------------------------------------------------------------------------

A. What Is EPA Finalizing and How Does it Differ From the Proposal?

This final rule makes a number of important changes to the program
set out in our Notice of Proposed Rulemaking (NPRM). Among these are
changes that will yield significantly greater overall NOX
and PM reductions, especially in the critical early years of the
program: The adoption of standards for remanufactured marine engines
and a 2-year pull-ahead of the Tier 4 NOX requirements for
line-haul locomotives and for 2000-3700 kW (2760-4900 hp) marine
engines.
The major elements of the final program are summarized below. We
are also revising existing testing, certification, and compliance
provisions to better ensure emissions control in use. Detailed
provisions and our justifications for them are discussed in sections
III and IV. Section VII of this preamble describes a number of
alternatives that we considered in developing the rule. After
evaluating the alternatives, we believe that our new program provides
the best opportunity for achieving timely and very substantial
emissions reductions from locomotive and marine diesel engines. It
balances a number of key factors: (1) Achieving very significant
emissions reductions as early as possible, (2) providing appropriate
lead time to develop and apply advanced control technologies, and (3)
coordinating requirements in this final rule with existing highway and
nonroad diesel engine programs. The provisions we are finalizing that
are different from the proposed program are:
The adoption of standards for remanufactured marine diesel
engines to address emissions from the existing fleet (this was
presented as one of the proposal alternatives),
Inclusion of Tier 4 NOX controls on 2015-2016
model year locomotives at initial build rather than at first
remanufacture,
A two-year pull-ahead of the Tier 4 NOX
standard for 2000-3700 kW marine engines to 2014,
Inclusion of Class II railroads in the remanufactured
locomotives program,
No Tier 4 standards for the small fleet of large
recreational vessels at this time,
A revised approach to migratory vessels that spend part of
their time overseas,
Credit for locomotive design measures that reduce
emissions as part of efforts to improve efficiency,
A number of changes to test and compliance requirements
detailed in sections III and IV.
Overall, our comprehensive three-part approach to setting standards
for locomotives and marine diesel engines will provide very large
reductions in PM, NOX, and toxic compounds, both in the
near-term (as early as 2008), and in the long-term. These reductions
will be achieved in a manner that: (1) Leverages technology
developments in other diesel sectors, (2) aligns well with the clean
diesel fuel requirements already being implemented, and (3) provides
the lead time needed to deal with the significant engineering design
workload that is involved.
(1) Locomotive Emission Standards
We are setting stringent exhaust emission standards for newly-built
and remanufactured locomotives, furthering

[[Page 37099]]

the initiative for cleaner locomotives started in 2004 with the
establishment of the ULSD locomotive fuel program, and adding this
important category of engines to the highway and nonroad diesel
applications already covered under EPA's National Clean Diesel
Campaign.
Briefly, for newly-built line-haul locomotives we are setting a new
Tier 3 PM standard of 0.10 grams per brake horsepower-hour (g/bhp-hr),
based on improvements to existing engine designs. This standard will
take effect in 2012. We are also setting new Tier 4 standards of 0.03
g/bhp-hr for PM and 1.3 g/bhp-hr for NOX, based on the
evolution of high-efficiency catalytic aftertreatment technologies now
being developed and introduced in the highway diesel sector. The Tier 4
standards will take effect in 2015. We are requiring that
remanufactured Tier 2 locomotives meet a PM standard of 0.10 g/bhp-hr,
based on the same engine design improvements as Tier 3 locomotives, and
that remanufactured Tier 0 and Tier 1 locomotives meet a 0.22 g/bhp-hr
PM standard. We are also requiring that remanufactured Tier 0
locomotives meet a NOX standard of 7.4 g/bhp-hr, the same
level as current Tier 1 locomotives, or 8.0 g/bhp-hr if the locomotive
is not equipped with a separate loop intake air cooling system. Section
III provides a detailed discussion of these new standards, and section
IV details improvements being made to the applicable test,
certification, and compliance programs.
In setting our original locomotive emission standards in 1998, the
historic pattern of transitioning older line-haul locomotives to road-
and yard-switcher service resulted in our making little distinction
between line-haul and switch locomotives. Because of the increase in
the size of new locomotives in recent years, that pattern cannot be
sustained by the railroad industry, as today's 4000+ hp (3000+ kW)
locomotives are poorly suited for switcher duty. Furthermore, although
there is still a fairly sizeable legacy fleet of older smaller line-
haul locomotives that could find their way into the switcher fleet,
essentially the only newly-built switchers put into service over the
last two decades have been of radically different design, employing one
to three smaller high-speed diesel engines designed for use in nonroad
applications. We are establishing new standards and special
certification provisions for newly-built and remanufactured switch
locomotives that take these factors into account.
Locomotives spend a substantial amount of time idling, during which
they emit harmful pollutants, consume fuel, create noise, and increase
maintenance costs. We are requiring that idle controls, such as
Automatic Engine Stop/Start Systems (AESS), be included on all newly-
built Tier 3 and Tier 4 locomotives. We also are requiring that they be
installed on all existing locomotives that are subject to the new
remanufactured engine standards, at the point of first remanufacture
under the standards, unless already equipped with idle controls.
Additional idle emissions control beyond AESS is encouraged in our
program by factoring it into the certification test program.
(2) Marine Engine Emission Standards
We are setting emissions standards for newly-built and
remanufactured marine diesel engines with displacements up to 30 liters
per cylinder (referred to as Category 1 and 2, or C1 and C2, engines).
Newly-built engines subject to the new standards include those used in
commercial, recreational, and auxiliary power applications, and those
below 37 kW (50 hp) that were previously regulated in our nonroad
diesel program.
The new marine diesel engine standards include stringent engine-
based Tier 3 standards for newly-built marine diesel engines that phase
in beginning in 2009. These are followed by aftertreatment-based Tier 4
standards for engines above 600 kW (800 hp) that phase in beginning in
2014. The specific levels and implementation dates for the Tier 3 and
Tier 4 standards vary by engine size and power. This yields an array of
emission standards levels and start dates that help ensure the most
stringent standards feasible at the earliest possible time for each
group of newly-built marine engines, while helping engine and vessel
manufacturers implement the program in a manner that minimizes their
costs for emission reductions. The new standards and implementation
schedules, as well as their technological feasibility, are described in
detail in section III of this preamble.
We are also adopting standards to address the considerable impact
of emissions from large marine diesel engines installed in vessels in
the existing fleet. These standards apply to commercial marine diesel
engines above 600 kW when these engines are remanufactured, and take
effect as soon as certified remanufacture systems are available. The
final requirements are different from the programmatic alternative on
which we sought comment in that there is no mandatory date by which
marine remanufacture systems must be made available. However, systems
for the larger Category 2 marine diesel engines are expected to become
available at the same time as the locomotive remanufacture systems for
similar engines, as early as 2008, because Category 2 marine diesel
engines are often derived from locomotive engines. This new marine
remanufacture program is described in more detail in section
III.B(2)(b). We intend to revisit this program in the future to
evaluate the extent to which remanufacture systems are being introduced
into the market without a mandatory requirement, and to determine if
the program should be extended to small commercial and recreational
engines as well.
Taken together, the program elements described above constitute a
comprehensive program that addresses the problems caused by locomotive
and marine diesel emissions from both a near-term and long-term
perspective. It does this while providing for an orderly and cost-
effective implementation schedule for the railroads, vessel owners,
manufacturers, and remanufacturers.

B. Why Is EPA Taking This Action?

(1) Locomotives and Marine Diesels Contribute to Serious Air Pollution
Problems
As we discuss extensively in both the proposal and today's action,
EPA strongly believes it is appropriate to take steps now to reduce
future emissions from locomotive and marine diesel engines. Emissions
from these engines generate significant emissions of PM2.5
and NOX that contribute to nonattainment of the National
Ambient Air Quality Standards for PM2.5 and ozone.
NOX is a key precursor to ozone and secondary PM formation.
These engines also emit hazardous air pollutants or air toxics, which
are associated with serious adverse health effects. Finally, emissions
from locomotive and marine diesel engines cause harm to public welfare,
including contributing to visibility impairment and other harmful
environmental impacts across the U.S.
The health and environmental effects associated with these
emissions are a classic example of a negative externality (an activity
that imposes uncompensated costs on others). With a negative
externality, an activity's social cost (the cost borne to 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 below and in section

[[Page 37100]]

II, emissions from locomotives and marine diesel engines and vessels
impose public health and environmental costs on society. However, these
added costs are not reflected in the costs of those using these engines
and equipment. The current market and regulatory scheme do not correct
this externality because firms in the market are rewarded for
minimizing their production costs, including the costs of pollution
control, and do not benefit from reductions in emissions. In addition,
firms that may take steps to use equipment that reduces air pollution
may find themselves at a competitive disadvantage compared to firms
that do not. The emission standards that EPA is finalizing help address
this market failure and reduce the negative externality from these
emissions by providing a regulatory incentive for engine and locomotive
manufacturers to produce engines and locomotives that emit fewer
harmful pollutants and for railroads and vessel builders and owners to
use those cleaner engines.
Emissions from locomotive and marine diesel engines account for
substantial portions of the country's current ambient PM2.5
and NOX levels. We estimate that today these engines account
for about 20 percent of mobile source NOX emissions and
about 25 percent of mobile source diesel PM2.5 emissions.
Under this rulemaking, by 2030, NOX emissions from these
diesel engines will be reduced annually by 800,000 tons and
PM2.5 emissions by 27,000 tons, and these reductions will
grow beyond 2030 as fleet turnover to the cleanest engines continues.
EPA has already taken steps to bring emissions levels from highway
and nonroad diesel vehicles and engines to very low levels over the
next decade, while the per horsepower-hour emission levels for
locomotive and marine diesel engines remain at much higher levels--
comparable to the emissions for highway trucks in the early 1990s.
Both ozone and PM2.5 contribute to serious public health
problems, including premature mortality, aggravation of respiratory and
cardiovascular disease (as indicated by increased hospital admissions
and emergency room visits, school absences, loss work days, and
restricted activity days), changes in lung function and increased
respiratory symptoms, altered respiratory defense mechanisms, and
chronic bronchitis. Diesel exhaust is of special public health concern,
and since 2002 EPA has classified exposure to diesel exhaust as likely
to be carcinogenic to humans by inhalation from environmental
exposures.\4\ Recent studies are showing that populations living near
large diesel emission sources such as major roadways, rail yards, and
marine ports are likely to experience greater diesel exhaust exposure
levels than the overall U.S. population, putting them at greater health
risks.^{5, 6}
---------------------------------------------------------------------------

\4\ U.S. EPA (2002) Health Assessment Document for Diesel Engine
Exhaust. EPA/600/8-90/057F. Office of Research and Development,
Washington DC. This document is available electronically at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060.
\5\ Kinnee, E.J.; Touman, J.S.; Mason, R.; Thurman, J.; Beidler,
A.; Bailey, C.; Cook, R. (2004) Allocation of onroad mobile
emissions to road segments for air toxics modeling in an urban area.
Transport. Res. Part D 9: 139-150.
\6\ State of California Air Resources Board. Roseville Rail Yard
Study. Stationary Source Division, October 14, 2004. This document
is available electronically at: http://www.arb.ca.gov/diesel/documents/rrstudy.htm and State of California Air Resources Board.
Diesel Particulate Matter Exposure Assessment Study for the Ports of
Los Angeles and Long Beach, April 2006. This document is available
electronically at: http://www.arb.ca.gov/regact/marine2005/portstudy0406.pdf.
---------------------------------------------------------------------------

EPA recently conducted an initial screening-level analysis \7\ of
selected marine port areas and rail yards to better understand the
populations that are exposed to diesel particulate matter (DPM)
emissions from these facilities.^{8, 9} This screening-level
analysis focused on a representative selection of national marine ports
and rail yards.\10\ Of the 47 marine ports and 37 rail yards selected,
the results indicate that at least 13 million people, including a
disproportionate number of low-income households, African-Americans,
and Hispanics, living in the vicinity of these facilities, are being
exposed to ambient DPM levels that are 2.0 [mu]g/m³ and 0.2
[mu]g/m³ above levels found in areas further from these
facilities. Because those populations exposed to DPM emissions from
marine ports and rail yards are more likely to be low-income and
minority residents, these populations will benefit from the controls
being finalized in this action. The detailed findings of this study are
available in the public docket for this rulemaking.
---------------------------------------------------------------------------

\7\ This type of screening-level analysis is an inexact tool and
not appropriate for regulatory decisionmaking; it is useful in
beginning to understand potential impacts and for illustrative
purposes. Additionally, the emissions inventories used as inputs for
the analyses are not official estimates and likely underestimate
overall emissions because they are not inclusive of all emission
sources at the individual ports in the sample. For example, most
inventories included emissions from ocean-going vessels (powered by
Category 3 engines), as well as some commercial vessel categories,
including harbor crafts, (powered by Category 1 and 2 engines),
cargo handling equipment, locomotives, and heavy-duty vehicles. This
final rule will not address emissions from ocean-going vessels,
cargo handling equipment or heavy-duty vehicles.
\8\ ICF International. September 28, 2007. Estimation of diesel
particulate matter concentration isopleths for marine harbor areas
and rail yards. Memorandum to EPA under Work Assignment Number 0-3,
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2003-0190.
\9\ ICF International. September 28, 2007. Estimation of diesel
particulate matter population exposure near selected harbor areas
and rail yards. Memorandum to EPA under Work Assignment Number 0-3,
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2003-0190.
\10\ The Agency selected a representative sample of the top 150
U.S. ports including coastal, inland, and Great Lake ports. In
selecting a sample of rail yards the Agency identified a subset from
the hundreds of rail yards operated by Class I Railroads.
---------------------------------------------------------------------------

Today, millions of Americans continue to live in areas that do not
meet existing air quality standards. Currently, ozone concentrations
exceeding the 8-hour ozone NAAQS occur over wide geographic areas,
including most of the nation's major population centers. As of October
10, 2007, approximately 88 million people live in 39 designated areas
(which include all or part of 208 counties) that either do not meet the
current PM2.5 NAAQS or contribute to violations in other
counties, and 144 million people live in 81 areas (which include all or
part of 368 counties) designated as not in attainment for the 8-hour
ozone NAAQS. These numbers do not include the people living in areas
where there is a significant future risk of failing to maintain or
achieve either the current or future PM2.5 or ozone NAAQS.
In addition to public health impacts, there are public welfare and
environmental impacts associated with ozone and PM2.5
emissions. Ozone causes damage to vegetation which leads to crop and
forestry economic losses, as well as harm to national parks, wilderness
areas, and other natural systems. NOX and direct emissions
of PM2.5 can contribute to the impairment of visibility in
many parts of the U.S., where people live, work, and recreate,
including national parks, wilderness areas, and mandatory class I
federal areas. The deposition of airborne particles can also reduce the
aesthetic appeal of buildings and culturally important objects through
soiling and can contribute directly (or in conjunction with other
pollutants) to structural damage by means of corrosion or erosion.
Finally, NOX emissions from diesel engines contribute to the
acidification, nitrification, and eutrophication of water bodies.
While EPA has already adopted many emission control programs that
are expected to reduce ambient ozone and PM2.5 levels,
including the Clean Air Interstate Rule (CAIR) (70 FR 25162, May 12,
2005) and the Clean Air

[[Page 37101]]

Nonroad Diesel Rule (69 FR 38957, June 29, 2004), the Heavy Duty Engine
and Vehicle Standards and Highway Diesel Fuel Sulfur Control
Requirements (66 FR 5002, Jan. 18, 2001), and the Tier 2 Vehicle and
Gasoline Sulfur Program (65 FR 6698, Feb. 10, 2000), the additional
PM2.5 and NOX emission reductions resulting from
this rule will assist states in attaining and maintaining the Ozone and
the PM2.5 NAAQS both near term and in the decades to come.
In September 2006, EPA finalized revised PM2.5 NAAQS
standards and over the next few years the EPA will undergo the process
of designating areas that do not meet this new standard. EPA modeling,
conducted as part of finalizing the revised NAAQS, projects that in
2015 up to 52 counties with 53 million people may violate either the
daily or annual standards for PM2.5 (or both), while an
additional 27 million people in 54 counties may live in areas that have
air quality measurements within 10 percent of the revised NAAQS. Even
in 2020 up to 48 counties, with 54 million people, may still not be
able to meet the revised PM2.5 NAAQS and an additional 25
million people, living in 50 counties, are projected to have air
quality measurements within 10 percent of the revised standards. The
locomotive and marine diesel PM2.5 reductions resulting from
this rulemaking are needed by a number of states to both attain and
maintain the revised PM2.5 NAAQS.
State and local governments continue working to protect the health
of their citizens and comply with requirements of the Clean Air Act
(CAA or ``the Act''). As part of this effort they recognize the need to
secure additional major reductions in both diesel PM2.5 and
NOX emissions by undertaking numerous state-level
actions.¹¹ However, they have also urged Agency action to
finalize a strong locomotive and marine diesel engine program that will
provide crucial emission reductions both in the near and long-term.
---------------------------------------------------------------------------

\11\ Two examples of state and local actions are: California Air
Resources Board (2006). Emission Reduction Plan for Ports and Goods
Movements (April 2006), Available electronically at www.arb.ca.gov/
gmp/docs/finalgmpplan090905.pdf; Connecticut Department of
Environmental Protection (2006). Connecticut's Clean Diesel Plan
(January 2006). See http://www.dep.state.ct.us/air2/diesel/index.htm
for description of initiative.
---------------------------------------------------------------------------

The federal program finalized today results in earlier and
significantly greater NOX and PM reductions from the
locomotive and marine sector than the proposed program because of the
first-ever national standards for remanufactured marine engines and the
starting of Tier 4 NOX requirements for line-haul
locomotives and for 2000-3700 kW (2760-4900 hp) marine engines two
years earlier than proposed. These changes reflect important
cooperative efforts by the regulated industry to implement cleaner
technology as early as possible. While the program finalized today will
help many states and communities achieve cleaner air, for some areas,
such as the South Coast of California, the reductions achieved through
this rule will not alone enable them to meet their near-term ozone and
PM air quality goals. This was also the case for our 1998 locomotive
rulemaking, where the State of California worked with Class I railroads
operating in southern California to develop a Memoranda of
Understanding (MOU) ensuring that the cleanest technologies enabled by
federal rules were expeditiously introduced in areas of California with
greatest air quality improvement needs. EPA continues to support
California's efforts to reconcile likely future growth in the
locomotive and marine sector with the public health protection needs of
the area, and today's final rule includes provisions which are well-
suited to encouraging early deployment of cleaner technologies through
the development of similar programs.
In addition to these new standards, EPA has a number of voluntary
programs that help enable government, industry, and local communities
to address challenging air quality problems. The EPA SmartWay program
has worked with railroads to encourage them to reduce unnecessary
locomotive idling and will continue to promote the use of innovative
idle reduction technologies that can substantially reduce locomotive
emissions while reducing fuel consumption. EPA's National Clean Diesel
Campaign, through its Clean Ports USA program is working with port
authorities, terminal operators, and trucking and rail companies to
promote cleaner diesel technologies and emission reduction strategies
through education, incentives, and financial assistance. Part of these
efforts involves voluntary retrofit programs that can further reduce
emissions from the existing fleet of diesel engines. Finally, EPA is
implementing a new Sustainable Ports Strategy which will allow EPA to
partner with ports, business partners, communities and other
stakeholders to become world leaders in sustainability, including
achieving cleaner air. This new strategy builds on the success of
collaborative work EPA has been doing in partnership with the American
Association of Port Authorities (AAPA), and through port related
efforts of Clean Ports USA, SmartWay, EPA's Regional Diesel
Collaboratives and other programs. Together these approaches augment
the regulations being finalized today, helping states and communities
achieve larger reductions sooner in the areas of our country that need
them the most.
(2) Advanced Technologies Can Be Applied
Air pollution from locomotive and marine diesel exhaust is a
challenging problem. However, we believe it can be addressed
effectively through a combination of engine-out emission reduction
technologies and high-efficiency catalytic aftertreatment technologies.
As discussed in greater detail in section III.C, the development of
these aftertreatment technologies for highway and nonroad diesel
applications has advanced rapidly in recent years, so that new engines
can achieve very large emission reductions in PM and NOX (in
excess of 90 and 80 percent, respectively).
High-efficiency PM control technologies are being broadly used in
many parts of the world and are being used domestically to comply with
EPA's heavy-duty truck standards that started taking effect in the 2007
model year. These technologies are highly durable and robust in use and
have proved extremely effective in reducing exhaust hydrocarbon (HC)
and carbon monoxide emissions.
Control of NOX emissions from locomotive and marine
diesel engines can also be achieved with high-efficiency exhaust
emission control technologies. Such technologies are expected to be
used to meet the stringent NOX standards included in EPA's
heavy-duty highway diesel and nonroad Tier 4 programs and have been in
production for heavy-duty trucks in Europe since 2005 and in many
stationary source applications throughout the world.
Section III.C discusses additional engineering challenges in
applying these technologies to newly-built locomotive and marine
engines, as well as the development steps that we expect to be taken to
resolve the challenges. With the lead time available and the assurance
of ULSD for the locomotive and marine sectors in 2012, as provided by
our 2004 final rule for nonroad engines and fuel, we are confident the
application of advanced technology to locomotives and marine diesel
engines will proceed at a reasonable rate of progress and will result
in systems

[[Page 37102]]

capable of achieving the new standards on time.
(3) Basis for Action Under the Clean Air Act
Authority for the actions promulgated in this document is granted
to the EPA by sections 114, 203, 205, 206, 207, 208, 213, 216, and
301(a) of the Clean Air Act as amended in 1990 (42 U.S.C. 7414, 7522,
7524, 7525, 7541, 7542, 7547, 7550 and 7601(a)).
Authority to Set Standards. EPA is promulgating emissions standards
for new marine diesel engines pursuant to its authority under section
213(a)(3) and (4) of the CAA. EPA is promulgating emission standards
for new locomotives and new engines used in locomotives pursuant to its
authority under section 213(a)(5) of the CAA.
EPA has previously determined that certain existing locomotive
engines, when they are remanufactured, are returned to as-new condition
and are expected to have the same performance, durability, and
reliability as freshly-manufactured locomotive engines. Consequently we
set emission standards for these remanufactured engines that apply at
the time of remanufacture (defined as ``to replace, or inspect and
qualify, each and every power assembly of a locomotive or locomotive
engine, whether during a single maintenance event or cumulatively
within a five-year period * * *'' (see 61 FR 53102, October 4, 1996; 40
CFR 92.2). In this action we are adopting new tiers of standards for
both freshly manufactured and remanufactured locomotives and locomotive
engines.
In the proposal for this rulemaking we also discussed applying a
similar approach to marine diesel engines. Many marine diesel engines,
particularly those above 600 kW (800 hp), periodically undergo a
maintenance process that returns them to as-new condition. A full
rebuild that brings an engine back to as-new condition includes a
complete overhaul of the engine, including piston, rings, liners,
turbocharger, heads, bearings, and geartrain/camshaft removal and
replacement. Engine manufacturers typically provide instructions for
such a full rebuild. Marine diesel engine owners complete this process
to maintain engine reliability, durability, and performance over the
life of their vessel, and to avoid the need to repower (replace the
engine) before their vessel wears out. A commercial marine vessel can
be in operation in excess of 40 years, which means that a marine diesel
engine may be remanufactured to as-new condition three or more times
before the vessel is scrapped.
Because these remanufactured engines are returned to as-new
condition, section 213(a)(3) and (4) give EPA the authority to set
emission standards for those engines. We are adopting requirements for
remanufactured marine diesel engines, described in section III.B(2)(b)
of this action. For the purpose of this program, we are defining
remanufacture as the replacement of all cylinder liners, either in one
maintenance event or over the course of five years (for the purpose of
this program, ``replacement'' includes the removing, inspecting and
requalifying a liner). While replacement of cylinder liners is only one
element of a full rebuild, it is common to all rebuilds. Marine diesel
engines that do not have their cylinder liners replaced all at once or
within a five-year period, or that do not perform cylinder liner
replacement at all, are not considered to be returned to as-new
condition and therefore are not considered to be remanufactured. Those
engines will not be subject to the marine remanufacture requirements.
Pollutants That Can Be Regulated. CAA section 213(a)(3) directs the
Administrator to set NOX, volatile organic compounds (VOCs),
or carbon monoxide standards for classes or categories of engines such
as marine diesel engines that contribute to ozone or carbon monoxide
concentrations in more than one nonattainment area. These ``standards
shall achieve the greatest degree of emission reduction achievable
through the application of technology which the Administrator
determines will be available for the engines or vehicles, giving
appropriate consideration to cost, lead time, noise, energy, and safety
factors associated with the application of such technology.''
CAA section 213(a)(4) authorizes the Administrator to establish
standards to control emissions of pollutants which ``may reasonably be
anticipated to endanger public health and welfare'' where the
Administrator determines, as it has done for emissions of PM, that
nonroad engines as a whole contribute significantly to such air
pollution. The Administrator may promulgate regulations that are deemed
appropriate, taking into account costs, noise, safety, and energy
factors, for classes or categories of new nonroad vehicles and engines
which cause or contribute to such air pollution.
Level of the Standards. CAA section 213(a)(5) directs EPA to adopt
emission standards for new locomotives and new engines used in
locomotives that achieve the ``greatest degree of emissions reductions
achievable through the use of technology that the Administrator
determines will be available for such vehicles and engines, taking into
account the cost of applying such technology within the available time
period, the noise, energy, and safety factors associated with the
applications of such technology.'' Section 213(a)(5) does not require
any review of the contribution of locomotive emissions to pollution,
though EPA does provide such information in this rulemaking. As
described in section III of this preamble and in chapter 4 of the final
Regulatory Impact Analysis (RIA), EPA has evaluated the available
information to determine the technology that will be available for
locomotives and engines subject to EPA standards.
Certification and Implementation. EPA is also acting under its
authority to implement and enforce both the marine diesel emission
standards and the locomotive emission standards. Section 213(d)
provides that the standards EPA adopts for both new locomotive and
marine diesel engines ``shall be subject to sections 206, 207, 208, and
209'' of the Clean Air Act, with such modifications that the
Administrator deems appropriate to the regulations implementing these
sections. In addition, the locomotive and marine standards ``shall be
enforced in the same manner as [motor vehicle] standards prescribed
under section 202'' of the Act. Section 213(d) also grants EPA
authority to promulgate or revise regulations as necessary to determine
compliance with, and enforce, standards adopted under section 213.
Technological Feasibility and Cost of Standards. The evidence
provided in section III.C of this Preamble and in chapter 4 of the RIA
indicates that the stringent emission standards we are setting today
for newly-built and remanufactured locomotive and marine diesel engines
are feasible and reflect the greatest degree of emission reduction
achievable through the use of technology that will be available in the
model years to which they apply. We have given appropriate
consideration to costs in setting these standards. Our review of the
costs and cost-effectiveness of these standards indicate that they will
be reasonable and comparable to the cost-effectiveness of other
emission reduction strategies that EPA has required in prior
rulemakings. We have also reviewed and given appropriate consideration
to the energy factors of this rule in terms of fuel efficiency as well
as any safety and noise factors associated with these standards.
Health and Environmental Need for the Standards. The information in

[[Page 37103]]

section II of this Preamble and chapter 2 of the RIA regarding air
quality and public health impacts provides strong evidence that
emissions from marine diesel engines and locomotives significantly and
adversely impact public health or welfare. EPA has already found in
previous rules that emissions from new marine diesel engines contribute
to ozone and carbon monoxide concentrations in more than one area which
has failed to attain the ozone and carbon monoxide NAAQS (64 FR 73300,
December 29, 1999). EPA has also previously determined that it is
appropriate to establish PM standards for marine diesel engines under
section 213(a)(4), and the additional information on the
carcinogenicity of exposure to diesel exhaust noted above reinforces
this finding. In addition, we have already found that emissions from
nonroad engines as a whole significantly contribute to air pollution
that may reasonably be anticipated to endanger public welfare due to
regional haze and visibility impairment (67 FR 68241, Nov. 8, 2002). We
find here, based on the information in the NPRM and in section II of
this preamble and Chapters 2 and 3 of the final RIA, that emissions
from the new marine diesel engines likewise contribute to regional haze
and to visibility impairment.
The PM and NOX emission reductions resulting from these
standards are important to states' efforts in attaining and maintaining
the ozone and the PM2.5 NAAQS in the near term and in the
decades to come. As noted above, the risk to human health and welfare
will be significantly reduced by the standards finalized in today's
action.

II. Air Quality and Health Impacts

The locomotive and marine diesel engines subject to this final rule
generate significant emissions of particulate matter (PM) and nitrogen
oxides (NOX) that contribute to nonattainment of the
National Ambient Air Quality Standards (NAAQS) for PM2.5 and
ozone. These engines also emit hazardous air pollutants or air toxics
that are associated with serious adverse health effects and contribute
to visibility impairment and other harmful environmental impacts across
the U.S.
By 2030, these standards are expected to reduce annual locomotive
and marine diesel engine PM2.5 emissions by 27,000 tons;
NOX emissions by 800,000 tons; and volatile organic compound
(VOC) emissions by 43,000 tons as well as reducing carbon monoxide (CO)
and toxic compounds known as air toxics.\12\
---------------------------------------------------------------------------

\12\ Nationwide locomotive and marine diesel engines comprise
approximately 3 percent of the nonroad mobile sources hydrocarbon
inventory. EPA National Air Quality and Emissions Trends Report
1999. March 2001, Document Number: EPA 454/R-0-004. This document is
available in Docket EPA-HQ-OAR-2003-0190. This document is available
electronically at: http://www.epa.gov/air/airtrends/aqtrnd99/.
---------------------------------------------------------------------------

We project that reductions of PM2.5, NOX, and
VOC emissions from locomotive and marine diesel engines will produce
nationwide air quality improvements. According to air quality modeling
performed in conjunction with this rule, all 39 current
PM2.5 nonattainment areas will experience a decrease in
their projected 2030 design values. Likewise the 133 mandatory class I
federal areas that EPA modeled will all see improvements in their
visibility. This rule will also result in nationwide ozone benefits. In
2030, 573 counties (of 579 that have monitored data) experience at
least a 0.1 ppb decrease in their ozone design values.

A. Overview

From a public health perspective, we are concerned with locomotive
and marine diesel engines' contributions to atmospheric levels of
particulate matter in general, diesel PM2.5 in particular,
various gaseous air toxics, and ozone. Today, locomotive and marine
diesel engine emissions represent a substantial portion of the U.S.
mobile source diesel PM2.5 and NOX inventories,
approximately 20 percent of mobile source NOX and 25 percent
of mobile source diesel PM2.5. Over time, the relative
contribution of these diesel engines to air quality problems is
expected to increase as the emission contribution from other mobile
sources decreases and the usage of locomotives and marine vessels
increases. By 2030, without the additional emissions controls finalized
in today's rule, locomotive and marine diesel engines will emit about
65 percent of the total mobile source diesel PM2.5 emissions
and 35 percent of the total mobile source NOX emissions.
Based on the most recent data available for this rule, air quality
problems continue to persist over a wide geographic area of the United
States. As of October 10, 2007 there are approximately 88 million
people living in 39 designated areas (which include all or part of 208
counties) that either do not meet the current PM2.5 NAAQS or
contribute to violations in other counties, and 144 million people
living in 81 areas (which include all or part of 366 counties)
designated as not in attainment for the 8-hour ozone NAAQS. These
numbers do not include the people living in areas where there is a
significant future risk of failing to maintain or achieve either the
current or future PM2.5 or ozone NAAQS. Figure II-1
illustrates the widespread nature of these problems. This figure
depicts counties which are currently designated nonattainment for
either or both the 8-hour ozone NAAQS and PM2.5 NAAQS. It
also shows the location of mandatory class I federal areas for
visibility.
BILLING CODE 1505-01-D

[[Page 37104]]

[GRAPHIC] [TIFF OMITTED] TR06MY08.000

BILLING CODE 1505-01-C

[[Page 37105]]

The engine standards finalized in this rule will help reduce
emissions of PM, NOX, VOCs, CO, and air toxics and their
associated health and environmental effects. Emissions from locomotives
and diesel marine engines contribute to PM and ozone concentrations in
many, if not all, of these nonattainment areas.\13\ The engine
standards being finalized today will become effective as early as 2008,
making the expected PM2.5, NOX, and VOC inventory reductions
from this rulemaking critical to a number of states as they seek to
either attain or maintain the current PM2.5 or ozone NAAQS.
---------------------------------------------------------------------------

\13\ See section II.B.(1)(c) and II.B.(2)(c) for a summary of
the impact emission reductions from locomotive and marine diesel
engines will have on air quality in current PM2.5 and ozone
nonattainment areas.
---------------------------------------------------------------------------

Beyond the impact locomotive and marine diesel engines have on our
nation's ambient air quality the diesel exhaust emissions from these
engines are also of particular concern since exposure to diesel exhaust
is classified as likely to be carcinogenic to humans by inhalation from
environmental levels of exposure.\14\ Many people spend a large portion
of time in or near areas of concentrated locomotive or marine diesel
emissions, near rail yards, marine ports, railways, and waterways.
Recent studies show that populations living near large diesel emission
sources such as major roadways,\15\ rail yards \16\ and marine ports
\17\ are likely to experience greater diesel exhaust exposure levels
than the overall U.S. population, putting them at a greater health
risk.
---------------------------------------------------------------------------

\14\ U.S. EPA (2002) Health Assessment Document for Diesel
Engine Exhaust. EPA/600/8-90/057F. Office of Research and
Development, Washington, DC. This document is available in Docket
EPA-HQ-OAR-2003-0190. This document is available electronically at
http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060.
\15\ Kinnee, E.J.; Touma, J.S.: Mason, R.; Thurman, J.; Beidler,
A.; Bailey, C.; Cook, R. (2004) Allocation of onroad mobile
emissions to road segments for air toxics modeling in an urban area.
Transport. Res. Part D 9:139-150; also see Cohen, J.; Cook, R;
Bailey, C.R.; Carr, E. (2005) Relationship between motor vehicle
emissions of hazardous pollutants, roadway proximity, and ambient
concentrations in Portland, Oregon. Environ. Modeling & Software 20:
7-12.
\16\ Hand, R.; Di, P; Servin, A.; Hunsaker, L.; Suer, C. (2004)
Roseville Rail Yard Study. California Air Resources Board. This
document is available in Docket EPA-HQ-OAR-2003-0190. [Online at
http://www.arb.ca.gov/diesel/documents/rrstudy.htm].
\17\ Di P.; Servin, A.; Rosenkranz, K.; Schwehr, B.; Tran, H.
(April 2006); Diesel Particulate Matter Exposure Assessment Study
for the Ports of Los Angeles and Long Beach. State of California Air
Resources Board.
---------------------------------------------------------------------------

EPA recently conducted an initial screening-level analysis \18\ of
selected marine port areas and rail yards to better understand the
populations that are exposed to diesel particulate matter (DPM)
emissions from these facilities.^{19, 20} This screening-level
analysis focused on a representative selection of national marine ports
and rail yards.\21\ Of the 47 marine ports and 37 rail yards selected,
the results indicate that at least 13 million people, including a
disproportionate number of low-income households, African-Americans,
and Hispanics, living in the vicinity of these facilities, are being
exposed to ambient DPM levels that are 2.0 [mu]g/m³ and 0.2
[mu]g/m³ above levels found in areas further from these
facilities. Because those populations exposed to DPM emissions from
marine ports and rail yards are more likely to be low-income and
minority residents, these populations will benefit from the controls
being finalized in this action. The detailed findings of this study are
available in the public docket for this rulemaking.
---------------------------------------------------------------------------

\18\ This type of screening-level analysis is an inexact tool
and not appropriate for regulatory decision-making; it is useful in
beginning to understand potential impacts and for illustrative
purposes. Additionally, the emissions inventories used as inputs for
the analyses are not official estimates and likely underestimate
overall emissions because they are not inclusive of all emission
sources at the individual ports in the sample. For example, most
inventories included emissions from ocean-going vessels (powered by
Category 3 engines), as well as some commercial vessel categories,
including harbor crafts (powered by Category 1 and 2 engines), cargo
handling equipment, locomotives, and heavy-duty vehicles. This final
rule will not address emissions from ocean-going vessels, cargo
handling equipment or heavy-duty vehicles.
\19\ ICF International. September 28, 2007. Estimation of diesel
particulate matter concentration isopleths for marine harbor areas
and rail yards. Memorandum to EPA under Work Assignment Number 0-3,
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2003-0190.
\20\ ICF International. September 28, 2007. Estimation of diesel
particulate matter population exposure near selected harbor areas
and rail yards. Memorandum to EPA under Work Assignment Number 0-3,
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2003-0190.
\21\ The Agency selected a representative sample of the top 150
U.S. ports including coastal, inland and Great Lake ports. In
selecting a sample of rail yards the Agency identified a subset from
the hundreds of rail yards operated by Class I Railroads.
---------------------------------------------------------------------------

In the following sections we review important public health effects
linked to pollutants emitted from locomotive and marine diesel engines.
First, the human health effects caused by the pollutants and their
current and projected ambient levels are discussed. Following the
discussion of health effects, the modeled air quality benefits
resulting from this action and the welfare effects associated with
emissions from diesel engines are presented. Finally, the locomotive
and marine engine emission inventories for the primary pollutants
affected by this rule are provided. In summary, the emission reductions
from this rule will contribute to controlling the health and welfare
problems associated with ambient PM and ozone levels and with diesel-
related air toxics.
Taken together, the materials in this section and in the proposal
describe the need for tightened emission standards for both locomotive
and marine diesel engines and the air quality and public health
benefits resulting from this program. This section is not an exhaustive
treatment of these issues. For a fuller understanding of the topics
treated here, you should refer to the extended presentations in Chapter
2, 3 and 5 of the Regulatory Impact Analysis (RIA) accompanying this
final rule.

B. Public Health Impacts

(1) Particulate Matter
The locomotive and marine engine standards detailed in this action
will result in significant reductions in primary (directly emitted)
PM2.5 emissions. In addition, the standards finalized today will reduce
emissions of NOX and VOCs, which contribute to the formation
of secondary PM2.5. Locomotive and marine diesel engines emit high
levels of NOX, which react in the atmosphere to form
secondary PM2.5 (namely ammonium nitrate). These engines also emit SO2
and VOC, which react in the atmosphere to form secondary PM2.5 composed
of sulfates and organic carbonaceous PM2.5. This rule will reduce both
primary and secondary PM.

[[Page 37106]]

(a) Background
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. PM10 refers to particles
generally less than or equal to 10 micrometers ([mu]m) in diameter.
PM2.5 refers to fine particles, generally less than or equal to 2.5
[mu]m in diameter. Inhalable (or ``thoracic'') coarse particles refer
to those particles generally greater than 2.5 [mu]m but less than or
equal to 10 [mu]m in diameter. Ultrafine PM refers to particles less
than 100 nanometers (0.1 [mu]m) in diameter. Larger particles tend to
be removed by the respiratory clearance mechanisms (e.g. coughing),
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., SOx, NOX and
VOC) in the atmosphere. The chemical and physical properties of PM2.5
may vary greatly with time, region, meteorology, and source category.
Thus, PM2.5 may include a complex mixture of different pollutants
including sulfates, nitrates, organic compounds, elemental carbon and
metal compounds. These particles can remain in the atmosphere for days
to weeks and travel hundreds to thousands of kilometers.
The primary PM2.5 NAAQS includes a short-term (24-hour)
and a long-term (annual) standard. The 1997 PM2.5 NAAQS
established by EPA set the 24-hour standard at a level of 65 [mu]g/
m³ based on the 98th percentile concentration averaged over
three years. The annual standard specifies an expected annual
arithmetic mean not to exceed 15 [mu]g/m³ averaged over
three years.
EPA has recently amended the NAAQS for PM2.5 (71 FR
61144, October 17, 2006). The final rule, signed on September 21, 2006,
addressed revisions to the primary and secondary NAAQS for PM to
provide increased protection of public health and welfare,
respectively. The level of the 24-hour PM2.5 NAAQS was
revised from 65 [mu]g/m³ to 35 [mu]g/m³ and the
level of the annual PM2.5 NAAQS was retained at 15 [mu]g/
m³. With regard to the secondary standards for
PM2.5, EPA has revised these standards to be identical in
all respects to the revised primary standards.
(b) Health Effects of PM2.5
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), and the 2005 PM Staff Paper.^{22, 23} Further discussion
of health effects associated with PM can also be found in the RIA for
this rule.
---------------------------------------------------------------------------

\22\ U.S. EPA (2004) Air Quality Criteria for Particulate Matter
(Oct 2004), Volume I Document No. EPA600/P-99/002aF and Volume II
Document No. EPA600/P-99/002bF. This document is available in Docket
EPA-HQ-OAR-2003-0190.
\23\ U.S. EPA (2005) Review of the National Ambient Air Quality
Standard for Particulate Matter: Policy Assessment of Scientific and
Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. This
document is available in Docket EPA-HQ-OAR-2003-0190.
---------------------------------------------------------------------------

Health effects associated with short-term exposures (hours to days)
to ambient PM 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
PM2.5 and both total and cardiovascular and respiratory
mortality.\24\ In addition, a reanalysis of the American Cancer Society
Study shows an association between fine particle and sulfate
concentrations and lung cancer mortality.\25\
---------------------------------------------------------------------------

\24\ Dockery, DW; Pope, CA III: Xu, X; et al. 1993. An
association between air pollution and mortality in six U.S. cities.
N Engl J Med 329:1753-1759.
\25\ Pope, C. A., III; Burnett, R. T.; Thun, M. J.; Calle, E.
E.; Krewski, D.; Ito, K.; Thurston, G. D. (2002) Lung cancer,
cardiopulmonary mortality, and long-term exposure to fine
particulate air pollution. J. Am. Med. Assoc. 287:1132-1141.
---------------------------------------------------------------------------

The health effects of PM2.5 have been further documented
in local impact studies which have focused on health effects due to
PM2.5 exposures measured on or near roadways. These studies
take into account all air pollution sources, including both spark-
ignition (gasoline) and diesel powered vehicles, and indicate that
exposure to PM2.5 emissions near roadways, which are
dominated by mobile sources, are associated with potentially serious
health effects. For instance, a recent study found associations between
concentrations of cardiac risk factors in the blood of healthy young
police officers and PM2.5 concentrations measured in
vehicles.\26\ Also, a number of studies have shown associations between
residential or school outdoor concentrations of some fine particle
constituents that are found in motor vehicle exhaust, and adverse
respiratory outcomes, including asthma prevalence in children who live
near major roadways.^{27, 28, 29} Although the engines
considered in this rule differ from those in these studies with respect
to their applications and fuel qualities, these studies provide an
indication of the types of health effects that might be expected to be
associated with personal exposure to PM2.5 emissions from
large marine diesel and locomotive engines.
---------------------------------------------------------------------------

\26\ Riediker, M.; Cascio, W.E.; Griggs, T.R.; et al. (2004)
Particulate matter exposure in cars is associated with
cardiovascular effects in healthy young men. Am J Respir Crit Care
Med 169: 934-940.
\27\ Van Vliet, P.; Knape, M.; de Hartog, J.; Janssen, N.;
Harssema, H.; Brunekreef, B. (1997). Motor vehicle exhaust and
chronic respiratory symptoms in children living near freeways. Env.
Research 74: 122-132.
\28\ Brunekreef, B., Janssen, N.A.H.; de Hartog, J.; Harssema,
H.; Knape, M.; van Vliet, P. (1997). Air pollution from truck
traffic and lung function in children living near roadways.
Epidemiology 8:298-303.
\29\ Kim, J.J.; Smorodinsky, S.; Lipsett, M.; Singer, B.C.;
Hodgson, A.T.; Ostro, B. (2004). Traffic-related air pollution near
busy roads: The East Bay children's respiratory health study. Am. J.
Respir. Crit. Care Med. 170: 520-526.
---------------------------------------------------------------------------

Recent new studies from the State of California provide evidence
that PM2.5 emissions within marine ports and rail yards can
contribute significantly to elevated ambient concentrations near these
sources.^{30, 31} A substantial number of people experience
exposure to locomotive and marine diesel engine emissions, raising
potential health concerns. The controls finalized in this action will
help reduce exposure to PM2.5, specifically exposure to
marine port and rail yard related diesel PM2.5 sources.
Additional information on marine port and rail yard emissions and
ambient exposures can be found in Chapter 2 of the RIA.
---------------------------------------------------------------------------

\30\ State of California Air Resources Board. Roseville Rail
Yard Study. Stationary Source Division, October 14, 2004. This
document is available in Docket EPA-HQ-OAR-2003-0190. This document
is available electronically at: http://www.arb.ca.gov/diesel/
documents/rrstudy.htm.
\31\ State of California Air Resources Board. Diesel Particulate
Matter Exposure Assessment Study for the Ports of Los Angeles and
Long Beach, April 2006. This document is available in Docket EPA-HQ-
OAR-2003-0190. This document is available electronically at: ftp://
ftp.arb.ca.gov/carbis/msprog/offroad/marinevess/documents/
portstudy0406.pdf.
---------------------------------------------------------------------------

[[Page 37107]]

PM2.5 concentrations exceeding the level of the
PM2.5 NAAQS occur in many parts of the country.\32\ In 2005
EPA designated 39 nonattainment areas for the 1997 PM2.5
NAAQS (70 FR 943, January 5, 2005). These areas are comprised of 208
full or partial counties with a total population exceeding 88 million.
The 1997 PM2.5 NAAQS was recently revised and the 2006
PM2.5 NAAQS became effective on December 18, 2006. Table II-
1 presents the number of counties in areas currently designated as
nonattainment for the 1997 PM2.5 NAAQS as well as the number
of additional counties that have monitored data that is violating the
2006 PM2.5 NAAQS.

Table II-1.--Fine Particle Standards: Current Nonattainment Areas and
Other Violating Counties
------------------------------------------------------------------------
Nonattainment areas/other violating Number of
counties counties Population a
------------------------------------------------------------------------
1997 PM2.5 Standards: 39 areas currently 208 88,394,000
designated.............................
2006 PM2.5 Standards: counties with 49 18,198,676
violating monitors b...................
-------------------------------
Total............................... 257 106,595,676
------------------------------------------------------------------------
Notes:
(a) Population numbers are from 2000 census data.
(b) This table provides an estimate of the counties violating the 2006
PM2.5 NAAQS based on 2003-05 air quality data. The areas designated as
nonattainment for the 2006 PM2.5 NAAQS will be based on 3 years of air
quality data from later years. Also, the county numbers in the summary
table includes only the counties with monitors violating the 2006
PM2.5 NAAQS. The monitored county violations may be an underestimate
of the number of counties and populations that will eventually be
included in areas with multiple counties designated nonattainment.

A number of state governments have told EPA that they need the
reductions this rule will provide in order to meet and maintain the
PM2.5 NAAQS. Areas designated as not attaining the 1997
PM2.5 NAAQS will need to attain the 1997 standards in the
2010 to 2015 time frame, and then maintain them thereafter. The
attainment dates associated with the potential new 2006
PM2.5 nonattainment areas are likely to be in the 2015 to
2020 timeframe. The emission standards finalized in this action become
effective as early as 2008 making the NOX, PM, and VOC
inventory reductions from this rulemaking useful to states in attaining
or maintaining the PM2.5 NAAQS.
---------------------------------------------------------------------------

\32\ A listing of the PM2.5 nonattainment areas is
included in the RIA for this rule.
---------------------------------------------------------------------------

EPA has already adopted many emission control programs that are
expected to reduce ambient PM2.5 levels and which will
assist in reducing the number of areas that fail to achieve the
PM2.5 NAAQS. Even so, our air quality modeling for this
final rule projects that in 2020, with all current controls but
excluding the reductions achieved through this rule, up to 11 counties
with a population of 24 million may not attain the current annual
PM2.5 standard of 15 [mu]g/m³. These numbers do
not account for additional areas that have air quality measurements
within 10 percent of the annual PM2.5 standard. These areas,
although not violating the standards, will also benefit from the
additional reductions from this rule ensuring long-term maintenance of
the PM2.5 NAAQS.
Air quality modeling performed for this final rule shows that in
2020 and 2030 all 39 current PM2.5 nonattainment areas will
experience decreases in their PM2.5 design values. For areas
with current PM2.5 design values greater than 15 [mu]g/
m³ the modeled future-year population weighted
PM2.5 design values are expected to decrease on average by
0.08 [mu]g/m³ in 2020 and by 0.16 [mu]g/m³ in
2030. The maximum decrease for future-year PM2.5 design
values will be 0.38 [mu]g/m³ in 2020 and 0.81 [mu]g/
m³ in 2030. The air quality modeling methodology and the
projected reductions are discussed in more detail in Chapter 2 of the
RIA.
(2) Ozone
The locomotive and marine engine standards finalized in this action
are expected to result in significant reductions of NOX and
VOC emissions. NOX and VOC contribute to the formation of
ground-level ozone pollution or smog. People in many areas across the
U.S. continue to be exposed to unhealthy levels of ambient ozone.
(a) Background
Ground-level ozone pollution is typically formed by the reaction of
volatile organic compounds (VOC) and nitrogen oxides (NOX)
in the lower atmosphere in the presence of heat and sunlight. These
pollutants, often referred to as ozone precursors, are emitted by many
types of pollution sources, such as highway and nonroad motor vehicles
and engines, power plants, chemical plants, refineries, makers of
consumer and commercial products, industrial facilities, and smaller
area sources.
The science of ozone formation, transport, and accumulation is
complex.\33\ Ground-level ozone is produced and destroyed in a cyclical
set of chemical reactions, many of which are sensitive to temperature
and sunlight. When ambient temperatures and sunlight levels remain high
for several days and the air is relatively stagnant, ozone and its
precursors can build up and result in more ozone than typically occurs
on a single high-temperature day. Ozone can also be transported into an
area from pollution sources found hundreds of miles upwind, resulting
in elevated ozone levels even in areas with low local VOC or
NOX emissions.
---------------------------------------------------------------------------

\33\ U.S. EPA Air Quality Criteria for Ozone and Related
Photochemical Oxidants (Final). U.S. Environmental Protection
Agency, Washington, DC, EPA 600/R-05/004aF-cF, 2006. This document
is available in Docket EPA-HQ-OAR-2003-0190. This document may be
accessed electronically at: http://www.epa.gov/ttn/naaqs/standards/
ozone/s_o3_cr_cd.html.
---------------------------------------------------------------------------

The current ozone NAAQS, established by EPA in 1997, has an 8-hour
averaging time. 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 ppm. On June 20, 2007, EPA proposed to
strengthen the ozone NAAQS, the proposed revisions reflect new
scientific evidence about ozone and its effects on people and public
welfare.\34\ The final

[[Page 37108]]

ozone NAAQS rule is scheduled for March 2008.
---------------------------------------------------------------------------

\34\ EPA proposed to set the 8-hour primary ozone standard to a
level within the range of 0.070-0.075 ppm. The agency also requested
comments on alternative levels of the 8-hour primary ozone standard,
within a range from 0.060 ppm up to and including retention of the
current standard (0.084 ppm). EPA also proposed two options for the
secondary ozone standard. One option would establish a new form of
standard designed specifically to protect sensitive plants from
damage caused by repeated ozone exposure throughout the growing
season. This cumulative standard would add daily ozone
concentrations across a three-month period. EPA proposed to set the
level of the cumulative standard within the range of 7 to 21 ppm-
hours. The other option would follow the current practice of making
the secondary standard equal to the proposed 8-hour primary
standard.
---------------------------------------------------------------------------

(b) Health Effects of Ozone
The health and welfare effects of ozone are well documented and are
assessed in EPA's 2006 ozone Air Quality Criteria Document (ozone AQCD)
and EPA Staff Paper.^{35, 36} Ozone can irritate the
respiratory system, causing coughing, throat irritation, and/or
uncomfortable sensation in the chest. Ozone can reduce lung function
and make it more difficult to breathe deeply; breathing may also become
more rapid and shallow than normal, thereby limiting a person's
activity. Ozone can also aggravate asthma, leading to more asthma
attacks that require medical attention and/or the use of additional
medication. There is evidence of an elevated risk of mortality
associated with acute exposure to ozone, especially in the summer or
warm season when ozone levels are typically high. Animal toxicological
evidence indicates that with repeated exposure, ozone can inflame and
damage the lining of the lungs, which may lead to permanent changes in
lung tissue and irreversible reductions in lung function. People who
are more susceptible to effects associated with exposure to ozone can
include children, the elderly, and individuals with respiratory disease
such as asthma. Those with greater exposures to ozone, for instance due
to time spent outdoors (e.g., children and outdoor workers), are also
of particular concern.
---------------------------------------------------------------------------

\35\ U.S. EPA Air Quality Criteria for Ozone and Related
Photochemical Oxidants (Final). U.S. Environmental Protection
Agency, Washington, DC, EPA 600/R-05/004aF-cF, 2006. This document
is available in Docket EPA-HQ-OAR-2003-0190. This document may be
accessed electronically at: http://www.epa.gov/ttn/naaqs/standards/
ozone/s_o3_cr_cd.html.
\36\ U.S. EPA (2007) Review of the National Ambient Air Quality
Standards for Ozone, Policy Assessment of Scientific and Technical
Information. OAQPS Staff Paper.EPA-452/R-07-003. This document is
available in Docket EPA-HQ-OAR-2003-0190. This document is available
electronically at: http:www.epa.gov/ttn/naaqs/standards/ozone/s_
o3_cr_.html.
---------------------------------------------------------------------------

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 toxicological studies have
suggested potential interactions between ozone and PM with increased
responses observed to mixtures of the two pollutants compared to either
ozone or PM alone. The respiratory morbidity observed in animal studies
along with the evidence from epidemiologic studies supports a causal
relationship between acute ambient ozone exposures and increased
respiratory-related emergency room visits and hospitalizations in the
warm season. In addition, there is suggestive evidence of a
contribution of ozone to cardiovascular-related morbidity and non-
accidental and cardiopulmonary mortality.
(c) Current and Projected Ozone Levels
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.\37\ As of October 10, 2007, there were
approximately 144 million people living in 81 areas (which include all
or part of 366 counties) designated as not in attainment with the 8-
hour ozone NAAQS. These numbers do not include the people living in
areas where there is a future risk of failing to maintain or attain the
8-hour ozone NAAQS.
---------------------------------------------------------------------------

\37\ A listing of the 8-hour ozone nonattainment areas is
included in the RIA for this rule.
---------------------------------------------------------------------------

States with 8-hour ozone nonattainment areas are required to take
action to bring those areas into compliance in the future. Based on the
final rule designating and classifying 8-hour ozone nonattainment areas
(69 FR 23951, April 30, 2004), most 8-hour ozone nonattainment areas
will be required to attain the ozone NAAQS in the 2007 to 2013 time
frame and then maintain the NAAQS thereafter.\38\ Many of these
nonattainment areas will need to adopt additional emission reduction
programs and the NOX and VOC reductions from this final
action are particularly important for these states. In addition, EPA's
review of the ozone NAAQS is currently underway with a final rule
scheduled for March 2008. If the ozone NAAQS is revised then new
nonattainment areas will be designated. While EPA is not relying on it
for purposes of justifying this rule, the emission reductions from this
rulemaking will also be helpful to states if EPA revises the ozone
NAAQS to be more stringent.
---------------------------------------------------------------------------

\38\ The Los Angeles South Coast Air Basin 8-hour ozone
nonattainment area will have to attain before June 15, 2021.
---------------------------------------------------------------------------

EPA has already adopted many emission control programs that are
expected to reduce ambient ozone levels. These control programs are
described in section I.B.1 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 air quality
modeling performed for this rule, which does not include any additional
local controls, we estimate nine counties (where 22 million people are
projected to live) will exceed the 8-hour ozone NAAQS in 2020.\39\ An
additional 39 counties (where 29 million people are projected to live)
are expected to be within 10 percent of violating the 8-hour ozone
NAAQS in 2020.
---------------------------------------------------------------------------

\39\ We expect many of the 8-hour ozone nonattainment areas to
adopt additional emission reduction programs but we are unable to
quantify or rely upon future reductions from additional state and
local programs that have not yet been adopted.
---------------------------------------------------------------------------

This rule results in reductions in nationwide ozone levels. The air
quality modeling projects that in 2030, 573 counties (of 579 that have
monitored data) experience at least a 0.1 ppb decrease in their ozone
design values. There are three nonattainment areas in southern
California, the Los Angeles-South Coast Air Basin nonattainment area,
the Riverside Co. (Coachella Valley) nonattainment area and the Los
Angeles--San Bernardino (W. Mojave) nonattainment area, which will
experience 8-hour ozone design value increases due to the
NOX disbenefits which occur in these VOC-limited ozone
nonattainment areas. Briefly, NOX reductions at certain
times and in some areas can lead to increased ozone levels. The air
quality modeling methodology (Section 2.3), the projected reductions
(Section 2.2.4), and the limited NOX disbenefits (Section
2.2.4.2.1), are discussed in more detail in Chapter 2 of the RIA.
Results from the air quality modeling conducted for this final rule
indicate that the locomotive and marine diesel engine emission
reductions in 2020 and 2030 will improve both the average and
population-weighted average ozone concentrations for the U.S. In
addition, the air quality modeling shows that on average this final
rule will help bring counties closer to ozone attainment as well as
assist counties whose ozone concentrations are within ten percent below
the standard. For example, in projected nonattainment counties, on a
population-weighted basis, the 8-hour ozone design value will on
average decrease by 0.13 ppb in 2020 and 0.62 ppb in 2030.\40\
---------------------------------------------------------------------------

\40\ Ozone design values are reported in parts per million (ppm)
as specified in 40 CFR part 50. Due to the scale of the design value
changes in this action, results have been presented in parts per
billion (ppb) format.
---------------------------------------------------------------------------

The impact of the reductions has also been analyzed with respect to
those areas that have the highest design

[[Page 37109]]

values, at or above 85 ppb, in 2020. We project there will be nine U.S.
counties with design values at or above 85 ppb in 2020. After
implementation of this rule, we project that one of these nine counties
will drop below 85 ppb. Further, two of the nine counties will be at
least 10 percent closer to a design value of less than 85 ppb, and on
average all nine counties will be about 18 percent closer to a design
value of less than 85 ppb.
(3) Air Toxics
People experience elevated risk of cancer and other noncancer
health effects from exposure to the class of pollutants known
collectively as ``air toxics''. Mobile sources are responsible for a
significant portion of this exposure. According to the National Air
Toxic Assessment (NATA) for 1999, mobile sources, including locomotive
and marine diesel marine engines, were responsible for 44 percent of
outdoor toxic emissions and almost 50 percent of the cancer risk among
the 133 pollutants quantitatively assessed in the 1999 NATA. Benzene is
the largest contributor to cancer risk of all the assessed pollutants
and mobile sources were responsible for about 68 percent of all benzene
emissions in 1999. Although the 1999 NATA did not quantify cancer risks
associated with exposure to diesel exhaust, EPA has concluded that
diesel exhaust ranks with other emissions that the national-scale
assessment suggests pose the greatest relative risk.
According to the 1999 NATA, nearly the entire U.S. population was
exposed to an average level of air toxics that has the potential for
adverse respiratory noncancer health effects. This potential was
indicated by a hazard index (HI) greater than 1.\41\ Mobile sources
were responsible for 74 percent of the potential noncancer hazard from
outdoor air toxics in 1999. About 91 percent of this potential
noncancer hazard was from acrolein; \42\ however, the confidence in the
RfC for acrolein is medium \43\ and confidence in NATA estimates of
population noncancer hazard from ambient exposure to this pollutant is
low.\44\ It is important to note that NATA estimates of noncancer
hazard do not include the adverse health effects associated with
particulate matter identified in EPA's Particulate Matter Air Quality
Criteria Document. Gasoline and diesel engine emissions contribute
significantly to particulate matter concentration.
---------------------------------------------------------------------------

\41\ To express chronic noncancer hazards, we used the RfC as
part of a calculation called the hazard quotient (HQ), which is the
ratio between the concentration to which a person is exposed and the
RfC. (RfC is defined by EPA as, ``an estimate of a continuous
inhalation exposure to the human population, including sensitive
subgroups, with uncertainty spanning perhaps an order of magnitude,
which is likely to be without appreciable risks of deleterious
noncancer effects during a lifetime.'') A value of the HQ less than
one indicates that the exposure is lower than the RfC and that no
adverse health effects would be expected. Combined noncancer hazards
were calculated using the hazard index (HI), defined as the sum of
hazard quotients for individual air toxic compounds that affect the
same target organ or system. As with the hazard quotient, a value of
the HI at or below 1.0 will likely not result in adverse effects
over a lifetime of exposure. However, a value of the HI greater than
1.0 does not necessarily suggest a likelihood of adverse effects.
Furthermore, the HI cannot be translated into a probability that
adverse effects will occur and is not likely to be proportional to
risk.
\42\ U.S. EPA (2006) National-Scale Air Toxics Assessment for
1999. This material is available electronically at http://
www.epa.gov/ttn/atw/nata1999/risksum.html.
\43\ U.S. EPA (2003) Integrated Risk Information System File of
Acrolein. National Center for Environmental Assessment, Office of
Research and Development, Washington, D.C. 2003. This material is
available electronically at http://www.epa.gov/iris/subst/0364.htm.
\44\ U.S. EPA (2006) National-Scale Air Toxics Assessment for
1999. This material is available electronically at http://
www.epa.gov/ttn/atw/nata1999/risksum.html.
---------------------------------------------------------------------------

The NATA modeling framework has a number of limitations which
prevent its use as the sole basis for setting regulatory standards.
These limitations and uncertainties are discussed on the 1999 NATA
website.\45\ Even so, this modeling framework is very useful in
identifying air toxic pollutants and sources of greatest concern,
setting regulatory priorities, and informing the decision making
process.
---------------------------------------------------------------------------

\45\ U.S. EPA (2006) National-Scale Air Toxics Assessment for
1999. http://www.epa.gov/ttn/atw/nata1999.
---------------------------------------------------------------------------

The following section provides a brief overview of air toxics which
are associated with nonroad engines, including locomotive and marine
diesel engines, and provides a discussion of the health risks
associated with each air toxic.
(a) Diesel Exhaust (DE)
Locomotive and marine diesel engines emit diesel exhaust (DE), a
complex mixture comprised of carbon dioxide, oxygen, nitrogen, water
vapor, carbon monoxide, nitrogen compounds, sulfur compounds and
numerous low-molecular-weight hydrocarbons. A number of these gaseous
hydrocarbon components are individually known to be toxic, including
aldehydes, benzene and 1,3-butadiene. The diesel particulate matter
(DPM) present in diesel exhaust consists of fine particles (< 2.5
[mu]m), including a subgroup with a large number of ultrafine particles
(< 0.1 [mu]m). These particles have a large surface area which makes
them an excellent medium for adsorbing organics and their small size
makes them highly respirable and able to reach the deep lung. Many of
the organic compounds present on the particles and in the gases are
individually known to have mutagenic and carcinogenic properties.
Diesel exhaust varies significantly in chemical composition and
particle sizes between different engine types (heavy-duty, light-duty),
engine operating conditions (idle, accelerate, decelerate), and fuel
formulations (high/low sulfur fuel). Also, there are emissions
differences between on-road and nonroad engines because the nonroad
engines are generally of older technology. This is especially true for
locomotive and marine diesel engines.\46\
---------------------------------------------------------------------------

\46\ U.S. EPA (2002) Health Assessment Document for Diesel
Engine Exhaust. EPA/600/8-90/057F Office of Research and
Development, Washington DC. Pp1-1 1-2. This document is available
electronically at http://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=29060. This document can be found in Docket
EPA-HQ-OAR-2003-0190.
---------------------------------------------------------------------------

After being emitted in the engine exhaust, diesel exhaust undergoes
dilution as well as chemical and physical changes in the atmosphere.
The lifetime for some of the compounds present in diesel exhaust ranges
from hours to days.
(i) Diesel Exhaust: Potential Cancer Effects
In EPA's 2002 Diesel Health Assessment Document (Diesel HAD),\47\
exposure to diesel exhaust was classified as likely to be carcinogenic
to humans by inhalation from environmental exposures, in accordance
with the revised draft 1996/1999 EPA cancer guidelines. A number of
other agencies (National Institute for Occupational Safety and Health,
the International Agency for Research on Cancer, the World Health
Organization, California EPA, and the U.S. Department of Health and
Human Services) have made similar classifications. However, EPA also
concluded in the Diesel HAD that it is not possible currently to
calculate a cancer unit risk for diesel exhaust due to a variety of
factors that limit the current studies, such as limited quantitative
exposure histories in occupational groups investigated for lung cancer.
---------------------------------------------------------------------------

\47\ U.S. EPA (2002) Health Assessment Document for Diesel
Engine Exhaust. EPA/600/8-90/057F Office of Research and
Development, Washington, DC. This document is available
electronically at http://cfpub.epa.gov/ncea/cfm/
recordisplay.cfm?deid=29060. This document can be found in Docket
EPA-HQ-OAR-2003-0190.
---------------------------------------------------------------------------

For the Diesel HAD, EPA reviewed 22 epidemiologic studies on the
subject of the carcinogenicity of workers exposed

[[Page 37110]]

to diesel exhaust in various occupations, finding increased lung cancer
risk, although not always statistically significant, in 8 out of 10
cohort studies and 10 out of 12 case-control studies within several
industries, including railroad workers. Relative risk for lung cancer
associated with exposure ranged from 1.2 to 1.5, although a few studies
show relative risks as high as 2.6. Additionally, the Diesel HAD also
relied on two independent meta-analyses, which examined 23 and 30
occupational studies respectively, which found statistically
significant increases in smoking-adjusted relative lung cancer risk
associated with exposure to diesel exhaust, of 1.33 to 1.47. These
meta-analyses demonstrate the effect of pooling many studies and in
this case show the positive relationship between diesel exhaust
exposure and lung cancer across a variety of diesel exhaust-exposed
occupations.^{48, 49}
---------------------------------------------------------------------------

\48\ Bhatia, R., Lopipero, P., Smith, A. (1998) Diesel exposure
and lung cancer. Epidemiology 9(1):84-91.
\49\ Lipsett, M; Campleman, S; (1999) Occupational exposure to
diesel exhaust and lung cancer: a meta-analysis. Am J Public Health
80(7): 1009-1017.
---------------------------------------------------------------------------

In the absence of a cancer unit risk, the Diesel HAD sought to
provide additional insight into the significance of the diesel exhaust-
cancer hazard by estimating possible ranges of risk that might be
present in the population. An exploratory analysis was used to
characterize a possible risk range by comparing a typical environmental
exposure level for highway diesel sources to a selected range of
occupational exposure levels. The occupationally observed risks were
then proportionally scaled according to the exposure ratios to obtain
an estimate of the possible environmental risk. A number of
calculations are needed to accomplish this, and these can be seen in
the EPA Diesel HAD. The outcome was that environmental risks from
diesel exhaust exposure could range from a low of 10^-4 to
10^-5 to as high as 10^-3, reflecting the range of
occupational exposures that could be associated with the relative and
absolute risk levels observed in the occupational studies. Because of
uncertainties, the analysis acknowledged that the risks could be lower
than 10^-4 or 10^-5, and a zero risk from diesel
exhaust exposure was not ruled out.
Retrospective health studies of railroad workers have played an
important part in determining that exposure to diesel exhaust is likely
to be carcinogenic to humans by inhalation from environmental
exposures. Key evidence of the diesel exhaust exposure linkage to lung
cancer comes from two retrospective case-control studies of railroad
workers which are discussed at length in the Diesel HAD and summarized
in Chapter 2 of the RIA.
(ii) Diesel Exhaust: Other Health Effects
Noncancer health effects of acute and chronic exposure to diesel
exhaust emissions are also of concern to the EPA. EPA derived a diesel
exhaust reference concentration (RfC) from consideration of four well-
conducted chronic rat inhalation studies showing adverse pulmonary
effects.^{50, 51,}^{52, 53} The RfC is 5 [mu]g/
m³ for diesel exhaust as measured by diesel PM. This RfC
does not consider allergenic effects such as those associated with
asthma or immunologic effects. There is growing evidence, discussed in
the Diesel HAD, that exposure to diesel exhaust can exacerbate these
effects, but the exposure-response data are presently lacking to derive
an RfC. The EPA Diesel HAD states, ``With DPM [diesel particulate
matter] being a ubiquitous component of ambient PM, there is an
uncertainty about the adequacy of the existing DE [diesel exhaust]
noncancer database to identify all of the pertinent DE-caused noncancer
health hazards.'' (p. 9-19). The Diesel HAD concludes ``that acute
exposure to DE [diesel exhaust] has been associated with irritation of
the eye, nose, and throat, respiratory symptoms (cough and phlegm), and
neurophysiological symptoms such as headache, lightheadedness, nausea,
vomiting, and numbness or tingling of the extremities.'' \54\
---------------------------------------------------------------------------

\50\ Ishinishi, N; Kuwabara, N; Takaki, Y; et al. (1988) Long-
term inhalation experiments on diesel exhaust. In: Diesel exhaust
and health risks. Results of the HERP studies. Ibaraki, Japan:
Research Committee for HERP Studies; pp. 11-84.
\51\ Heinrich, U; Fuhst, R; Rittinghausen, S; et al. (1995)
Chronic inhalation exposure of Wistar rats and two different strains
of mice to diesel engine exhaust, carbon black, and titanium
dioxide. Inhal. Toxicol. 7:553-556.
\52\ Mauderly, JL; Jones, RK; Griffith, WC; et al. (1987) Diesel
exhaust is a pulmonary carcinogen in rats exposed chronically by
inhalation. Fundam. Appl. Toxicol. 9:208-221.
\53\ Nikula, KJ; Snipes, MB; Barr, EB; et al. (1995) Comparative
pulmonary toxicities and carcinogenicities of chronically inhaled
diesel exhaust and carbon black in F344 rats. Fundam. Appl. Toxicol.
25:80-94.
\54\ ``Health Assessment Document for Diesel Engine Exhaust,''
U.S. Environmental Protection Agency, 600/8-90/057F, http://
www.epa.gov/ttn/atw/dieselfinal.pdf, May 2002, p. 9-9.
---------------------------------------------------------------------------

Exposure to diesel exhaust has also been shown to cause serious
noncancer effects in occupational exposure studies. One study of
railroad workers and electricians, cited in the Diesel HAD,\55\ found
that exposure to diesel exhaust resulted in neurobehavioral impairments
in one or more areas including reaction time, balance, blink reflex
latency, verbal recall, and color vision confusion indices. Pulmonary
function tests also showed that 10 of the 16 workers had airway
obstruction and another group of 10 of 16 workers had chronic
bronchitis, chest pain, tightness, and hyperactive airways. Finally, a
variety of studies have been published subsequent to the completion of
the Diesel HAD. One such study, published in 2006,\56\ found that
railroad engineers and conductors with diesel exhaust exposure from
operating trains had an increased incidence of chronic obstructive
pulmonary disease (COPD) mortality. The odds of COPD mortality
increased with years on the job so that those who had worked more than
16 years as an engineer or conductor after 1959 had an increased risk
of 1.61 (95% confidence interval, 1.12-2.30). EPA is assessing the
significance of this study within the context of the broader
literature.
---------------------------------------------------------------------------

\55\ Kilburn (2000) See HAD Chapter 5-7.
\56\ Hart, JE; Laden F; Schenker, M.B.; and Garshick, E. Chronic
Obstructive Pulmonary Disease Mortality in Diesel-Exposed Railroad
Workers; Environmental Health Perspective July 2006: 1013-1016.
---------------------------------------------------------------------------

(iii) Ambient PM2.5 Levels and Exposure to Diesel Exhaust PM
The Diesel HAD also briefly summarizes health effects associated
with ambient PM and discusses the EPA's annual PM2.5 NAAQS
of 15 [mu]g/m\3\. There is a much more extensive body of human data
showing a wide spectrum of adverse health effects associated with
exposure to ambient PM, of which diesel exhaust is an important
component. The PM2.5 NAAQS is designed to provide protection from the
noncancer and premature mortality effects of PM2.5 as a whole.
(iv) Diesel Exhaust PM Exposures
Exposure of people to diesel exhaust depends on their various
activities, the time spent in those activities, the locations where
these activities occur, and the levels of diesel exhaust pollutants in
those locations. The major difference between ambient levels of diesel
particulate and exposure levels for diesel particulate is that exposure
accounts for a person moving from location to location, proximity to
the emission source, and whether the exposure occurs in an enclosed
environment.

Occupational Exposures

Occupational exposures to diesel exhaust from mobile sources,
including

[[Page 37111]]

locomotive engines and marine diesel engines, can be several orders of
magnitude greater than typical exposures in the non-occupationally
exposed population.
Over the years, diesel particulate exposures have been measured for
a number of occupational groups. A wide range of exposures have been
reported, from 2 [mu]g/m³ to 1,280 [mu]g/m³, for
a variety of occupations. Studies have shown that miners and railroad
workers typically have higher diesel exposure levels than other
occupational groups studied, including firefighters, truck dock
workers, and truck drivers (both short and long haul).\57\ As discussed
in the Diesel HAD, the National Institute of Occupational Safety and
Health (NIOSH) has estimated a total of 1,400,000 workers are
occupationally exposed to diesel exhaust from on-road and nonroad
vehicles including locomotive and marine diesel engines.
---------------------------------------------------------------------------

\57\ Diesel HAD Page 2-110, 8-12; Woskie, SR; Smith, TJ;
Hammond, SK: et al. (1988a) Estimation of the DE exposures of
railroad workers: II. National and historical exposures. Am J Ind
Med 12:381-394.
---------------------------------------------------------------------------

Elevated Concentrations and Ambient Exposures in Mobile Source-Impacted
Areas

Regions immediately downwind of rail yards and marine ports may
experience elevated ambient concentrations of directly-emitted
PM2.5 from diesel engines. Due to the unique nature of rail
yards and marine ports, emissions from a large number of diesel engines
are concentrated in a small area. Furthermore, emissions occur at or
near ground level, allowing emissions of diesel engines to reach nearby
receptors without fully mixing with background air.
A 2004 study conducted by the California Air Resources Board (CARB)
examined the air quality impacts of railroad operations at the J.R.
Davis Rail Yard, the largest service and maintenance rail facility in
the western United States.\58\ The yard occupies 950 acres along a one-
quarter mile wide and four-mile long section of land in Roseville, CA.
The study developed an emissions inventory for the facility for the
year 2000 and modeled ambient concentrations of diesel PM using a well-
accepted dispersion model (ISCST3). The study estimated substantially
elevated diesel PM concentrations in an area 5,000 meters from the
facility, with higher concentrations closer to the rail yard. Using
local meteorological data, annual average contributions from the rail
yard to ambient diesel PM concentrations under prevailing wind
conditions were 1.74, 1.18, 0.80, and 0.25 [mu]g/m³ at
receptors located 200, 500, 1000, and 5000 meters from the yard,
respectively. Several tens of thousands of people live within the area
estimated to experience substantial increases in annual average ambient
PM2.5 as a result of these rail yard emissions.
---------------------------------------------------------------------------

\58\ Hand, R.; Pingkuan, D.; Servin, A.; Hunsaker, L.; Suer, C.
(2004) Roseville rail yard study. California Air Resources Board.
[Online at http://www.arb.ca.gov/diesel/documents/rrstudy.htm] This
document can be found in Docket EPA-HQ-OAR-2003-0190.
---------------------------------------------------------------------------

Another study from CARB evaluated air quality impacts of diesel
engine emissions within the Ports of Long Beach and Los Angeles in
California, one of the largest ports in the U.S.\59\ Like the earlier
rail yard study, the port study employed the ISCST3 dispersion model.
Using local meteorological data, annual average concentrations were
substantially elevated over an area exceeding 200,000 acres. Because
the ports are located near heavily-populated areas, the modeling
indicated that over 700,000 people lived in areas with at least 0.3
[mu]g/m\3\ of port-related diesel PM in ambient air, about 360,000
people lived in areas with at least 0.6 [mu]g/m³ of diesel
PM, and about 50,000 people lived in areas with at least 1.5 ug/
m³ of ambient diesel PM directly from the port. Most
recently, CARB released several additional Railyard Health Risk
Assessments which all show that diesel PM emissions result in
significantly higher pollution risks in nearby communities.\60\
Together these studies highlight the substantial contribution these
facilities make to elevated ambient concentrations in populated areas.
---------------------------------------------------------------------------

\59\ State of California Air Resources Board. Diesel Particulate
Matter Exposure Assessment Study for the Ports of Los Angeles and
Long Beach, April 2006. This document is available in Docket EPA-HQ-
OAR-2003-0190. This document is available electronically at: ftp://
ftp.arb.ca.gov/carbis/msprog/offroad/marinevess/documents/
portstudy0406.pdf.
\60\ These studies are available in Docket EPA-HQ-OAR-2003-0190.
Studies are also available at http://www.arb.ca.gov/railyard/hra/
hra.htm.
---------------------------------------------------------------------------

As mentioned in section II.A of this preamble, EPA recently
conducted an initial screening-level analysis of a representative
selection of national marine port areas and rail yards to begin to
better understand the populations that are exposed to DPM emissions
from these facilities.^{61, 62} As part of this study, a
computer geographic information system (GIS) was used to identify the
locations and property boundaries of 47 marine ports and 37 rail yard
facilities.\63\ Census information was used to estimate the size and
demographic characteristics of the population living in the vicinity of
the ports and rail yards. The results indicate that at least 13 million
people, including a disproportionate number of low-income, African-
Americans, and Hispanics, live in the vicinity of these facilities and
are being exposed to ambient DPM levels that are 2.0 [mu]g/
m³ and 0.2 [mu]g/m³ above levels found in areas
further from these facilities. These populations will benefit from the
controls being finalized in this action. This study is discussed in
greater detail in chapter 2 of the RIA and detailed findings of this
study are available in the public docket for this rulemaking.
---------------------------------------------------------------------------

\61\ ICF International. September 28, 2007. Estimation of diesel
particulate matter concentration isopleths for marine harbor areas
and rail yards. Memorandum to EPA under Work Assignment Number 0-3,
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2003-0190.
\62\ ICF International. September 28, 2007. Estimation of diesel
particulate matter population exposure near selected harbor areas
and rail yards. Memorandum to EPA under Work Assignment Number 0-3,
Contract Number EP-C-06-094. This memo is available in Docket EPA-
HQ-OAR-2003-0190.
\63\ The Agency selected a representative sample of the top 150
U.S. ports including coastal, inland, and Great Lake ports. In
selecting a sample of rail yards the Agency identified a subset from
the hundreds of rail yards operated by Class I Railroads.
---------------------------------------------------------------------------

(b) Other Air Toxics--benzene, 1,3-butadiene, formaldehyde,
acetaldehyde, acrolein, POM, naphthalene
Locomotive and marine diesel engine exhaust emissions also
contribute to ambient levels of other air toxics known or suspected as
human or animal carcinogens, or that have noncancer health effects.
These other air toxics 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 cancer risk or noncancer hazard
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 and noncancer risk from
breathing outdoor air toxics. The reductions in locomotive and marine
diesel engine emissions finalized in this rulemaking will help reduce
exposure to these harmful substances.
Benzene: EPA has characterized benzene as a known human carcinogen
(causing leukemia) by all routes of exposure, and concludes that
exposure is associated with additional health effects, including
genetic changes in both humans and animals and increased proliferation
of bone marrow cells in

[[Page 37112]]

mice.^{64, 65, 66} 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. The IARC has determined that benzene is a human carcinogen
and the U.S. DHHS has characterized benzene as a known human
carcinogen.^{67, 68}
---------------------------------------------------------------------------

\64\ U.S. EPA. 2000. Integrated Risk Information System File for
Benzene. This material is available electronically at http://
www.epa.gov/iris/subst/0276.htm.
\65\ International Agency for Research on Cancer (IARC). 1982.
Monographs on the evaluation of carcinogenic risk of chemicals to
humans, Volume 29, Some industrial chemicals and dyestuffs, World
Health Organization, Lyon, France, p. 345-389.
\66\ Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry,
V.A. 1992. Synergistic action of the benzene metabolite hydroquinone
on myelopoietic stimulating activity of granulocyte/macrophage
colony-stimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691-
3695.
\67\ International Agency for Research on Cancer (IARC). 1987.
Monographs on the evaluation of carcinogenic risk of chemicals to
humans, Volume 29, Supplement 7, Some industrial chemicals and
dyestuffs, World Health Organization, Lyon, France.
\68\ U.S. Department of Health and Human Services National
Toxicology Program 11th Report on Carcinogens available at: http://
ntp.niehs.nih.gov/go/16183.
---------------------------------------------------------------------------

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.^{69, 70} The
most sensitive noncancer effect observed in humans, based on current
data, is the depression of the absolute lymphocyte count in
blood.^{71, 72} 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.^{73, 74, 75, 76} EPA's IRIS program has
not yet evaluated these new data.
---------------------------------------------------------------------------

\69\ Aksoy, M. (1989). Hematotoxicity and carcinogenicity of
benzene. Environ. Health Perspect. 82: 193-197.
\70\ Goldstein, B.D. (1988). Benzene toxicity. Occupational
medicine. State of the Art Reviews. 3: 541-554.
\71\ Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E.
Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, M.T. Smith, N. Titenko-
Holland, L.P. Zhang, W. Blot, S.N. Yin, and R.B. Hayes (1996)
Hematotoxicity among Chinese workers heavily exposed to benzene. Am.
J. Ind. Med. 29: 236-246.
\72\ U.S. EPA (2002) Toxicological Review of Benzene (Noncancer
Effects). Environmental Protection Agency, Integrated Risk
Information System (IRIS), Research and Development, National Center
for Environmental Assessment, Washington DC. This material is
available electronically at http://www.epa.gov/iris/subst/0276.htm.
\73\ Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohen, B.;
Melikian, A.; Eastmond, D.; Rappaport, S.; Li, H.; Rupa, D.;
Suramaya, R.; Songnian, W.; Huifant, Y.; Meng, M.; Winnik, M.; Kwok,
E.; Li, Y.; Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003) HEI Report 115,
Validation & Evaluation of Biomarkers in Workers Exposed to Benzene
in China.
\74\ Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et
al. (2002) Hematological changes among Chinese workers with a broad
range of benzene exposures. Am. J. Industr. Med. 42: 275-285.
\75\ Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. (2004)
Hematotoxically in Workers Exposed to Low Levels of Benzene. Science
306: 1774-1776.
\76\ Turtletaub, K.W. and Mani, C. (2003) Benzene metabolism in
rodents at doses relevant to human exposure from Urban Air. Research
Reports Health Effect Inst. Report No.113.
---------------------------------------------------------------------------

1,3-Butadiene: EPA has characterized 1,3-butadiene as carcinogenic
to humans by inhalation.^{77, 78} The IARC has determined that
1, 3-butadiene is a human carcinogen and the U.S. DHHS has
characterized 1,3-butadiene as a known human
carcinogen.^{79, 80} There are numerous studies consistently
demonstrating that 1,3-butadiene is metabolized into genotoxic
metabolites by experimental animals and humans. The specific mechanisms
of 1,3-butadiene-induced carcinogenesis are unknown; however, the
scientific evidence strongly suggests that the carcinogenic effects are
mediated by genotoxic metabolites. Animal data suggest that females may
be more sensitive than males for cancer effects associated with 1,3-
butadiene exposure; while there are insufficient data in humans from
which to draw conclusions about sensitive subpopulations.
---------------------------------------------------------------------------

\77\ U.S. EPA (2002) Health Assessment of 1,3-Butadiene. Office
of Research and Development, National Center for Environmental
Assessment, Washington Office, Washington, DC. Report No. EPA600-P-
98-001F. This document is available electronically at http://
www.epa.gov/iris/supdocs/buta-sup.pdf.
\78\ U.S. EPA (2002) Full IRIS Summary for 1,3-butadiene (CASRN
106-99-0). Environmental Protection Agency, Integrated Risk
Information System (IRIS), Research and Development, National Center
for Environmental Assessment, Washington, DC http://www.epa.gov/
iris/subst/0139.htm.
\79\ International Agency for Research on Cancer (IARC) (1999)
Monographs on the evaluation of carcinogenic risk of chemicals to
humans, Volume 71, Re-evaluation of some organic chemicals,
hydrazine and hydrogen peroxide and Volume 97 (in preparation),
World Health Organization, Lyon, France.
\80\ U.S. Department of Health and Human Services (2005)
National Toxicology Program 11th Report on Carcinogens available at:
ntp.niehs.nih.gov/index.cfm?objectid=32BA9724-F1F6-975E-
7FCE50709CB4C932.
---------------------------------------------------------------------------

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.\81\
---------------------------------------------------------------------------

\81\ Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996)
Subchronic toxicity of 4-vinylcyclohexene in rats and mice by
inhalation. Fundam. Appl. Toxicol. 32:1-10.
---------------------------------------------------------------------------

Formaldehyde: Since 1987, EPA has classified formaldehyde as a
probable human carcinogen based on evidence in humans and in rats,
mice, hamsters, and monkeys.\82\ EPA is currently reviewing recently
published epidemiological data. For instance, 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.^{83, 84} NCI is
currently updating 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.\85\ Extended follow-up of a cohort of British chemical
workers did not find evidence of an increase in nasopharyngeal or
lymphohematopoietic cancers, but a continuing statistically significant
excess in lung cancers was reported.\86\ Recently, the IARC re-
classified formaldehyde as a human carcinogen (Group 1).\87\
---------------------------------------------------------------------------

\82\ U.S. EPA (1987) Assessment of Health Risks to Garment
Workers and Certain Home Residents from Exposure to Formaldehyde,
Office of Pesticides and Toxic Substances, April 1987.
\83\ Hauptmann, M.; Lubin, J.H.; Stewart, P.A.; Hayes, R.B.;
Blair, A. 2003. Mortality from lymphohematopoetic malignancies among
workers in formaldehyde industries. Journal of the National Cancer
Institute 95: 1615-1623.
\84\ Hauptmann, M.; Lubin, J.H.; Stewart, P.A.; Hayes, R.B.;
Blair, A. 2004. Mortality from solid cancers among workers in
formaldehyde industries. American Journal of Epidemiology 159: 1117-
1130.
\85\ Pinkerton, L.E. 2004. Mortality among a cohort of garment
workers exposed to formaldehyde: an update. Occup. Environ. Med. 61:
193-200.
\86\ Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended
follow-up of a cohort of British chemical workers exposed to
formaldehyde. J National Cancer Inst. 95:1608-1615.
\87\ International Agency for Research on Cancer (IARC). 2006.
Formaldehyde, 2-Butoxyethanol and 1-tert-Butoxypropan-2-ol. Volume
88. (in preparation), World Health Organization, Lyon, France.
---------------------------------------------------------------------------

Formaldehyde exposure also causes a range of noncancer health
effects, including irritation of the eyes (burning and watering of the
eyes), nose and throat. Decreased pulmonary function has been observed
in humans. Effects from repeated exposure in humans include respiratory
tract irritation, chronic bronchitis and nasal epithelial lesions.\88\
---------------------------------------------------------------------------

\88\ U.S. Department of Health and Human Services Agency for
Toxic Substances and Disease Registry. 1999. Toxicological Profile
for formaldehyde. Available at http://www.atsdr.cdc.gov/toxprofiles/
tp111.html.
---------------------------------------------------------------------------

Acetaldehyde: EPA has characterized acetaldehyde as a probable
human carcinogen, based on nasal tumors in rats.\89\ Acetaldehyde is
reasonably

[[Page 37113]]

anticipated to be a human carcinogen by the U.S. Department of Health
and Human Services (DHHS) in the 11th Report on Carcinogens and is
classified as possibly carcinogenic to humans (Group 2B) by the
International Agency for Research on Carcinogens
(IARC).^{90, 91} EPA is currently conducting a reassessment of
cancer and noncancer risk from inhalation exposure to acetaldehyde.
---------------------------------------------------------------------------

\89\ U.S. EPA. 1991. Integrated Risk Information System File of
Acetaldehyde. Research and Development, National Center for
Environmental Assessment, Washington, DC. This material is available
electronically at http://www.epa.gov/iris/subst/0290.htm.
\90\ U.S. Department of Health and Human Services National
Toxicology Program 11th Report on Carcinogens available at:
ntp.niehs.nih.gov/index.cfm?objectid=32BA9724-F1F6-975E-
7FCE50709CB4C932.
\91\ International Agency for Research on Cancer (IARC). 1999.
Re-evaluation of some organic chemicals, hydrazine, and hydrogen
peroxide. IARC Monographs on the Evaluation of Carcinogenic Risk of
Chemical to Humans, Vol 71. Lyon, France.
---------------------------------------------------------------------------

The primary noncancer effects of exposure to acetaldehyde vapors
include irritation of the eyes, skin, and respiratory tract.\92\ In
short-term (4 week) rat studies, compound-related histopathological
changes were observed only in the respiratory system at various
concentration levels of exposure.^{93, 94} Data from these
studies were used by EPA to develop an inhalation reference
concentration. Some asthmatics have been shown to be a sensitive
subpopulation to decrements in functional expiratory volume (FEV1 test)
and bronchoconstriction upon acetaldehyde inhalation.\95\
---------------------------------------------------------------------------

\92\ U.S. EPA. 1991. Integrated Risk Information System File of
Acetaldehyde. This material is available electronically at http://
www.epa.gov/iris/subst/0290.htm.
\93\ Appleman, L.M., R.A. Woutersen, V.J. Feron, R.N. Hooftman,
and W.R.F. Notten. 1986. Effects of the variable versus fixed
exposure levels on the toxicity of acetaldehyde in rats. J. Appl.
Toxicol. 6: 331-336.
\94\ Appleman, L.M., R.A. Woutersen, and V.J. Feron. 1982.
Inhalation toxicity of acetaldehyde in rats. I. Acute and subacute
studies. Toxicology. 23: 293-297.
\95\ Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and Matsuda, T.
1993. Aerosolized acetaldehyde induces histamine-mediated
bronchoconstriction in asthmatics. Am. Rev. Respir. Dis. 148(4 Pt
1): 940-3.
---------------------------------------------------------------------------

Acrolein: Acrolein is extremely acrid and irritating to humans when
inhaled, with acute exposure resulting in upper respiratory tract
irritation, mucus hypersecretion and congestion. Levels considerably
lower than 1 ppm (2.3 mg/m³) elicit subjective complaints of
eye and nasal irritation and a decrease in the respiratory
rate.^{96, 97} Lesions to the lungs and upper respiratory tract
of rats, rabbits, and hamsters have been observed after subchronic
exposure to acrolein. Based on animal data, individuals with
compromised respiratory function (e.g., emphysema, asthma) are expected
to be at increased risk of developing adverse responses to strong
respiratory irritants such as acrolein. This was demonstrated in mice
with allergic airway-disease by comparison to non-diseased mice in a
study of the acute respiratory irritant effects of acrolein.\98\ EPA is
currently in the process of conducting an assessment of acute exposure
effects for acrolein. The intense irritancy of this carbonyl has been
demonstrated during controlled tests in human subjects who suffer
intolerable eye and nasal mucosal sensory reactions within minutes of
exposure.\99\
---------------------------------------------------------------------------

\96\ Weber-Tschopp, A; Fischer, T; Gierer, R; et al. (1977)
Experimentelle reizwirkungen von Acrolein auf den Menschen. Int Arch
Occup Environ Hlth. 40(2):117-130. In German.
\97\ Sim, VM; Pattle, RE. (1957) Effect of possible smog
irritants on human subjects. J Am Med Assoc. 165(15):1908-1913.
\98\ Morris JB, Symanowicz PT, Olsen JE, et al. 2003. Immediate
sensory nerve-mediated respiratory responses to irritants in healthy
and allergic airway-diseased mice. J Appl Physiol. 94(4):1563-1571.
\99\ Sim VM, Pattle RE. Effect of possible smog irritants on
human subjects. JAMA. 165: 1980-2010, 1957.
---------------------------------------------------------------------------

EPA determined in 2003 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.\100\ The IARC determined in 1995 that acrolein was not
classifiable as to its carcinogenicity in humans.\101\
---------------------------------------------------------------------------

\100\ U.S. EPA. (2003). Integrated Risk Information System File
of Acrolein. Research and Development, National Center for
Environmental Assessment, Washington, DC. This material is available
at http://www.epa.gov/iris/subst/0364.htm.
\101\ International Agency for Research on Cancer (IARC). 1995.
Monographs on the evaluation of carcinogenic risk of chemicals to
humans, Volume 63, Dry cleaning, some chlorinated solvents and other
industrial chemicals, World Health Organization, Lyon, France.
---------------------------------------------------------------------------

Polycyclic Organic Matter (POM): POM is generally defined as a
large class of organic compounds which have multiple benzene rings and
a boiling point greater than 100 degrees Celsius. Many of the compounds
included in the class of compounds known as POM are classified by EPA
as probable human carcinogens based on animal data. One of these
compounds, naphthalene, is discussed separately below. Polycyclic
aromatic hydrocarbons (PAHs) are a subset 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
(a subclass of POM) 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.^{102, 103} EPA has not yet evaluated these recent
studies.
---------------------------------------------------------------------------

\102\ Perera, F.P.; Rauh, V.; Tsai, W-Y.; et al. (2002) Effect
of transplacental exposure to environmental pollutants on birth
outcomes in a multiethnic population. Environ Health Perspect. 111:
201-205.
\103\ Perera, F.P.; Rauh, V.; Whyatt, R.M.; Tsai, W.Y.; Tang,
D.; Diaz, D.; Hoepner, L.; Barr, D.; Tu, Y.H.; Camann, D.; Kinney,
P. (2006) Effect of prenatal exposure to airborne polycyclic
aromatic hydrocarbons on neurodevelopment in the first 3 years of
life among inner-city children. Environ Health Perspect. 114: 1287-
1292.
---------------------------------------------------------------------------

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.\104\ The draft reassessment recently
completed external peer review.\105\ Based on external peer review
comments received to date, additional analyses are being undertaken.
This external review draft does not represent official agency opinion
and was released solely for the purposes of external peer review and
public comment. Once EPA evaluates public and peer reviewer comments,
the document will be revised. The National Toxicology Program listed
naphthalene as ``reasonably anticipated to be a human carcinogen'' in
2004 on the basis of bioassays reporting clear evidence of
carcinogenicity in rats and some evidence of carcinogenicity in
mice.\106\ 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.\107\ Naphthalene also
causes a number of chronic non-cancer effects in animals, including

[[Page 37114]]

abnormal cell changes and growth in respiratory and nasal tissues.\108\
---------------------------------------------------------------------------

\104\ U.S. EPA (2004) Toxicological Review of Naphthalene
(Reassessment of the Inhalation Cancer Risk), Environmental
Protection Agency, Integrated Risk Information System, Research and
Development, National Center for Environmental Assessment,
Washington, DC. This material is available electronically at http://
www.epa.gov/iris/subst/0436.htm.
\105\ Oak Ridge Institute for Science and Education (2004)
External Peer Review for the IRIS Reassessment of the Inhalation
Carcinogenicity of Naphthalene. August 2004. http://cfpub.epa.gov/
ncea/cfm/recordisplay.cfm?deid=84403.
\106\ National Toxicology Program (NTP). (2004). 11th Report on
Carcinogens. Public Health Service, U.S. Department of Health and
Human Services, Research Triangle Park, NC. Available from: http://
ntp-server.niehs.nih.gov.
\107\ International Agency for Research on Cancer (IARC) (2002)
Monographs on the Evaluation of the Carcinogenic Risk of Chemicals
for Humans. Vol. 82. Lyon, France.
\108\ U.S. EPA (1998) Toxicological Review of Naphthalene,
Environmental Protection Agency, Integrated Risk Information System,
Research and Development, National Center for Environmental
Assessment, Washington, DC. This material is available
electronically at http://www.epa.gov/iris/subst/0436.htm.
---------------------------------------------------------------------------

C. Environmental Impacts

There are a number of public welfare effects associated with the
presence of ozone, NOX and PM2.5 in the ambient
air. In this section we discuss visibility, the impact of deposition on
ecosystems and materials, and the impact of ozone on plants, including
trees, agronomic crops and urban ornamentals.
(1) Visibility
Visibility can be defined as the degree to which the atmosphere is
transparent to visible light. Airborne particles degrade visibility by
scattering and absorbing light. Visibility is important because it has
direct significance to people's enjoyment of daily activities in all
parts of the country. Individuals value good visibility for the well-
being it provides them directly, where they live and work and in places
where they enjoy recreational opportunities. Visibility is also highly
valued in significant natural areas such as national parks and
wilderness areas and special emphasis is given to protecting visibility
in these areas. For more information on visibility, see the final 2004
PM AQCD as well as the 2005 PM Staff Paper.^{109, 110}
---------------------------------------------------------------------------

\109\ U.S. EPA (2004) Air Quality Criteria for Particulate
Matter (Oct 2004), Volume I Document No. EPA600/P-99/002aF and
Volume II Document No. EPA600/P-99/002bF. This document is available
in Docket EPA-HQ-OAR-2003-0190.
\110\ U.S. EPA (2005) Review of the National Ambient Air Quality
Standard for Particulate Matter: Policy Assessment of Scientific and
Technical Information, OAQPS Staff Paper. EPA-452/R-05-005. This
document is available in Docket EPA-HQ-OAR-2003-0190.
---------------------------------------------------------------------------

EPA is pursuing a two-part strategy to address visibility. First,
to address the welfare effects of PM on visibility, EPA has set
secondary PM2.5 standards which act in conjunction with the
establishment of a regional haze program. In setting this secondary
standard, EPA has concluded that PM2.5 causes adverse effects on
visibility in various locations, depending on PM concentrations and
factors such as chemical composition and average relative humidity.
Second, section 169 of the Clean Air Act provides additional authority
to address existing visibility impairment and prevent future visibility
impairment in the 156 national parks, forests and wilderness areas
categorized as mandatory class I federal areas (62 FR 38680-81, July
18, 1997).\111\ In July 1999, the regional haze rule (64 FR 35714) was
put in place to protect the visibility in mandatory class I federal
areas. Visibility can be said to be impaired in both PM2.5
nonattainment areas and mandatory class I federal areas.
---------------------------------------------------------------------------

\111\ These areas are defined in section 162 of the Act as those
national parks exceeding 6,000 acres, wilderness areas and memorial
parks exceeding 5,000 acres, and all international parks which were
in existence on August 7, 1977.
---------------------------------------------------------------------------

Locomotives and marine engines contribute to visibility concerns in
these areas through their primary PM2.5 emissions and their
NOX emissions which contribute to the formation of secondary
PM2.5.
Current Visibility Impairment
As of October 10, 2007, almost 90 million people live in
nonattainment areas for the 1997 PM2.5 NAAQS. These populations, as
well as large numbers of individuals who travel to these areas, are
likely to experience visibility impairment. In addition, while
visibility trends have improved in mandatory class I federal areas the
most recent data show that these areas continue to suffer from
visibility impairment.\112\ In summary, visibility impairment is
experienced throughout the U.S., in multi-state regions, urban areas,
and remote mandatory class I federal areas.^{113, 114}
---------------------------------------------------------------------------

\112\ U.S. EPA (2002). Latest Findings on National Air Quality--
2002 Status and Trends. EPA 454/K-03-001.
\113\ U.S. EPA. Air Quality Designations and Classifications for
the Fine Particles (PM2.5) National Ambient Air Quality Standards,
December 17, 2004. (70 FR 943, Jan 5, 2005) This document is also
available on the Web at: http://www.epa.gov/pmdesignations/.
\114\ U.S. EPA. Regional Haze Regulations, July 1, 1999. (64 FR
35714, July 1, 1999).
---------------------------------------------------------------------------

Future Visibility Impairment
Air quality modeling conducted for this final rule was used to
project visibility conditions in 133 mandatory class I federal areas
across the U.S. in 2020 and 2030. The results indicate that improvement
in visibility will occur in all mandatory class I federal areas
although all areas will continue to have annual average deciview levels
above background in 2020 and 2030. Chapter 2 of the RIA contains more
detail on the visibility portion of the air quality modeling.
(2) Plant and Ecosystem Effects of Ozone
Elevated ozone levels contribute to environmental effects, with
impacts to plants and ecosystems being of most concern. Ozone can
produce both acute and chronic injury in sensitive species depending on
the concentration level and the duration of the exposure. Ozone effects
also tend to accumulate over the growing season of the plant, so that
even low concentrations experienced for a longer duration have the
potential to create chronic stress on vegetation. Ozone damage to
plants includes visible injury to leaves and 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 final 2006
Criteria Document presents more detailed information on ozone effects
on vegetation and ecosystems.
As discussed above, locomotive and marine diesel engine emissions
of NOX contribute to ozone and therefore the NOX
standards will help reduce crop damage and stress on vegetation from
ozone.
(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

[[Page 37115]]

hazard posed by several pollutants including mercury, dioxin and
PCBs.\115\
---------------------------------------------------------------------------

\115\ U.S. EPA (2000). Deposition of Air Pollutants to the Great
Waters: Third Report to Congress. Office of Air Quality Planning and
Standards. EPA-453/R-00-0005. This document is available in Docket
EPA-HQ-OAR-2003-0190.
---------------------------------------------------------------------------

Adverse impacts on water quality can occur when atmospheric
contaminants deposit to the water surface or when material deposited on
the land enters a water body through runoff. Potential impacts of
atmospheric deposition to water bodies 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.^{116, 117, 118, 119, 120}
---------------------------------------------------------------------------

\116\ U.S. EPA (2004). National Coastal Condition Report II.
Office of Research and Development/ Office of Water. EPA-620/R-03/
002. This document is available in Docket EPA-HQ-OAR-2003-0190.
\117\ Gao, Y., E.D. Nelson, M.P. Field, et al. 2002.
Characterization of atmospheric trace elements on PM2.5 particulate
matter over the New York-New Jersey harbor estuary. Atmos. Environ.
36: 1077-1086.
\118\ Kim, G., N. Hussain, J.R. Scudlark, and T.M. Church. 2000.
Factors influencing the atmospheric depositional fluxes of stable
Pb, 210Pb, and 7Be into Chesapeake Bay. J. Atmos. Chem. 36: 65-79.
\119\ Lu, R., R.P. Turco, K. Stolzenbach, et al. 2003. Dry
deposition of airborne trace metals on the Los Angeles Basin and
adjacent coastal waters. J. Geophys. Res. 108(D2, 4074): AAC 11-1 to
11-24.
\120\ Marvin, C.H., M.N. Charlton, E.J. Reiner, et al. 2002.
Surficial sediment contamination in Lakes Erie and Ontario: A
comparative analysis. J. Great Lakes Res. 28(3): 437-450.
---------------------------------------------------------------------------

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.
The NOX, VOC and PM standards finalized in this action
will help reduce the environmental impacts of atmospheric deposition.
(4) Materials Damage and Soiling
The deposition of airborne particles can reduce the aesthetic
appeal of buildings and culturally important articles through soiling,
and can contribute directly (or in conjunction with other pollutants)
to structural damage by means of corrosion or erosion.\121\ Particles
affect materials principally by promoting and accelerating the
corrosion of metals, by degrading paints, and by deteriorating building
materials such as concrete and limestone. Particles contribute to these
effects because of their electrolytic, hygroscopic, and acidic
properties, and their ability to adsorb corrosive gases (principally
sulfur dioxide). The rate of metal corrosion depends on a number of
factors, including the deposition rate and nature of the pollutant; the
influence of the metal protective corrosion film; the amount of
moisture present; variability in the electrochemical reactions; the
presence and concentration of other surface electrolytes; and the
orientation of the metal surface.
---------------------------------------------------------------------------

\121\ U.S. EPA (2005). Review of the National Ambient Air
Quality Standards for Particulate Matter: Policy Assessment of
Scientific and Technical Information, OAQPS Staff Paper. This
document is available in Docket EPA-HQ-OAR-2003-0190.
---------------------------------------------------------------------------

The PM2.5 standards finalized in this action will help reduce the
airborne particles that contribute to materials damage and soiling.

D. Other Criteria Pollutants Affected by This Final Rule

Locomotive and marine diesel engines account for about 1 percent of
the mobile source carbon monoxide (CO) inventory. 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 9 ppm for the 8-hour average. These values are
not to be exceeded more than once per year. As of October 10, 2007,
there are 854 thousand people living in 4 areas (made up of 5 counties)
that are designated as nonattainment for CO.
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. Additional
information on CO related health effects can be found in the Air
Quality Criteria for Carbon Monoxide.\122\
---------------------------------------------------------------------------

\122\ U.S. EPA (2000). Air Quality Criteria for Carbon Monoxide,
EPA/600/P-99/001F. This document is available in Docket EPA-HQ-OAR-
2003-0190.
---------------------------------------------------------------------------

E. Emissions from Locomotive and Marine Diesel Engines

(1) Overview
The engine standards in this final rule will affect emissions of
PM2.5, NOX, VOCs, CO, and air toxics for
locomotive and marine diesel engines. Based on our analysis for this
rulemaking, we estimate that in 2001 locomotive and marine diesel
engines contributed almost 60,000 tons (18 percent) to the national
mobile source diesel PM2.5 inventory and about 2.0 million
tons (16 percent) to the mobile source NOX inventory. In
2030, absent the standards finalized today, these engines will
contribute about 50,000 tons (65 percent) to the mobile source diesel
PM2.5 inventory and almost 1.6 million tons (35 percent) to
the mobile source NOX inventory. Under today's final
standards, by 2030, annual NOX emissions from these engines
will be reduced by 800,000 tons, PM2.5 emissions by 27,000
tons, and VOC emissions by 43,000 tons.
Locomotive and marine diesel engine emissions are expected to
continue to be a significant part of the mobile source emissions
inventory, both nationally and in ozone and PM2.5
nonattainment areas, in the coming years. Absent the standards
finalized today, we expect overall emissions from these engines to
decrease modestly over the next ten to fifteen years then remain
relatively flat through 2025 due to existing regulations such as lower
fuel sulfur requirements, the phase-in of locomotive and marine diesel
Tier 1 and Tier 2 engine standards, and the current Tier 0 locomotive
remanufacturing requirements. Starting after 2025, emission inventories
from these engines once again begin increasing due to growth in the
locomotive and marine sectors, see Table II-2.
Each sub-section below discusses one of the affected pollutants,
including expected emissions reductions associated with the final
standards. Table II-2 summarizes the impacts of this rule for 2012,
2015, 2020, 2030 and

[[Page 37116]]

2040. Further details on our inventory estimates are available in
chapter 3 of the RIA.
BILLING CODE 1505-01-D
[GRAPHIC] [TIFF OMITTED] TR06MY08.001

BILLING CODE 1505-01-C
(2) PM2.5 Emission Reductions
As described earlier, EPA believes that reductions of diesel
PM2.5 emissions are an important part of the nation's
progress toward clean air. PM2.5 reductions resulting from
this final rule will reduce hazardous air pollutants or air toxics from
these engines, reduce diesel exhaust exposure in communities near these
emissions sources, and help areas address visibility and other
environmental impacts associated with PM2.5 emissions.
In 2001, annual emissions from locomotive and marine diesel engines
totaled about 60,000 tons (18 percent) of the national mobile source
diesel PM2.5 inventory and by 2030 these engines, absent
this final rule, contribute about 50,000 tons (65 percent) of the
mobile source diesel PM2.5 inventory. Both Table II-2 and
Figure II-2 show that PM2.5 emissions are relatively flat
through 2030 before beginning to rise again due to growth in these
sectors.
Table II-2 and Figure II-2 present PM2.5 emission
reductions from locomotive and marine diesel engines with the final
standards required in this rule. Emissions of PM2.5 drop in
2012 and 2015 by 4,200 and 7,300 tons respectively. By 2020, annual
PM2.5 reductions total 14,500 tons and by 2030 emissions are
reduced further by 27,000 tons annually. Significant reductions from
these engines continue through 2040 when approximately 37,000 tons of
PM2.5 are annually eliminated as a result of this rule.
BILLING CODE 1505-01-D

[[Page 37117]]

[GRAPHIC] [TIFF OMITTED] TR06MY08.002

BILLING CODE 1505-01-C
(3) NOX Emissions Reductions
In 2001 annual emissions from locomotive and marine diesel engines
totaled about 2.0 million tons. Due to earlier engine standards for
these engines, annual NOX emissions drop to approximately
1.6 million tons in 2030. Both Table II-2 and Figure II-3 show
NOX emissions remaining fairly flat through 2030 before
beginning to rise again due to growth in these sectors.
As shown in Table II-2 and Figure II-3, in the near term this rule
reduces annual NOX emissions from the current national
inventory baseline by 87,000 tons in 2012 and 161,000 tons in 2015. By
2020, annual NOX emissions are cut by 371,000 tons and by
2030--795,000 tons are eliminated. As with PM2.5 emissions,
a yearly decline in NOX emissions continues through 2040
when more than 1.1 million tons of NOX are annually reduced
from locomotive and marine diesel engines.
These numbers are comparable to emission reductions projected in
2030 for our already established Clean Air Nonroad Diesel (CAND)
program. Table II-3 provides the 2030 NOX emission
reductions (and PM reductions) for this rule compared to the Heavy-Duty
Highway rule and CAND rule. The 2030 NOX reductions of about
738,000 tons for the CAND rule are slightly less than those from this
rule.
BILLING CODE 1505-01-D

[[Page 37118]]

[GRAPHIC] [TIFF OMITTED] TR06MY08.003

BILLING CODE 1505-01-C

Table II-3.--Projected 2030 Emissions Reductions From Recent Mobile
Source Rules
[Short tons]
------------------------------------------------------------------------
Rule NOX PM2.5
------------------------------------------------------------------------
Locomotive and Marine......................... 795,000 27,000
Clean Air Nonroad Diesel...................... 738,000 129,000
Heavy-Duty Highway............................ 2,600,000 109,000
------------------------------------------------------------------------

(4) Volatile Organic Compounds Emissions Reductions
Emissions of volatile organic compounds (VOCs) from locomotive and
marine diesel engines are shown in Table II-2, along with the estimates
of the reductions we expect from the HC standard in our rule in 2012,
2015, 2020, 2030 and 2040. In 2012, 8,000 tons of VOCs are reduced and
in 2015 15,000 tons are annually eliminated from the inventory. By
2020, reductions will expand to 28,000 tons annually from these
engines. Over the next ten years, annual reductions from controlled
locomotive and marine diesel engines will produce annual VOC reductions
of 43,000 tons in 2030 and 55,000 tons in 2040. Figure II-4 shows our
estimate of VOC emissions between 2006 and 2040 both with and without
this rule.
BILLING CODE 1505-01-D

[[Page 37119]]

[GRAPHIC] [TIFF OMITTED] TR06MY08.004

BILLING CODE 1505-01-C

III. Emission Standards

This section details the emission standards, implementation dates,
and other major requirements of the new program. Following brief
summaries of the types of locomotives and marine engines covered, we
describe the provisions for:
Standards for remanufactured Tier 0, 1, and 2 locomotives,
Tier 3 and Tier 4 standards for newly-built line-haul
locomotives,
Standards and other provisions for switch locomotives,
Requirements to reduce idling locomotive emissions,
Tier 3 and Tier 4 standards for newly-built marine diesel
engines, and
Standards for remanufactured marine diesel engines.
An assessment of the technological feasibility of the standards
follows the program description. To ensure that the benefits of the
standards are realized throughout the useful life of these engines, and
to incorporate lessons learned over the last few years from the
existing test and compliance programs, we are also revising test
procedures and related certification requirements, and adding
comparable provisions for remanufactured marine diesel engines. These
are described in section IV.

A. What Locomotives and Marine Engines Are Covered?

The regulations being adopted affect locomotives currently
regulated under part 92 and marine diesel engines and vessels currently
regulated under parts 89, 1039, and 94, as described below.\123\ In
addition, they apply to existing marine diesel engines above 600 kW
(800 hp).
---------------------------------------------------------------------------

\123\ All of the regulatory parts referenced in this preamble
are parts in Title 40 of the Code of Federal Regulations, unless
otherwise noted.
---------------------------------------------------------------------------

With some exceptions, the locomotive regulations apply for all
locomotives originally built in or after 1973 that operate extensively
within the United States. See section IV.B for a discussion of the
exemption for locomotives that are used only incidentally within the
U.S. The exceptions include historic steam-powered locomotives and
locomotives powered solely by an external source of electricity. In
addition, the regulations generally do not apply to some existing
locomotives owned by small businesses. Furthermore, engines used in

[[Page 37120]]

locomotive-type vehicles with less than 750 kW (1006 hp) total power
(used primarily for railway maintenance), engines used only for hotel
power (for passenger railcar equipment), and engines that are used in
self-propelled passenger-carrying railcars, are excluded from these
regulations. The engines used in these smaller locomotive-type vehicles
are generally subject to the nonroad engine requirements of Parts 89
and 1039.
The marine diesel engine program applies to all propulsion and
auxiliary engines with per cylinder displacement up to 30 liters.\124\
For purposes of these standards, these marine diesel engines are
categorized both by per cylinder displacement and by maximum engine
power.
---------------------------------------------------------------------------

\124\ Marine diesel engines at or above 30 liters per cylinder,
called Category 3 engines, are typically used for propulsion power
on ocean-going ships. EPA is addressing Category 3 engines through
separate actions, including a planned rulemaking for a new tier of
federal standards (see Advance Notice of Proposed Rulemaking
published December 7, 2007 at 72 FR 69522) and participation on the
U.S. delegation to the International Maritime Organization for
negotiations of new international standards (see http://www.epa.gov/
otaq/oceanvessels.com for information on both of those actions), as
well as EPA's Clean Ports USA Initiative (see http://www.epa.gov/
cleandiesel/ports/index.htm).
---------------------------------------------------------------------------

According to our existing definitions, a marine engine is defined
as an engine that is installed or intended to be installed on a marine
vessel. Engines that are on a vessel but that are not ``installed'' are
generally considered to be land-based nonroad engines and are regulated
under 40 CFR part 89 or part 1039. Consistent with our current marine
diesel engine program, the standards adopted in this rule apply to
engines manufactured for sale in the United States or imported into the
United States beginning with the effective date of the standards. The
standards also apply to any engine installed for the first time in a
marine vessel after it has been used in another application subject to
different emission standards. In other words, an existing nonroad
diesel engine would become a new marine diesel engine, and subject to
the marine diesel engine standards, when it is marinized for use in a
marine application.
Consistent with our current program, the marine engine standards we
are finalizing will not apply to marine diesel engines installed on
foreign vessels. While we received many comments requesting that we
extend the new standards to engines on foreign vessels operating in the
United States, we have determined that it is appropriate to postpone
this decision to our rulemaking for Category 3 marine diesel engines.
This will allow us to consider all engines on an ocean-going vessel as
a system; this may facilitate the application of advanced emission
control technologies because these engines often share a common fuel
and/or exhaust system. This approach is also consistent with the United
States Government's proposal to amend Annex VI of the International
Convention for the Prevention of Pollution from Ships (MARPOL)
currently under consideration at the International Maritime
Organization (IMO), which calls for significant emission reductions
from all engines on ocean-going vessels.\125\ EPA expects to finalize
new Category 3 engine emission standards in late 2009.\126\
---------------------------------------------------------------------------

\125\ See ``Revision of the MARPOL Annex VI, the NOX
Technical Code and Related Guidelines; Development of Standards for
NOX, PM, and SOX,'' submitted by the United
States, BLG 11/15, Sub-Committee on Bulk Liquids and Gases, 11th
Session, Agenda Item 5, February 9, 2007, Docket ID EPA-HQ-OAR-2007-
0121-0034. This document, along with the U.S. Statement concerning
the same, is also available on our Web site: www.epa.gov/otaq/
oceanvessels.com.
\126\ See 72 FR 68518, December 5, 2007 for the new regulatory
deadline for the final rule for an additional tier of standards for
Category 3 rulemaking (final rule by December 17, 2009).
---------------------------------------------------------------------------

B. What Standards Are We Adopting?

(1) Locomotive Standards
(a) Line-Haul Locomotives
We are setting new emission standards for newly-built and
remanufactured line-haul locomotives. Our standards for newly-built
line-haul locomotives will be implemented in two tiers: Tier 3, based
on engine design improvements, and Tier 4, based on the application of
the high-efficiency catalytic aftertreatment technologies now being
developed and introduced in the highway diesel sector. Our standards
for remanufactured line-haul locomotives apply to all Tier 0, 1, and 2
locomotives and are based on engine design improvements. Table III-1
summarizes the line-haul locomotive standards and implementation dates.
The feasibility of the new standards and the technologies involved are
discussed in detail in section III.C.

Table III.--1 Line-Haul Locomotive Standards
[g/bhp-hr]
----------------------------------------------------------------------------------------------------------------
Standards apply to Take effect in year PM NOX HC
----------------------------------------------------------------------------------------------------------------
Remanufactured Tier 0 without separate 2008 as Available, 2010 0.22 8.0 1.00
loop intake air cooling. Required.
Remanufactured Tier 0 with separate loop 2008 as Available, 2010 0.22 7.4 0.55
intake air cooling. Required.
Remanufactured Tier 1..................... 2008 as Available, 2010 0.22 7.4 0.55
Required.
Remanufactured Tier 2..................... 2008 as Available, 2013 0.10 5.5 0.30
Required.
New Tier 3................................ 2012......................... 0.10 5.5 0.30
New Tier 4................................ 2015......................... 0.03 1.3 0.14
----------------------------------------------------------------------------------------------------------------

(i) Remanufactured Locomotives
As proposed, we are setting new standards for the existing fleet of
Tier 0, Tier 1, and Tier 2 locomotives, to apply at the time of
remanufacture. These standards will also apply at the first
remanufacture of Tier 2 locomotives added to the fleet between now and
the start of Tier 3.
Commenters have suggested that EPA adopt a naming convention for
the standards tiers to avoid confusion over whether, for example, the
terms ``Tier 0 standards'' and ``Tier 0 locomotives'' are referring to
the ``old'' Tier 0 standards adopted in 1998 or the ``new'' Tier 0
standards promulgated in this rule. A similar confusion may exist for
old and new Tier 1 and Tier 2 standards, including for marine engines.
The confusion is compounded by the fact that many of the locomotives
previously subject to the old Tier 0 standards will now be subject to
the new Tier 1 standards, and so a Tier 0 locomotive that is upgraded
to meet them could fairly be called a Tier 1 locomotive, and likewise
for Tier 2/Tier 3 standards.

[[Page 37121]]

In response, we are adopting a simple approach whereby a Tier 0
locomotive remanufactured under the more stringent Tier 0 standards we
are adopting in this rule will be designated a Tier 0+ locomotive. A
Tier 0 locomotive originally manufactured with a separate loop intake
air cooling system that is remanufactured to the Tier 1+ standards will
be designated as a Tier 1+ locomotive. We are adopting the same
approach for Tier 1 and Tier 2 locomotives. That is, those
remanufactured under the new standards would be called Tier 1+ and Tier
2+ locomotives, respectively. We are also suggesting that in many
contexts, including a number of places in this final rule, there is
really no need to make distinctions of this sort, as no ambiguity
arises. In these contexts it would be perfectly acceptable to drop the
``+'' designation and simply refer to Tier 0, 1, and 2 locomotives and
standards.
As described in section IV.B(3), the new Tier 0+, 1+, and 2+
standards (and corresponding switch-cycle standards) may apply when a
Tier 0, 1, or 2 locomotive is remanufactured anytime after this final
rule takes effect, if a certified remanufacture system is available.
However, this early certification is voluntary on the part of the
manufacturers, and so if no emissions control system is certified early
for a locomotive, these standards will instead apply beginning January
1, 2010 for Tier 0 and 1, and no later than January 1, 2013 for Tier 2.
We are also adopting the proposed reasonable cost provision, described
in section IV.B(3), to protect against the unlikely event that the only
certified systems made in the early program phase are exorbitantly
priced.
Although under this approach, certification of new remanufacture
systems in the early phase of the program is voluntary, we believe that
developers will strive to certify systems to the new standards as early
as possible, even in 2008, to establish these products in the market,
especially for the locomotive models anticipated to have significant
numbers coming due for remanufacture in the next few years. This focus
on higher volume products also maximizes the potential for large
emission reductions very early in this program, greatly offsetting the
effect of slow turnover to new Tier 3 and Tier 4 locomotives inherent
in this sector.
These remanufactured locomotive standards represent PM reductions
of about 50 percent for Tier 0 and Tier 1 locomotives, and
NOX reductions of about 20 percent for Tier 0+ locomotives
with separate loop aftercooling. Significantly, these reductions will
be substantial in the early years. This will be important to State
Implementation Plans (SIPs) being developed to achieve attainment with
the NAAQS, owing to the 2008 start date and relatively rapid
remanufacture schedule (roughly every 7 years, though it varies by
locomotive model and age).
Some commenters argued for delaying the remanufactured locomotive
standards and some argued for accelerating them. However, little
technical justification was provided on either side and, after
reconsideration, we believe the proposed standards and dates are
appropriate. However, based on the comments, we have identified two
current Tier 0 locomotive models that are not likely to meet the new
standards under the full range of required test conditions, owing to
limitations in the original locomotive design. These are the General
Electric (GE) Dash-8 locomotives not equipped with separate loop
aftercooling, and the Electro-Motive Diesel (EMD) SD70MAC locomotives
that are equipped with separate loop aftercooling. As a result, we are
allowing an exception in ambient temperature and altitude conditions
under which these models, when remanufactured, must meet the new
standards, as detailed in the Part 1033 regulations. These exceptions
are limited to the extent that it is technically feasible to meet the
relevant standards under most in-use conditions.
(ii) Newly-Built Locomotives
We are adopting the proposed Tier 3 and Tier 4 line-haul locomotive
standards but with an earlier start date for Tier 4 NOX,
along with an additional compliance flexibility option. We requested
comment in the NPRM on whether additional NOX emission
reductions would be feasible and appropriate for Tier 3 locomotives in
the 2012 timeframe, based on reoptimization of existing Tier 2
NOX control technologies, or the addition of new engine-
based technologies such as exhaust gas recirculation (EGR).
Manufacturers submitted detailed technical comments indicating that
achieving such reductions would result in a large fuel economy penalty,
a major engine redesign that would hamper Tier 4 technology
development, or both. Our own review of the technical options leads us
to the same conclusion and we are therefore finalizing the Tier 3
emissions standards as proposed.
We proposed to allow manufacturers to defer meeting the Tier 4
NOX standard on newly-built locomotives until the 2017 model
year, in order to work through any implementation and technological
issues that might arise with advanced NOX control
technology. Even so, we expected that manufacturers would undertake a
single comprehensive redesign program for Tier 4, relying on the same
basic locomotive platform and overall emission control space
allocations for all Tier 4 product years. With this in mind, we
proposed that locomotives certified under Tier 4 in 2015 and 2016
without Tier 4 NOX control systems should have these systems
added when they undergo their first remanufacture and be subject to the
Tier 4 NOX standard thereafter.
We received many comments from state and local air quality
agencies, and from environmental organizations, arguing that earlier
implementation of these advanced technologies is technologically
feasible and emphatically stating that they were needed to address the
nation's air quality problems. Further review of the test data
available for the proposed rule and of new test data available since
the proposal supports the argument for earlier implementation of Tier 4
NOX controls. This information is discussed in detail in
section III.C. Consequently, after considering this data and industry
comments regarding feasibility, we have concluded that the progress
made in the development of NOX aftertreatment technology has
been such that this proposed allowance to defer NOX control
is not consistent with our obligation under section 213(a)(3) of the
Clean Air Act to set standards that ``achieve the greatest degree of
emission reduction achievable through the application of technology
which the Administrator determines will be available for the engines or
vehicles, giving appropriate consideration to cost, lead time, noise,
energy, and safety factors associated with the application of such
technology.''
We are therefore not adopting this allowance for deferred
NOX control in 2015-2016 Tier 4 locomotives, effectively
advancing the Tier 4 NOX standard for locomotives by two
years. Besides meeting our obligation under the Clean Air Act, this
change will simplify the certification and compliance program for all
stakeholders by providing a single step for Tier 4 implementation. It
will also provide substantial additional NOX reductions
during years that are important to some states for NAAQS attainment,
thus helping to address what was arguably the most critical comment we
received from state and local air agencies and environmental
organizations.
We recognize that designing locomotives to meet the stringent Tier
4

[[Page 37122]]

standards in 2015 with the high levels of performance and reliability
demanded by the railroad industry will be challenging. As in other
recent EPA mobile source programs, we proposed and are finalizing
several compliance flexibility measures to aid the transition to these
very clean technologies. Specifically, we are adopting two distinct
compliance flexibility options for NOX that, while ensuring
the earliest possible introduction of advanced emission control, will
provide locomotive manufacturers some level of risk mitigation should
the technology solutions prove to be less robust than we project. The
first compliance flexibility is consistent with the flexibility program
described in our NPRM providing an in-use compliance margin for
NOX of 1.3 g/bhp-hr at full useful life (i.e., a 2.6 g/bhp-
hr emissions cap for in-use testing) for the first three Tier 4 model
years. See section IV.A(8) for details on this program.
The second flexibility provision is an alternative NOX
compliance option that reduces the in-use NOX add-on to 0.6
g/bhp-hr (i.e., a 1.9 g/bhp-hr emissions cap for any in-use testing)
for model years 2015-2022. While significantly tightening the in-use
emissions cap, the provision provides manufacturers with significantly
more time to develop advanced NOX emission control systems
using real in-use experiences from the locomotive fleet. Complementing
this focus on improving technology through experience with the in-use
fleet, this provision also allows manufacturers to substitute
additional in-use tests on locomotives in lieu of the typical
production line testing requirements of our locomotive regulations.
This optional in-use testing would be in addition to the current in-use
testing requirements of our locomotive certification program. See
section IV.A(8) for details on this program.
For reasons explained in the NPRM, Tier 4 line-haul locomotives
will not be required to meet standards on the switch cycle, but we are
requiring that newly-built Tier 3 locomotives and Tier 0 through Tier 2
locomotives remanufactured under this program be subject to switch
cycle standards, set at levels above the line-haul cycle standards.
Section III.B(1)(b) provides details.
(b) Switch Locomotives
The NPRM discussed at some length the importance and challenges of
turning over today's large switch locomotive fleet to clean diesel. In
response, we proposed standards and other provisions aimed at
overcoming these challenges by encouraging the replacement of old high-
emitting units with newly-built or refurbished locomotives powered by
very clean engines developed for the nonroad equipment market.
We are adopting the new standards for switch locomotives that we
proposed. As proposed, we are also continuing the existing Part 92
policy of requiring Tier 0 switch locomotives to only meet standards on
the switch cycle, while requiring Tier 1 and Tier 2 locomotives to meet
the applicable standards on both the line-haul and switch cycles. This
policy was adopted to ensure that manufacturers design emission
controls to function broadly over all notches. The switch cycle
standards shown in Table III-2 will require emission reductions
equivalent to those required by our new standards that apply over the
line-haul cycle. Note that these switch cycle standards also apply to
the Tier 3 and earlier line-haul locomotives that are subject to
compliance requirements on the switch cycle, as mentioned above and in
Section III.B(1)(b).
We are also adopting the proposed Tier 3 and 4 emission standards
for newly-built switch locomotives, as shown in Table III-2. These
standards are slightly more stringent than the Tier 3 and Tier 4 line-
haul standards. Given these more stringent switch cycle standards, it
is not necessary to require to Tier 3 and 4 switchers to meet the line-
haul standards over the line-haul cycle.

Table III.--2 Emission Standards for Switch Locomotives
[g/bhp-hr]
----------------------------------------------------------------------------------------------------------------
Switch locomotive standards apply to Take effect in year PM NOX HC
----------------------------------------------------------------------------------------------------------------
Remanufactured Tier 0..................... 2008 as available, 2010 0.26 11.8 2.10
required.
Remanufactured Tier 1..................... 2008 as available, 2010 0.26 11.0 1.20
required.
Remanufactured Tier 2..................... 2008 as available, 2013 0.13 8.1 0.60
required.
Tier 3.................................... 2011......................... 0.10 5.0 0.60
Tier 4.................................... 2015......................... 0.03 1.3 0.14
----------------------------------------------------------------------------------------------------------------

We are also finalizing the proposed streamlined certification
option to help in the early implementation of the switch locomotive
program. As described in section IV.B(9), during a 10-year program
start-up period aimed at encouraging the turnover of the existing
switcher fleet to the new cleaner engines, switch locomotives may use
nonroad-certified engines (Table III-3) without need for an additional
certification under the locomotive program. In the years before the
nonroad Tier 4 start dates, we are making this provision available
using pre-Tier 4 nonroad engines meeting today's standards of 0.15 g/
bhp-hr PM and 3.0/4.8 g/bhp-hr NOX+NMHC (below/above 750
hp), because switchers built with these nonroad engines will still be
much cleaner than those meeting the current switch locomotive Tier 2
standards of 0.24 and 8.1 g/bhp-hr PM and NOX, respectively.
Commenters suggested that we allow the use of even earlier-tier
nonroad engines under this option, as these would still be
substantially cleaner than the engines being replaced. However, we feel
this would defeat the purpose of the program, and would not be
justifiable on a feasibility basis, as current-tier nonroad engines
will be available for incorporation into new switchers in any year of
the program. We are adopting other compliance and ABT provisions
relevant to switch locomotives as discussed in section IV.B(1), (2),
(3), and (9).

[[Page 37123]]

Table III.--3 Relevant Large Nonroad Engine Tier 4 Standards
[g/bhp-hr]
----------------------------------------------------------------------------------------------------------------
Engine power Model year PM NOX
----------------------------------------------------------------------------------------------------------------
At or Below 750 hp.................... 2011 0.01 3.0 (NOX+NMHC) \a\
2014 0.01 0.30
750-1200 hp........................... 2011 0.075 2.6
2015 0.02 0.50
Over 1200 hp.......................... 2011 0.075 0.50 genset; 2.6 non-genset
2015 0.02 0.50
----------------------------------------------------------------------------------------------------------------
Note: (a) 0.30 NOX for 50% of sales in 2011-2013, or alternatively 1.5 g NOX for 100% of sales.

Finally, we are revising the definition of a switch locomotive to
make clear that it is the total switch locomotive power rating
(including power from any auxiliary engines that can operate when a
main engine is operating), and not the individual engine power rating,
that must be below 2300 hp to qualify, and to drop the unnecessary
requirement that it be designed or used primarily for short distance
operation. This clears up the ambiguity in the Part 92 definition over
multi-engine switchers.
(c) Reduction of Locomotive Idling Emissions
We are adopting the proposed requirement that an Automatic Engine
Stop/Start System (AESS) be used on all new Tier 3 and Tier 4
locomotives and installed on all existing locomotives that are subject
to the new remanufactured engine standards, at the point of first
remanufacture under the new standards. Locomotives equipped with an
AESS device under this program must shut down the locomotive engine
after no more than 30 continuous minutes of idling, and be able to stop
and start the engine at least six times per day without causing engine
damage or other serious problems. Continued idling is allowed under the
following conditions: to prevent engine damage such as damage caused by
coolant freezing, to maintain air pressure for brakes or starter
systems, to recharge the locomotive battery, to perform necessary
maintenance, or to otherwise comply with applicable government
regulations.
Commenters also pointed out that it can sometimes be appropriate to
allow a locomotive to idle to heat or cool the cab, and we are adopting
regulations to allow it where necessary. Our implementation of this
provision will rely on the strong incentive railroads have to limit
idling to realize fuel cost savings after they have invested capital by
installing an AESS system on a locomotive. We expect the railroads to
appropriately develop policies instructing operators when it is
acceptable to idle the locomotive to provide heating or cooling to the
locomotive cab. We do not believe that those individuals responsible
for developing railroad policies have any incentive to encourage or
allow unnecessary idling. It is our intention to stay abreast of how
well this combination of idle control systems and railroad policies
does in fact accomplish the intended goal of reducing unnecessary
idling. In general, we may consider it to be circumvention of this
provision for an individual operator to use the AESS system in a manner
other than that for which the system was designed and implemented per a
railroad's policy directive.
A further reduction in idling emissions can be achieved through the
use of onboard auxiliary power units (APUs), either as standalone
systems or in conjunction with an AESS. In contrast to AESS, which
works to reduce unnecessary idling, the APU goes further by also
reducing the amount of time when locomotive engine idling is necessary,
especially in cold weather climates. APUs are small (less than 50 hp)
diesel engines that stop and start themselves as needed to provide:
heat to both the engine coolant and engine oil, power to charge the
batteries, and power to run accessories such as those required for cab
comfort. This allows the much larger locomotive engine to be shut down
while the locomotive remains in a state of readiness, thereby reducing
fuel consumption without the risk of the engine being damaged in cold
weather. APUs are powered by nonroad engines compliant with EPA or
State of California nonroad engine standards, and emit at much lower
levels than an idling locomotive under current standards.
Some commenters suggested we require both an AESS and an APU.
However, the amount of idle reduction an APU can provide is dependent
on a number of variables, such as the function of the locomotive (e.g.,
a switcher or a line-haul), where it operates (i.e., geographical
area), and its operating characteristics (e.g., number of hours per day
that it operates). As we stated in the NPRM, at this time we are not
requiring that APUs be installed on every locomotive because it is not
clear how much additional benefit they would provide outside of regions
and times of the year where low temperatures or other factors that
warrant the use of an APU exist and because they do involve some
inherent design and operational complexities that could not be
justified without such commensurate benefits. We are, however, adopting
the proposed provision to encourage the additional use of APUs by
providing in our test regulations, a process by which the manufacturer
can appropriately account for the proven emission benefits of a more
comprehensive idle reduction system.
In response to comment, we are adopting a more flexible approach
that will allow the idle reduction requirement for remanufactured Tier
0+, 1+, and 2+ locomotives to be addressed in a separate certification
apart from the certification of the full remanufacture system. Under
this approach, remanufacturers will be allowed to obtain a certificate
for a system that meets all of the requirements of part 1033 except for
those of Sec. 1033.115(g). However, since the idle controls would
still need to be installed in a certified configuration before the
remanufactured locomotive is returned to service, some other entity
would need to obtain a certificate to cover the requirements of Sec.
1033.115(g). (This separate certification approach is somewhat
analogous to allowing a motor vehicle engine manufacturer to hold the
certificate for exhaust emission standards and a motor vehicle
manufacturer to hold the certificate for evaporative emission standards
for a single motor vehicle.) Note that manufacturers of freshly
manufactured locomotives and their customers will also have the choice
as to whether the AESS is installed as part of the certified engine
configuration at the factory or by an aftermarket company pursuant to a
separate certification before the freshly manufactured locomotive is
put into

[[Page 37124]]

service. These provisions will allow more companies to remain in the
AESS manufacturing market and thus provide more choices to the
railroads.
As described in Chapter 5 of the RIA, manufacturers of AESS, and
demonstrations done in partnership between government and industry have
shown that for most locomotives the fuel savings that result in the
first few years after installation of an AESS system will offset the
cost of adding the system to the locomotive. Given these short payback
times for adding idle reduction technologies to a typical locomotive,
normal market forces have led many railroads to retrofit a number of
their locomotives with such controls. However, as is common with
pollution, market prices generally do not account for the external
social costs of the idling emissions, leading to an underinvestment in
idling reduction systems. This rulemaking addresses those locomotives
for which the railroads judge the fuel savings insufficient to justify
the cost of the retrofit. We believe that applying AESS to these
locomotives is appropriate when one also considers the significant
emissions reductions that will result.
(2) Marine Diesel Engine Standards
(a) Newly-Built Marine Engines
We are adopting Tier 3 and Tier 4 emission standards for newly-
built marine diesel engines with displacements under 30 liters per
cylinder. Our analysis of the feasibility of these standards is
summarized in section III.C and detailed in the RIA.
We are retaining our existing per-cylinder displacement approach to
establishing cutpoints for standards, but are revising and refining it
in several places to ensure that the appropriate standards apply to
every group of engines in this very diverse sector and to provide for
an orderly phase-in of the program to spread out the redesign workload
burden:
We are moving the C1/C2 cutpoint from 5 liters/cylinder to 7
liters/cylinder, because the latter is a more accurate cutpoint between
today's high- and medium-speed diesels.
We are revising the per-cylinder displacement cutpoints within
Category 1 to better define the application of standards.
An additional differentiation is made between high power density
engines typically used in planing vessels and standard power density
engines, with a cutpoint between them set at 35 kW/liter (47 hp/liter).
We are removing the distinction for marine diesels under 37 kW (50
hp) in Category 1, originally made because these were regulated under
our nonroad engine program.
Finally, we will further group engines by maximum engine power,
especially in regards to setting appropriate long-term aftertreatment-
based standards.
Note that we are retaining the differentiation between recreational
and non-recreational marine engines within Category 1 because there are
differences in their certification programs. Also, as discussed below,
we are not finalizing Tier 4 standards for recreational marine engines
at this time. Section IV.C(10) clarifies the definition of recreational
marine diesel engine.
The new standards and implementation schedules are shown on Tables
III-4 through 7. Briefly summarized, the marine diesel standards
include stringent engine-based Tier 3 standards, phasing in over 2009-
2014. They also include aftertreatment-based Tier 4 standards for
commercial marine engines at or above 600 kW (800 hp), phasing in over
2014-2017. For engines of power levels not included in the Tier 3 and
Tier 4 tables, the previous tier of standards (Tier 2 or Tier 3,
respectively) continues to apply. These standards and implementation
dates are the same as those proposed except: (1) Recreational marine
engines are not subject to Tier 4 standards; (2) The Tier 4
NOX standard for 2000-3700 kW engines has been pulled
forward by two years; (3) The proposed optional Tier 4 approach
coordinated with locomotive Tier 4 has been modified; and (4) based on
comments we received, the Tier 3 standards for high power density
engines in the 3.5 to 7 liter/cylinder category (Table III-5) have been
adjusted slightly to better align them with standards in other
categories. The first three of these changes are discussed in more
detail below. See section 3.2.1.1 of the Summary and Analysis of
Comments document for discussion of the fourth.

Table III-4.--Tier 3 Standards for Marine Diesel C1 Commercial Standard Power Density
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum engine power L/cylinder PM g/bhp-hr (g/kW-hr) NOX+HC \d\ g/bhp-hr (g/kW-hr) Model year
--------------------------------------------------------------------------------------------------------------------------------------------------------
<19 kW................................ <0.9 0.30 (0.40) 5.6 (7.5) 2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
19 to <75 kW.......................... <0.9 \a\ 0.22 (0.30) 5.6 (7.5) 2009
0.22 (0.30) \b\ 3.5 (4.7) \b\ 2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
75 to <3700 kW........................ <0.9 0.10 (0.14) 4.0 (5.4) 2012
0.9-<1.2 0.09 (0.12) 4.0 (5.4) 2013
1.2-<2.5 0.08 (0.11) \c\ 4.2 (5.6) 2014
2.5-<3.5 0.08 (0.11) \c\ 4.2 (5.6) 2013
3.5-<7.0 0.08 (0.11) \c\ 4.3 (5.8) 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
(a) <75 kW engines at or above 0.9 L/cylinder are subject to the corresponding 75-3700 kW standards.
(b) Option: 0.15 g/bhp-hr (0.20 g/kW-hr) PM/4.3 g/bhp-hr (5.8 g/kW-hr) NOX+HC in 2014.
(c) This standard level drops to 0.07 g/bhp-hr (0.10 g/kW-hr) in 2018 for <600 kW engines.
(d) Tier 3 NOX+HC standards do not apply to 2000-3700 kW engines.

Table III-5.--Tier 3 Standards for Marine Diesel C1 Recreational and Commercial High Power Density
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum engine power L/cylinder PM g/bhp-hr (g/kW-hr) NOX+HC g/bhp-hr (g/kW-hr) Model year
--------------------------------------------------------------------------------------------------------------------------------------------------------
<19 kW................................ <0.9 0.30 (0.40) 5.6 (7.5) 2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
19 to <75 kW.......................... <0.9 \a\ 0.22 (0.30) 5.6 (7.5) 2009

[[Page 37125]]

.............................. 0.22 (0.30) \b\ 3.5 (4.7) \b\ 2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
75 to <3700 kW........................ <0.9 0.11 (0.15) 4.3 (5.8) 2012
0.9-<1.2 0.10 (0.14) 4.3 (5.8) 2013
1.2-<2.5 0.09 (0.12) 4.3 (5.8) 2014
2.5-<3.5 0.09 (0.12) 4.3 (5.8) 2013
3.5-<7.0 0.08 (0.11) 4.3 (5.8) 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
(a) <75 kW engines at or above 0.9 L/cylinder are subject to the corresponding 75-3700 kW standards.
(b) Option: 0.15 g/bhp-hr (0.20 g/kW-hr) PM/4.3 g/bhp-hr (5.8 g/kW-hr) NOX+HC in 2014.

Table III-6.--Tier 3 Standards for Marine Diesel C2 \a\
----------------------------------------------------------------------------------------------------------------
PM g/bhp-hr (g/kW- NOX+HC \b\ g/bhp-hr
Maximum engine power L/cylinder hr) (g/kW-hr) Model year
----------------------------------------------------------------------------------------------------------------
<3700 kW..................... 7-<15 0.10 (0.14) 4.6 (6.2) 2013
15-<20 0.20 (0.27) \c\ 5.2 (7.0) 2014
20-<25 0.20 (0.27) 7.3 (9.8) 2014
25-<30 0.20 (0.27) 8.2 (11.0) 2014
----------------------------------------------------------------------------------------------------------------
Notes:
(a) See note (c) of Table III-7 for optional Tier 3/Tier 4 standards.
(b) Tier 3 NOX+HC standards do not apply to 2000-3700 kW engines.
(c) For engines below 3300 kW in this group, the PM Tier 3 standard is 0.25g/bhp-hr (0.34 g/kW-hr).

Table III-7.--Tier 4 Standards for Marine Diesel C1 and C2
----------------------------------------------------------------------------------------------------------------
PM g/bhp-hr (g/kW- NOX g/bhp-hr (g/kW- HC g/bhp-hr (g/kW-
Maximum engine power hr) hr) hr) Model year
----------------------------------------------------------------------------------------------------------------
At or above 3700 kW.......... 0.09 (0.12) \a\ 1.3 (1.8) 0.14 (0.19) \c\ 2014
0.04 (0.06) 1.3 (1.8) 0.14 (0.19) b, c 2016
----------------------------------------------------------------------------------------------------------------
2000 to <3700 kW............. 0.03 (0.04) 1.3 (1.8) 0.14 (0.19) c, d 2014
1400 to <2000 kW............. 0.03 (0.04) 1.3 (1.8) 0.14 (0.19) c 2016
600 to <1400 kW.............. 0.03 (0.04) 1.3 (1.8) 0.14 (0.19) b 2017
----------------------------------------------------------------------------------------------------------------
Notes:
(a) This standard is 0.19 g/bhp-hr (0.25 g/kW-hr) for engines with 15-30 liter/cylinder displacement.
(b) Optional compliance start dates can be used within these model years; see discussion below.
(c) Option for C2: Tier 3 PM/NOX+HC at 0.10 / 5.8 g/bhp-hr (0.14/7.8 g/kW-hr) in 2012, and Tier 4 in 2015.
(d) The Tier 3 PM standards continue to apply for these engines in model years 2014 and 2015 only.

Engine manufacturers argued that modifying standard power density
engines between 2000 and 3700 kW for Tier 3 NOX, and again
for Tier 4 NOX shortly after would be too difficult. They
argued that these engines could meet Tier 4 NOX in 2014, two
years earlier, if the Tier 3 NOX+HC standard, proposed to
apply in 2012, 2013, or 2014, depending on displacement, did not have
to be met. We have analyzed this group of engines and agree that the
suggested approach would be feasible and would have very little
detrimental effect on NOX reductions in 2012-2013, while
providing significant additional NOX reductions thereafter.
We are therefore leaving the Tier 3/Tier 4 PM standards as proposed but
revising the NOX implementation schedule as suggested by the
industry.
The Tier 3 standards for engines with maximum engine power less
than 75 kW (100 hp) are based on the nonroad diesel Tier 2 and Tier 3
standards, because these smaller marine engines are largely derived
from (and often nearly identical to) the nonroad engine designs. The
relatively straightforward carry-over nature of this approach also
allows for an early implementation schedule, in model year 2009,
providing substantial early benefits to the program. However, some of
the nonroad engines less than 75 kW are also subject to aftertreatment-
based Tier 4 nonroad standards, and our new program does not carry
these over into the marine sector, due to vessel design and operational
constraints discussed in section III.C. Because of the widespread use
of both direct- and indirect-injection diesel engines in the 19 to 75
kW (25-100 hp) engine market today, we are making two options available
to manufacturers for meeting Tier 3 standards on any engine in this
range, as indicated in Table III-4. One option focuses on lower PM and
the other on lower NOX, though both require substantial
reductions in both PM and NOX and will take effect in 2014.
With important exceptions, we are subjecting marine diesel engines
at or above 75 kW (100 hp) to new emissions standards in two steps,
Tier 3 and Tier 4. The Tier 3 standards are based on the engine-out
emission reduction potential (apart from the addition of exhaust
aftertreatment) of the nonroad Tier 4 diesel engines that will be
introduced beginning in 2011. The Tier 3 standards for C1 engines will
phase in over 2012-2014. We believe it is appropriate to coordinate the
marine Tier 3 standards

[[Page 37126]]

with the nonroad Tier 4 (rather than Tier 3) engine developments in
this way because marine diesel engines are largely derived from land-
based nonroad counterparts, and because the advanced fuel and
combustion systems that we expect the Tier 4 nonroad engines to employ
will allow approximately a 50 percent reduction in PM when compared to
the reduction potential of the nonroad Tier 3 engines. Inserting an
additional marine engine tier based on nonroad Tier 3 engines would
result in overly short lead time and stability periods and/or a delay
in stringent standards.
We are applying high-efficiency aftertreatment-based Tier 4
standards to all commercial and auxiliary C1 and C2 engines over 600 kW
(800 hp). These standards will phase in over 2014-2017. Marine diesels
over 600 kW, though fewer in number, are the workhorses of the inland
waterway and intercoastal marine industry, running at high load
factors, for many hours a day, over decades of heavy use. As a result
they also account for the bulk of marine diesel engine emissions.
After considering the substantial number of comments received on
the feasibility of extending Tier 4 standards to engines below 600 kW,
we are not at this time setting Tier 4 standards for these engines. We
may do so at some point in the future if further technology
developments show a path to address the issues we identify in RIA
chapter 4 with the application of aftertreatment technologies to
smaller vessels.
We are also not extending the Tier 4 program to recreational marine
diesel engines. In our proposal we indicated that at least some
recreational vessels, those with engines above 2000 kW (2760 hp), have
the space and design layout conducive to aftertreatment-based controls
and professional crews who oversee engine operation and maintenance.
This suggested that aftertreatment-based standards would be feasible
for these larger recreational engines. While commenters on the proposal
did not disagree with these views, they pointed out these very large
recreational vessels often travel outside the United States, and, for
tax reasons, flag outside the U.S. as well. Commenters argued that
applying Tier 4 standards to large recreational marine diesel engines
would further discourage U.S.-flagging because vessels with those
engines would be limited to using only those foreign ports that make
ULSD and reductant for NOX aftertreatment available at
recreational docking facilities, limiting their use and hurting the
vessel's resale value. The aftertreatment devices used to meet Tier 4
are expected to be sensitive to sulfur in the exhaust and so ULSD must
be used in these engines.
In general, we expect ULSD to become widely available worldwide,
which would help reduce these concerns. However, there are areas such
as Latin America and parts of the Caribbean that currently do not plan
to require use of this fuel. Even in countries where ULSD is available
for highway vehicles but not mandated for other mobile sources,
recreational marinas may choose to not make ULSD and reductant
available if demand is limited to a small number of vessels, especially
if the storage and dispensing costs are high. To the extent the fuel
requirements for Tier 4 engines encourage vessel owners to flag outside
the United States, the results would be increased emissions since the
international standards for these engines are equivalent to EPA's Tier
1 standards.
After considering the above, we conclude that it is preferable at
this time to hold recreational engines marine diesel engines to the
Tier 3 standards. We plan to revisit this decision when we consider the
broader questions of the application of our national marine diesel
engine standards to engines on foreign vessels that enter U.S. ports in
the context of our Category 3 marine diesel engine rulemaking.
There is a group of commercial vessels that share some of the
characteristics of recreational vessels in that they also operate
outside the United States. However, the concerns that lead us to
exclude recreational vessels from the Tier 4 standards (flagging or
registering in a foreign country and thus avoiding all U.S. emission
standards; resale value) do not generally apply to commercial vessels.
Unlike recreational vessels, the majority of commercial vessels with C1
or C2 main propulsion engines that operate in the United States do not
have the option of flagging offshore. This is because they are engaged
full-time in harbor activities in U.S. ports or in transporting freight
or otherwise operating only between two U.S. ports, and cabotage laws
require such vessels be flagged in the United States. In addition, most
of these vessels operate at or between U.S. ports, so ULSD availability
is not expected to be a problem. Finally, the resale of U.S. commercial
vessels on the world market is already affected by other U.S.-specific
vessel design and operation requirements, and these standards are not
expected to affect that situation.
Nevertheless, some commercial vessels are used in ways that could
make the use of ULSD and even urea an intractable problem. These are
commercial vessels that are routinely operated outside of the United
States for extended periods of time, including tug/barge cargo vessels
operated on circle routes between the United States and Latin America
that routinely refuel in places where ULSD is not available, and lift
boats, utility boats, supply boats and crewboats that are used in the
offshore drilling industry and are contracted to work in waters off
Latin America or Western Africa for up to several years at a time
without returning to the United States. Owners of these vessels
informed us that requiring them to use Tier 4 engines will adversely
impact their business in significant ways since they would have to
arrange for ULSD and urea outside the United States, potentially at
great additional cost, and that this is turn would affect their ability
to compete with foreign transportation providers who do not face the
same costs. These owners flag their vessels in the U.S. to maximize the
flexibility of their business operations, but they informed us that
they would consider segregating their fleets and flagging some
elsewhere if they are required to use Tier 4 engines. Similar to the
recreational marine case, the engines on reflagged vessels would not be
subject to any U.S. emission controls or compliance requirements. In
addition, there could be adverse impacts on associated industries that
use these services, if there are fewer vessels available for use in the
Untied States. For all of these reasons, these vessel owner/operators
encouraged EPA to consider a provision that would not require these
vessels to use Tier 4 engines.
We do not expect ULSD availability at foreign commercial ports to
be a widespread problem. Many industrial nations already have or are
expected to shift to ULSD in the near future, including Japan (by
2008), Singapore (in 2007), Mexico (in 2007 for ``Northern border
areas''), the EU member states (by 2009), and Australia (by 2009).
Other countries may also make ULSD available by 2016, as refineries in
other countries modify their production to supply ULSD to the U.S.
markets even if they do not require it domestically. However, ULSD may
be difficult to obtain in some areas of the world, notably Latin
America and Africa. Therefore, it is reasonable to include a limited
compliance exemption from the Tier 4 standards for the narrow set of
vessels that are described above.
Because the decision of whether a Tier 4 engine is required must be
made at the design phase of a vessel, and not after it goes into
service, it is preferable to define such an exemption based on vessel
design characteristics instead of

[[Page 37127]]

the owner's intentions for how the vessel may ultimately be used. After
consulting with industry representatives, we concluded that the most
obvious design feature that indicates the vessel is intended for
extensive international use is compliance with international safety
standards. We have concluded that the costs of obtaining and
maintaining certification for the International Convention for the
Safety of Life at Sea (SOLAS) are high enough to discourage owners of
vessels that will not be used outside the United States to obtain
certification to evade the Tier 4 standards. These costs can range from
about $250,000 to $1 million in capital costs and from about $50,000 to
$100,000 in annual operating costs. The Port State Information Exchange
database maintained by the U.S. Coast Guard indicates that about 30
percent of offshore supply vessels built annually are SOLAS certified
and that 3 percent or fewer passenger vessels and tugs built annually
are SOLAS certified (based on new vessel construction, 1995-2006).\127\
Therefore, to be eligible for the exemption, the owner will be required
to obtain and maintain relevant international safety certification
pursuant to the requirements of the United States Coast Guard and SOLAS
for the vessel on which an exempted engine is installed.
---------------------------------------------------------------------------

\127\ Memorandum to Docket EPA-HQ-OAR-2003-0190, Marine
Vessels--SOLAS Certification, from Jean MarieRevelt, dated January
11, 2007.
---------------------------------------------------------------------------

Vessel owners will be required to petition EPA for an exemption for
a particular vessel in order for an engine manufacturer to sell them an
exempted engine; granting of the exemption will not be automatic. In
evaluating a request for a Tier 4 exemption, we will consider the
owner's projections of how and where the vessel will be used and the
availability of ULSD in those areas, as well as the mix of SOLAS and
non-SOLAS vessels in the owner's current fleet and the extent to which
those vessels are being or have been operated outside the United
States. In general, it is our expectation that fleets should first use
existing pre-Tier 4 vessels for operations where ULSD may not be
available. Therefore, we would not expect to grant an exemption for a
vessel that will be part of a fleet that does not already have a
significant percentage of Tier 4 vessels, since a fleet with a smaller
percentage of Tier 4 vessels would likely have more pre-Tier 4 vessels
that could be employed in the overseas application instead. For
example, if 30 percent of an owner's current fleet has SOLAS
certification, we would expect that up to 70 percent of the vessels in
that fleet could be Tier 4 compliant without changes in the operation
of the fleet. We may also ask the petitioner to demonstrate that other
vessels in the petitioner's fleet remain in service outside the United
States and have not been placed into service domestically. EPA does not
expect to approve applications for the Tier 4 exemption described in
this paragraph prior to 2021; we expect that the existing fleet of Tier
3 vessels can be used for overseas operations during that time. If an
owner petitions EPA for an exemption prior to that year, we may request
additional information on the owner's expected operation plans for that
vessel and a more complete explanation as to why another vessel in the
existing fleet could not be redirected to the offshore application with
the Tier 4 vessel under construction taking that vessel's place.
Finally, a failure to maintain SOLAS certification for the vessel on
which an exempted engine is installed would result in a finding of
noncompliance and the owner would be liable for applicable fines and
other penalties.
To address the situation in which an owner of a vessel with Tier 4
engines wants to use that vessel in a country that does not have ULSD
available, we are also including a provision that will allow the owner
to petition EPA to temporarily remove or disable the Tier 4 controls on
vessels that are operated solely outside the United States for a given
period of time. The petitioner will need to specify where the vessel
will operate, how long the vessel will operate there, and why the owner
will be unable to provide ULSD for the vessel. The petitioner will also
be required to describe what actions will be taken to disable or
disconnect the Tier 4 controls. Permission to disable or remove the
Tier 4 controls will be allowed only for the period specified by the
owner and agreed to by EPA; however, the owner may re-petition EPA at
the end of that period for an extension. As part of the approval of
such a petition, the petitioner will be required to agree to re-install
or reconnect the Tier 4 emission control devices prior to re-entry into
the United States, whether this occurs only at the end of the specified
period or earlier.
These provisions for migratory vessels are intended to facilitate
the use of vessels certified to the U.S. federal marine diesel emission
standards while they are operated for extended periods in areas that
may not have ULSD available. It should be noted that vessels that
receive either limited exemptions or that petition EPA to remove or
disable Tier 4 controls will still be subject to the MARPOL emission
limits when they are operated outside the United States. We may review
these migratory vessel provisions in the context of our upcoming
Category 3 marine diesel engine rulemaking. We may also revisit this
program in the future if the number of exemption requests appears to be
unreasonably high or if we find that significant numbers of vessels
that have obtained exemptions from Tier 4 are, in fact, in use
domestically.
Note that the implementation schedule in the above marine standards
tables is expressed in terms of model years, consistent with past
practice and the format of our regulations. However, in two cases we
believe it is appropriate to provide a manufacturer the option to delay
compliance somewhat, as long as the standards are implemented within
the indicated model year. Specifically, we are allowing a manufacturer
to delay Tier 4 compliance within the 2017 model year for 600-1000 kW
(800-1300 hp) engines by up to 9 months (but no later than October 1,
2017) and, for Tier 4 PM, within the 2016 model year for engines at or
above 3700 kW (4900 hp) by up to 12 months (but no later than December
31, 2016). We consider this option to delay implementation appropriate
in order to give some flexibility in spreading the implementation
workload and ensure a smooth transition to the long-term Tier 4
program.
The Tier 4 standards for locomotives and for C2 diesel marine
engines of comparable size are at the same numerical levels but differ
somewhat in implementation schedule: Locomotive Tier 4 standards start
in 2015, while diesel marine Tier 4 standards start in 2016 for engines
in the 1400-2000 kW (1900-2700 hp) range, and in 2014 for engines over
2000 kW (with final PM standards starting in 2016 for these engines).
We consider these locomotive and marine diesel Tier 4 implementation
schedules to be close enough to warrant our adopting a marine engine
option based on the Tier 4 locomotive schedule, aimed at facilitating
continuance of today's frequent practice of developing a common engine
platform for both markets. Commenters on the proposal supported this
marine engine option, but expressed concerns about competitiveness
issues and argued that we should remove the proposed restriction to
engines of 7-15 liter/cylinder displacement and under 3700 kW maximum
engine power.
We are adopting this locomotive-based marine engine option, but
with

[[Page 37128]]

some changes from the proposed approach to address potential
competitiveness issues, as well as our own concern that this option be
used only for the intended purpose of avoiding unnecessary dual design
efforts. First, we are retaining some limits on its scope, specifically
to engines above both a 7 liters per cylinder limit (Category 2 in the
marine sector) and a 1400 kW (1900 hp) maximum engine power. Second, if
the option is used, its standards must be met for all of a
manufacturer's marine engines at or above 1400 kW (1900 hp) in the same
displacement category (that is, 7-15, 15-20, 20-25, or 25-30 liters per
cylinder) in all of the model years 2012 through 2016. This will help
ensure the option is not gamed by artificially subdividing engine
platforms. Because the switch locomotive program we are establishing
already includes a similar streamlined option allowing the use of land-
based nonroad engines, we are not extending this option to switchers.
We are adopting another provision to help ensure that this
locomotive-based marine engine option is environmentally beneficial and
is not used to gain a competitive advantage. We are requiring that
marine engines under this option meet Tier 3 standards in 2012, the
year Tier 3 starts for locomotives, with standards numerically
corresponding to locomotive Tier 3 standards levels: 0.14 g/kW-hr (0.10
g/bhp-hr) PM and 7.8 g/kW-hr NOX+HC (5.8 g/bhp-hr: that is,
5.5 + 0.30 g/bhp-hr combined NOX and HC). Otherwise a
manufacturer could take advantage of the later-starting marine Tier 3
schedule to generate credits or allow increased emissions from these
engines until 2015 when the option requires Tier 4 compliance. This
approach also deals fairly with the problem identified in the proposal
regarding redesigning locomotive-based engine platforms to meet the
numerically lower marine Tier 3 NOX level.
Finally, we considered but are not adopting a provision that would
set a total vessel power limit for the Tier 4 standards. The comments
we received on this issue lead us to conclude that multiple-engine
configurations are used in vessel designs for specific purposes and are
not likely to be employed to evade the Tier 4 standards. We may
consider this type of restriction in a future action, however, if
multiple-engine vessels are built in applications that have typically
used a different number of engines in the past.
(b) Remanufactured Marine Engines
In addition to the standards for newly-built engines, we are
adopting for the first time emission standards for marine diesel
engines on existing vessels. Many of these existing engines will remain
in the fleet for 40 years or more, making them what would otherwise be
a substantial source of air pollution. The marine remanufacture program
will provide early PM reductions by reducing emissions from this legacy
fleet sooner than would be the case from the retirement of old vessels
in favor of new vessels with cleaner engines. Additional early
NOX reductions are expected to be achieved from the use of
locomotive remanufacture systems recertified under this program for
Category 2 engines.
The program we are finalizing is modified from what we described in
the NPRM. In the NPRM we described a two-part program that would have
applied to all commercial marine diesel engines above 600 kW when they
are remanufactured. In the first part, which we considered beginning as
early as 2008, vessel owners/operators and engine rebuilders who
remanufacture engines would be required to use a certified
remanufacture system when an engine is remanufactured (defined as
replacement of all cylinder liners, either in one event or over a five-
year period) if such a certified system is available. In the second
part, which we considered beginning in 2013, a marine diesel engine
identified by EPA as a high-sales volume engine model would have been
required to meet specified emission requirements when it is
remanufactured. Specifically, the remanufacturers or owners of such
engines would have been required to use systems certified to meet the
standard; if no certified system is available, they would have needed
to either retrofit the engines with emission reduction technology that
demonstrates at least a 25 percent reduction or replace the engines
with new ones. For engines not identified as high-sales volume engines,
Part 1 would have continued to apply.
Several commenters requested that EPA not finalize this program at
this time but instead consider it in a separate rulemaking. They noted
that this would allow additional time to consider the program and its
requirements. Postponing the program, however, would also result in the
loss of important emission reductions early in the program. Delay is
also not necessary because the program we are adopting consists only of
the first part of the program described in our proposal, requiring the
owner of a marine diesel engine to use a certified marine remanufacture
system when the engine is remanufactured if such a system is available.
We are not adopting a requirement for the mandatory availability of
remanufacture systems. (Under the option discussed in the proposal, in
certain circumstances, if a remanufacture system was not made available
the owner would have been required to retrofit an emission control
technology, repower the vessel (replace its engines) or scrap the
vessel.)
The marine remanufacture program we are adopting applies to all
commercial marine diesel engines with maximum engine power greater than
600 kW and manufactured in 1973 or later, through Tier 2. The beginning
date of 1973 is based on our existing locomotive program; many of the
techniques used to achieve those standards are expected to be
applicable to marine diesel engines over 600 kW.
As described in more detail below, the program draws on aspects of
our locomotive remanufacture and diesel retrofit programs with regard
to the basic requirements that apply and how remanufacture systems are
certified. The remainder of this section describes the main features of
the program. The technological feasibility of this program is described
in section III.C, and the certification requirements are set out in
section IV. Small manufacturer, engine dresser, vessel builder, and
operator flexibilities are set out in section IV.A(13)(b).
Similar to the locomotive program, the marine program we are
finalizing applies when a marine diesel engine is remanufactured.
Covered engines are those that are remanufactured to as-new condition.
Based on discussions with engine manufacturers, we have determined that
replacing all cylinder liners is a simple and clear indicator that the
servicing being done is extensive enough for the engine to be
considered functionally equivalent to a freshly manufactured engine,
both mechanically and in terms of how it is used. Therefore, we are
defining remanufacture as the removal and replacement of all cylinder
liners, either during a single maintenance event or over a five-year
period. It should be noted that marine diesel engines are not
considered to be remanufactured if the rebuilding process falls short
of this definition (i.e., the cylinder liners are removed and replaced
over more than a five-year period). As with locomotives, remanufactured
marine diesel engines are new until they are sold or placed into
service.

[[Page 37129]]

For the purpose of this program, ``replace'' includes removing,
inspecting, and requalifying a liner. This addresses the situation in
which an engine experiences a cylinder failure prior to a scheduled
rebuild: The owner might replace the failed cylinder right away and
replace the others at rebuild; then, at the time of rebuild, the
installer would likely inspect the cylinder that was a few months old
to make sure it qualified for continued use according to the
certificate holder's instructions. We do not think that owners will
fail to requalify cylinders to avoid the remanufacture requirements
because requalification is done both to ensure the continued
reliability and durability of the engine and as part of surveys
necessary to retain vessel certification for safety and other purposes.
The five-year provision was first adopted in the locomotive program to
help ensure that the standards are not avoided through phased
remanufacturing (i.e., not replacing the power assemblies all at once).
It is reasonable to use this approach in the marine sector as most
commercial engines are rebuilt all at once, although some owners may
choose a rolling rebuild approach in which a certain number of
cylinders are rebuilt every year. We may revisit the five-year limit
after a few years of the program to evaluate whether this is the
appropriate period and whether owners are adjusting their rebuild
practices, particularly with respect to rolling rebuilds, to circumvent
the regulations (see discussion of rolling rebuilds, below).
When an engine is remanufactured, it must be certified as meeting
the emission standards for remanufactured engines (by using a certified
remanufacture system) unless there is no certified remanufacturing
system available for that engine. In other words, the owner/operator or
installer of a covered engine would be required to use a certified
marine remanufacture system when remanufacturing that engine if one is
available. If there is no certified system available at that time,
there is no requirement. Availability means not only that EPA has
certified a system, but also that it can be obtained and installed in a
timely manner consistent with normal business practices. For example, a
system would generally not be considered to be available if it required
that the engine be removed from the vessel and shipped to a factory to
be remanufactured unless that is the normal rebuild process for that
engine. Similarly, a system would not be considered to be available if
the component parts are not available for purchase in the period
normally associated with a scheduled rebuild. If a certified system is
not available there is no requirement to comply with this program until
the next remanufacture, at which time the remanufacturer would need to
check again to see if a system is available. Nonavailability due to
inability to obtain parts may be demonstrated by a written record that
shows a good faith effort to obtain parts.
Several states and localities have voluntary retrofit programs to
reduce emissions from marine diesel engines. These programs encourage
vessel owners to apply emission reduction strategies in return for a
financial or operational incentive. Retrofit systems range from engine
adjustments to installing different cylinders, fuel injectors,
turbochargers, or other engine components. To receive the incentive,
the owner must demonstrate the reduction, often through emission
measurements. We received state agency comments expressing concern
about the potential inconsistency between state and local retrofit
programs and a potential marine remanufacture program. Specifically, a
situation could be created in which a vessel owner who has already
applied a retrofit device pursuant to a state or local retrofit program
would be required to remove the voluntary retrofit device and install a
certified marine remanufacture system. We do not want to negatively
impact the positive benefits that arise from state and local retrofit
programs, especially in those cases in which the retrofit achieves a
greater reduction (e.g., retrofit of a SCR system) than a certified
marine remanufacture system. We also do not want to discourage these
programs especially in early years where states and local programs may
achieve reductions before certified remanufacture systems become
available.
Therefore, we are adopting a provision that will allow an owner/
operator of an engine that is fit with a retrofit device prior to 2017
pursuant to a state or local retrofit program to request a qualified
exemption from the marine remanufacture requirements for that engine.
This qualified exemption will be available only to engines equipped
with retrofit device under a state or local program before 2017. The
owner/operator must request the exemption prior to a remanufacturing
event that would otherwise trigger the requirement to use a certified
remanufacture system. The request must include documentation that the
vessel has been retrofit pursuant to a state or local retrofit program
and a signed statement declaring that to be true. Except for the
initial request for a specific vessel and a specific retrofit, a
request would be considered to be approved unless we notify the
requestor otherwise within 30 days of the date that we receive the
request. Note that the exemption does not apply where the sponsoring
government specifies that inclusion in the retrofit program is not
intended to provide an exemption from the requirements of this subpart.
EPA's granting of the exemption is conditioned upon the owner/
operator's continued use and maintenance of the retrofit kit that
provides the basis for the exemption.
Beginning in 2017, this exemption will no longer be available for
new retrofits. Engines included in state or local retrofit programs
will be required to use a certified remanufacture system if one is
available when the engine is remanufactured. In this case either the
certified remanufacture system would be part of the retrofit or the
vessel owner would use a certified remanufacture system the next time
at the next remanufacture event.
At this time, we are adopting standards for remanufacture systems
only for marine diesel engines over 600 kW. This 600 kW threshold is
reasonable because of the long hours of use, often at high load, of
engines above 600 kW, and their long services lives. These engines are
also more likely to undergo regular full overhauls, returning them to
as-new condition. Commercial marine diesel engines larger than 600 kW
typically undergo periodic full, like-new rebuilds. These large engines
are often installed on tugs, towboats, ferries, offshore supply
vessels, lakers, and coasters, which require reliable power at all
times. These vessels are often used for ten or more hours a day, every
day of the year. As a result, these engines are typically subject to
regular maintenance to ensure their dependability. In addition, many
manufacturers provide guidance for a full rebuild to as-new condition.
This might include replacing piston rings, heads, bearings, and gear
train/camshaft as well as piston liners.\128\ Rebuilding to as-new
condition helps ensure smooth operation over the full maintenance
interval. Owners of these vessels are also motivated to maintain their
engines because it is very complicated and expensive to repower their
vessels; replacing an engine may require major hull modifications.
Because these vessels operate for decades, often 40 or

[[Page 37130]]

more years, their engines may be remanufactured to as-new condition
anywhere from three to six or even more times before the vessel is
scrapped.
---------------------------------------------------------------------------

\128\ See Note from Amy Kopin, Mechanical Engineer, to Jean
Marie Revelt, EPS, Re: Marine Remanufacture Program. A copy of this
Note is available in Docket OAR-2003-0190.
---------------------------------------------------------------------------

We are not setting standards for marine remanufacture systems for
engines below 600 kW because we currently do not have sufficient data
to determine the extent that rebuilding of engines below 600kW
qualifies as remanufacturing to an as new condition. Smaller commercial
engines under 600 kW or recreational engines typically have shorter
useful lives than the larger engines and do not see as much wear on an
annual basis. This means it takes longer to acquire the hours between
maintenance intervals. Engines on some smaller commercial or
recreational marine vessels may not be rebuilt at all but, instead, are
replaced or the vessel is scrapped. There may also be other
technological and cost issues with applying remanufacture requirements
to smaller commercial or recreational engines.
For these reasons, we are finalizing only standards for
remanufactured commercial marine diesel engines above 600 kW. We may
revisit this approach after implementing the program to evaluate
whether other remanufactured marine diesel engines should be included
in the program as well.
A certified marine remanufacture system must achieve a 25 percent
reduction in PM emissions compared to the engine's measured baseline
emissions level (the emission level of the engine as rebuilt according
to the manufacturer's specification but before the installation of the
remanufacture system) without increasing NOX emissions
(within 5 percent). We are not finalizing a 0.22 g/kW-hr PM cap, as
proposed. The percent reduction is being adopted because the large
range of engine platforms on existing marine diesel engines makes the
selection of an effective numeric emission limit impractical. A more
stringent emission limit may prevent the development of remanufacture
systems for many engines, while a less stringent limit could allow
manufacturers to certify remanufacture systems for engines that already
meet the limit without any additional emission benefits. A percentage
reduction has the advantage of allowing more engines to participate in
the program while ensuring valid emission reductions.
We are not adopting the multi-step approach discussed in the
proposal. This approach, based on the Urban Bus program, would have
entailed setting standards based on reductions of 60 percent, 40
percent, and 20 percent, and requiring that a rebuild use the certified
kit meeting the most stringent of these three standards if available.
Manufacturers expressed concern that such a requirement would
discourage the development of remanufacture systems since they could
rapidly become obsolete. Owners were concerned that they would be
subject to a moving requirement that would complicate their engine
maintenance and overhaul schedules and could result in identical engine
models being required to use different remanufacture systems. They also
were concerned that such an approach would mean they would have to use
a different system every time they remanufacture, and the impacts on
engines that are remanufactured over several maintenance events. For
these reasons, instead of adopting the multi-step approach, we are
adopting a single emission reduction requirement. If several certified
systems are available, we will allow any of them to be used. However,
states may develop incentive programs to encourage the use of the
certified remanufacture system with the greatest reduction. Also, we
may revisit the emission level in the future to determine if it should
be modified to reflect advances in applying new PM reduction
technologies to existing marine diesel engines.
We expect that this PM reduction will be met by using
incrementally-improved components that are replaced when an engine is
remanufactured, based on reduction technologies manufacturers are
already using or will be using to achieve the Tier 3 PM standards. For
example, a remanufacture system could reduce PM emissions by using
different fuel injectors or different piston rings to reduce oil
consumption. Remanufacturing systems may not adversely affect engine
reliability, durability, or power.
Some engine manufacturers expressed concern about the potential for
unintended adverse effects on engine performance, reliability, or
durability that could occur if another entity develops a remanufacture
system for their engines. They were particularly concerned about being
held responsible for an emission failure if the remanufacture system
does not perform as intended, or for an engine failure if the system
causes other engine components to fail. To address this concern, the
program we are finalizing requires any person who wishes to certify a
remanufacture system for an engine not produced by that person to
notify the original engine manufacturer and request their comments on
the remanufacture system. Any comments received by the certifier are
required to be included in the certification application, as well as a
description of how those comments were addressed.
As we described at proposal, this final rule includes a cost cap on
marine diesel remanufacture systems of $45,000 per ton of PM reduced,
based on the incremental cost of the remanufacture system (the cost in
excess of what a rebuild would otherwise cost). This cost cap is
analogous to the reasonable cost limit in the current locomotive
remanufacturing program and is intended to ensure that marine
remanufacture systems do not impose excessively burdensome cost
requirements on vessel owners that are not justified by the benefits of
the reductions. The $45,000 per ton of PM reduced is similar to the
cost of a number of mobile source retrofit programs. This cap includes
all costs to the vessel owner associated with the remanufacture system
beyond those associated with an engine remanufactured without a
certified system, such as labor for any special installation procedures
and any modifications to the vessel or its operation (e.g., fuel
consumption impacts).
It may not be possible for the certifier to predict the
characteristics of all vessels that can use the remanufacture system
and therefore provide a comprehensive estimate of the total incremental
costs of installing the remanufacture system. Therefore, in addition to
an estimate of the vessel-related installation costs that would apply
to most vessels, the certifier must also provide an estimate of the
amount of residual incremental costs that would be available for
installation of the remanufacture system on a particular vessel without
triggering the $45,000 per ton PM threshold (i.e., the maximum amount
installation may cost for a particular vessel after the cost of the
remanufacture system is deducted from the $45,000 maximum cost). This
will guide vessel owners in determining if the cost of a certified
remanufacture system will exceed the $45,000 threshold for a particular
vessel.
We are including a provision that will allow a vessel owner to
request an exemption from EPA if the vessel owner can demonstrate to
EPA's satisfaction that actual installation cost for his or her vessel
will exceed the $45,000 per ton PM threshold. This may be necessary,
for example, if a vessel with external keel cooling cannot be modified
to achieve required cooling levels required by the remanufacture system
without extensive modifications to the vessel hull. We are also
including a small business exemption as well as a

[[Page 37131]]

financial hardship provision (see Section IV.A.13(b)(vi and vii)) that
would allow postponing the requirements for owners who can show
financial hardship.
Marine remanufacture systems can be certified as soon as this rule
goes into effect. A remanufacture system will be considered to be
available 120 days after we issue a certificate of conformity for it or
90 days after we include it on our list of certified remanufacture
systems, whichever is later. Prior to the end of that period, a kit
will not be considered to be ``available.'' This period allows time for
owners to arrange for remanufacturing with a certified system once one
that applies to the relevant engine has been certified. Once a marine
remanufacture system is certified, as evidenced by an EPA-issued
certificate of conformity, it will be considered to be available until
it is withdrawn or the certificate holder fails to obtain a certificate
of conformity for a subsequent year. We will maintain a list of
available remanufacture systems and provide access to this list by
posting it on our website. Owners should consult the list prior to any
particular remanufacturing event to determine whether a certified
system is available and therefore whether they are affected by the
program. Uncertified systems purchased before that date can be used as
long as they are consistent with the normal parts inventory practices
of the owner or rebuild facility. Stockpiling of uncertified
remanufacture systems to evade the requirements of the program is not
allowed.
For engines on a rolling rebuild schedule (i.e., cylinder liners
are not replaced all at once but are replaced in sets on a schedule of
5 or fewer years, for example 5 sets of 4 liners for a 20-cylinder
engine on a 5-year schedule), the requirement is triggered at the time
the remanufacture system becomes available, with the engine required to
be in a certified configuration when the last set of cylinder liners is
replaced. The remanufacturing requirements do not apply for cylinder-
liner replacements that occurred before the remanufacture system
becomes available. Any remanufacturing that occurs after the system is
available needs to use the certified system, including remanufacturing
that occurs on a rolling schedule over less than five years following
the availability of the remanufacturing system. If the components of a
certified remanufacture system are not compatible with the engine's
current configuration, the program allows the owner to postpone the
installation of the remanufacture system until the replacement of the
last set of cylinder-liners, which would occur no later than five years
after the availability of the system. At that time, all engine
components must be replaced according to the certified remanufacture
system requirements.
Initially, we expect marine remanufacture systems to be certified
for C2 engines that are derived from certified locomotive remanufacture
systems. Some of these certified locomotive systems are already used on
C2 marine diesel engines, or can be used with modification. The new
Tier 0+, Tier 1+ and Tier 2+ certified locomotive remanufacture systems
are likely to be capable of being used on marine diesel engines without
much additional development when those certified locomotive systems
become available, for additional reductions. To encourage this
practice, we are providing a streamlined certification process for
locomotive systems certified to the new Tier 0+, Tier 1+, or Tier 2+
standards for use on C2 engines. The streamlined certification will
also be allowed for existing Tier 0 locomotive remanufacture systems
(certified under part 92), but those systems can be used only on pre-
Tier 1 (uncertified) C2 marine engines, and the use of these existing
Tier 0 systems will not be permitted after systems certified to the new
Tier 0+ (or Tier 1+ if applicable) locomotive standards are made
available. The streamlined certification process will require only an
engineering analysis demonstrating that the system would achieve
emission reductions from marine engines similar to those from
locomotives. The streamlined certification process will allow
modifications to the previously certified locomotive system as
necessary to install the system on a C2 marine engine. If the
manufacturer of a locomotive remanufacture system chooses to modify
that system in a substantive way, for example to remove NOX
emission controls (because the marine remanufacture program only
requires PM reductions), then the system will have to be recertified as
a marine remanufacture system based on measured values and subject to
all of the other certification requirements of the marine remanufacture
program (see section IV). We are not providing a similar streamlined
certification process for C1 marine systems because there are currently
no certified remanufacture systems for C1-equivalent engines through
our other mobile source programs.
The program described above is engine-based in that it assumes that
remanufacture systems will consist of changes to engine components or
operational settings. At least one user asked EPA to consider also
allowing remanufacture systems consisting of the use of specified fuels
or fuel additives. The program we are adopting will allow this type of
remanufacture system, subject to the following constraints.
First, the use of a remanufacture system based on a fuel or fuel
additive will not be mandatory if such a system is certified. Instead,
the use of a fuel or fuel additive system will be allowed as an
alternative compliance mechanism in place of an engine-based
remanufacture system. In other words, if an engine-based remanufacture
system is certified, owners of the affected engine models can either
use that engine-based system or use a fuel or fuel additive system if
one has also been certified; if there is no certified engine-based
system, then there is no requirement to use the fuel or fuel additive
remanufacture system. This requirement is necessary because, in
contrast to an engine-based system, a fuel or fuel additive-based
system requires positive action on the part of the owner to achieve the
emission reductions. In the case of an engine-based system, the owner
installs the replacement parts at the time of rebuild; installation of
the parts will achieve the required reductions and there is little
impact on the owner or the vessel's operations. In the case of a fuel
or fuel additive system, however, the owner will be required to use the
specified fuel or fuel additive at all times; if the owner does not
take the required action, the ``system'' will not be in use. Because a
fuel or fuel additive-based system will require the owner to do
something on a continuous basis and require additional recording and
recordkeeping, the success of the system requires a positive commitment
on behalf of the owner/operator.
Second, the certifier of a remanufacture system based on a fuel or
fuel additive will be required to show that use of the fuel or fuel
additive meets the 25 percent PM reduction based on measured values,
without increasing NOX emissions, for all engines to which
the system will apply. This will require testing an engine with and
without the use of the specified fuel or fuel additive. Different
engines may be combined into one engine family for the purpose of
certification, based on EPA approval.
Third, any fuel or fuel additive for which certification is sought
under the marine remanufacture program must first be registered under
40 CFR Part 79, Registration of Fuels and Fuel Additives. This is to
ensure that the fuel or fuel additive does not contain

[[Page 37132]]

substances that are otherwise controlled by EPA.
Fourth, as part of the certification, the certifier will be
required to provide a sampling procedure that can be used by EPA or
other enforcement authorities to verify owner compliance onboard and
for enforcement purposes. That procedure should explain how to detect
if the appropriate level of fuel additive or if the appropriate fuel
type is actually being used onboard on the basis of a fuel sample taken
from a fuel tank on the vessel. In addition to being provided to EPA as
part of the certification process, the certifier will be required to
provide a copy of this procedure to the purchaser as part of the
remanufacture system package and will be required to maintain a copy of
the procedure on the internet to facilitate in-field compliance
verification.
Fifth, the remanufacture system will require a notification to be
placed at the appropriate fill location (either on the fuel tank inlet
in the case of fuels or pre-blended fuel additives, or as specified on
the engine in the case of fuel additives not blended in the fuel) that
indicates the engine is outfitted with a fuel or fuel additive
remanufacture system and that compliant fuel or additives must be used
at all times.
Finally, when an owner agrees to use a fuel or fuel additive-based
remanufacture system in lieu of an engine-based system, that owner must
also agree to any recordkeeping requirements specified in the
certification of that system. These may include keeping a record of the
purchase of the specified fuel or fuel additive and, in the case of
additives, the amounts and dates of the additive use. These
requirements must be set out by the certifier as part of the kit, and
the owner will be deemed to have agreed to them by affixing a label to
the engine or appropriate fuel or fuel additive inlet indicating that
it is certified with a fuel or fuel-additive remanufacture system.
If an owner or operator chooses a certified remanufacture system
based on a particular fuel or fuel additive to meet these remanufacture
requirements, the failure to use the fuel or fuel additive would be a
violation of 1068.101(b)(1).
Allowing the use of fuel or fuel additive-based remanufacture
systems is not intended to be a mechanism to require fuel switching for
marine diesel engines, either to 15 ppm fuel earlier than required or
to distillate from residual fuel for auxiliary engines on vessels with
Category 3 marine diesel engines or for those smaller vessels than may
currently use residual fuel in their C2 main propulsion engines. It is
also not intended to prevent the use of off-spec fuel in marine diesel
engines. If there is no certified engine-based remanufacture system
available for an engine, a fuel or fuel additive-based kit will not be
required to be used even if one is certified.
EPA is committed to the development and successful operation of a
marine remanufacture program. We intend to assess the effectiveness of
this program as early as 2012 to ascertain the extent to which engine
manufacturers are providing certified remanufacture systems. If
remanufacture systems are not available or are not in the process of
being developed and certified at that time for a significant number of
engines, we may consider changes to the program. As part of that
assessment, we may evaluate whether to include Part 2 of the program
described in our proposal. Part 2 would require the owner/operator or
installers of a marine diesel engine identified by EPA as a high-sales
volume engine to either use a certified remanufacture system when the
engine is remanufactured or, if no system is available, retrofit an
emission reduction technology for the engine that meets the 25 percent
PM reduction, or repower (replace the engine with a freshly
manufactured engine). Part 2 was intended to create a market for marine
remanufacture systems, to help ensure their development over the
initial five years of the program. However, vessel owners were very
concerned that a mandatory repower program would have the opposite
impact, and would discourage certification of remanufacture systems in
favor of mandatory repowers due to the higher value of a replacement
engine compared to a remanufacture system. In evaluating the
effectiveness of the remanufacture program in the future, EPA may
revisit the need for Part 2, or something similar, to ensure emission
reductions from the large marine legacy fleet are occurring in a timely
and effective manner. We may also evaluate other aspects of the
program, including the criteria that trigger a remanufacturing event
(including the 5-year period for incremental remanufactures), and
whether we should set remanufacture standards for engines less than 600
kW.
(3) Carbon Monoxide, Hydrocarbon, and Smoke Standards
We did not propose and are not setting new standards for CO.
Emissions of CO are typically relatively low in diesel engines today
compared to non-diesel pollution sources. Furthermore, among diesel
application sectors, locomotives and marine diesel engines are already
subject to relatively stringent CO standards in Tier 2--essentially 1.5
and 3.7 g/bhp-hr, respectively, compared to the current heavy-duty
highway diesel engine CO standard of 15.5 g/bhp-hr. Therefore, the Tier
3 and Tier 4 CO standards for all locomotives and marine diesel engines
will remain at current Tier 2 levels and remanufactured Tier 0, 1 and 2
locomotives will likewise continue to be subject to the existing CO
standards for each of these tiers. Although we are not setting more
stringent standards for CO in Tier 4, we note that aftertreatment
devices using precious metal catalysts that we project will be employed
to meet Tier 4 PM, NOX and HC standards will provide
meaningful reductions in CO emissions as well.
As discussed in section II, HC emissions, often characterized as
VOCs, are precursors to ozone formation, and include compounds that EPA
considers to be air toxics. As with CO, emissions of HC are typically
relatively low in diesel engines compared to non-diesel sources.
However, in contrast to CO standards, the HC standard for Tier 2 line-
haul locomotives (0.30 g/bhp-hr), though comparable to HC standards
from other diesel applications in Tier 2 and Tier 3, is more than twice
that of the long-term 0.14 g/bhp-hr standard set for both the heavy-
duty highway 2007 and nonroad Tier 4 programs. For marine diesel
engines, the Tier 2 HC standard is expressed as part of a combined
NOX+HC standard varying (by engine size) between 5.4 and 8.2
g/bhp-hr, which clearly allows for high HC levels. Our more stringent
Tier 3 NOX+HC standards for marine diesel engines will
likely provide some reduction in HC emissions, but we expect that the
catalyzed exhaust aftertreatment devices used to meet the Tier 4
locomotive and marine NOX and PM standards will concurrently
provide very sizeable reductions in HC emissions. Therefore, in
accordance with the Clean Air Act section 213 provisions outlined in
section I.B(3) of this preamble, we are applying a 0.14 g/hp-hr HC
standard to locomotives and marine diesel engines in Tier 4. This level
is the same as that adopted for highway and nonroad diesel engines
equipped with high-efficiency aftertreatment.
We are retaining the existing form of the HC standards through Tier
3. That is, locomotive and marine HC standards will remain in the form
of total hydrocarbons (THC), except for gaseous- and alcohol-fueled
engines (See 40CFR Sec. 92.8 and Sec. 94.8). Likewise, the Tier 3
marine NOX+HC standards are based on THC, except that Tier 3
standards for less than 75 kW (100 hp) engines are

[[Page 37133]]

based on NMHC, consistent with their basis in the nonroad engine
program. Tier 4 HC standards are expressed as NMHC standards,
consistent with aftertreatment-based standards adopted for highway and
nonroad diesel engines.
As for other diesel mobile sources, we believe that locomotive
smoke standards currently in place are of diminishing usefulness as PM
emissions are reduced to very low levels, as these low-PM engines emit
very little or no visible smoke. We are therefore not setting smoke
standards for locomotives covered under the new 40 CFR Part 1033
created by this final rule, if the locomotives are certified to a PM
family emission limit (FEL) or standard of 0.05 g/bhp-hr (0.07 g/kW-hr)
or lower. Locomotives certified with PM at higher levels are subject to
smoke standards equal to those established previously in Part 92. This
allows manufacturers of locomotives certified to Tier 4 PM (or to an
FEL slightly above Tier 4) to avoid the unnecessary expense of testing
for smoke. Marine diesel engines currently have no smoke standards and
we are not setting any in this rule.
Commenters suggested that smoke testing is superfluous for pre-Tier
4 engines as well, because a properly maintained engine meeting any
tier of EPA emissions standards will also meet the smoke standards.
Based on the available information, we remain unconvinced that this
argument is valid in all cases and we are therefore retaining the smoke
standards for locomotives with PM FELs above 0.05 g/bhp-hr. However, we
do agree that this relationship generally holds true for engines
designed to emission standards being set in this rule, and are
therefore waiving the smoke test requirement from certification,
production line, and in-use testing, unless there is visible evidence
of excessive smoke emissions. This provides the test cost savings
sought by the manufacturers but retains the EPA enforcement opportunity
if smoke should become a problem in engines subject to this program.

C. Are the Standards Feasible?

In this section, we describe the feasibility of the various
emission control technologies we project will be used to meet the
standards we are finalizing today. Because of the range of engines and
applications we cover in this rulemaking and because of the diversity
in technologies that will be available for them, our standards span a
range of emission levels. We have identified a number of different
emission control technologies we expect will be used to meet these
standards. The technologies range from incremental improvement of
existing engine components to highly advanced catalytic exhaust
aftertreatment systems similar to those expected to be used to control
emissions from heavy-duty diesel trucks and nonroad equipment.
We first describe the feasibility of emission control technologies
we project will be used to meet the standards we are finalizing for
existing locomotive and marine engines that are remanufactured as new
(i.e., Tier 0, 1, 2 locomotives and marine diesel engines >600 kW). We
next describe how these same technologies will be applied to meet the
interim standards for freshly manufactured engines (i.e., Tier 3). We
conclude this section with a discussion of catalytic exhaust
aftertreatment technologies projected to be used to meet our Tier 4
standards. Throughout this section, we also address many of the
comments submitted by stakeholders concerning the feasibility,
applicability, performance, and durability of the emission control
technologies we presented in the Notice of Proposed Rulemaking (NPRM).
For a more detailed analysis of these technologies, issues related to
their application to locomotive and marine diesel engines, and our
response to public comments, we refer you to the Regulatory Impact
Analysis (RIA) and Summary & Analysis of Comments documents associated
with this rulemaking.
(1) Emission Control Technologies for Remanufacture of Existing
Locomotives and Marine Diesel Engines >600 kW
In the locomotive sector, emissions standards already exist for
engines that are remanufactured as new. Some of these engines were
originally unregulated (i.e. Tier 0), and others were originally built
to earlier emissions standards (Tier 1 and Tier 2). This rulemaking now
requires more stringent standards for these engines whenever the
locomotives are remanufactured as new. Our remanufactured engine
standards apply to locomotive engines and marine engines >600 kW that
were originally built as early as 1973.
We project that incremental improvements to existing engine
components will make it feasible to meet both our locomotive and marine
remanufactured engine standards for PM. In many cases, these
improvements have already been implemented on newly built locomotives
to meet our current locomotive standards. To meet the more stringent
NOX standard for the locomotive Tier 0+ and Tier 1+
remanufacturing program, we expect that improvements in fuel system
design, engine calibration and optimization of existing after-cooling
systems will be used to reduce NOX from the current 9.5 g/
bhp-hr Tier 0 standard to the tightened Tier 1+ standard for
NOX of 7.4 g/bhp-hr. These are the same technologies used to
meet the current Tier 1 emission standard of 7.4 g/bhp-hr. In essence,
locomotive manufacturers will duplicate current Tier 1 locomotive
NOX and HC emission solutions and incorporate them into the
portion of the existing Tier 0 fleet able to accommodate them (i.e.
locomotives manufactured with separate-circuit cooling systems for
intake air and engine coolant). For older Tier 0 locomotives without
separate-circuit cooling systems, reaching the Tier 1 NOX
level will not be possible, and 8.0 g/hp-hr represents the lowest
achievable NOX emission level through the application of
improved fuel system design.
To meet the more stringent PM standards for the Tier 0+, 1+, and 2+
locomotive and marine remanufacturing programs (as well as the new
locomotive Tier 3 interim standards), we expect that lubricating oil
consumption control technologies will be implemented. A significant
fraction of the PM in today's medium-speed locomotive and locomotive-
based marine engines is comprised of lubricating oil.\129\ Engine
design changes which reduce oil consumption also reduce the volatile
organic fraction of the engine-out PM. Whether oil consumption is
reduced through improvements in piston ring-pack design, improved
closed crankcase ventilation systems, or a combination of both, lower
PM emissions will result. We believe that use of existing low-oil-
consumption piston ring-pack designs--in conjunction with improvements
to closed crankcase ventilation systems--can provide the significant,
near-term PM reductions required for these remanufacturing programs.
These PM-reducing technologies can be applied to all medium-speed
locomotive and locomotive-based marine engines--including those built
as far back as 1973.
---------------------------------------------------------------------------

\129\ Smith, B., Osborne, D., Fritz, S., ``AAR Locomotive
Emissions Testing 2006 Final Report,'' Association of American
Railroads, Document LA-023.
---------------------------------------------------------------------------

For the remanufacture of locomotive- and nonroad-based marine
engines >600 kW, we believe that similar improvements to piston ring-
pack designs, as well as turbocharger, fuel system, and closed
crankcase ventilation system improvements can achieve the 25 percent PM
reduction required in this program without the use of exhaust
aftertreatment devices.

[[Page 37134]]

Turbocharger designs which increase engine airflow or charge air
cooling system enhancements which reduce intake air temperatures can
reduce PM levels. Fuel system changes such as increased injection
pressure or improved injector tip design can enhance fuel atomization,
improving combustion efficiency and reducing soot PM. Any combination
of these improvements--or other technologies which achieve the 25
percent PM reduction--can become part of a certified marine
remanufacture kit.
We believe that some fraction of the remanufacturing systems for
locomotives can be developed and certified as early as this year, so we
are requiring the usage of the new Tier 0+, Tier 1+ and Tier 2+
emission control systems as soon as they are available. However, we
estimate that it will take approximately 2 years to complete the
development and certification process for all of the Tier 0+ and Tier
1+ emission control systems, so full implementation of the Tier 0+ and
Tier 1+ remanufactured engine standards is not anticipated until it is
required in 2010. We base this lead time on the types of technology
that we expect to be implemented and on the amount of lead time
locomotive manufacturers needed to certify similar systems for our
current remanufacturing program. The lead time required to implement
the design changes necessary to meet the Tier 3 and remanufactured Tier
2 locomotive PM emission standards led to an implementation date of
2012 for new Tier 3 engines and 2013 for remanufactured Tier 2 engines.
These engine changes include further improvements to ring pack designs
(especially for two-stroke engines) and the implementation of high
efficiency crankcase ventilation systems, which are described and
illustrated in detail in Chapter 4 of the RIA.
(2) Emission Control Technologies for New Tier 3 Locomotive and Marine
Diesel Engines
The new Tier 3 locomotive and marine diesel engine standards
require PM reductions relative to current Tier 2 levels. Based upon our
on-highway and nonroad clean diesel experience, we expect that the
introduction of ULSD fuel into the locomotive and marine sectors will
reduce sulfate PM formation and assist in meeting the PM standards for
locomotives (both remanufactured Tier 2 and new Tier 3) and new marine
diesel engines. We believe that the combination of reduced sulfate PM
and incremental design changes that bring oil and crankcase emission
control to near Tier 3 nonroad or 2007 heavy-duty on-highway levels can
provide at least a 50 percent reduction in PM emissions.
For Tier 3 marine diesel engines (which are, in almost all
instances, a derivative of land-based nonroad and locomotive engines),
the technologies and design changes needed to meet the more stringent
NOX and PM standards are already being developed for nonroad
Tier 4 applications. In order to meet our nonroad Tier 4 emission
levels, these engines, in the years before 2012, will see significant
base engine improvements designed to reduce engine-out emissions. For
details on the design, calibration, and hardware changes we expect will
be used to meet the Tier 3 standards for lower horsepower marine
engines, we refer you to our nonroad Tier 4 rulemaking.\130\ For
example, we expect that marine engines will utilize high-pressure,
common-rail fuel injection systems or improvements in unit injector
design. When such fuel system improvements are used in conjunction with
engine mapping and calibration optimization, the marine Tier 3 diesel
engine standards can be met. In the case of locomotive-based marine
engines, we expect that manufacturers will transfer the technologies
used to meet locomotive standards to the marine engine designs.
---------------------------------------------------------------------------

\130\ ``Final Regulatory Impact Analysis: Control of Emissions
from Nonroad Diesel Engines,'' EPA420-R-04-007, May 2004, Docket
EPA-HQ-OAR-2003-0012. The RIA is also available online at http://
epa.gov/nonroad-diesel/2004fr/420r04007.pdf.
---------------------------------------------------------------------------

The 2009 Tier 3 start date for marine engines <75 kW constitutes a
special case. We proposed this very early start date, matched with
standard levels equal to the nonroad engine Tier 4 standard levels that
take effect in 2008, based on our assessment that these engines are
close derivatives of the nonroad engines on which they are based--in
some cases, with no substantive modifications. The 2009 start date
accounts for time needed to make the necessary modifications, prepare
for and conduct the certification process, and deal with the large
overall workload burden for diesel engine manufacturers. Although the
manufacturers commented that this is a very aggressive schedule, at the
limits of feasibility, they did not refute our assessment. Their
objections to implementation of the not-to-exceed (NTE) standard on the
same schedule, and our response, are discussed in section IV.A(3).
Because all of the aforementioned technologies to reduce
NOX and PM emissions can be developed for production,
certified, and introduced into the marine engine sector without
extended lead-time, we believe these technologies can be implemented
for some engines as early as 2009, and for all engines by 2014, on a
schedule that very closely follows the nonroad Tier 4 engine changes.
(3) Catalytic Exhaust Aftertreatment Technologies for Tier 4 Locomotive
and Marine Engines
For marine diesel engines in commercial service that are greater
than 600 kW and for all locomotives, we are setting stringent Tier 4
standards based on the use of advanced catalytic exhaust aftertreatment
systems to control both PM and NOX emissions. There are four
main issues to address when analyzing the application of this
technology to these new sources: The efficacy of the fundamental
catalyst technology in terms of the percent reduction in emissions
given certain engine conditions such as exhaust temperature; its
appropriateness in terms of packaging; its long-term durability; and
whether the technology significantly impacts an industry's supply chain
infrastructure--especially with respect to supplying urea reductant for
NOX aftertreatment on locomotives and marine vessels. We
have carefully examined these points, and based upon our analysis
(detailed in Chapter 4 of the RIA), we have identified robust PM and
NOX catalytic exhaust aftertreatment systems that are
suitable for locomotives and marine engines that also pose a manageable
impact on the rail and marine industries' infrastructure.
(a) Catalytic PM Emission Control Technology
The most effective exhaust aftertreatment used for diesel PM
emission control is the diesel particulate filter (DPF). In Europe,
more than one million light-duty diesel passenger cars are OEM-equipped
with DPF systems, and worldwide, over 200,000 DPF retrofits to diesel
engines have been completed.\131\ Broad application of catalyzed diesel
particulate filter (CDPF) systems with greater than 90 percent PM
control began with the successful introduction of 2007 model year
heavy-duty diesel trucks in the United States. These systems use a
combination of passive and active soot regeneration strategies. CDPF
systems utilizing metal substrates are a further development that
balances a degree of elemental carbon soot control with reduced

[[Page 37135]]

backpressure, improved ability of the trap to clear oil ash, greater
design freedom regarding filter size/shape, and greater system
robustness. Metal-CDPFs were initially introduced as passive-
regeneration retrofit technologies for diesel engines designed to
achieve approximately 60 percent control of PM emissions. Recent data
from development of these systems for Euro-4 truck applications has
shown that metal-CDPF trapping efficiency for elemental carbon PM can
exceed 70 percent for engines with inherently low elemental carbon
emissions.\132\
---------------------------------------------------------------------------

\131\ ``Diesel Particulate Filter Maintenance: Current Practices
and Experience'', Manufacturers of Emission Controls Association,
June 2005, online at http://meca.org/galleries/default-file/Filter_
Maintenance_White_Paper_605_final.pdf.
\132\ Jacob, E., La[euml]mmerman, R., Pappenheimer, A., Rothe,
D. ``Exhaust Gas Aftertreatment System for Euro 4 Heavy-duty
Engines'', MTZ, June, 2006.
---------------------------------------------------------------------------

Data from locomotive testing confirms a relatively low elemental
carbon fraction and relatively high organic fraction for PM emissions
from medium-speed Tier 2 locomotive engines.\133\ The use of an
oxidizing catalyst with platinum group metals (PGM) coated directly to
the CPDF combined with a diesel oxidation catalyst (DOC) mounted
upstream of the CDPF will provide 95 percent or greater removal of HC,
including the semi-volatile organic compounds that contribute to PM.
Such systems will reduce overall PM emissions from a locomotive or
marine diesel engine by approximately 90 percent from today's levels.
---------------------------------------------------------------------------

\133\ Smith, B., Osborne, D., Fritz, S. ``AAR Locomotive
Emissions Testing 2006 Final Report'' Association of American
Railroads, Document LA-023.
---------------------------------------------------------------------------

We believe that locomotive and marine diesel engine manufacturers
will benefit from the extensive development taking place to implement
DPF technologies in advance of the heavy-duty truck and nonroad PM
standards in Europe and the United States. Given the steady-state
operating characteristics of locomotive and marine engines, DPF
regeneration strategies will certainly be capable of precisely
controlling PM under all conditions and passively regenerating whenever
the exhaust gas temperature is >250 [deg]C. Therefore, we believe that
the Tier 4 PM standards we are adopting for locomotive and marine
diesel engines are technologically feasible. And given the level of
activity in the on-highway and nonroad sectors to implement DPF
technology, we have concluded that our implementation dates for
locomotive and marine diesel engines are appropriate and achievable.
(b) Catalytic NOX Emission Control Technology
We have analyzed a variety of technologies available for
NOX reduction to determine their applicability to diesel
engines in the locomotive and marine sectors. As described in more
detail in Chapter 4 of the RIA, we expect locomotive and marine diesel
engine manufacturers will choose to use Selective Catalytic Reduction
(SCR) to comply with our new standards. SCR is a commonly-used
aftertreatment device for meeting stricter NOX emissions
standards in diesel applications worldwide. Stationary power plants
fueled with coal, diesel, and natural gas have used SCR for three
decades as a means of controlling NOX emissions, and
currently European heavy-duty truck manufacturers are using this
technology to meet Euro 5 emissions limits. To a lesser extent, SCR has
been introduced on diesel engines in the U.S. market, but the
applications have been largely limited to ferry boats and stationary
electrical power generation demonstration projects in California and
several of the Northeast states. However, several heavy-duty truck
engine manufacturers have indicated that they will use SCR technology
by 2010, when 100 percent of the heavy-duty diesel trucks are required
to meet the NOX limits of the 2007 heavy-duty highway
rule.^{134, 135} Providing comment on our NPRM, locomotive and
marine diesel engine manufacturers confirm that they expect to use
urea-SCR catalyst systems to comply with our Tier 4 standards. While
other promising NOX-reducing technologies such as lean
NOX catalysts, NOX adsorbers, and advanced
combustion control continue to be developed (and may be viable
approaches to the standards we are setting today), our analysis assumes
that SCR will be the Tier 4 NOX technology of choice in the
locomotive and marine diesel engine sectors.
---------------------------------------------------------------------------

\134\ ``Review of SCR Technologies for Diesel Emission Control:
European Experience and Worldwide Perspectives,'' presented by Dr.
Emmanuel Joubert, 10th DEER Conference, July 2004.
\135\ Lambert, C., ``Technical Advantages of Urea SCR for Light-
Duty and Heavy-Duty Diesel Vehicle Applications,'' SEA Technical
Paper 2004-01-1292, 2004.
---------------------------------------------------------------------------

An SCR catalyst supports the chemical reactions which reduce
nitrogen oxides in the exhaust stream to elemental nitrogen
(N2) and water by using ammonia (NH3) as the
reducing agent. The most-common method for supplying ammonia to the SCR
catalyst is to inject an aqueous urea-water solution into the exhaust
stream. In the presence of high-temperature exhaust gasses (>250
[deg]C), the urea hydrolyzes to form NH3 and CO2.
The NH3 is stored on the surface of the SCR catalyst where
it is used to complete the NOX-reduction reaction. In
theory, it is possible to achieve 100 percent NOX conversion
if the NH3-to-NOX ratio ([alpha]) is 1:1 and the
space velocity within the catalyst is not excessive. However, given the
space limitations in packaging exhaust aftertreatment devices in mobile
applications, an [alpha] of 0.85-1.0 is often used to balance the need
for high NOX conversion rates against the potential for
NH3 slip (where NH3 passes through the catalyst
unreacted). The urea dosing strategy and the desired [alpha] are
dependent on the conditions present in the exhaust gas; namely
temperature and the quantity of NOX present (which can be
determined by engine mapping, temperature sensors, and NOX
sensors). Overall NOX conversion efficiency, especially
under low-temperature exhaust gas conditions, can be improved by
controlling the ratio of two NOX species within the exhaust
gas; NO2 and NO. This can be accomplished through use of an
oxidation catalyst upstream of the SCR catalyst to promote the
conversion of NO to NO2. The physical size and catalyst
formulation of the oxidation catalyst are the principal factors that
control the NO2-to-NO ratio, and by extension, improve the
low-temperature performance of the SCR catalyst.
Recent studies have shown that SCR systems are capable of providing
well in excess of 80 percent NOX reduction efficiency in
high-power, diesel applications.^{136, 137, 138} SCR catalysts
can achieve significant NOX reduction throughout much of the
exhaust gas temperature operating range observed in locomotive and
marine applications. Collaborative research and development activities
between diesel engine manufacturers, truck manufacturers, and SCR
catalyst suppliers have also shown that SCR is a mature, cost-effective
solution for NOX reduction on diesel engines in other mobile
sources. While many of the published studies have focused on highway
truck applications, similar trends, operational characteristics, and
NOX reduction efficiencies have been reported for marine and
stationary applications as well.\139\ Given the preponderance of
studies and data--and our analysis summarized here and detailed in
Chapter 4 of the RIA--we have

[[Page 37136]]

concluded that this technology is appropriate for locomotive and marine
diesel applications. Furthermore, locomotive and marine diesel engine
manufacturers will benefit from the extensive development taking place
to implement SCR technologies in advance of the heavy-duty truck
NOX standards in Europe and the U.S. The urea dosing systems
for SCR, already in widespread use across many different diesel
applications, are expected to become more refined, robust, and reliable
in advance of our Tier 4 locomotive and marine standards. Given the
predominately steady-state operating characteristics of locomotive and
marine engines, SCR NOX control strategies will certainly be
capable of precisely controlling NOX under all conditions
whenever the exhaust gas temperature is greater than 250 [deg]C.
---------------------------------------------------------------------------

\136\ Walker, A.P. et al., ``The Development and In-Field
Demonstration of Highly Durable SCR Catalyst Systems,'' SAE 2004-01-
1289.
\137\ Conway, R. et al., ``Combined SCR and DPF Technology for
Heavy Duty Diesel Retrofit,'' SAE Technical Paper 2005-01-1862,
2005.
\138\ ``The Development and On-Road Performance and Durability
of the Four-Way Emission Control SCRTTM System,'' presented by Andy
Walker, 9th DEER Conference, August 28, 2003.
\139\ Telephone conversation with Gary Keefe, Argillon, June 6,
2006.
---------------------------------------------------------------------------

To ensure that we have the most up-to-date information on urea-SCR
NOX technologies and their application to locomotive and
marine engines, we have met with a number of locomotive and marine
engine manufacturers, as well as manufacturers of catalytic
NOX emission control systems. Through our discussions we
have learned that some engine manufacturers perceive some risk
regarding urea injection accuracy and long-term catalyst durability,
both of which could result in either less efficient NOX
reduction or ammonia emissions. Comments on our NPRM, submitted by the
Manufacturers of Emission Controls Association (MECA), provided
additional information on the issues of urea dosing accuracy, catalyst
durability, and system performance and their comments are consistent
with our own analysis that urea-SCR technology can provide durable
control of NOX emissions. We have carefully investigated
these issues for other diesel applications and conclude that precise
urea injection systems and durable catalysts already exist and have
been applied to urea-SCR NOX emission control systems which
are similar to those that we expect to be implemented in locomotive and
marine applications.
Urea injection systems applied to on-highway diesel trucks and
diesel electric power generators already ensure the precise injection
of urea, and these applications have similar--if not more dynamic--
engine operation as compared to locomotive and marine engine operation.
To ensure precise urea injection across all engine operating
conditions, these systems utilize NOX sensors to maintain
closed-loop feedback control of urea injection. These NOX-
sensor-based feedback control systems are similar to oxygen sensor-
based systems that are used with catalytic converters on virtually
every gasoline vehicle on the road today. These systems, already
developed for many diesel engines, are directly applicable to
locomotive and marine engines as well.
(c) Durability of Catalytic PM and NOX Emission Control
Technology
Published studies indicate that SCR systems will experience very
little deterioration in NOX conversion throughout the life-
cycle of a diesel engine.^{140, 141} The principal mechanism of
deterioration in an SCR catalyst is thermal sintering--the loss of
catalyst surface area due to the melting and growth of active catalyst
sites under high-temperature conditions (as the active sites melt and
combine, the total number of active sites at which catalysis can occur
is reduced). This effect can be minimized by design of the SCR catalyst
washcoat and substrate for the exhaust gas temperature window in which
it will operate. Several commenters noted that locomotives are subject
to consist operation in tunnels, which results in elevated exhaust gas
temperatures. Further, they speculated that these elevated exhaust
temperatures could reach 700 [deg]C--a temperature that could lead to
deterioration of catalyst performance over the useful life of a
locomotive. To investigate this scenario, EPA conducted a study (in
cooperation with locomotive manufacturers and the railroads) in August,
2007 on Union Pacific's Norden tunnel system (between Sparks, NV and
Roseville, CA).\142\ We determined that the peak, post-turbine exhaust
gas temperature observed in the 2 trailing units of a 4-unit lead
consist was only 560 [deg]C. In light of this new information, we are
more confident that catalytic aftertreatment devices will be both
effective and durable when used in locomotive service.
---------------------------------------------------------------------------

\140\ Conway, R. et al., ``NOX and PM Reduction Using
Combined SCR and DPF Technology in Heavy Duty Diesel Applications,''
SAE Technical Paper 2005-01-3548, 2005.
\141\ Searles, R.A., et al., ``Investigation of the Feasibility
of Achieving EURO V Heavy-Duty Emission Limits with Advanced
Emission Control Systems,'' 2007 AECC Conference--Belgium, Paper
Code: F02E310.
\142\ ``Locomotive Exhaust Temperatures During High Altitude
Tunnel Operation In Donner Pass,'' U.S. EPA, August 29, 2007. This
document is available in Docket EPA-HQ-OAR-2003-0190-0736.
---------------------------------------------------------------------------

Another mechanism for catalyst deterioration is chemical
poisoning--the plugging and/or chemical de-activation of active
catalytic sites. Phosphorus from the engine oil and sulfur from diesel
fuel are the primary components in the exhaust stream which can de-
activate a catalytic site. The risk of catalyst deterioration due to
sulfur poisoning will be all but eliminated with the 2012
implementation of ULSD fuel (<15 ppm S) for locomotive and marine
applications. Locomotive and marine operators will already have several
years of experience running ULSD fuel by the time NOX
aftertreatment technology is required. Catalyst deterioration due to
chemical poisoning can also be reduced through the use of an engine oil
with lower levels of sulfated ash, phosphorous, and sulfur (commonly
referred to as ``low-SAPS'' oil). Such an oil formulation, designed for
use in 2007 DPF- and DOC-equipped on-highway, heavy-duty engines was
introduced in October 2006 and is specified by the American Petroleum
Institute (API) as ``CJ-4.'' \143\ This specification has new and/or
lower limits on the amount of sulfated ash, phosphorous, and sulfur an
oil may contain and was developed specifically for 2007 on-highway
engines equipped with exhaust aftertreatment technologies running on
ULSD fuel. Previous oil formulations for heavy-duty, on-highway
engines, such as API CI-4, did not specify a limit for sulfur content,
and allowed higher levels of phosphorous (0.14% vs. 0.12%) and ash
(1.2~1.5% vs. 1.0%) content.\144\
---------------------------------------------------------------------------

\143\ ``API CJ-4 Performance Specifications,'' American
Petroleum Institute, online at http://apicj-4.org/performance_
spec.html. This document is available in Docket EPA-HQ-OAR-2003-
0190-0738.
\144\ ``CJ-4 Performance Specification: Frequently Asked
Questions,'' Lubrizol, online at http://www.lubrizol.com/cj-4/
faq.asp. This document is available in Docket EPA-HQ-OAR-2003-0190-
0741.
---------------------------------------------------------------------------

The migration of low-SAPS engine oil properties to future
locomotive and marine oil formulations--while beneficial and
directionally helpful in regards to the durability, performance, and
maintenance of the exhaust aftertreatment components we reference--does
not affect our feasibility analysis. European truck and marine
applications have shown that SCR is a durable technology even without
using a low-SAPs oil formulation. One commenter suggested that these
newer, low-SAPS oil formulations, developed for use in on-highway and
nonroad diesel engines, may not be appropriate for locomotive or marine
applications. While we acknowledge that the exact oil formulation for
locomotive and marine applications using ULSD fuel is not known today,
we do believe that there is adequate time to develop an appropriate oil
formulation. For example, in the State of California, all

[[Page 37137]]

intra-state locomotives, marine vessels (in the SCAQMD), and nonroad
engines have been operating with ULSD fuel since June, 2006--so there
should already be field data/experience available today to begin
developing an oil formulation for ULSD in advance of the implementation
date for aftertreatment-forcing standards. In addition, the nonroad
sector will have transitioned to ULSD fuel nationwide by June, 2010,
followed by the locomotive sector in June, 2012--again, leaving ample
time to develop an oil formulation which does not contain any more
sulphated-ash than necessary to neutralize crankcase acids.
Thermal cycling, mechanical vibration, and shock loads are all
factors which can affect the mechanical durability of exhaust system
components. The stresses applied to the aftertreatment devices by these
factors can be managed through the selection of proper materials and
the design of support and mounting structures which are capable of
withstanding the shock and vibration levels present in locomotive and
marine applications. One commenter to our NPRM stated that shock
loading for a locomotive catalyst is estimated to be 10-12 g. This
level of shock loading is consistent with the levels that catalyst
substrate manufacturers, catalyst canners, and exhaust system
manufacturers are currently designing to (for OEM aftertreatment
systems and components subject to the durability requirements of on-
highway, marine, and nonroad applications). Nonroad applications such
as logging equipment are subject to shock loads in excess of 10 g and
on-highway applications can exceed 30 g (with some OEM applications
specifying a 75 g shock load requirement).\145\ In addition, the
American Bureau of Shipping (ABS) specification for exhaust manifolds
on diesel engines states that these parts may need to withstand
vibration levels as high as 10 g at 600 [deg]C for 90
minutes.\146\ Given these examples of shock and vibration requirements
for today's nonroad, on-highway, and marine environments, we believe
that appropriate support structures can be designed and developed for
the aftertreatment devices we expect to be used on Tier 4 locomotives.
---------------------------------------------------------------------------

\145\ Correspondence from Adam Kotrba of Tenneco. This document
is available in Docket EPA-HQ-OAR-2003-0190-0742.
\146\ ``ABS Rules for Building and Classing--Steel Vessels Under
90 Meters (295 Feet) In Length,'' Part 4--Vessel Systems and
Machinery, American Bureau of Shipping, 2006.
---------------------------------------------------------------------------

(d) Packaging of Catalytic PM and NOX Emission Control
Technologies
Locomotive manufacturers will need to design the exhaust system
components to accommodate the aftertreatment system. Our analysis,
detailed in the RIA, shows that the packaging requirements for the
aftertreatment system are such that they can be accommodated within the
envelope defined by the Association of American Railroads (AAR) Plate
``L'' clearance diagram for freight locomotives.\147\ The typical
volume required for the SCR catalyst and post-SCR ammonia slip catalyst
for Euro V and U.S. 2010 heavy-duty truck applications is approximately
2 times the engine displacement, and the upstream DOC/CDPF volume is
approximately 1-1.5 times the engine displacement. Due to the longer
useful life and maintenance intervals required for locomotive
applications, we estimate that the SCR catalyst volume will be sized at
approximately 2.5 times the engine displacement, and the combined DOC/
CDPF volume will be approximately 1.7 times the engine displacement.
For a typical locomotive engine with 6 ft³ of total cylinder
displacement, the volume requirement for the aftertreatment components
alone would be approximately 25 ft³ (of the 80
ft³ estimated to be available for packaging these components
and their associated ducts/hardware above the engine).
---------------------------------------------------------------------------

\147\ ``AAR Manual of Standards and Recommended Practices,''
Standard S-5510, Association of American Railroads.
---------------------------------------------------------------------------

EPA engineers have examined Tier 2 EMD and GE line-haul locomotives
and acknowledge that packaging the necessary aftertreatment components
will be a difficult task. However, this task should not be more
difficult (and will quite likely less so) than the packaging challenges
faced by nonroad and on-highway applications. Given the space available
on today's locomotives, we feel that packaging catalytic PM and
NOX emission control technologies onboard locomotives may be
less challenging than packaging similar technologies onboard other
mobile sources (such as light-duty vehicles, heavy-duty trucks, and
nonroad equipment). Given that similar exhaust systems are either
already implemented onboard these vehicles or will be implemented on
these vehicles years before similar systems would be required onboard
locomotives and marine vessels, we have concluded that any packaging
issues will be successfully addressed early in the locomotive and
marine vessel design process. Our analysis concludes that there is
adequate space to package these components, as well as their associated
ducts, transitions, and urea/exhaust mixing devices. This conclusion
also applies to new switcher locomotives as well, which while being
shorter in length than line-haul locomotives, are also equipped with
smaller, less-powerful engines--resulting in smaller volume
requirements for the aftertreatment components.
For commercial vessels which use marine diesel engines greater than
600 kW, we expect these vessels will be designed to accommodate the
exhaust system components engine manufacturers specify as necessary to
meet the new standards. Our discussions with marine architects and
engineers, along with our review of vessel characteristics, leads us to
conclude that for commercial marine vessels, adequate engine room space
can be made available to package aftertreatment components. Packaging
of these components, and analyzing their mass/placement effect on
vessel characteristics, will become part of design process undertaken
by marine architecture firms.\148\
---------------------------------------------------------------------------

\148\ Telephone conversation between Brian King, Elliot Bay
Design Group, and Brian Nelson, EPA, July 24, 2006.
---------------------------------------------------------------------------

We did determine, however, that for recreational vessels and for
vessels equipped with engines less than 600 kW, catalytic PM and
NOX exhaust aftertreatment systems were less practical from
a packaging standpoint than for the larger, commercially operated
vessels. We have identified catalytic emission control systems that
would significantly reduce emissions from these smaller vessels.
However, after taking into consideration costs, energy, safety, and
other relevant factors, we found a number of reasons, detailed in the
RIA, to not adopt any new exhaust aftertreatment-forcing standards at
this time on these smaller vessels. One reason is that most of these
vessels use seawater-cooled exhaust systems--and even seawater
injection into their exhaust systems--to cool engine exhaust gases and
prevent the overheating materials such as a fiberglass hull. This
current practice of cooling and seawater injection could reduce the
effectiveness of catalytic exhaust aftertreatment systems. This is
significantly more challenging than for gasoline catalyst systems due
to much larger relative catalyst sizes and cooler exhaust temperatures
typical of diesel engines. In addition, because of these vessels' small
size and their typical operation by planing high on the surface

[[Page 37138]]

of the water, catalytic exhaust aftertreatment systems pose several
significant packaging and weight challenges. These challenges could be
addressed by the use of lightweight hull and superstructure materials.
But any solution which employs new, lightweight hull and superstructure
materials would have to be developed, tested and approved by
classifying organizations prior to their application on vessels using
catalytic exhaust aftertreatment systems. Taken together, these factors
led us to conclude that it is not prudent to set aftertreatment-forcing
emission standards for marine diesel engines below 600 kW at this time.
(e) Infrastructure Impacts of Catalytic PM and NOX Emission
Control Technologies
For PM trap technology the rail and marine industries will
experience minimal impacts on their infrastructures. Since PM trap
technology relies on no separate reductant, any infrastructure impacts
will be limited to some minor changes in maintenance practices and
equipment at maintenance facilities. Such maintenance will be limited
to the infrequent removal of ash buildup from within a PM trap. This
type of maintenance may require that maintenance facilities
periodically remove PM traps for ash cleaning and may involve the use
of a crane or other lifting device. We understand that much of this
kind of infrastructure already exists for other locomotive and marine
engine maintenance practices. We have toured shipyards and locomotive
maintenance facilities at rail switchyards, and we observed that such
facilities are generally already adequate for any required PM trap
removal and maintenance.
We do expect some impact on the railroad and marine sectors to
accommodate the use of a separate reductant for use in a NOX
SCR system. For light-duty, heavy-duty, and nonroad applications, the
commonly preferred reductant in an SCR system has been a 32.5 percent
urea-water solution. The 32.5 percent solution, also known as the
``eutectic'' concentration, provides the lowest freezing point (-11
[deg]C or 12 [deg]F) and ensures that the ratio of urea-to-water will
not change when the solution begins to freeze.\149\ Heated urea storage
tanks and insulation of the urea dosing hardware onboard the locomotive
(urea storage tank, pump, and lines) may be necessary to prevent
freeze-up in northern climates. Locomotives and marine vessels are
commonly refueled from large, centralized fuel storage tanks, tanker
trucks, or tenders with long-term purchase agreements. Urea suppliers
will be able to distribute urea to the locomotive and marine markets in
a similar manner, or they may choose to employ multi-compartment diesel
fuel/urea tanker trucks for delivery of both products simultaneously.
The frequency that urea will need to be replenished is dependent on
many factors; urea storage capacity, engine duty-cycle, and expected
urea dosing rate for each application. We expect that locomotive
manufacturers and marine vessel designers will size the urea storage
tanks appropriate to the usage factors for each application plus some
margin-of-safety (to reduce the probability that an engine will be
operated without urea). Discussions concerning the urea infrastructure
in North America and specifications for an emissions-grade urea
solution are now under way amongst light- and heavy-duty on-highway
diesel stakeholders.
---------------------------------------------------------------------------

\149\ Miller, W. et al., ``The Development of Urea-SCR
Technology for US Heavy Duty Trucks,'' SAE Technical Paper 2000-01-
0190, 2000.
---------------------------------------------------------------------------

Although an infrastructure for widespread transportation, storage,
and dispensing of SCR-grade urea does not currently exist in the U.S.,
the affected stakeholders in the light- and heavy-duty on-highway and
nonroad diesel sectors are expected to follow the European model, where
diesel engine/truck manufacturers and fuel refiners/distributors have
formed a collaborative working group known as ``AdBlue.'' The goal of
the AdBlue organization is to resolve potential problems with the
supply, handling, and distribution of urea and to establish standards
for product purity.\150\ With regard to urea production capacity, the
U.S. has more-than-sufficient capacity to meet the additional needs of
the rail and marine industries. For example, in 2003, the total diesel
fuel consumption for Class I railroads was approximately 3.8 billion
gallons.\151\ If 100 percent of the Class I locomotive fleet were
equipped with SCR catalysts, approximately 190 million gallons-per-year
of 32.5 percent urea-water solution would be required.\152\ It is
estimated that 190 million gallons of urea solution would require 0.28
million tons of dry urea (1 ton dry urea is needed to produce 667
gallons of 32.5 percent urea-water solution). Currently, the U.S.
consumes 14.7 million tons of ammonia resources per year, and relies on
imports for 41 percent of that total (of which, urea is the principal
derivative). In 2005 domestic ammonia producers operated their plants
at 66 percent of rated capacity, resulting in 4.5 million tons of
reserve production capacity.\153\ In the very long-term situation
above, where 100 percent of the locomotive fleet required urea, only
6.2 percent of the reserve domestic capacity would be needed to satisfy
the additional demand. A similar analysis for the marine industry, with
a yearly diesel fuel consumption of 2.2 billion gallons per year, would
not significantly impact the urea demand-to-reserve capacity equation.
Since the rate at which urea-SCR technology is introduced to the
railroad and marine markets will be gradual--and the reserve urea
production capacity is more-than-adequate to meet the expected demand
from all diesel markets in the 2017 timeframe--EPA does not project any
urea cost or supply issues, beyond the costs estimated in the RIA, will
result from implementing the Tier 4 standards.
---------------------------------------------------------------------------

\150\ ``Ensuring the Availability and Reliability of Urea Dosing
for On-Road and Non-Road,'' presented by Glenn Barton, Terra Corp.,
9th DEER Conference, August 28, 2003.
\151\ ``National Transportation Statistics--2004,'' Table 4-5,
U.S. Bureau of Transportation Statistics.
\152\ Assuming the dosing rate of 32.5 percent urea-water
solution is 5 percent of the total fuel consumed; 3.8 billion
gallons of diesel fuel * 0.05 = 190 million gallons of urea-water
solution.
\153\ ``Mineral Commodity Summaries 2006,'' page 118, U.S.
Geological Survey, online at www.minerals.usgs.gov/minerals/pubs/
mcs/mcs2006.pdf.
---------------------------------------------------------------------------

(f) Unregulated Pollutants
There is potential for the formation of unregulated pollutants of
significant concern to EPA any time engine technologies change,
including when new emission control technologies are added. Some
examples of these unregulated pollutants include N2O and
ammonia (NH3). In addition, failure to dose urea in an SCR
system while operating under load may cause elevated NO2
emissions. Similarly, use of a CDPF that produces NO2 in
excess of what is needed for passive regeneration--and operated without
a downstream SCR system--may lead to elevated NO2 emissions.
Such increased NO2 emissions could be a concern for
operation in enclosed environments such as locomotive operation in
minimally ventilated or unventilated tunnels. Similarly, use of
NOX reduction catalysts with poor selectivity could result
in elevated N2O emissions. An aggressive urea dosing
strategy within an SCR system (for high levels of NOX
control) without a properly designed/calibrated feedback control
system, ammonia slip catalyst, or adequate exhaust/urea mixing could
also result in elevated ammonia (NH3) emissions.

[[Page 37139]]

These NH3 emissions, which can be minimized through the use
of closed-loop feedback and control of urea injection, can be all-but-
eliminated through use of an oxidation catalyst downstream of the SCR
catalyst. Such catalysts, commonly referred to as ``slip catalysts,''
are in use today and have been shown to be highly effective at
eliminating ammonia emissions.\154\
---------------------------------------------------------------------------

\154\ Smedler, Gudmund, ``NOX Emission Control
Options'', 2007 HDD Emission Control Symposium--Gothenberg, Sweden,
September 11, 2007.
---------------------------------------------------------------------------

The issue of NH3 emissions (or ammonia slip) was raised
by several commenters, with claims that excessive NH3
emissions are ``inevitable'', and may reach 25 ppm during steady-state
operation and 100 ppm during transient operation. We have assessed this
issue and concluded that a properly-designed slip catalyst, with good
selectivity to nitrogen (N2), can convert most of the excess
NH3 released from the SCR catalyst into N2 and
water. Recent studies by Johnson Matthey and the Association for
Emissions Control by Catalyst (AECC) have shown that an aged SCR system
equipped with a slip catalyst can achieve tailpipe NH3
levels of less of than 10 ppm when tested on the European Stationary
Cycle (ESC) and European Transient Cycle (ETC).^{154, 155} The
SCR system in the Johnson Matthey study was aged on a cycle which
included 400 hours of high-temperature operation at 650 [deg]C (to
simulate active DPF regeneration events). Our analysis of the
locomotive engine operating conditions presumes a maximum, post-turbine
exhaust temperature of 560 [deg]C. This presumption is based on
implementation of a ``passive'' DPF regeneration approach (in which
NO2 created by the oxidation catalyst is sufficient to
oxidize trapped soot) and our own testing of locomotives during
operation in non-ventilated tunnels.\142\ Under these conditions, we
expect slip catalysts to be durable and effective in reducing
NH3 slip.
---------------------------------------------------------------------------

\155\ Searles, R.A., et al., ``Investigation of Feasibility of
Achieving EURO V Heavy-Duty Emission Limits with Advanced Emission
Control Systems,'' 2007 AECC Conference--Belgium, Paper Code:
F02E310.
---------------------------------------------------------------------------

We expect manufacturers to be conscious of these possibilities and
to take appropriate action to minimize or prevent the formation of
unregulated pollutants when designing emission control systems.
Manufacturers must comply with the ``Prohibited Controls'' section of
40 CFR 1033.115(c), which states:
``You may not design or produce your locomotives with emission
control devices, systems, or elements of design that cause or
contribute to an unreasonable risk to public health, welfare, or safety
while operating. For example, this would apply if the locomotive emits
a noxious or toxic substance it would otherwise not emit that
contributes to such an unreasonable risk.''
Emission control systems designed to meet the 2007 and 2010 heavy-
duty truck and Tier 2 light-duty vehicle emission standards already
take these unregulated pollutants into account through compliance with
section 202(A)(4) of the Clean Air Act. CDPF systems that minimize
formation of excess NO2 while still relying primarily on
passive regeneration have entered production for OEM and retrofit
applications. Compact urea-SCR systems that have been developed to meet
the U.S. 2010 heavy-duty truck standards use closed-loop controls that
continuously monitor NOX reduction performance. Such systems
have the capability to control stack emissions of NH3 to
below 5 ppm during transient operation even without the use of an
ammonia slip catalyst. We understand that such systems may still emit
some very small level of uncontrolled pollutants and we would not
generally consider a system that releases de minimis amounts of
NH3 or N2O while employing technology consistent
with limiting these emissions to be in violation of Sec. 1033.115(c)--
which is the same way we currently treat passenger cars and heavy-duty
trucks with regard to N2O and H2S emissions.
(4) The New Standards Are Technologically Feasible
Our rulemaking involves a range of engines, and we have identified
a range of technologically feasible emission control technologies that
we project will be used to meet our new standards. Some of these
technologies are incremental improvements to existing engine
components, and many of these improved components have already been
applied to similar engines. The other technologies we identified
involve catalytic exhaust aftertreatment systems. For these
technologies we carefully examined the catalyst technology, its
applicability to locomotive and marine engine packaging constraints,
its durability with respect to the lifetime of today's locomotive and
marine engines, and its impact on the infrastructure of the rail and
marine industries. From our analysis, which is presented in detail in
our RIA, we conclude that incremental improvements to engine components
and the implementation of catalytic PM and NOX exhaust
aftertreatment technology will be feasible to meet our new emissions
standards.

IV. Certification and Compliance Program

This section describes the regulatory changes being finalized for
the locomotive and marine compliance programs, beyond the standards
discussed in section III. The most obvious change is that the
regulations have been written in plain language. They are structured to
contain the provisions that are specific to locomotives in a new part
1033 and the provisions that are specific to marine engines and vessels
in a new part 1042. We also proposed to apply the general provisions of
existing parts 1065 and 1068.\156\ The plain language regulations,
however, are not intended to significantly change the compliance
program, except as specifically noted in today's notice. These plain
language regulations will supersede the regulations in part 92 and 94
(for Categories 1 and 2) as early as the 2008 model year. See section
III for the starting dates for different engines. The changes from the
existing programs are described below briefly along with other notable
aspects of the compliance program. See the regulatory text for the
detailed requirements and see the Summary and Analysis of Comments
document for a more complete rationale for the changes being adopted.
Note: The term manufacturer is used in this section to include
locomotive and marine manufacturers and remanufacturers.
---------------------------------------------------------------------------

\156\ We proposed modifications to the existing provisions of 40
CFR part 1068 on May 18, 2007 (72 FR 28097). Readers interested in
the compliance provisions that will apply to locomotives and marine
diesel engines should also read the actual regulatory changes in
that will be finalized in that rulemaking.
---------------------------------------------------------------------------

A. Issues Common to Locomotives and Marine

For many aspects of compliance, we are adopting similar provisions
for marine engines and locomotives, which are discussed in this
section. Several other issues are also included in this section, where
we are specifying different provisions, but where the issues are
similar in nature. The remaining compliance issues are discussed in
sections IV.B. (for locomotives) and IV.C. (for marine).
(1) Test Procedures
(a) Incorporation of Part 1065 Test Procedures for Locomotive and
Marine Diesel Engines
As part of our initiative to update the content, organization and
writing style

[[Page 37140]]

of our regulations, we are revising our test procedures. We have
grouped all of our engine dynamometer and field testing test procedures
into one part entitled, ``Part 1065: Test Procedures.'' For each engine
or vehicle sector for which we have recently promulgated standards
(such as land-based nonroad diesel engines or recreational vehicles),
we identified an individual part as the standard-setting part for that
sector. These standard-setting parts then refer to one common set of
test procedures in part 1065. These programs regulate land-based on-
highway heavy-duty engines, land-based nonroad diesel engines,
recreational vehicles, and nonroad spark-ignition engines over 19 kW.
In this rule, we are applying part 1065 to all locomotive and marine
diesel engines, as part of a plan to eventually have all our engine
programs refer to a common set of procedures.
In the past, each engine or vehicle sector had its own set of
testing procedures. There are many similarities in test procedures
across the various sectors. However, as we introduced new regulations
for individual sectors, the more recent regulations featured test
procedure updates and improvements that the other sectors did not have.
As this process continued, we recognized that a single set of test
procedures allows for improvements to occur simultaneously across
engine and vehicle sectors. A single set of test procedures is easier
to understand than trying to understand many different sets of
procedures, and it is easier to move toward international test
procedure harmonization if we only have one set of test procedures. We
note that procedures that are particular for different types of engines
or vehicles, for example, test schedules designed to reflect the
conditions expected in use for particular types of vehicles or engines,
remain separate and are reflected in the standard-setting parts of the
regulations.
The part 1065 test procedures are organized and written to be
clearer than locomotive- and marine-specific test procedures found in
parts 92 and 94. In addition, part 1065 improves the content of the
respective testing specifications, including the following:
Specifications and calculations written in the
international system of units (SI)
Procedures by which manufacturers can demonstrate that
alternate test procedures are equivalent to specified procedures
Specifications for new measurement technology that has
been shown to be equivalent or more accurate than existing technology
Procedures that improve test repeatability
Calculations that simplify emissions determination
New procedures for field testing engines
More comprehensive sets of definitions, references, and
symbols
Calibration and accuracy specifications that are scaled to
the applicable standard, which allows us to adopt a single
specification that applies to a wide range of engine sizes and
applications.
We are adopting the lab-testing and field-testing specifications in
part 1065 for all locomotive and marine diesel engines. These
procedures replace those currently published in parts 92 and 94. We are
making a gradual transition from the part 92 and 94 procedures. In
general, we specify that manufacturers use the test procedures in 1065
when certifying under part 1033 or 1042. However, we will allow
manufacturers to use a combination of the old and new test procedures
through 2014, provided such use is done using good engineering
judgment. Moreover, manufacturers may continue to rely on carryover
test data based on part 92 or 94 procedures to recertify engine
families that are not changing.
In the future, we may apply the test procedures specified in part
1065 to other types of engines, so we encourage companies involved in
producing or testing other engines to stay informed of developments
related to these test procedures.
(b) Revisions to Part 1065
Part 1065 was originally adopted on November 8, 2002 (67 FR 68242)
and was initially applicable to standards regulating large nonroad
spark-ignition engines and recreational vehicles under 40 CFR parts
1048 and 1051. The test procedures initially adopted in part 1065 were
sufficient to conduct testing, but on July 13, 2005 (70 FR 11534) we
promulgated a final rule that reorganized these procedures and added
content to make various improvements. Today, we are finalizing
additional modifications, largely as proposed. The reader is referred
to the NPRM, the regulatory text, and the docket for more information
about the changes being made to Part 1065 in this final rule. Note that
since part 1065 applies for diesel engines subject to parts 86 and
1039, we are also making some minor revisions to those parts to reflect
the changes being made to part 1065. (We are also making a technical
correction to an equation in Sec. 86.117-96.)
These changes will become effective July 7, 2008. Section
1065.10(c)(6) of the existing regulations includes a provision that
automatically allows manufacturers an additional 12 months beyond the
effective date to revise their test procedures to comply with the new
regulations. Since these changes will not affect the stringency of the
standards, we also plan to use our authority under Sec. 1065.10(c)(4)
to allow the use of carryover data collected using the earlier
procedures.
(2) Certification Fuel
It is well-established that measured emissions may be affected by
the properties of the fuel used during the test. For this reason, we
have historically specified allowable ranges for test fuel properties
such as cetane and sulfur content. These specifications are intended to
represent most typical fuels that are commercially available in use.
This helps to ensure that the emissions reductions expected from the
standards occur in use as well as during emissions testing.
In our previous regulation of in-use locomotive and marine diesel
fuel, we established a 15 ppm sulfur standard at the refinery gate for
locomotive and marine (LM) diesel fuel beginning June 1, 2012. However,
since we intended to allow the sale, distribution, and use of higher
sulfur LM diesel fuel (such as contaminated ULSD) to continue
indefinitely, we did not set a ``hard and fast'' downstream requirement
that only 15 ppm LM diesel may be sold and distributed in all areas of
the country . Because refiners cannot intentionally produce off-
specification fuel for locomotives, most in-use locomotive and marine
diesel fuel will be ULSD (with a sulfur content of 15 ppm or less).
Nevertheless, we expect that some fuel will be available with sulfur
levels between 15 and 500 ppm, and our existing regulations require
that such fuel be designated as 500 ppm sulfur diesel fuel. Note that
fuel designated as 500 ppm sulfur is also known as low sulfur diesel
fuel (LSD).
Because we have reduced the upper limit for locomotive and marine
diesel fuel sulfur content for refiners to 15 ppm in 2012, we are
establishing new ranges of allowable sulfur content for diesel test
fuels. See section IV.C.(8) for information about testing marine
engines designed to use residual fuel. For marine diesel engines, we
are specifying the use of ULSD fuel as the test fuel for Tier 3 and
later standards. We believe this will correspond to the fuels that
these engines will see in use over the long term. We recognize that
this approach will mean that some marine engines will use a test fuel
that is lower in sulfur than in-use fuel

[[Page 37141]]

during the first few years and that other Tier 2 marine engines allowed
to be produced after 2012 will use a test fuel that is higher in sulfur
than fuel already available in use when they are produced. However, we
believe that it is more important to align changes in marine test fuels
with changes in the PM standards than strictly with changes in the in-
use fuel. Nevertheless, we are allowing Tier 2 certification with fuel
meeting the 7 to 15 ppm sulfur specification to simplify testing but
will require that PM emissions be corrected to be equivalent to testing
conducted with the specified fuel. This will ensure that the effective
stringency of the Tier 2 standards will not be affected.
For locomotives, we will require that Tier 4 engines be certified
based on ULSD test fuels. We are also requiring that these locomotives
use ULSD in the field. We will continue to allow the use of 500 ppm LM
diesel fuel, in older locomotives in the field.\157\ Thus, we are
requiring that remanufacture systems for Tier 0 and Tier 1 locomotives
be certified on LSD test fuel. We are allowing the use of test fuels
other than those specified here. Specifically, we will allow the use of
ULSD during emission testing for locomotives otherwise required to use
LSD, provided they do not use sulfur-sensitive technology (such as
oxidation catalysts). However, as a condition of this allowance, the
manufacturer will be required to add an additional amount to the
measured PM emissions to make them equivalent to what would have been
measured using LSD. For example, we will allow a manufacturer to test
with ULSD if they adjusted the measured PM emissions upward by 0.01 g/
bhp-hr (which would be a relatively conservative adjustment and would
ensure that manufacturers would not gain an inappropriate advantage by
testing on ULSD).
---------------------------------------------------------------------------

\157\ Under our existing fuel regulations (40 CFR 80.510(g)),
500 ppm LM diesel fuel may not be sold and/or distributed in the
Northeast/Mid-Atlantic (NE/MA) area beginning October 1, 2012. Such
fuel may no longer be used in the NE/MA area beginning December 1,
2012.
---------------------------------------------------------------------------

We are adopting special fuel provisions for Tier 3 locomotives and
Tier 2 locomotive remanufacture systems. The final regulations specify
that the test fuel for these be ULSD without sulfur correction since
these locomotives will use ULSD in use for most of their service lives.
However, unlike Tier 4 locomotives, we will not require them to be
labeled to require the use of ULSD, unless they included sulfur
sensitive technology.
We are adopting a new flexibility for locomotives and Category 2
marine engines to reduce fuel costs for testing. Because these engines
can consume 200 gallons of diesel fuel per hour at full load, fuel can
represent a significant fraction of the testing cost, especially if the
manufacturer must use specially blended fuel rather than commercially
available fuel. To reduce this cost, we will allow manufacturers to
immediately begin testing of locomotives and Category 2 marine engines
with commercially available diesel fuel. We do not believe that this
will change the effective stringency of the standards.
For both locomotive and marine engines, all of the specifications
described above will apply to emission testing conducted for
certification, production-line testing, and in-use, as well as any
other testing for compliance purposes for engines in the designated
model years. Any compliance testing of previous model year engines will
be done with the fuels designated in our regulations for those model
years.
(3) Supplemental Emission Standards
We are continuing the supplemental emission standards for
locomotives and marine engines. For locomotives, this means we will
continue to apply notch emission caps, based on the emission rates in
each notch, as measured during certification testing. We recognize that
for our Tier 4 standards it will not be practical to measure very low
levels of PM emissions separately for each notch during testing, and
thus we are changing the calculation of the PM notch cap for Tier 4
locomotives. All other notch caps will be determined and applied as
they currently are under 40 CFR 92.8(c). See Sec. 1033.101(e) of the
regulations for the detailed calculation.
Marine engines will continue to be subject to not-to-exceed (NTE)
standards; however, we are making certain changes to these standards
based upon our understanding of in-use marine engine operation and
based upon the underlying Tier 3 and Tier 4 duty cycle emissions
standards. As background, we determine NTE compliance by first applying
a multiplier to the duty-cycle emission standard, and then we compare
to that value an emissions result that is recorded when an engine runs
within a certain range of engine operation. This range of operation is
called an NTE zone (see 40 CFR 94.106). The first regulation of ours
that included NTE standards was the commercial marine diesel
regulation, finalized in 1999. After we finalized that regulation, we
promulgated other NTE regulations for both heavy-duty on-highway and
nonroad diesel engines. We also finalized a regulation that requires
heavy-duty on-highway engine manufacturers to conduct field testing to
demonstrate in-use compliance with the on-highway NTE standards.
Throughout our development of these other regulations, we have learned
many details about how best to specify NTE zones and multipliers that
will ensure the greatest degree of in-use emissions control, while at
the same time will avoid disproportionately stringent requirements for
engine operation that has only a minor contribution to an engine's
overall impact on the environment. Based upon the Tier 3 and Tier 4
standards--and our best information of in-use marine engine operation--
we are making certain improvements to our marine NTE standards.
For marine engines we are broadening the NTE zones in order to
better control emissions in regions of engine operation where an
engine's emissions rates (i.e. grams/hour, tons/day) are greatest;
namely at high engine speed and high engine load. This is especially
important for commercial marine engines because they typically operate
at steady-state at high-speed and high-load operation. This change also
will make our marine NTE zones much more similar to our on-highway and
nonroad NTE zones. Additionally, we analyzed different ways to define
the marine NTE zones, and we determined a number of ways to improve and
simplify the way we define and calculate the borders of these zones. We
feel that these improvements will help clarify when an engine is
operating within a marine NTE zone.
Note that we specify different duty cycles to which a marine engine
may be certified, based upon the engine's specific application (e.g.,
fixed-pitch propeller, controllable-pitch propeller, constant speed,
auxiliary, etc.). These duty cycles are described below in section
IV.C.(9). Correspondingly, we also have a unique NTE zone for each of
these duty cycles. These different NTE zones are intended to best
reflect an engine's real-world range of operation for that particular
application. One primary change in the NTE zones, compared to the NPRM,
is for controllable-pitch propeller applications. Rather than using the
nonroad NTE zone, as proposed, the final NTE zone for these engines has
been revised to better reflect marine engine operation. Please refer to
section 1042.101(c) of the new regulations for a description of our new
NTE standards. In the cases where marine auxiliary engines use the same
duty cycle as their land-based nonroad counterparts, we

[[Page 37142]]

are adopting the same NTE standards as we have already finalized for
nonroad engines in 40 CFR Sec. 1039.101. As the standards for marine
diesel engines under 75 kW are based on the corresponding nonroad
engine standards, we are aligning the NTE standard start dates for
these engines with the nonroad engine NTE start dates in 2012 and 2013.
We are also implementing new NTE multipliers. We have analyzed how
the Tier 3 and Tier 4 emissions standards affect the stringency of the
marine NTE standards, especially in comparison to the stringency of the
underlying duty cycle standards. We recognized that in certain sub-
regions of our new NTE zones, slightly higher multipliers are necessary
because of the way that our more stringent Tier 3 and Tier 4 emissions
standards will affect the stringency of the NTE standards. For
comparison, Tier 2 marine NTE standards contain multipliers that range
in magnitude from 1.2 to 1.5 times the corresponding duty cycle
standard. The new multipliers range from 1.2 to 1.9 times the standard.
Even with these slightly higher NTE multipliers, we are confident that
our changes to the marine NTE standards will ensure the greatest degree
of in-use emissions control. We are also confident that our changes to
the marine NTE standards will continue to ensure proportional emissions
reductions, across the full range of marine engine operation.
We are also adopting other NTE provisions for marine engines that
are similar to our existing heavy-duty on-highway and nonroad diesel
NTE standards. We are making these particular changes to account for
the implementation of catalytic exhaust treatment devices on marine
engines. One such provision is to account for when a marine engine
rarely operates within a limited region of the NTE zone (i.e. less than
5 percent of in-use operation). Another provision allows small
deficiencies in NTE compliance for a limited period of time. We feel
that these provisions have been effective in our on-highway and nonroad
NTE programs; therefore, we are adopting them for our marine NTE
standards as well.
(4) Emission Control Diagnostics
We requested comment on a requirement that all Tier 4 engines
include a simple engine diagnostic system to alert operators to general
emission-related malfunctions. As is described in the S&A document, we
are not adopting such general requirements today. (See section IV.A.(7)
of this Final Rule for related requirements involving SCR systems.) We
are, however, adopting special provisions for locomotives that include
emission related diagnostics. First, we will require locomotive
operators to respond to malfunction indicators by performing the
required maintenance or inspection. Second, locomotive manufacturers
will be allowed to repair such malfunctioning locomotives during in-use
compliance testing (they would still be required to include a
description of the malfunction in the in-use testing report.). This
approach takes advantage of the unique market structure with two major
manufacturers and only a few railroads buying nearly all of the freshly
manufactured locomotives. These provisions create incentives for both
the manufacturers and railroads to work together to develop a
diagnostic system that would effectively reveal real emission
malfunctions. Our current regulations already require that locomotive
operators complete all manufacturer-specified emission-related
maintenance, and this new requirement treats repairs indicated by
diagnostic systems as such emission-related maintenance. Thus, the
railroads will have a strong incentive to make sure that they only have
to perform this additional maintenance when real malfunctions are
occurring. On the other hand, manufacturers will want to have all
emission malfunctions revealed so that when they test an in-use
locomotive they can repair identified malfunctions before testing if
the railroad has not yet done it.
(5) Monitoring and Reporting of Emissions Related Defects
We are applying the defect reporting requirements of Sec. 1068.501
to replace the provisions of subparts E in parts 92 and 94. This will
result in two significant changes for manufacturers. First, Sec.
1068.501 obligates manufacturers to tell us when they learn that
emission control systems are defective and to conduct investigations
under certain circumstances to determine if an emission-related defect
is present. Second, it changes the thresholds after which they must
submit defect reports. See the text 40 CFR 1068.501 for details about
this requirement.
(6) Rated Power
We are specifying in parts 1033 and 1042 how to determine maximum
engine power in the regulations for both locomotives and marine
engines. The term ``maximum engine power'' will be used for marine
engines instead of previously undefined terms such as ``rated power''
or ``power rating'' to specify the applicability of the standards. The
addition of this definition is intended to allow for more objective
applicability of the standards. More specifically, for marine engines,
we define maximum engine power to mean the maximum brake power output
on the nominal power curve for an engine.
For locomotives, the term ``rated power'' will continue to be used,
but is explicitly defined to be the brakepower of the engine at notch
8. We will continue to use the term ``rated power'' because this
definition is consistent with the commercial meaning of the term.
(7) In-Use Compliance for SCR Operation
As discussed in section III.C, we are projecting that manufacturers
will use urea-based SCR systems to comply with the Tier 4 emission
standards.\158\ These systems are very effective at controlling
NOX emissions as long as the operator continues to supply
urea of acceptable quality. Thus we considered concepts put forward by
manufacturers in other mobile source sectors in dealing with this
issue. These include design features to prevent an engine from being
operated without urea if an operator ignores repeated warnings and
allows the urea level to run too low. EPA has issued a guidance
document for urea SCR systems discussing the use of such features on
highway diesel vehicles.
---------------------------------------------------------------------------

\158\ The provisions described in this section will apply
equally to SCR systems using reductants other than urea, except for
systems using normal diesel fuel as the reductant.
---------------------------------------------------------------------------

We believe that the nature of the locomotive and large commercial
marine sectors supports a different in-use compliance approach. This
approach focuses on requirements for operators of locomotives and
marine diesel engines that depend on urea SCR to meet EPA standards,
aided by onboard alarm and logging mechanisms that engine manufacturers
will be required to include in their engine designs. Except in the rare
instance that operation without urea may be necessary, the regulatory
provisions put no burden on the end-user beyond simply filling the urea
tank with appropriate quality urea. Specifically, we are specifying:
That it is illegal to operate without acceptable quality
urea when the urea is needed to keep the SCR system functioning
properly;
That manufacturers must include clear and prominent
instructions to the operator on the need for, and proper steps for,
maintaining urea, including a

[[Page 37143]]

statement that it is illegal to operate the engine without urea;
That manufacturers must include visible and audible alarms
at the operator's console to warn of low urea levels or inadequate urea
quality;
That engines and locomotives must be designed to track and
log, in nonvolatile computer memory, all incidents of engine operation
with inadequate urea injection or urea quality; and
That operators must report to EPA in writing any incidence
of operation with inadequate urea injection or urea quality within 30
days of each incident, and
That, when requested, locomotive and vessel operators must
provide EPA with access to, and assistance in obtaining information
from, the electronic onboard incident logs.
We understand that in extremely rare circumstances, such as during
a temporary emergency involving risk of personal injury, it may be
necessary to operate a vessel or locomotive without adequate urea. We
would intend such extenuating circumstances to be taken into account
when considering what penalties or other actions are appropriate as a
result of such operation. The information from SCR compliance
monitoring systems described above may also be useful for state and
local air quality agencies and ports to assist them in any marine
engine compliance programs they implement.
Our new regulations specify that what constitutes acceptable urea
solution quality be specified by the manufacturers in their maintenance
instructions and require that the certified emission control system
must meet the emissions standards with any urea solution within stated
specifications. This could be facilitated by an industry standard for
urea quality, which we expect will be generated in the future as these
systems move closer to market. We recognize that this will likely
require automated sensing of some characteristic indicator such as urea
concentration or exhaust NOX concentration.
We believe these provisions can be an effective tool in ensuring
urea use for locomotives and large commercial marine vessels because of
the relatively small number of railroads and operators of large
commercial vessels in the U.S., especially considering that the number
of SCR-equipped locomotives and vessels will ramp up quite gradually
over time. In-use compliance provisions of the sort we are adopting for
locomotives and large commercial marine engines would be much less
effective in other mobile source sectors such as highway vehicles
because successful enforcement involving millions of vehicle owners
would be extremely difficult. In addition, the highway and nonroad
diesel sectors are characterized by a wide variety of applications and
duty cycles, which further differentiate in-use compliance approaches
that may make sense in the relatively uniform rail and marine sectors
from those that would be effective in the highway and nonroad sectors.
(8) Temporary In-Use Compliance Margins
Consistent with the approach we took in the highway heavy-duty rule
(66 FR 5113) and nonroad diesel rule (69 FR 38957), we are adopting a
provision for in-use compliance flexibility in the initial years of the
Tier 4 program. We proposed to allow adjusted in-use compliance
standards for the first three model years of the Tier 4 locomotive
standards to help assure the manufacturers that they will not face
recall if they exceed standards by a small amount during this
transition to advanced clean diesel technologies.
Commenters suggested that the reasons we gave for applying this
provision to locomotives were valid for marine engines too. We agree
and are extending this provision to Tier 4 marine diesel engines.
Commenters also argued that we over-emphasized the flexibility needed
for NOX technology compared to PM technology. In response,
we have concluded that it is appropriate to provide an alternative set
of margins available to manufacturers willing to accept more stringent
in-use compliance levels for NOX in exchange for somewhat
less stringent levels for PM.
Table IV-1 shows the in-use adjustments that we will apply. These
adjustments would be added to the appropriate standards or FELs in
determining the in-use compliance level for a given in-use hours
accumulation. Our intent is that these add-on levels be available only
for highly-effective advanced technologies such as particulate traps
and SCR, and so we will apply them only to engines certified at or
below the Tier 4 standards without the use of credits, through the
first three model years of the new standards. As part of the
certification process, manufacturers will still be required to
demonstrate compliance with the unadjusted Tier 4 certification
standards using deteriorated emission rates. Therefore manufacturers
will not be able to use these in-use adjustments in setting design
targets for the engine. They need to project that engines will meet the
standards in use without adjustment. The in-use adjustments merely
provide some assurance that they will not be forced to recall engines
because of some small miscalculation of the expected deterioration
rates.
Also, to avoid what would essentially be a doubling up of the
benefits of the two alternatives, contrary to their purpose, we are
requiring that a manufacturer may only use the alternative set of add-
ons for an engine family if this choice is indicated in the
certification application and may not reverse this choice in carry-over
certifications or certifications by design.

Table IV-1.--In-Use Add-Ons (g/bhp-hr)
------------------------------------------------------------------------
Primary set Alternative set
For useful life fractions -----------------------------------
NOX PM NOX PM
------------------------------------------------------------------------
<50% UL............................. 0.7 ....... 0.2
50%-75% UL.......................... 1.0 0.01 0.3 0.03
>75% UL............................. 1.3 ....... 0.4
------------------------------------------------------------------------

As discussed in section III.B(1)(a)(ii), in response to industry
comments, we are providing another Tier 4 NOX compliance
option for line-haul locomotives with a reduced in-use NOX
add-on of 0.6 g/bhp-hr. Under this option, for the first 8 model years
of Tier 4 (2015-2022), a line-haul locomotive manufacturer may certify
a locomotive to the 1.3 g/bhp-hr NOX standard without
needing to calculate or apply a deterioration factor. These
locomotives, when tested in-use, must comply with an in-use standard of
1.9 g/bhp-hr but

[[Page 37144]]

do not get the additional NOX compliance margins discussed
above.
Because this option is meant to address manufacturer concerns about
manufacturing variability as well as catalyst durability, we are
allowing manufacturers using this option to substitute an in-use
locomotive test for each required production line test. These tests
must be conducted on locomotives with more than 50 hours of accumulated
operation, but at less than one-half of their useful life, and are in
addition to normally-required manufacturer in-use testing. Furthermore,
locomotives certified under this option may not generate credits under
the ABT program because of their potentially higher in-use emissions.
Also, of course, they may not be purposely designed to emit regulated
pollutants at higher levels in use than at certification. This option
will be available through the 2022 model year. It will not be available
for the 2015-2022 model year locomotives when they are remanufactured
in 2023 or later.
(9) Fuel Labels and Misfueling
The advanced emission controls that will be used to comply with
many of the new standards will require the use of ULSD. Therefore, we
are requiring that manufacturers notify each purchaser of a Tier 4
locomotive or marine engine that it must be fueled only with the ultra
low-sulfur diesel fuel meeting our regulations. We are also applying
this requirement for locomotives and engines having sulfur-sensitive
technology and certified using ULSD. All of these locomotives and
vessels must be labeled near the refueling inlet to say: ``Ultra-Low
Sulfur Diesel Fuel Only''. These labels are required to be affixed or
updated any time any engine on a vessel is replaced after the new
program goes into effect.
We are requiring the use of ULSD in locomotives and vessels labeled
as requiring such use, including all Tier 4 locomotives and marine
engines. More specifically, use of the wrong fuel for locomotives or
marine engines would be a violation of 40 CFR 1068.101(b)(1) because
use of the wrong fuel would have the effect of disabling the emission
controls.
We addressed the supply of ultra-low sulfur fuel in our previous
regulation of in-use locomotive and marine diesel fuel. Specifically,
we established a 15 ppm sulfur standard at the refinery gate for
locomotive and marine (LM) diesel fuel beginning June 1, 2012. However,
since we allow the sale, distribution, and use of 500 ppm LM diesel
fuel to continue indefinitely, we did not set a ``hard and fast''
downstream requirement that only 15 ppm LM diesel may be sold and
distributed in all areas of the country.\159\ This was to allow the LM
diesel fuel pool to remain an outlet for off-specification distillate
product and interface/transmix material. Because refiners cannot
intentionally produce off-specification fuel for locomotives--refiners
will no longer be able to produce nonroad, locomotive, or marine diesel
fuel above 15 ppm beginning June 1, 2012--most in-use locomotive and
marine diesel fuel will be ULSD (with a sulfur content of 15 ppm or
less). Nevertheless, we expect that some fuel will be available with
sulfur levels between 15 and 500 ppm, and our regulations require such
fuel to be designated as 500 ppm sulfur diesel fuel.
---------------------------------------------------------------------------

\159\ However, in the Northeast/Mid-Atlantic (NE/MA) area, as
defined at 40 CFR 80.510(g), 500 ppm LM diesel fuel may no longer be
sold and/or distributed beginning October 1, 2012. Such fuel may no
longer be used in the NE/MA area beginning December 1, 2012.
---------------------------------------------------------------------------

We received comments regarding the fact that we did not set a
strict downstream requirement on the use of 15 ppm LM for the entire
country. The commenters feared that while a port might receive
deliveries of 15 ppm LM fuel, the port might keep its pump labeled as
``500 ppm LM'' to allow it to receive and dispense either 15 ppm or 500
ppm LM. (As part of the diesel fuel regulations, all pumps dispensing
diesel fuel must be labeled with the type and maximum sulfur level of
the diesel fuel being dispensed.) The commenters were concerned that if
such practice were widespread, marine vessels that require ULSD could
potentially have problems finding it.
We understand the commenters' concerns and have discussed a few
potential solutions to this problem. One possible option is to require
large ports (i.e., ports over some certain size) to make 15 ppm LM
diesel fuel available. This size requirement could be by volume of
single sale or above some other specified volume. Under this
requirement, those ports with multiple tanks could continue to offer
500 ppm LM diesel fuel in addition to the 15 ppm LM diesel fuel. Or, if
a port (regardless of size) continues to sell 500 ppm LM diesel fuel,
it must also sell 15 ppm LM diesel fuel. Another potential option would
be to limit the sale of 500 ppm LM diesel fuel to small ports and
locomotives only. However, these potential solutions would need to be
discussed thoroughly with all stakeholders (including those in the fuel
distribution and marketing industry) and put out for notice and
comment. Therefore, we are merely noting potential solutions in this
final rule but we are committing to investigate this issue further and,
if the facts warrant doing so, addressing it in a separate action.
(10) Deterioration Factor Plan Requirements
In this rulemaking, we are amending our deterioration factor (DF)
provisions to include an explicit requirement that DF plans be
submitted by manufacturers for our approval in advance of conducting
engine durability testing, or in the case where no new durability
testing is being conducted, in advance of submitting the engine
certification application. We are not fundamentally changing either the
locomotive or marine engine DF requirements with this provision, other
than to require advance approval.
An advance submittal and approval format will allow us sufficient
time to ensure consistency in DF procedures, without the need for
manufacturers to repeat any durability testing or for us to deny an
application for certification should we find the procedures to be
inconsistent with the regulatory provisions. We expect that the DF plan
would outline the amount of service accumulation to be conducted for
each engine family, the design of the representative in-use duty cycle
on which service will be accumulated, and the quantity of emission
tests to be conducted over the service accumulation period.
(11) Production Line Testing
We proposed to continue the existing production line testing
provisions that apply to manufacturers. Some manufacturers suggested
that we should eliminate this requirement on the basis that very low
noncompliance rates are being detected at a high expense. While we
agree that compliance rates have been very good, we do not agree that
they mean that the program has little or no value. As we move toward
more stringent emission standards with this rulemaking, we anticipate
that the margin of compliance with the standards for these engines is
likely to decrease. Consequently, this places an even greater
significance on the need to ensure little variation in production
engines from the certification engine, which is often a prototype
engine. For this reason, it is important to maintain our production
line testing program.
However, the existing regulations allow manufacturers to develop
alternate programs that provide equivalent assurance of compliance on
the production line and to use such programs instead of the specified

[[Continued on page 37145]]

[Federal Register: June 30, 2008 (Volume 73, Number 126)]
[Rules and Regulations]
[Page 37145-37194]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jn08-15]

[[pp. 37145-37194]] Control of Emissions of Air Pollution From Locomotive Engines and
Marine Compression-Ignition Engines Less Than 30 Liters per Cylinder;
Republication

[[Continued from page 37144]]

[[Page 37145]]

production line testing program. For example, given the small sales
volumes associated with marine engines it may be appropriate to include
a production verification program for marine engines as part of a
manufacturer's broader production verification programs for its non-
marine engines. We believe these existing provisions already address
the concerns raised to us by the manufacturers.
We are adding provisions to allow manufacturers to use special
procedures for production line testing of catalyst-equipped engines.
Under the existing Part 92 and Part 94 programs, a manufacturer of a
catalyst-equipped locomotive or Category 2 marine engine would be
required to assemble and test the engine with a complete catalyst
system. At the manufacturer's choice, the engine could be broken in by
operating it for up to 300 hours or it could be tested in a ``green''
state and its measured emissions adjusted by applying ``green engine
factors''. The new regulations in Parts 1033 and 1042 will continue to
allow these options, but will also include additional options.
For locomotives, the new regulations will allow a locomotive to be
used in service for up to 1,000 hours before it is tested. This will be
sufficient time to degreen a catalyst. We believe that this approach
should work well for locomotives given the very close working
relationships between the manufacturers and the major railroads. (See
section IV.A.(8) for additional interim provisions related to
production-line testing of locomotives.)
We do not believe this locomotive approach would work for marine
engines because the marine market is much more diverse and the very
close working relationships cannot be assumed. Therefore, we will rely
on our general authority to approve alternate PLT programs. Should a
consensus develop in the future about how to appropriately verify that
engines and catalysts are produced to conform to the regulations, we
may adopt specific regulatory provisions to address these marine
engines.
(12) Evaporative Emission Requirements
While nearly all locomotives currently subject to part 92 are
fueled with diesel fuel, Sec. 92.7 includes evaporative emission
provisions that would apply for locomotives fueled by a volatile liquid
fuel such as gasoline or ethanol. These regulations do not specify test
procedures or specific numerical limits, but rather set ``good
engineering'' requirements. We are adopting these same requirements in
part 1033.
We are also adopting similar requirements for marine engines and
vessels that run on volatile fuels. We are not aware of any
compression-ignition marine engines currently being produced that would
be subject to these requirements but believe that it is appropriate to
adopt these requirements now rather than waiting until such engines are
produced. In this final rule, we are adopting requirements for
controlling evaporative emissions that are identical to those for
locomotives. As described in the proposal, we intend to apply to
compression-ignition marine engines and vessels the same requirements
we will be adopting for spark-ignition engines and vessels before the
end of 2008 (as proposed at 72 FR 28098). We therefore intend to modify
part 1042 in the final rule corresponding to that proposal related to
spark-ignition marine engines and vessels. Specifically, if someone
were to build a marine vessel with a compression-ignition engine that
runs on a volatile liquid fuel, the engine would be subject to the
exhaust emission standards of part 1042, but the fuel system would be
subject to the evaporative emission requirements of the recently
proposed part 1045.\160\
---------------------------------------------------------------------------

\160\ Part 1045 was proposed on May 18, 2007 (72 FR 28097).
---------------------------------------------------------------------------

(13) Small Business Provisions
There are a number of small businesses that will be subject to this
rule because they are locomotive manufacturers/remanufacturers,
railroads, marine engine manufacturers, post-manufacture marinizers,
vessel builders, or vessel operators. We largely continue the existing
provisions that were adopted previously for these small businesses in
the 1998 Locomotive and Locomotive Engines Rule (April 16, 1998; 63 FR
18977); our 1999 Commercial Marine Diesel Engines Rule (December 29,
1999; 64 FR 73299) and our 2002 Recreational Diesel Marine program
(November 8, 2002; 67 FR 68304). These provisions, which are discussed
below, are designed to minimize regulatory burdens on small businesses
needing added flexibility to comply with emission standards while still
ensuring the greatest emissions reductions achievable. (See section
IX.C of this rule for discussion of our outreach efforts with small
entities.)
(a) Locomotive Sector
(i) Production-Line and In-Use Testing Does not Apply
Production-line and in-use testing requirements do not apply to
small locomotive manufacturers until January 1, 2013, which is up to
five calendar years after this program becomes effective.
In the 1998 Locomotive Rule (April 16, 1998; 63 FR 18977), the in-
use testing exemption was provided to small remanufacturers with
locomotives or locomotive engines that became new during the 5-year
delay, and this exemption was applicable to these locomotives or
locomotive engines for their entire useful life (the exemption was
based on model years within the delay period, but not calendar years as
we are promulgating today). As an amendment to the existing in-use
testing exemption, small remanufacturers with these new locomotives or
locomotive engines must now begin complying with the in-use testing
requirements after the five-year delay on January 1, 2013 (exemption
based on calendar years). Thus, they are no longer exempt from in-use
testing for the entire useful life of a locomotive or a locomotive
engine. We are finalizing this provision to ensure that small
remanufacturers comply with our standards in-use, and subsequently, the
public is assured they are receiving the air quality benefits of
today's standards. In addition, this amendment provides a date certain
for small remanufacturers when in-use testing requirements begin to
apply.
We received a number of comments asking us to clarify whether or
not we were still planning to require production-line audits or
verification for small locomotive remanufacturers during this 5-year
delay (until January 1, 2013). In response, we are clarifying that we
did not intend to exempt small locomotive remanufacturers from
production-line audits during the 5-year delay (our intent was to
exempt these entities from production-line and in-use testing
requirements). We believe this requirement is of minimal regulatory
burden to small locomotive remanufacturers. Moreover, we have clarified
the general auditing regulations to explicitly allow audits to be
conducted by the owner/operator, which further minimizes the burden.
(ii) Class III Railroads Exempt From New Standards for Existing Fleets
EPA is limiting the category of small railroads which are exempt
from the Tier 0, 1 and 2 remanufacturing requirements for existing
fleets to those railroads that qualify as Class III railroads and that
are not owned by a large parent company. Under the current Surface
Transportation Board classification system, this exemption is limited
to railroads having total revenue less than $25.5 million per year.
This change requires that all Class II

[[Page 37146]]

railroads, when remanufacturing their locomotives, meet the new
standards finalized for existing fleets.
EPA had requested comment on whether the small railroads exemption
from emissions standards for existing fleets had been effective and
appropriate and whether they should continue under the new program
finalized today. Under part 92, only railroads qualifying as ``large''
businesses, as defined by the Small Business Administration (SBA) were
subject to the standards for their pre-existing fleet. The SBA
definition of a large railroad is based on employment. For line-haul
railroads the threshold is 1,500 or more employees, and for short-haul
railroads it is 500 or more employees. Additionally, any railroad owned
by a parent company that is large by SBA definition is also subject to
the current existing fleet requirements. Although this excludes a
majority of the more than 500 U.S. freight railroads, it addresses the
vast majority of the emissions because it includes all Class I
railroads.
The majority of comments supported revising the criterion for
exempting railroads from emissions standards for existing fleets. While
some of these commenter's felt that a revenue based approach exempting
Class III railroads was appropriate, others disagreed, and argued that
all railroads, regardless of classification or revenues should be
subject to the new emission standards for existing fleets. These
commenters felt no exemption would be legitimate because of both the
extremely long operational life of these locomotive engines and the
predominance of Class II and III railroads in various nonattainment
areas of the country which contribute to air quality problems. Those
commenters opposing any change to the existing exemption scheme argued
that the current approach of exempting all small railroads should be
retained because the costs involved in meeting new standards for
existing fleets would impose a heavy financial burden on small
railroads currently exempt from the program. Additionally, these
commenters argued that small railroads' emissions are trivial and do
not impact air quality.
In finalizing this new approach, EPA believes that continuing to
exempt Class III railroads with annual revenues under $25.5 million
while including all Class II railroads in the existing fleet program is
a reasonable approach that addresses both industry concerns regarding
costs while also recognizing that small railroads do contribute to air
pollution in areas they service including nonattainment areas
throughout the U.S.
We are clarifying our definition that intercity passenger or
commuter railroads are not included as railroads that are small
businesses because they are typically governmental or are large
businesses. Due to the nature of their business, these entities are
largely funded through tax transfers and other subsidies. Thus, the
only passenger railroads that could qualify for the small railroad
provisions will be small passenger railroads related to tourism.
(iii) Small Railroads Excluded From In-Use Testing Program
The railroad in-use testing program continues to apply to Class I
freight railroads only, and thus no small railroads are subject to this
testing requirement. It is important to note many Class II and III
freight railroads qualify as small businesses. This provision provides
flexibility to all Class II and III railroads, which includes small
railroads. All Class I freight railroads are large businesses.\161\
---------------------------------------------------------------------------

\161\ U.S. EPA, Assessment and Standards Division, Memorandum
from Chester J. France to Alexander Cristofaro of U.S. EPA's Office
of Policy, Economics, and Innovation, Locomotive and Marine Diesel
RFA/SBREFA Screening Analysis, September 25, 2006.
---------------------------------------------------------------------------

(iv) Hardship Provisions
Section 1068.245 of the existing regulations in title 40 contains
hardship provisions for engine and equipment manufacturers, including
those that are small businesses. We will apply this section for
locomotives as described below.
Under the unusual circumstances hardship provision, locomotive
manufacturers may apply for hardship relief if circumstances outside
their control cause their failure to comply and if the failure to sell
the subject locomotives will have a major impact on the company's
solvency. 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 shut down of a supplier with no
alternative available. The terms and time frame of the relief depend on
the specific circumstances of the company and the situation involved.
As part of its application for hardship, a company is required to
provide a compliance plan detailing when and how it will achieve
compliance with the standards.
(b) Marine Sector
(i) Revised Definitions of Small-Volume Manufacturer and Small-Volume
Boat Builder
As proposed, we are revising the definitions of small-volume
manufacturer (SVM) and small-volume boat builder to include worldwide
production. Currently, an SVM is defined as a manufacturer with annual
U.S.-directed production of fewer than 1,000 engines (marine and
nonmarine engines), and a small-volume boat builder is defined as a
boat manufacturer with fewer than 500 employees and with annual U.S.-
directed production of fewer than 100 boats. By including worldwide
production in these definitions, we prevent a manufacturer or boat
builder with a large worldwide production of engines or boats, or a
large worldwide presence, from receiving relief from the requirements
of this program. The provisions that apply to small-volume
manufacturers and small-volume boat builders as described below are
intended to minimize the impact of this rule for those entities that do
not have the financial resources to quickly respond to requirements in
the rule.
(ii) Broader Engine Families and Testing Relief
Broader engine families: We are finalizing as proposed the
provision that post-manufacture marinizers (PMMs) and SVMs be allowed
to continue to group all commercial Category 1 engines into one engine
family for certification purposes, all recreational engines into one
engine family, and all Category 2 engines into one family. As with
existing regulations, these entities are responsible for certifying
based on the ``worst-case'' emitting engine. This approach minimizes
certification testing because the marinizer and SVMs can use a single
engine in the first year to certify their whole product line. In
addition, marinizers and SVMs may then carry over data from year to
year until changing engine designs in a way that might significantly
affect emissions.
As described in the proposal, this broad engine family provision
still requires a certification test and the associated burden for
small-volume manufactures. We realize that the test costs are spread
over low sales volumes, and we recognize that it may be difficult to
determine the worst-case emitter without additional testing but we need
a reliable, test-based, technical basis to issue a certificate for
these engines. However, manufacturers will be able to use carryover
test data to spread costs over multiple years of production.
Production-line and deterioration testing: In addition, as
proposed, SVMs producing engines less than or equal to 600 kW (800 hp)
are exempted from production-line and deterioration testing for the
Tier 3 standards. We will assign a deterioration factor for use in

[[Page 37147]]

calculating end-of-useful life emission factors for certification. This
approach minimizes compliance testing since production-line and
deterioration testing is more extensive than a single certification
test. As described in the proposal, Tier 3 standards for these engines
are not expected to require the use of aftertreatment--similar to the
existing Tier 1 and Tier 2 standards. The Tier 4 standards for engines
greater than 600 kW are expected to require aftertreatment emission-
control devices. Currently, we are not aware of any SVMs that produce
engines greater than 600 kW, except for one marinizer that plans to
discontinue their production in the near future.\162\
---------------------------------------------------------------------------

\162\ U.S. EPA, Assessment and Standards Division, Memorandum
from Chester J France to Alexander Cristofaro of U.S. EPA's Office
of Policy, Economics, and Innovation, Locomotive and Marine Diesel
RFA/SBREFA Screening Analysis, September 25, 2006.
---------------------------------------------------------------------------

We are finalizing provisions that require SVMs to undertake
production-line and deterioration testing in the future if they begin
producing these larger engines due to the sophistication of
manufacturers that produce engines with aftertreatment technology. We
believe these manufacturers will have the resources to conduct both the
design and development work for the aftertreatment emission-control
technology, along with production-line and deterioration testing.
(iii) Delayed Standards
One-year delay: As described in the proposal, post-manufacture
marinizers (PMMs) generally depend on engine manufacturers producing
base engines for marinizing. This can delay the certification of the
marinized engines. There may be situations in which, despite its best
efforts, a marinizer cannot meet the implementation dates, even with
the provisions described in this section. Such a situation may occur if
an engine supplier without a major business interest in a marinizer
were to change or drop an engine model very late in the implementation
process or was not able to supply the marinizer with an engine in
sufficient time for the marinizer to recertify the engine. Based on
this concern, we are finalizing as proposed to allow a one-year delay
in the implementation dates of the Tier 3 standards for post-
manufacture marinizers qualifying as small businesses (the definition
of small business, not SVM, used by EPA for these provisions for
manufacturers of new marine diesel engines--or other engine equipment
manufacturing--is 1,000 or fewer employees; as defined by the Small
Business Administration's (SBA) regulations at 13 CFR 121.201) and
producing engines less than or equal to 600 kW (800 hp).
As described above and in the proposal, the Tier 4 standards for
engines greater than 600 kW (800hp) are expected to require
aftertreatment emission-control devices. We will not apply this one-
year delay to small PMMs that begin marinizing these larger engines in
the future due to the sophistication of entities that produce engines
with aftertreatment technology. We expect that the large base engine
manufacturer (with the needed resources), not the small PMM, will
conduct both the design and development work for the aftertreatment
emission-control technology and that they will also take on the
certification responsibility in the future. Thus, the small PMM
marinizing large engines will not need a one-year delay.
Three-year delay for not-to-exceed (NTE) requirements: As described
in the proposal, additional lead time is also appropriate for PMMs to
demonstrate compliance with NTE requirements. Their reliance on another
company's base engines affects the time needed for the development and
testing work needed to comply. Thus, as proposed, PMMs qualifying as
small businesses and producing engines less than or equal to 600 kW
(800hp) may also delay compliance with the NTE requirements by up to
three years, for the Tier 3 standards. Three years of extra lead time
(compared to one year for the primary certification standards) is
appropriate considering their more limited resources. As described
above and in the proposal, the Tier 4 standards for engines greater
than 600 kW are expected to require aftertreatment emission-control
devices. We do not apply this three-year delay to small PMMs that begin
marinizing these larger engines in the future due to the sophistication
of entities that produce engines with aftertreatment technology. We
expect that the large base engine manufacturer (with the needed
resources), not the small PMM, will conduct both the design and
development work for the aftertreatment emission-control technology and
that they will also take on the certification responsibility in the
future. Thus, the small PMM marinizing large engines does not need a
three-year delay for compliance with the NTE requirements.
Five-year delay for recreational engines: For recreational marine
diesel engines, the existing regulations (2002 Recreational Diesel
Marine program; November 8, 2002, 67 FR 68304) allow small-volume
manufacturers up to a five-year delay for complying with the standards.
However, as proposed, we will not continue this provision. As discussed
above and in the proposal, the Tier 3 standards for these engines are
expected to be engine-out standards which do not require the use of
aftertreatment--similar to the existing Tier 1 and Tier 2 standards.
The Tier 4 standards will not apply to recreational engines. Also, Tier
3 engines are expected to require far less in terms of new hardware,
and in fact, are expected to only require upgrades to existing hardware
(i.e., new fuel systems). In addition, manufacturers have experience
with engine-out standards from the existing Tier 1 and Tier 2
standards, and thus, they have learned how to comply with such
standards. Thus, small-volume manufacturers of recreational marine
diesel engines do not need more time to meet the new standards. For
small PMMs of recreational marine diesel engines, the one-year delay
described earlier will provide enough time for these entities to meet
today's standards.
(iv) Engine Dressing Exemption
We are finalizing as proposed that marine engine dresser will
continue to be exempt from certification and compliance requirements.
As described in the proposal, many marine diesel engine manufacturers
take a new, land-based engine and modify it for installation on a
marine vessel. Some of these companies modifying an engine make no
changes that might affect emissions. Instead, the modifications may
consist of adding mounting hardware and a generator or reduction gears
for propulsion. It can also involve installing a new marine cooling
system that meets original manufacturer specifications and duplicates
the cooling characteristics of the land-based engine but with a
different cooling medium (such as sea water). In many ways, these
manufacturers are similar to nonroad equipment manufacturers that
purchase certified land-based nonroad engines to make auxiliary
engines. This simplified approach of producing an engine can more
accurately be described as dressing an engine for a particular
application. As indicated above, engine dressers make changes to an
engine without affecting the emission characteristics of the engine,
which would include modifications that do not affect aftertreatment
emission-control devices or systems (as stated earlier, Tier 4
standards for engines greater than 600 kW (800 hp) are expected to
require aftertreatment).
Because the modified land-based engines are subsequently used on a
marine vessel, however, these modified engines are considered marine
diesel

[[Page 37148]]

engines, which then fall under these requirements. As described in the
proposal, while we continue to consider them to be manufacturers of a
marine diesel engine, they are not be required to obtain a certificate
of conformity (as long as they ensure that the original label remains
on the engine and report annually to EPA that the engine models that
are exempt pursuant to this provision). This extends section 94.907 of
the existing regulations. For further details of engine dressers
responsibilities see section 1042.605 of the regulations.
(v) Vessel Builder Provisions
Current recreational marine engines regulations (2002 Recreational
Diesel Marine program; November 8, 2002, 67 FR 68304) allow
manufacturers with a written request from a small-volume boat builder
to produce a limited number of uncertified engines (over a five year
period)--an amount equal to 80 percent of the boat builders sales for
one year. For builders with very small production volumes, this 80
percent allowance could be exceeded, as long as sales did not exceed 10
engines in any one year nor 20 total engines over five years and
applied only to engines less than or equal to 2.5 liters per cylinder.
We are not continuing this provision because recreational marine
engines are subject only to the Tier 3 standards that are not expected
to change the physical characteristics of engines (Tier 3 standards
will not result in a larger engine or otherwise require any more space
within a vessel). Because of the similarity to Tier 2 engine standards
there will be no need for boat builders to redesign engine compartments
thus eliminating the need for this 5 year delay provision.
(vi) Small Vessel Operators Exempt From New Standards for Existing
Fleet
In the proposed rule, we requested comment on an alternative
program option (Alternative 5: Existing Engines) that would for the
first time set emission standards for marine diesel engines on existing
vessels--the marine existing fleet or remanufacture program. As
described earlier in section III.B.2.b, Remanufactured Marine
Standards, we plan to finalize only the first part of this option
requiring the owner of a marine diesel engine (vessel operator) to use
a certified marine remanufacture system when the engine is
remanufactured if such a system is available.
The marine existing fleet program will apply only to those
commercial marine diesel engines (C1 and C2 engines) which meet the
following criteria:
Greater than 600 kW (800 hp);
Tier 0 or Tier 1 engines for C1 engines;
Tier 0, Tier 1 or Tier 2 engines for C2 engines;
Built in model year 1973 or later; and
Have a certified kit available at time of remanufacture.
We estimate that about 4 percent (or about 3,885 of 105,406
engines) of all C1 and C2 engines are subject to the existing fleet
program and are likely to have certified kits available at the time of
remanufacture. Thus, the percentage of vessels impacted by the
remanufacture program is estimated to be similar.
Industry commented that a small portion of the vessel operators
with engines greater than 600 kW (800 hp) are small businesses that
would be significantly burdened by the existing fleet program. To
address these comments, the requirements of the marine existing fleet
program do not apply to owners of marine diesel engines or vessel
operators with less than $5 million in gross annual sales revenue. This
threshold includes annual sales revenue from parent companies or
affiliates of the owners/operators. (Small Business Administration's
(SBA's) regulations at 13 CFR 121.103 describe how SBA determines
affiliation.) If at some future date gross annual sales revenues are $5
million or more, they become subject to the existing fleet program at
that point. The $5 million limit was chosen because a substantial
sample of data for vessel operators--with vessels that have C1 and C2
engines greater than 600 kW--indicates that a significant portion of
the total revenue for this sample set, about 80 percent, is generated
by operators with $5 million or more in annual sales revenue.\163\
---------------------------------------------------------------------------

\163\ The Waterways Journal, Inc., 2006 Inland River Record.
---------------------------------------------------------------------------

We expect that the amount of emissions from this sector correlates
reasonably well with the amount of revenue generated (anticipate that
revenue corresponds to activity which correlates well to emissions),
and thus, most of the emissions from vessel operators (with engines
greater than 600 kW (800 hp)) is obtained from those operators with $5
million or greater in revenue. The $5 million threshold for annual
sales revenue is estimated to include about 8 percent less of the total
vessel operator revenue compared to a $10 million limit, while
reflecting 15 percent more revenue than a $1 million threshold. About
90 percent of all vessel operators with C1 and C2 engines have less
than $5 million in revenue. The cost to remanufacture engines is a
greater burden to the vessel operators with less than $5 million in
revenue (larger fraction of revenue, etc.) than those above this limit.
Therefore, the $5 million revenue threshold eliminates the regulatory
burden for a substantial number of small vessel operators, while
capturing a significant portion of the emissions from operators in the
marine remanufacture program.
(vii) Hardship Provisions
Sections 1068.245, 1068.250 and 1068.255 of the existing title 40
regulations contain hardship provisions for engine and equipment
manufacturers, including those that are small businesses. As proposed,
we will apply these sections for marine applications such as PMMs,
SVMs, and small-volume boat builders, which will effectively continue
existing hardship provisions for these entities as described below.
In addition, for the marine existing fleet or remanufacture
program, we are now providing these same hardship provisions to vessel
operators or marine remanufacturers that qualify as small businesses.
These provisions are described below.
Post-Manufacture Marinizers (PMMs), Small-Volume Manufacturers
(SVMs), and Vessel Operators (or Marine Remanufacturers): As proposed,
we are continuing two existing hardship provisions for PMMs and SVMs.
In addition, we now extend these two provisions to small vessel
operators or small marine remanufacturers for the marine existing fleet
program. All of these entities may apply for this relief on an annual
basis. First, under an economic hardship provision, PMMs, SVMs, and
vessel operators (or marine remanufacturers) may petition us for
additional lead time to comply with the standards. They must show that
they have taken all possible business, technical, and economic steps to
comply, but the burden of compliance costs will have a major impact on
their company's solvency. As part of its application of hardship, a
company is required to provide a compliance plan detailing when and how
it plans to achieve compliance with the standards. Hardship relief
could include requirements for interim emission reductions and/or
purchase and use of emission credits. The length of the hardship relief
decided during initial review is up to one year, with the potential to
extend the relief as needed. We anticipate that one to two years is
normally sufficient. Also, for PMMs and SVMs, if a certified base
engine is available, they must generally use this

[[Page 37149]]

engine. We believe this provision will protect PMMs and SVMs from undue
hardship due to certification burden. Also, some emission reduction can
be gained if a certified base engine becomes available. See the
regulatory text in 40 CFR 1068.250 for additional information.
Second, under the unusual circumstances hardship provision, PMMs,
SVMs, and vessel operators (or marine remanufacturers) may also apply
for hardship relief if circumstances outside their control cause the
failure to comply and if the failure to sell the subject engines will
have a major impact on their company's solvency. 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 shut
down of a supplier with no alternative available (the second example is
mainly for PMMs and SVMs). The terms and time frame of the relief
depend on the specific circumstances of the company and the situation
involved. As part of its application for hardship, a company is
required to provide a compliance plan detailing when and how it will
achieve compliance with the standards. We consider this relief
mechanism to be an option of last resort. We believe this provision
will protect PMMs, SVMs, and vessel operators (or marine
remanufacturers) from circumstances outside their control. We, however,
do not envision granting hardship relief if contract problems with a
specific company prevent compliance for a second time. See the
regulatory text in 40 CFR 1068.245 for additional information.
Small-volume boat builders: As proposed, we are continuing the
unusual circumstances hardship provision for small-volume boat builders
(those with less than 500 employees and worldwide production of fewer
than 100 boats). Small-volume boat builders may apply for hardship
relief if circumstances outside their control cause the failure to
comply and if the failure to sell the subject vessels will have a major
impact on the company's solvency. An example of an unusual circumstance
outside a boat builder's control may be an ``Act of God,'' a fire at
the boat building facility, or the unforeseen breakdown of a supply
contract with an engine supplier. This relief allows the boat builder
to use an uncertified engine and is considered a mechanism of last
resort. The terms and time frame of the relief depend on the specific
circumstances of the company and the situation involved. As part of its
application for hardship, a company is required to provide a compliance
plan detailing when and how it plans to achieve compliance with the
standards. See the regulatory text in 40 CFR 1068.250 for additional
information.
In addition, as described in the proposal, small-volume boat
builders generally depend on engine manufacturers to supply certified
engines in time to produce complying vessels by the date emission
standards begin to apply. We are aware of other applications where
certified engines have been available too late for equipment
manufacturers to adequately accommodate changing engine size (for
engines meeting Tier 4 standards, which are described in section
III.B.2 of today's rule) \164\ or performance characteristics. To
address this concern, we are allowing small-volume boat builders to
request up to one extra year before using certified engines if they are
not at fault and will face serious economic hardship without an
extension. See the regulatory text in 40 CFR 1068.255 for additional
information.
---------------------------------------------------------------------------

\164\ Tier 3 engine-out standards are not expected to change the
physical characteristics of marine engines. Tier 3 standards will
not result in a larger engine or otherwise require any more space
within a vessel. For Tier 4 standards, we expect that vessels will
be designed to accommodate emission components that engine
manufacturers specify as necessary to meet these new standards
(e.g., ensure adequate space is available to package aftertreatment
components).
---------------------------------------------------------------------------

(14) Alternate Tier 4 NOX+HC Standards
We proposed to continue our existing emission averaging programs
for the new Tier 4 NOX and HC standards for locomotives and
marine engines. However, the existing averaging programs do not allow
manufacturers to show compliance with HC standards using averaging.
Because we are concerned that this could potentially limit the benefits
of our averaging program as a phase-in tool for manufacturers, we are
establishing an alternate NOX+HC standard of 1.4 g/bhp-hr
that could be used as part of the averaging program. Manufacturers that
were unable to comply with the Tier 4 HC standard would be allowed to
certify to a NOX+HC FEL, and use emission credits to show
compliance with the alternate standard instead of the otherwise
applicable NOX and HC standards. For example, a manufacturer
may choose to use banked emission credits to gradually phase in its
Tier 4 1200 kW marine engines by producing a mix of Tier 3 and Tier 4
engines during the early part of 2014. NOX+HC credits and
NOX credits could be averaged together without discount.
The value of this alternate standard (1.4 g/bhp-hr) is the rounded
sum of the Tier 4 NOX and HC standards. We proposed to set
this value at the level of the NOX standard (1.3 g/bhp-hr).
However, based on the comments received, we no longer believe this to
be appropriate. See the Summary and Analysis of Comments for more
discussion of this issue.
(15) Other Issues
We are finalizing other minor changes to the compliance program.
For example, engine manufacturers will be required to provide
installation instructions to vessel manufacturers and kit installers to
ensure that engine cooling systems, aftertreatment exhaust emission
controls, and other emission controls are properly installed. Proper
installation of these systems is critical to the emission performance
of the equipment. Vessel manufacturers and kit installers will be
required to follow the instructions to avoid improper installation that
could render emission controls inoperative. Improper installation would
subject them to penalties equivalent to those for tampering with the
emission controls.
We are also clarifying the general requirement that no emission
controls for engines subject to this final rule may cause or contribute
to an unreasonable risk to public health, welfare, or safety,
especially with respect to noxious or toxic emissions that may increase
as a result of emission-control technologies. The regulatory language,
which addresses the same general concept as the existing Sec. Sec.
92.205 and 94.205, implements sections 202(a)(4) and 206(a)(3) of the
Act and clarifies that the purpose of this requirement is to prevent
control technologies that would cause unreasonable risks, rather than
to prevent trace emissions of any noxious compounds. This requirement
prevents the use of emission-control technologies that produce
pollutants for which we have not set emission standards but
nevertheless pose a risk to the public. As is described in Section III
and the Summary and Analysis of Comments document, this provision does
not preclude the use of urea-based SCR emission controls.
Some marine engine manufacturers have expressed concern over the
current provisions in our regulation for selection of an emission data
engine. Part 94 specifies that a marine manufacturer must select for
testing from each engine family the engine configuration which is
expected to be worst-case for exhaust emission compliance on in-use
engines. Some manufacturers have interpreted this to

[[Page 37150]]

mean that they must test all the ratings within an engine family to
determine which is the worst-case. Understandably, this interpretation
could cause production problems for many manufacturers due to the lead
time needed to test a large volume of engines. Our view is that the
current provisions do not necessitate testing of all ratings within an
engine family. Rather, manufacturers are allowed to base their
selection on good engineering judgment, taking into consideration
engine features and characteristics which, from experience, are known
to produce the highest emissions. This methodology is consistent with
the provisions for our on-highway and nonroad engine programs.
Therefore, we are keeping essentially the same language in part 1042 as
is in part 94. We are adopting similar language for locomotives and
will apply it in the same manner as we do for marine engines.

B. Compliance Issues Specific to Locomotives

(1) Refurbished Locomotives
Section 213(a)(5) of the Clean Air Act directs EPA to establish
emission standards for ``new locomotives and new engines used in
locomotives.'' In the previous rulemaking, we defined ``new
locomotive'' to mean a freshly manufactured or remanufactured
locomotive.\165\ We defined ``remanufacture'' of a locomotive as a
process in which all of the power assemblies of a locomotive engine are
replaced with freshly manufactured (containing no previously used
parts) or reconditioned power assemblies. In cases where all of the
power assemblies are not replaced at a single time, a locomotive is
considered to be ``remanufactured'' (and therefore ``new'') if all of
the power assemblies from the previously new engine had been replaced
within a five year period.
---------------------------------------------------------------------------

\165\ As is described in this section, freshly manufactured
locomotives, repowered locomotives, refurbished locomotives, and all
other remanufactured locomotives are all ``new locomotives'' in both
the previous and new regulations.
---------------------------------------------------------------------------

Our new regulations clarify the definition of ``freshly
manufactured locomotive'' when an existing locomotive is substantially
refurbished including the replacement of the old engine with a freshly
manufactured engine. The existing definition in Sec. 92.12 states that
freshly manufactured locomotives are locomotives that do not contain
more than 25 percent (by value) previously used parts. We allowed
freshly manufactured locomotives to contain up to 25 percent used parts
because of the current industry practice of using various combinations
of used and unused parts. This 25 percent value applies to the dollar
value of the parts being used rather than the number because it more
properly weights the significance of the various used and unused
components. We chose 25 percent as the cutoff because setting a very
low cutoff point would have allowed manufacturers to circumvent the
more stringent standards for freshly manufactured locomotives by
including a few used parts during the final assembly. On the other
hand, setting a very high cutoff point could have required
remanufacturers to meet standards applicable to freshly manufactured
locomotives, but such standards may not have been feasible given the
technical limitations of the existing chassis.
We are adding to Sec. 1033.901 a definition of ``refurbish'' which
will mean the act of modifying an existing locomotive such that the
resulting locomotive contains less than 50 percent (by value)
previously used parts (but more than 25 percent). We believe that where
an existing locomotive is improved to this degree, it is appropriate to
consider it separately from locomotives that are simply remanufactured
in a conventional sense. As described below, we are specifying
provisions for refurbished locomotives that vary by application (switch
or line-haul) and model year (before or after 2015). See also section
IV.B(2), which describes minimum credit proration factors for
refurbished locomotives.
We are also clarifying that any locomotives built before 1973
become ``new'' and thus subject to our emission standards when
refurbished. In the 1998 rulemaking, we determined that pre-1973
locomotives should not be considered ``new'' when remanufactured.\166\
An important policy consideration in making that determination was our
analysis of the feasibility of such locomotives to meet the Tier 0
emission standards. However, that analysis is not valid for refurbished
locomotives. Given the degree to which such locomotives are redesigned
and reconfigured, there is no reason that they should be considered
differently from 1973 locomotives simply because their frames (or some
other parts) were originally manufactured earlier.
---------------------------------------------------------------------------

\166\ ``Locomotive Emission Standards: Regulatory Support
Document'', APPENDIX L, ``Exclusion of Pre-1973 Locomotives'', April
1998.
---------------------------------------------------------------------------

We requested comment on setting more stringent standards for
refurbished locomotives, considering that these locomotives are
restored to a condition likely to allow for many years of continued
service. Industry commenters expressed concern that our subjecting
refurbished locomotives to more stringent standards could prove
counterproductive, because state and local programs that currently help
fund voluntary refurbishments to very clean emission levels could lose
their incentive to continue doing so, given that these refurbishments
would now just be meeting EPA standards. It was further argued that
these refurbishments would also lose any opportunity to generate
valuable ABT credits, given the challenge just in meeting the
standards.
We believe that the need for financial incentives will be just as
clear and just as strong under the new program as before. Refurbishing
a locomotive effectively removes an old, high-emitting locomotive from
the fleet and replaces it with a clean one. The substantial cost of
doing so and the potential that, absent incentives, old locomotives
(especially switchers) would continue in operation almost indefinitely
are the true drivers for creating incentives, regardless of the
standards involved. We expect that state and local government officials
involved in this process are well aware of this and will act
accordingly. The ABT credits that can be gained from these
refurbishments have not been a major factor to date and, considering
that the credits can subsequently be used to produce other, less clean
locomotives, we do not believe that state and local governments would
or should be satisfied to help finance clean locomotives that result in
dirtier locomotives elsewhere. As detailed below, we are therefore
adopting more stringent standards for refurbished locomotives and
phasing in these standards in a way that we believe best facilitates
continued refurbishment of existing locomotives, while recognizing
differences between the switch and line-haul locomotive fleets and the
emission reduction trends resulting from our tiered approach to
standards-setting.
Currently, small numbers of old low-horsepower locomotives are
being refurbished as significantly lower-emitting switch locomotives.
The regulations in part 92 subject these locomotives to the Tier 0
standards (unless they contain less than 25 percent previously used
parts) and allow them to generate emission credits if they are cleaner
than required. The regulations in part 1033 will continue this approach
through model year 2014. It is important to note that since most of
these locomotives were originally manufactured before 1973, simply by

[[Page 37151]]

meeting the Tier 0 standards they will achieve significant emission
reductions.
For similar reasons, we are adopting an interim program for
slightly larger locomotives with power between 2300 and 3000 horsepower
refurbished through model year 2014. These locomotives, which are
frequently used as road switchers, would also be subject to the Tier 0
standards for this period.
We do not believe, however, that it would be appropriate to allow
switch locomotives to be refurbished to the Tier 0+ standards in the
long term. Once the Tier 4 standards begin to apply, we will allow
these locomotives to be certified to the Tier 3 switch locomotive
standards, which will still provide the opportunity to generate some
emission credits as an incentive.
The story is slightly different for higher power line-haul
locomotives, which are currently not being refurbished. Nearly all of
these remaining in the Class I railroad fleets were originally
manufactured in or after 1973 and are already subject to the Tier 0 or
later standards. Therefore there will be less of an air quality
incentive to fund their refurbishment, and so we are specifying that
refurbished line-haul locomotives be subject to the same standards as
freshly manufactured locomotives. The regulations would treat them the
same except for emission credit proration factors, which are described
in section IV.B.(2)
Another important consideration is the potential for refurbishment
to be used as a loophole to circumvent the freshly manufactured
standards for line-haul locomotives. Railroads currently turn over
their line-haul fleets much faster than their switch fleets. However,
it is not hard to envision a scenario in which railroads began
refurbishing their locomotives rather than buying freshly manufactured
locomotives, especially as the Tier 4 standards went into effect. A
long-term program requiring that refurbished line-haul locomotives meet
the same standards as freshly manufactured locomotives prevents
refurbishment from being used as such a loophole.

Table IV-2.--Provisions for Refurbished Switch Locomotives
------------------------------------------------------------------------
Minimum
Applicable tier of proration
standards factor
------------------------------------------------------------------------
Locomotives refurbished before Tier 0+............... 0.60
2015.
Locomotives refurbished in 2015 Tier 3................ 0.60
or later.
------------------------------------------------------------------------

Table IV-3.--Provisions for Refurbished Line-Haul Locomotives
------------------------------------------------------------------------
Minimum
Applicable tier of proration
standards factor
------------------------------------------------------------------------
Locomotives refurbished before Tier 2+/3............. 0.60
2015.
Locomotives refurbished in 2015 Tier 4................ 0.60
or later.
------------------------------------------------------------------------

(2) Averaging, Banking and Trading
For the most part, our new regulations will continue the existing
averaging banking and trading provisions for locomotives. This section
only highlights the provisions that are most significant in the context
of this Final Rule. The reader is encouraged to read subpart H of part
1033 for details of this program.
In order to ensure that the ABT program is not used to delay the
implementation of the Tier 4 technology, we are applying a restriction
similar to the averaging restriction that was adopted for Tier 2
locomotives in the previous locomotive rulemaking. We are restricting
the number of Tier 4 locomotives that could be certified using credits
to no more than 50 percent of a manufacturer's annual production. As
was true for the earlier restriction, this is intended to ensure that
progress is made toward compliance with the advanced technology
expected to be needed to meet the Tier 4 standards. This will encourage
manufacturers to make every effort toward meeting the Tier 4 standards,
while allowing some use of banked credits to provide needed lead time
in implementing the Tier 4 standards by 2015, allowing them to
appropriately focus research and development funds.
We proposed to allow the carryover of all Part 92 credits except
for PM credits generated from Tier 0 or Tier 1 locomotives. The Tier 0
and Tier 1 PM standards under part 92 were set above the average
baseline level to act as caps on PM emissions rather than technology-
forcing standards. While Part 92 allows credits generated only relative
the estimated average baseline rather than the standards, we were still
concerned that such credits might have been windfall credits. However,
as is described in the Summary and Analysis of Comments document, after
further analysis we now believe that allowing the carryover of all part
92 PM credits is appropriate and will allow such credits to be used
under part 1033.
We are also updating the proration factors for credits generated or
used by remanufactured locomotives. The updated proration factors
better reflect the difference in service time for line-haul and switch
locomotives. The ABT program is based on credit calculations that
assume as a default that a locomotive would remain at a single FEL for
its full service life (from the point it is originally manufactured
until it is scrapped). However, when we established the existing
standards, we recognized that technology would continue to evolve and
that locomotive owners may wish to upgrade their locomotives to cleaner
technology and certify the locomotive to a lower FEL at a subsequent
remanufacture. We established proration factors based on the age of the
locomotive to make calculated credits for remanufactured locomotives
consistent with credits for freshly manufactured locomotives in terms
of lifetime emissions. These proration factors are shown in Sec.
1033.705 of the new regulations. These replace the existing proration
factors of Sec. 92.305. For example, using the new proration factors,
a 15-year-old line-haul locomotive certified to a new FEL that was 1.00
g/bhp-hr below the applicable standard would generate the same amount
of credit as a freshly manufactured locomotive that was certified to an
FEL that was 0.43 g/bhp-hr below the applicable standard because the
proration factor would be 0.43. For comparison, under the old
regulations, the proration factor would have been 0.50.

[[Page 37152]]

We are correcting how the proration factors apply for refurbished
locomotives to more appropriately give credits to railroads for
upgrading old locomotives to use clean engines, rather than to continue
using the old high emission engines indefinitely. As with the rest of
the program, credits will be calculated from the difference between the
applicable standard and the emissions of the new refurbished
locomotive, adjusted to account for the projected time the locomotive
would remain in service. The correction creates a floor for the credit
proration factor for refurbished locomotives of 0.60. This is equal to
the proration factor for 20-year-old switchers and would also be
equivalent to a proration factor for a locomotive that was just over 10
years old. For example, refurbishing a 35-year-old switch locomotive to
an FEL 1.0 g/bhp-hr below the Tier 0 standard would generate the same
amount of credit as a conventional remanufacture of a 20-year-old
switch locomotive to an FEL 1.0 g/bhp-hr below the Tier 0 standard.
This is because we believe that such refurbished switch locomotives
will almost certainly operate as long as a 20-year-old locomotive that
was remanufactured at the same time. Similarly, we believe that
refurbished line-haul locomotives would likely operate as long as a 10-
year-old locomotive that was remanufactured at the same time.
Finally, we are finalizing special provisions for credits generated
and used by Tier 3 and later locomotives. Under the current part 92 ABT
program, credits are segregated based on the cycle over which they are
generated but not by how the locomotive is intended to be used (switch,
line-haul, passenger, etc.). Line-haul locomotives can generate credits
for use by switch locomotives, and vice versa, because both types of
locomotives are subject to the same standards. However, for the Tier 3
and Tier 4 programs, switch and line-haul locomotives are subject to
different standards with emissions generally measured only for one test
cycle. We will allow credits generated by Tier 3 or later switch
locomotives over the switch cycle to be used by line-haul locomotives
to show compliance with line-haul cycle standards. As proposed, we are
not allowing such cross-cycle use of line-haul credits (or switch
credits generated by line-haul locomotives) by Tier 3 or later switch
locomotives.
To make this approach work without double-counting of credits, we
are also adopting a special calculation method where the credit using
locomotive is subject to standards over only one duty cycle while the
credit generating locomotive is subject to standards over both duty
cycles (and can thus generate credits over both cycles). In such cases,
we would require the use of credits under both cycles. For example, for
a Tier 4 line-haul engine family needing 1.0 megagram of NOX
credits to comply with the line-haul emission standard, the
manufacturer would have to use 1.0 megagram of line-haul NOX
credits and 1.0 megagram of switch NOX credits if the line-
haul credits were generated by a locomotive subject to standards over
both cycles.
(3) Phase-In and Reasonable Cost Limit
The new Tier 0 and 1 emission standards become applicable on
January 1, 2010. We also proposed a requirement for 2008 and 2009 when
a remanufacturing system is certified to these new standards. If such a
system is available before 2010 for a given locomotive model at a
reasonable cost, remanufacturers of those locomotives may no longer
remanufacture them to the previously applicable standards. They must
instead comply with the new Tier 0 or 1 emission standards when they
are remanufactured. Similarly, we are requiring them to use certified
Tier 2 systems for 2008 through 2012 when a remanufacturing system is
certified to the new Tier 2 standards. For the purposes of this
provision, ``reasonable cost'' means that the total incremental cost to
the operators of the locomotive (including initial hardware, increased
fuel consumption, and increased maintenance costs) during the useful
life of the locomotive must be less than $250,000. This cost limit is
based on the upper cost we think likely to be required to meet these
standards and reflects comments on our NPRM from remanufacturers.
As part of this phase-in requirement, we are requiring certifiers
to notify customers that they are applying for certificate such that
their locomotives will become subject to the new standards. We would
then allow owners/operators a minimum 90-day grace period (after we
issue the certificate) in which they could remanufacture their
locomotives to the previously applicable standards once they are
notified by the certificate holder that such systems are available.
This allows them to use up inventory of older parts. However, where the
certifiers do not immediately notify them, railroads would be allowed a
grace period of at least 120 days after they are notified. This
combined approach allows sufficient time to find out about the
availability of kits and to make appropriate plans for compliance. We
are also adding a new provision for owners/operators that limits the
total number of locomotives that would need to meet the new standards
during 2008 and 2009 to a fraction of the total number of
remanufactures they do between October 3, 2008 and December 31, 2009
that are subject to either the old or new standards.
We are adding provisions that would allow Tier 0/1 remanufacturers
to use during the phase-in period an assigned deterioration factor of
0.03 g/bhp-hr for PM and assume that all other deterioration factors
are zero. We will also apply an in-use PM add-on of 0.03 g/bhp-hr.
These two provisions are intended to address lead time concerns raised
by commenters. The commenters correctly point out that the available
lead time is not sufficient to allow remanufacturers to verify
durability of the emission controls in a more conventional way. By
addressing this lead time issue, we will make it more likely that the
low emission kits will be brought to market early.
(4) Recertification Without Testing
Once manufacturers have certified an engine family, we have
historically allowed them to obtain certificates for subsequent model
years using the same test data if the engines remain unchanged from the
previous model year. We refer to this type of certification as
``carryover.'' We are also extending this allowance to owner/operators.
Specifically, we are adding the following paragraph to the end of Sec.
1033.240:

(c) An owner/operator remanufacturing its locomotive to be
identical to the previously certified configuration may certify by
design without new emission test data. To do this, submit the
application for certification described in Sec. 1033.205, but
instead of including test data, include a description of how you
will ensure that your locomotives will be identical in all material
respects to their previously certified condition. You have all of
the liabilities and responsibilities of the certificate holder for
locomotives you certify under this paragraph.
(5) Railroad Testing
Section 92.1003 requires Class I freight railroads to annually test
a small sample of their locomotives. We proposed to adopt the same
requirements in Sec. 1033.810, but asked for comments on whether this
program should be changed. In particular, we requested suggestions to
better specify how a railroad selects which locomotives to test, which
has been a source of some confusion in recent years. In this final
rule, we are adopting a revised approach that should reduce this
confusion. The regulations provide four options for railroads to select

[[Page 37153]]

locomotives for testing and require EPA to notify the railroad by
January 1st for any year in which we choose to specify which
locomotives should be tested.
In addition, the maximum annual testing rate is being lowered to
0.075 percent, from the previously applicable rates of 0.15 to 0.10
percent. This new rate will require Class I railroads to test
approximately 20 locomotives per year. We believe that this number of
tests (in addition to the testing required for certificate holders)
will be enough to allow us to appropriately monitor the emission
performance of in-use locomotives.
(6) Test Conditions and Corrections
In our previous rule, we established test conditions that are
representative of in-use conditions. Specifically, we required that
locomotives comply with emission standards when tested at temperatures
from 45[deg]F to 105[deg]F and at both sea level and altitude
conditions up to about 4,000 feet above sea level. One of the reasons
we established such a broad range was to allow outdoor testing of
locomotives. While we only required that locomotives comply with
emission standards when tested at altitudes up to 4,000 feet for
purposes of certification and in-use liability, we also required
manufacturers to submit evidence with their certification applications,
in the form of an engineering analysis, that shows that their
locomotives were designed to comply with emission standards at
altitudes up to 7,000 feet. We included correction factors that are
used to account for the effects of ambient temperature and humidity on
NOX emission rates.
We are now changing how the regulations deal with the test
temperatures. We are specifying that testing without correction may be
performed down to a lower limit of 60[deg]F. In implementing the prior
regulations, we found that the broad temperature range with correction,
which was established to make testing more practical, was problematic.
Given the uncertainty with the existing correction, manufacturers have
generally tried to test in the narrower range being adopted today.
However, we will still allow manufacturers to test at lower
temperatures but will require them to develop correction factors
specific to their locomotive designs.
We are also changing the altitude requirements for switch
locomotives in response to a comment noting that switch locomotives
will rarely operate above 5,500 feet. For switch locomotives, we will
only require manufacturers to show that their locomotives comply with
emission standards at altitudes up to 5,500 feet.
(7) Duty Cycles and Calculations
(a) Idle Weighting Adjustments
While we did not propose any changes to the weighting factors for
the locomotive duty cycles, we did request comment on whether such
changes would be appropriate in light of the proposed idle reduction
requirements. The regulations specify an alternate calculation for
locomotive equipped with idle shutdown features. This provision allows
a manufacturer to appropriately account for the inclusion of idle
reduction features as part of its emission control system. There are
three primary reasons why we are not changing the calculation
procedures with respect to the idle requirements. First, different
shutdown systems will achieve different levels of idle reduction in
use. Thus, no single adjustment to the cycle would appropriately
reflect the range of reductions that will be achieved. Second, the
existing calculation provides an incentive for manufacturers to design
shutdown systems that achieve in the greatest degree of idle reduction
that is practical. Finally, our feasibility analysis is based in part
on the emission reductions achievable relative to the existing
standards. Since some manufacturers already rely on the calculated
emission reductions from shutdown features incorporated into many of
their locomotive designs, our feasibility is based in part on allowing
such calculations.
We are adopting a slight change to the way this adjustment works as
compared to the previous regulations. We are specifying that idle
emission rates for locomotives meeting our minimum shutdown
requirements in Sec. 1033.115 be reduced by 25 percent, unless the
manufacturer demonstrates that greater idle reduction will be achieved.
(b) Representative Cycles
We also recognize that the potential exists for locomotives to
include additional power notches, or even continuously variable
throttles, and that the standard FTP sequence for such locomotives
would result in an emissions measurement that does not accurately
reflect their in-use emissions performance. Moreover, some locomotives
may not have all of the specified notches, making it impossible to test
them over the full test. Under the previous regulations, we handled
such locomotives under our discretion to allow alternate calculations
(40 CFR 92.132(e)). We are now adopting more specific provisions in
Sec. 1033.520. In general, for locomotives missing notches, we believe
the existing duty cycle weighting factors should be reweighted without
the missing notches. For locomotives without notches or more than 8
power notches, the regulations reference following information provided
to us by manufacturers for the previous rulemaking that shows typical
notch power levels expressed as a percentage of the rated power of the
engine.
In response to comments we are also adding provisions to address
locomotives that include new design features that will result in
changes to the in-use duty cycle. Specifically, the regulations state
that manufacturers must notify us if they are adding design features
that will make the expected average in-use duty cycle of their engine
family significantly different from the otherwise applicable test
cycle. They must also recommend an alternate test cycle that represents
the expected average in-use duty cycle. We will specify whether to use
the default duty cycle, the recommended cycle, or a different cycle,
depending on which cycle we believe best represents expected in-use
operation. For locomotives subject to both line-haul and switch cycle
standards, the regulations specify that a single set of standards would
apply for the representative cycle.
(c) Energy Saving Design Features
We are adopting special provisions for locomotives equipped with
energy-saving design features, such as sophisticated electronic
optimization of throttle and brake settings based on route data or
locomotive operation in a consist, electronically controlled pneumatic
(ECP) brakes, and hybrid technology. The provisions we are adopting
recognize that to whatever degree the total work done by a locomotive
is reduced, the mass emissions would likely also be reduced. For
example, if certain design features reduced by three percent the amount
of work needed to pull a typical train, then the mass emission rate (g/
hr) would generally also be reduced by three percent. Under the new
provisions, manufacturers will be allowed to adjust their locomotives'
emissions to reflect this, based on data gathered prior to
certification.
Manufacturers choosing to adjust emissions under these provisions
must present a test plan to EPA for approval prior generating the in-
use data necessary to estimate their emissions reductions. The degree
to which manufacturers would be allowed to take

[[Page 37154]]

a credit at certification would be determined from a statistical
analysis of their supporting data to address the uncertainty in their
estimate. This would minimize the possibility that manufacturers would
be given credit for emission reductions that did not actually occur.
Later, additional data on the in-use fleet using the feature could be
gathered to improve the statistical certainty and this could then be
factored into subsequent certifications. In concept, however, if we had
perfect data, we would grant the manufacturers full credit for the
savings.
Since our standards are specified as brake-specific emission
limits, no credit or adjustment will be allowed for features that only
improve the engine's brake-specific fuel consumption. The nature of the
test procedure itself already properly credits such features. Thus,
allowing additional credits to be calculated would be double-counting
of credits.
(8) Non-OEM Remanufacturing Parts
We are adopting measures in Sec. 1033.645 to help provide for the
continued participation in remanufacturing by parts manufacturers
willing to take responsibility for the long-term emissions performance
of their parts but who lack the wherewithal to design and certify
entire locomotive remanufacture systems that may include complex
emissions control systems far beyond their expertise. Under this
program, we would determine, based on an upfront engineering analysis,
that the part supplier has a reasonable basis for concluding that use
of their part would be equivalent to the OEM part in use. We would
later verify its emission performance through in-use emission testing.
The exact nature of the engineering analysis necessary to
demonstrate that the part supplier has a reasonable basis for
concluding that use of their part (or parts) will not cause emissions
to increase beyond the level expected from the OEM part in use, is
expected to vary. We see four possible paths to accomplish this.
The part is shown to be identical to the original part in
all material respects.
The part differs physically from the original in a small
number of ways and each of these is evaluated to show that the
aftermarket part will be as good as or better than the original with
respect to emissions performance.
Measurable emission-critical parameters such as fuel
injection profile or engine oil consumption rate are established and an
engine (or relevant engine subsystem) using the aftermarket part is
shown through testing to perform as good or better than one with the
original part with respect to these parameters.
Emissions testing and durability demonstration is
performed in essentially the same manner as for remanufactured system
certification.
For example, cylinder liners differing only in color and part
number from the OEM liners would be identical in all material respects.
Those having different bore groove patterns would not be considered
identical, but an analysis of the difference this makes in the oil's
interaction with the cylinder wall and rings (which could have an
impact on PM emissions) could suffice to make the demonstration.
Chrome-plated cylinder liners in combination with a specified piston
ring set used in place of original rings and non-plated liners could be
expected to affect the emission-critical parameter of oil consumption,
especially later in the locomotive useful life due to differences in
wear rates. Bench or field testing over time demonstrating lower oil
consumption trends than original equipment could provide a sufficient
demonstration, provided no other emission-critical parameters are
involved. We do not believe it is necessary or even possible to specify
in the regulations the appropriate emission-critical parameters for all
of the locomotive aftermarket components identified in this provision
or to specify the test procedures and criteria by which these
parameters are evaluated. Instead, we are establishing broad criteria
and requiring the part suppliers to propose the appropriate emission-
critical parameters and corresponding test or analytical methods
appropriate to the part they produce.
We would allow railroads to use the non-OEM part during
remanufacturing once we have approved the supplier's engineering
analysis. Once the part has been installed in at least 250 locomotives,
we would require one of them to be tested. One additional locomotive
would need to be tested from the next additional 500 locomotives that
use the part. If any locomotives fail to meet all standards, we
generally require one additional locomotive to be tested for each
locomotive that fails. We would generally allow the supplier to include
testing performed by others. For example, if a railroad tests a
locomotive with the part under Sec. 1033.810, the supplier could
submit those test data as fulfillment of its test obligations.
We are adopting these provisions to address the specific issue of
parts that are typically replaced during remanufacturing and for which
there is an active aftermarket. Therefore, we are only specifying
cylinder liners, cylinder heads, pistons, rings, and fuel injectors as
being covered by this program. We reserve the authority to expand the
program to cover other parts.
(9) Use of Nonroad Engines Certified Under 40 CFR Parts 89 and 1039
Section 92.907 currently allows the use of a limited number of
nonroad engines in locomotive applications without certification under
the locomotive program. We believe a similar allowance should also be
included in the new regulations. However, we are making some changes to
these procedures. In general, manufacturers have not taken advantage of
these previously existing provisions. In some cases, this was because
the manufacturer wanted to produce more locomotives than allowed under
the exemption. However, in most cases, it was because the customer
wanted a full locomotive certification with the longer useful life and
additional compliance assurances. We are adopting new separate
approaches for the long term (Sec. 1033.625) and the short term (Sec.
1033.150), each of which addresses at least one of these issues.
For the long term, we are replacing the existing allowance that
relies on part 89 certificates with a design-certification program that
makes the locomotives subject to the locomotive standards in use but
does not require new testing to demonstrate compliance at
certification. Specifically, this program allows switch locomotive
manufacturers using nonroad engines to introduce up to 30 locomotives
of a new model prior to completing the traditional certification
requirements. While the manufacturer would be able to certify without
new testing, the locomotives would have locomotive certificates. Thus,
purchasers would have the compliance assurances they desire.
As is described in section III B (1)(b), the short-term program is
more flexible and does not require that the locomotives comply with the
switch cycle standards; instead the engines would be subject to the
part 1039 standards. The manufacturers would be required to use good
engineering judgment to ensure that the engines' emission controls
would function properly when installed in the locomotives. For example,
the locomotive manufacturer would need to ensure that sufficient
cooling capacity was available to cool the engine intake air. Given the
relative levels of the part 1039 standards and those being

[[Page 37155]]

proposed in 1033, we do believe there is little environmental risk with
this short-term allowance and thus are not including any limits of the
sales of such locomotives. Nevertheless, we are limiting this allowance
to model years through 2017. This provides sufficient time to develop
these new switchers. These locomotives would not be exempt from the
part 1033 locomotive standards when remanufactured, unless the
remanufacturing of the locomotive took place prior to 2018 and involved
replacement of the engines with certified new nonroad engines.
Otherwise, the remanufactured locomotive will be required to be covered
by a part 1033 remanufacturing certificate.
(10) Mexican and Canadian Locomotives
Under the prior regulations, Mexican and Canadian locomotives are
subject to the same requirements as U.S. locomotives if they operate
extensively within the U.S. The regulation 40 CFR 92.804(e) states:
Locomotives that are operated primarily outside of the United
States, and that enter the United States temporarily from Canada or
Mexico are exempt from the requirements and prohibitions of this part
without application, provided that the operation within the United
States is not extensive and is incidental to their primary operation.
We are changing this exemption to make it subject to our prior
approval, since we have found that the current language has caused some
confusion. When we created this exemption, it was our understanding
that Mexican and Canadian locomotives rarely operated in the U.S. and
the operation that did occur was limited to within a short distance of
the border. We are now aware that there are many Canadian locomotives
that do operate extensively within the U.S. and relatively few that
meet the conditions of the exemption. We have also learned that some
Mexican locomotives may be operating more extensively in the United
States. Thus, it is appropriate to make this exemption subject to our
prior approval. To obtain this exemption, a railroad will be required
to submit a detailed plan for our review prior to using uncertified
locomotives in the U.S. We will grant an exemption for locomotives that
we determine will not be used extensively in the U.S. and that such
operation will be incidental to their primary operation. Mexican and
Canadian locomotives that do not have such an exemption and do not
otherwise meet EPA regulations may not enter the United States.
(11) Other Locomotive Issues
The regulations in part 92 allow locomotive owners to voluntarily
subject their pre-1973 locomotives to the Tier 0 standards or to
include in the locomotive program low-horsepower locomotives that would
otherwise be excluded based on their rated power. We are also including
these options in the new part 1033. We will also provide two additional
options. First, we will allow Tier 0 switch locomotives, which are
normally not subject to line-haul cycle standards, to be voluntarily
certified to the line-haul cycle standards. Second, we will allow any
locomotives to be voluntarily certified to a more stringent tier of
standards. An example of where these options may be desirable would be
a case in which a customer wants to purchase a refurbished switch
locomotive that meets the Tier 2 standards. While it may seem obvious
that it would be allowed, the old regulations are unclear. The part
1033 regulations eliminate this confusion.
The existing and proposed regulations both specified that railroads
are required to perform emission-related maintenance. In response to
comments, we have added to the regulations a clarification that
unscheduled maintenance has to be performed in a timely manner, no
later than at the next ``92-day'' inspection required by the Federal
Railroad Administration. Railroads expressed concern that the
regulations, as previously written, would have required them to
immediately remove a locomotive from service to make emission-related
repairs. This was not our intent. Rather, the maintenance provision was
intended to merely require that the maintenance be performed in a
timely manner. For many repairs, it may be appropriate to wait until
the next 92-day inspection. However, for many others it would be
appropriate to make the repair sooner to the extent practical.
In response to comments, we are adding an interim allowance to
simplify certification testing of locomotive engines. Specifically, for
model years before 2014, we will allow manufacturers to test locomotive
engines for certification without replicating the transient behavior in
the locomotive. This will make it easier for manufacturers to certify
new cleaner remanufacturing systems for the full range of locomotive
models.

C. Compliance Issues Specific to Marine Engines

(1) Remanufacturing
As discussed in Section III, above, we are adopting a marine
remanufacture program for marine diesel engines over 600 kW built from
1973 through Tier 2 that requires the use of a certified remanufacture
system when such an engine is remanufactured, if one is available.
Certified remanufacture systems must achieve at least a 25 percent
reduction in PM emissions. This section briefly describes several
certification and compliance provisions for the marine remanufacture
program; the full program is contained in the regulations for this
rule.
In general, the normal certification requirements for new marine
diesel engines would apply, with minor variations as needed to
accommodate the characteristics of remanufactured engines. For example,
engine families are based on the same criteria as for freshly
manufactured engines, and testing, reporting, the application for
certification, and warranty requirements closely follow the provisions
that apply for freshly manufactured engines.
In general, remanufactured engines are considered to be ``new''
engines, and they remain new until sold or placed back into service
after the replacement of the last cylinder liner. The standards do not
apply for engines that are rebuilt without removing cylinder liners.
For a new engine to be placed into service, it must be covered by a
certificate of conformity.
As is the case with our other emission control programs,
certification testing for conformity demonstration will be performed on
the most common configuration within an engine family. An engine family
is a group of engines that have the same characteristics with respect
to combustion cycle and fuel, cooling system, method of air aspiration,
method of exhaust aftertreatment, combustion chamber design, bore and
stroke, and mechanical or electronic controls. Other configurations may
be included if it can be shown based on good engineering judgment that
they are likely to provide a PM reduction similar to the configuration
tested. Compliance for these other configurations is based on an
engineering demonstration that the remanufacturing system reduces PM
emissions by 25 percent without increasing NOX emissions.
Engine families may also include remanufacturing systems corresponding
to engines that were originally produced over multiple model years, as
long as the configuration does not change in a

[[Page 37156]]

way that affects the validity of certification for the remanufacturing
system.
To certify a remanufacture system, a manufacturer must measure
baseline emissions and emissions from an engine remanufactured using
its system. A baseline emission rate would be established by
remanufacturing an engine following normal procedures. That engine or a
second engine of the same configuration is then tested for emissions
after remanufacturing with the expected emission controls. The
remanufacturing system meets the emission standards of the program by
demonstrating a minimum 25 percent reduction in PM emissions and no
increase in NOX emissions (within 5 percent). The
remanufacturer must also demonstrate that the remanufacturing system
does not adversely affect engine reliability or power.
The remanufacturer must also demonstrate that the total marginal
cost of the remanufacturing system is less than $45,000 per ton of PM
reduction. For the purpose of this demonstration, marginal cost means
the difference in costs between remanufacturing the engine using the
remanufacture system and remanufacturing the engine conventionally.
Total marginal costs over the period of one useful life are divided by
the projected PM emissions over one useful life to obtain the cost of
the remanufacture system per ton of PM reduced. Costs to be considered
include hardware costs, labor costs, operating costs over one useful
life period, and other costs (such as shipping).
The useful life provisions established for freshly manufactured
engines would apply equally to remanufactured engines. In general,
remanufacturers would be responsible for meeting emission standards for
10 years or 10,000 hours of operation for Category 1 engines, and 10
years or 20,000 hours of operation for Category 2 engines.
Certification will rely on a deterioration factor, similar to
freshly manufactured engines. The certifying company may either use an
assigned value of 0.015 g/kW-hr for PM or develop a new deterioration
factor based on engine testing. For Tier 2 engines, the certifying
company needs to add the deterioration factor to measured emission
levels for certification. The deteriorated number must be less than the
applicable PM standard. For Tier 1 and earlier engines, the
deterioration factor is added to the emission level established for the
certified configuration and that higher emission level serves as the
emission standard for any in-use testing after certification.
The regulations allow for simplified certification requirements for
remanufacture systems that are already certified under the locomotive
program. This would require only an engineering analysis demonstrating
that the system would achieve emission reductions from marine engines
similar to those from locomotives. Because the marine remanufacture
program requires only a PM reduction, locomotive remanufacture system
manufacturers may modify those locomotive systems with respect to
NOX emissions. In that case, the system will have to be
recertified as a marine remanufacture system based on measured values
and subject to all of the other certification requirements of the
marine remanufacture program.
Remanufactured engines are not eligible for generating or using
emission credits for averaging, banking, or trading. This is
appropriate because the program we are finalizing is only mandatory if
a system has been certified for the relevant engine. We will reconsider
allowing systems to be based on emission credits when we consider
whether to adopt a mandatory marine remanufacture program (Part 2 of
the proposed program) at a later date.
Not-to-exceed standards do not apply to remanufacturing. This is
appropriate because the base engine in most cases is not subject to NTE
requirements. In addition, NTE is most appropriately considered in the
initial engine design phase; requiring remanufactured engines to meet
the NTE requirements would likely require more intensive engine
redesign than is anticipated by the simpler program we are finalizing.
Finally, other provisions such as those governing maintenance
intervals, warranties, duty cycles, test fuel, labeling, recordkeeping,
etc. are the same as or similar to those for freshly manufactured
engines.
(2) Replacement Engines
We are revising certain aspects of our existing provisions with
regard to replacement engines, as described below. These requirements
apply to all marine diesel engines, propulsion or auxiliary, regardless
of marine application. Section 1042.601(c) provisions apply instead of
the provision of section 1068.240(b)(3) that applies for other nonroad
engines.
(a) Replacement With a Freshly Manufactured Engine
Under the current marine diesel engine program, an engine
manufacturer is generally prohibited from selling a marine engine that
does not meet the standards that are in effect when that engine is
produced. However, we recognize that there may be situations in which a
vessel owner may require an engine certified to an earlier tier of
standards. The two most likely situations are (1) when a vessel has
been designed to use a particular engine such that it cannot physically
accommodate a different engine due to size or weight constraints (e.g.,
a new engine model will not fit into the existing engine compartment);
or (2) when the engine is matched to key vessel components such as the
propeller, or when a vessel has a pair of engines that must be matched
for the vessel to function properly.
To address these extreme situations, we amended existing regulation
40 CFR 94.1103(b)(3) to allow a manufacturer to produce a new engine
which meets an earlier tier of standards if the Administrator
determined that no new engine certified to the emission limits in
effect at that time is produced by any manufacturer with the
appropriate physical or performance characteristics needed to repower
the vessel. An engine manufactured pursuant to this provision is
subject to certain conditions: The replacement engine must meet
standards at least as stringent as those of the original engine; the
engine manufacturer must take possession of the original engine or
confirm it is destroyed; and the replacement engine must be clearly
labeled to show that it does not comply with the standards and that
sale or installation of the engine for any purpose other than as a
replacement engine is a violation of federal law and subject to civil
penalty.
We subsequently revised this provision to allow the engine
manufacturer to make the determination of whether an engine compliant
with the current standards would fit a vessel, but solely in cases of
catastrophic failure (see 70 CFR 40419, July 13, 2005). This change was
made to reflect industry concerns that obtaining prior EPA approval
would take too long. The engine manufacturer may make the determination
in catastrophic failure situations provided that the following
conditions are met: The manufacturer must determine that no certified
engine is available, either from its own product lineup or that of the
manufacturer of the original engine (if different); and the engine
manufacturer must document the reasons why an engine of a newer tier is
not usable, and this report must be made available to us upon request.
We also specified in Sec. 94.1103(a)(8) that no other significant
modifications to the vessel can be made as part of the process of
replacing the engine, or for a period of 6 months thereafter.
In response to comments on the proposal for this rulemaking, we are

[[Page 37157]]

finalizing three additional revisions to the replacement engine
provisions. First, engine manufacturers may now make the determination
with respect to the feasibility of using a current tier engine in both
noncatastrophic and catastrophic situations. This is a significant
change to the program. Engine manufacturers and user groups were
concerned about the amount of time that would be needed to obtain prior
EPA approval, even in these noncatastrophic cases. Even though the
noncatastrophic engine replacement is more typically planned in
advance, it is still the case that the determination must be made in a
timely manner to ensure the engine manufacturer has time to produce the
engine before the vessel is taken out of service for the replacement.
Therefore, we are revising the program to allow the engine manufacturer
to make such determinations, provided certain additional conditions are
met: The engine manufacturer must examine the suitability of
replacement with any current tier engine, either produced by that
manufacturer or any other manufacturer; the engine manufacturer must
make a record of each determination, which must be kept for eight years
and contain specific information; the record must be submitted to EPA
within 30 days after shipping each engine along with a statement
certifying that the information contained in that record is true. We
may reduce the reporting and recordkeeping requirements in this section
after a manufacturer has established a consistent level of compliance
with the requirements of this section.
These records will be used by EPA to evaluate whether engine
manufacturers are properly making the feasibility determination and
applying the replacement engine provisions. We may void any exemptions
we determine do not conform to the applicable requirements. When
assessing penalties under this provision we would consider whether the
manufacturer acted in good faith. Thus manufacturers are encouraged to
keep additional records to support their good faith attempt to comply
with the regulations. For example, manufacturers could keep records of
requests for replacement engines that are denied.
In making the determination that a current tier engine is not a
feasible replacement engine for a vessel, we expect the engine
manufacturer will evaluate not just engine dimensions and weight but
may also include other pertinent vessel characteristics. These
pertinent characteristics would include downstream vessel components
such as drive shafts, reduction gears, cooling systems, exhaust and
ventilation systems, and propeller shafts; electrical systems for
diesel generators (indirect drive engines); and such other ancillary
systems and vessel equipment that would affect the choice of an engine.
At the same time, there are differences between the new tier and
original tier engines that should not affect this determination, such
as the warranty period or life expectancy of a newer tier engine, or
its cost or production lead time. These characteristics should not be
part of the determination of whether or not a new tier engine can be
used as a replacement engine. With regard to the warranty period or
life expectancy for the new tier engine, an exception may be if these
are significantly shorter for the new tier engine than for an older
tier engine or the original engine and the shorter warranty period or
life expectancy for the newer model is consistent with industry
practices.
In addition, in the case of a vessel with two or more paired
engines, if the engine not in need of replacement has accumulated
service in excess of 75 percent of its useful life we specify that the
determination must consider replacement of both engines in the pair.
This requirement is necessary to prevent circumvention of the freshly
manufactured engine requirements by replacing one engine at a time and
relying on the need to pair the engines as the sole justification for
producing an engine to an earlier tier. We are also specifying that no
additional modifications may be made to a vessel for six months after
installing a new replacement engine made to a previous tier. This is to
avoid circumvention of the requirement to use a freshly manufactured
engine when a vessel is refurbished such that it becomes a new vessel.
The second change to the replacement engine provision is necessary
to accommodate the new tiers of standards we are adopting in this
rulemaking. Specifically, in making the feasibility determination the
engine manufacturer is now required to consider all previous tiers and
use any of their own engine models from the most recent tier that meets
the vessel's physical and performance requirements. If an engine
manufacturer can produce an engine that meets a previous tier of
standards representing better control of emissions than that of the
engine being replaced, the manufacturer would need to supply the engine
meeting the tier of standards with the lowest emission levels. For
example, if a Tier 1 engine is being replaced after the Tier 3
standards go into effect, the engine manufacturer would have to
demonstrate why a Tier 2 as well as a Tier 3 engine cannot be used
before a Tier 0 engine can be produced and installed. Similarly, for an
engine built prior to 2004, the engine manufacturer would have to
demonstrate why a Tier 1, Tier 2, or a Tier 3 engine cannot be used. It
should be noted, in the case of Tier 0 engines, that MARPOL Annex VI
prohibits replacing an existing engine at or above 130 kW with a
freshly manufactured engine unless it meets the Tier 1 standards.
The third change to the replacement engine provisions pertains to
Tier 4 engines. We are making the advance determination that Tier 4
engines equipped with aftertreatment technology to control either
NOX or PM are not required for use as replacement engines
for engines from previous tiers in accordance with this regulatory
replacement engine provision. Note, however, that Tier 4 engines will
be required to be used as replacement engines if the original engine
being replaced is a Tier 4 engine. We are making this determination in
advance because we expect that installing such a Tier 4 engine in a
vessel that was originally designed and built with a previous tier
engine could require extensive vessel modifications (e.g., addition of
a urea tank and associated plumbing; extra room for a SCR or PM filter;
additional control equipment) that may affect important vessel
characteristics (e.g., vessel stability). It should be noted that by
making this advance determination, EPA is not implying that Tier 4
engines are never appropriate for use as replacement engines for
engines from previous tiers; this determination is intended to simplify
the search across engines and is based on the presumption that Tier 4
engines may not fit in most cases. We are also not intending to prevent
states or local entities from including Tier 4 engines in incentive
programs that encourage vessel owners to replace previous tier existing
engines with new Tier 4 engines or to retrofit control technologies on
existing engines, since those incentive programs often are designed to
offset some of the costs of installing and/or using advanced emission
control technology solutions. This advance determination is being made
solely for Tier 4 marine diesel replacement engines that comply with
the Tier 4 standards through the use of catalytic aftertreatment
systems. Should an engine manufacturer develop a Tier 4 compliant
engine solution that does not require the use of such technology, then
this automatic determination will

[[Page 37158]]

not apply. Instead our existing provision will apply and it will be
necessary to show that a non-catalytic Tier 4 engine would not meet the
required physical or performance needs of the vessel.
(b) Replacement With an Existing Engine
Our current marine diesel engine program does not contain
provisions that address the case in which an engine is replaced with an
existing used engine. This means that if a vessel owner replaces an
existing engine with a used engine, then that replacement engine is not
required to be certified to our marine standards. It should be noted,
however, that engines greater than 600 kW that are built after 1973
would still be subject to the remanufacture program described in
Section III(C)(2)(b). This means if the existing engine that is the
replacement engine has all of its cylinder liners replaced, it will be
required to be remanufactured using a certified remanufacture system if
one is available for that engine. It is our expectation that a vessel
owner would not replace an existing engine above 600 kW with a
partially-rebuilt engine, and therefore we do not expect to see
replacement engines that are not remanufactured if there is a certified
remanufacture system available.
These remanufacture requirements would apply whether the owner is
obtaining an identical existing (used) replacement engine due to an
engine failure or through an engine exchange for a periodic engine
rebuild. These requirements would also apply if a vessel owner is
obtaining a different model existing (used) replacement engine, for
whatever reason.
It should be noted that pursuant to the definition of ``new marine
engine,'' used engines brought into the marine market from other
segments (e.g., locomotive, land-based nonroad, or highway sectors) are
considered to be new marine diesel engines when they are marinized or
modified for use on a vessel, and must meet the standards for newly
manufactured engines in effect when such an engine is marinized or
modified for installation on a vessel.
(c) Swing Engines
A swing engine is an additional engine that is purchased at the
time the vessel is constructed as part of a rebuild strategy. When an
engine is due for rebuild, that engine is removed from the vessel and
replaced with the swing engine. The removed engine is rebuilt and then
becomes the swing engine. Note that a swing engine is not meant to be a
replacement engine in case of engine failure. Rather, it is a
maintenance practice.
It is our expectation that the swing engine would undergo a
complete rebuild, including cylinder liner replacement, before it is
made available as the swing engine. That would constitute
remanufacturing, and the engine would be required to comply with the
engine remanufacture requirements. In general, this means that all
engines that are part of a swing engine rebuild practice are expected
to comply with the remanufacture requirements over time, providing a
certified remanufacture system is available.
(d) Vessel Refurbishing
Our current program specifies that in addition to newly
manufactured vessels, a vessel is considered to be ``new'' if it is
modified such that the value of the modifications exceeds 50 percent of
the value of the modified vessel. Such a refurbished vessel would be
required to have an engine that is compliant with the standards in
place when the vessel is modified. We expect that most vessel
modifications will not trigger this threshold, but the requirement is
necessary to accommodate those cases where a major structural change is
done to a vessel that make it like-new.
We are revising this provision to specify how temporary
modifications will be treated under this provision. In general,
temporary modifications to a vessel would not be considered to be
vessel refurbishing for the purpose of the ``new vessel'' definition.
We are defining temporary modifications as modifications to a vessel
that are made pursuant to a written contract between the vessel owners
and the purchaser of the vessel's services and that are made for the
purpose of fulfilling the purchaser's marine service requirements. To
be considered to be temporary, the modifications must be removed from
the vessel upon expiration of the contract or after a period of one
year, whichever is shorter. While we will allow a vessel owner to
petition EPA for a longer period of time, we will generally assume that
changes that are necessary for longer than one year are quasi-
permanent. We do not expect there to be many petitions for longer
periods of time because temporary modifications that exceed 50 percent
of the vessel's value would be considerable and would likely involve
the vessel's power plant.
(3) Personal Use Exemption
The current marine diesel engine emission control program contains
certain exemptions from the standards, including the following: test
engines; manufacturer-owned engines; display engines; competition
engines; export engines; and certain military engines. We also provide
an engine dresser exemption that applies to marine diesel engines that
are produced by marinizing a certified highway, nonroad, or locomotive
engine without changing it in any way that may affect the emissions
characteristics of the engine.
In addition to these existing exemptions we are also adding a new
provision that exempts an engine installed on a vessel manufactured by
a person for his or her own use (see 40 CFR 1042.630). This is intended
to address the hobbyists and fishermen who make their own vessel (from
a personal design, for example, or to replicate a vintage vessel) and
who would otherwise be considered to be a manufacturer subject to the
full set of emission standards by introducing a vessel into commerce.
The exemption is intended to allow such a person to install a rebuilt
engine, an engine that was used in another vessel owned by the person
building the new vessel, or a reconditioned vintage engine (to add
greater authenticity to a vintage vessel). The exemption is not
intended to allow such a person to order a new uncontrolled engine from
an engine manufacturer. We expect this exemption to involve a very
small number of vessels, so the environmental impact of this exemption
will be negligible, while the cost would otherwise be high to install a
certified compliant engine.
Because the exemption is intended for hobbyists and fishermen, we
are setting additional constraints. First, the vessel may not be used
for general commercial purposes. The one exception to this is that the
exemption allows a fisherman to use the vessel for his or her own
commercial fishing. Second, the exemption is limited to one such vessel
over a ten-year period and does not allow exempt engines to be sold for
at least five years. We believe these restrictions are not unreasonable
for a true hobby builder or comparable fisherman. Moreover, we require
that the vessel generally be built from unassembled components, rather
than simply completing assembly of a vessel that is otherwise similar
to one that must use a freshly manufactured engine certified to meet
the applicable emission standards. The person also must be building the
vessel him- or herself, and not simply ordering parts for someone else
to assemble. Finally, the vessel must be a vessel that is not classed
or subject to Coast Guard inspections or surveys.

[[Page 37159]]

(4) Lifeboat/Rescue Boat Exemption
Our current marine diesel engine program does not exempt lifeboats
or rescue boats, and we did not propose to revise that approach. This
approach was developed for the Tier 2 marine diesel engine standards.
As we explained in our 1999 FRM, the technologies that would meet Tier
2 standards would not have inherent negative effect on the performance
or power density of an engine, and we expected that manufacturers would
be able to use the range of technologies available to maintain or even
improve the performance capabilities and reliability of their engines.
We also note that land-based emergency engines such as standby
generators are not exempt from our emission control requirements in
either highway or nonroad applications.
We received several comments from manufacturers of lifeboats and
rescue boats requesting that we reconsider this approach and exempt
engines on lifeboats and rescue boats from the Tier 3 and Tier 4
standards. They noted that engines on lifeboats and rescue boats are
not regularly used as they are intended for use only during
emergencies, and they are generally only operated for 3 minutes once a
week and are water tested for a short period only a few times a year.
Boat manufacturers were also concerned about the reliability of
electronic controls and advanced technology aftertreatment systems in
these situations, especially when the boats are stored on deck and
exposed to the elements.
We've also learned that at least some engine manufacturers that
have certified engines in the past for use on Coast Guard approved
lifeboats and rescue boats pursuant to Coast Guard and international
(International Convention for the Safety of Life at Sea--SOLAS)
requirements have not yet done so for Tier 2 engines and may elect not
to do so at all.\167\ The Coast Guard and SOLAS certification
requirements are meant to ensure that an engine will perform after it
is inverted, will operate when submerged up to the crankshaft, and will
readily start at temperatures as low as -15 degrees C. This
certification is expensive and time-consuming, and those costs may be
difficult to recover over the limited U.S. market for lifeboats and
rescue boats (100 to 150 boats per year). Manufacturers of those
lifeboats that use those engines must either find an alternative engine
for their product, and recertify the boats to the Coast Guard and SOLAS
requirements, or exit the market.
---------------------------------------------------------------------------

\167\ See http://www.uscg.mil/hq/g-m/mse4/boatlb.htm#LIFEBOAT_
FOR_MERCHANT_VESSELS for Coast Guard requirements for lifeboats
and rescue boats.
---------------------------------------------------------------------------

After considering these comments, we conclude that it is reasonable
to modify our program for engines used on Coast Guard approved
lifeboats and rescue boats. First, our final program exempts engines
intended to be used on lifeboats and rescue boats from the Tier 4
standards. This exemption is appropriate for technological reasons. We
expect the Tier 4 standards to be met through the application of
aftertreatment technology. While we believe these technologies will be
durable and reliable, it is also the case the additional complexity
could possibly affect engine performance in an emergency, which is the
sole situation in which these engines would be used. For example, it
would be necessary to ensure the engines on the lifeboat or rescue boat
have onboard at all times an adequate supply of urea that meets the
quality requirements of an SCR system. In addition, if the engine on
the lifeboat or rescue boat is only run for very short periods of time
for periodic onboard tests, the PM filter may not have time to
regenerate. This could result in a small risk of plugging. Therefore,
it is reasonable to exempt these engines from the Tier 4 requirements.
It is worth noting that most lifeboat engines are less than 600 kW and
thus would not be subject to Tier 4 standards.
Second, to avoid a situation in which an engine certified to the
Coast Guard and SOLAS requirements is not available for use in a
lifeboat or rescue boat application, we are providing an exemption that
would have the effect of delaying the date of the emission standards
for engines used on those boats until SOLAS certified engines of the
respective emissions tier become available. Specifically, we will grant
exemptions for engines not complying with the Tier 3 requirements for
use in a Coast Guard approved lifeboat or rescue boat until such time
as a comparable Tier 3 engine that meets the weight, size, and
performance requirements of the boat is certified under the Coast Guard
and SOLAS requirements. Once such an engine becomes available, the non
Tier 3 compliant engines may not be sold for use in these applications.
This provision is necessary because the Coast Guard has observed a
precipitous drop in available SOLAS certified engines with the
emissions tier change from the Tier 1 emissions standards to the Tier 2
emissions standards. Given the high cost of SOLAS certification and the
low sales of SOLAS certified engines, engine manufacturers have delayed
SOLAS certification of new emission tier engines. After considering the
high cost of SOLAS certification, the need for additional lead time to
complete the SOLAS certification process and the importance of
lifeboats and rescue boats to safety, we have concluded it is
appropriate to provide this exemption. We are not requiring engine
manufacturers to certify these engines by a specified date. However, we
anticipate that engine manufacturers will over time certify their Tier
3 engines to the Coast Guard and SOLAS requirements, or modify their
existing Coast Guard certified engines as necessary to comply with the
Tier 3 requirements. Most of the marine diesel engines used on
lifeboats and rescue boats are derived from land-based highway or
nonroad engines. Once the Tier 3 requirements for those engines go into
effect and the Tier 2 or Tier 1 counterparts are retired from the
fleet, it will become more expensive to continue to provide parts and
service for these older engines, and engine manufacturers will prefer
to provide newer tier engines for lifeboats and rescue boats globally.
Because it is not possible to determine when that change will take
place, the final program specifies that when they do become available,
they must be used.
Finally, we are extending this exemption to Tier 2 engines as well.
We have learned that some lifeboat and rescue boat manufacturers are
having trouble obtaining engines that meet the Tier 2 standards. Note
that because Tier 2 engines are not regulated under part 1042, this
exemption is included in a new section in part 94 (94.914). As with the
Tier 3 exemption, once a Tier 2 engine becomes available that meets the
weight, size, and performance requirements of the boat and is certified
under the Coast Guard and SOLAS requirements the exemption will no
longer be available for freshly manufactured engines.
Engines that are produced to an earlier tier pursuant to these
provisions must be labeled to make clear that their use is limited to
lifeboats or rescue boats approved by the U.S. Coast Guard under
approval series 160.135 or 160.156. Using such a vessel as for a
purpose other than a lifeboat or rescue boat is a violation of the
regulations.
The above provisions are applicable only to engines in lifeboats
and rescue boats used solely for emergency purposes. This is an
important distinction because there are cases in which a lifeboat may
serve dual use on a vessel, both for general transportation (e.g.,
tenders) and for emergencies. Engines in lifeboats and rescue boats
that are not used solely for emergency purposes are not exempt. These
engines

[[Page 37160]]

are not expected to remain idle long enough for urea storage or PM trap
regeneration to be a problem. For all these reasons, the Tier 2 and 3
flexibility and Tier 4 exemption will apply only to engines intended
for installation on lifeboats approved by the U.S. Coast Guard under
approval series 160.135 (except those which are also approved for use
as launches or tenders) and rescue boats approved by the U.S Coast
Guard under series 160.156.
(5) Stand-By Emergency Auxiliary Engines
We are exempting certain stand-by emergency auxiliary engines from
the Tier 4 standards. This exemption is necessary due to the fact that
these engines are rarely used, their operation being limited to
periodic testing of several minutes duration. While the technologies
that will be used to achieve the Tier 4 standards are expected to be
durable, it is also the case that operation for such short periods of
time may not be enough to engage the aftertreatment regeneration
strategy. In addition, these auxiliary engines would need separate urea
tanks, rendering them more complicated to maintain and use in an
emergency situation.
This exemption is limited to dedicated stand-by emergency auxiliary
engines subject to United States Coast Guard requirements set out in 46
CFR part 112. In general, these stand-by emergency auxiliary engines
are supplemental to the ships' main auxiliary engines. They are located
away from the main engine compartment, have separate fuel tanks, and
are connected to the ships' power system in such a way as to provide
for emergency power only to emergency equipment and not the ship's
power grid generally. These engines must be labeled for use as marine
stand-by emergency auxiliary engines only.
Marine stand-by emergency engine means any marine auxiliary engine
whose operation is limited to unexpected emergency situations on a
vessel; these engines are subject to testing and maintenance required
by the United States Coast Guard. They are generally used to produce
power for critical networks or equipment (including power supplied to
portions of a vessel) when electric power from the main auxiliary
engine(s) is interrupted. Marine auxiliary engines used to supply power
to the vessel's general electric grid or that are operated on a
constant basis are not considered to be emergency marine auxiliary
engines.
Exempted engines are required to meet the applicable Tier 3
standards (in part 89 or part 94, as applicable). See 40 CFR 1068.265
for the provisions that apply for such exempt engines. The engines must
also be labeled to make clear that they are exempt and their use is
limited to emergency stand-by auxiliary power as specified in United
States Coast Guard requirements set out in 46 CFR part 112.
(6) Gas Turbine Engines
While gas turbine engines\168\ are used extensively in naval ships,
they are not used very often in commercial ships. Because of this and
because we do not currently have sufficient information, we are not
including marine gas turbines in this rulemaking. Nevertheless, we
believe that gas turbines could likely meet the new standards (or
similar standards) since they generally have lower emissions than
diesel engines and may reconsider gas turbines in a future rulemaking.
---------------------------------------------------------------------------

\168\ Gas turbine engines are internal combustion engines that
can operate using diesel fuel, but do not operate on a compression-
ignition or other reciprocating engine cycle. Power is extracted
from the combustion gas using a rotating turbine rather than
reciprocating pistons.
---------------------------------------------------------------------------

(7) Natural Gas Engines
The increasing deployment of tankers carrying liquefied natural gas
has led to greater numbers of large marine engines running on natural
gas instead of diesel fuel. Depending on the technological approach
engine manufacturers take, these engines could fall under our
definition for spark-ignition engines even though their design and
development is more like compression-ignition engines. Without some
clarifying provision, these engines would therefore be subject to the
standards that we are developing for inboard spark-ignition engines,
which are based on automotive technologies. Since this is clearly not
appropriate, we are adopting a provision to specify that natural gas
engines above 250 kW are subject to standards for marine compression-
ignition engines regardless of our regulatory definitions for spark-
ignition and compression-ignition engines. Since the analysis of
control technology and the estimated costs and emission reductions are
very similar to that for diesel-fueled engines, we have made no effort
to separately analyze these engines relative to the new emission
standards.
(8) Residual Fuel Engines
The vast majority of Category 1 and 2 marine diesel engines subject
to EPA's emission standards operate on distillate diesel fuel. There
are cases, however, in which the owner of a vessel may prefer to
operate a Category 2 engine on another type of diesel fuel. This is
mainly the case for auxiliary engines on ocean-going vessels, to allow
them to use the same fuel that is used in the propulsion engine
(typically residual fuel). There are also a few vessels operated on the
Great Lakes that use residual fuel or residual fuel blends.
Our marine diesel engine program requires engine manufacturers to
perform certification testing using the same type of fuel that will be
used in actual engine operation. This requirement, which was also
included in our 1999 Tier 2 rule, is intended to ensure that engines
meet the emission limits in operation. In our proposal, we noted that
engine manufacturers have not certified Category 1 or 2 engines that
can be operated on residual fuel to the Tier 2 standards. Manufacturers
explained that it is not profitable to do so due to the small size of
the U.S. market for these engines. They also informed us that it would
be difficult to meet EPA's PM standards on residual fuel.
Some owners expressed concern to EPA about the unavailability of
large auxiliary engines certified to the Tier 2 standards on residual
fuel. These owners expressed a preference for auxiliary engines run on
the same fuel as propulsion engines to simplify ship operations. To
respond to this concern, we asked for comment on a compliance
consisting of an alternative PM standard and a tighter NOX
standard. The alternative standards would be available for auxiliary
engines to be installed on vessels with Category 3 propulsion engines.
Certification testing would still be required on residual fuel but we
would allow alternative PM measurement procedures. To ensure that
questions of test fuel and PM measurement are resolved before
certification testing, manufacturers would have to apply to EPA to
exercise this flexibility.
The alternative of exempting residual fuel engines from the test
fuel requirement and allowing them to be tested on distillate fuel is
not appropriate. All of our mobile source emission control programs are
predicated on an engine meeting the emission standards in use. The test
fuel requirement is one of several provisions that help ensure in-use
compliance, including useful life periods, emission deterioration
factors, durability testing, and not-to-exceed zone. Amending the test
fuel provisions to allow manufacturers to certify residual fuel engines
using distillate fuel would introduce considerable uncertainty into the
in-use performance of these engines,

[[Page 37161]]

would weaken the emission standards, and would be contrary to the goals
of our program.
We received no comments supporting the compliance flexibility
described above, and therefore we are not revising our program with
respect to test fuels or the standards that apply to engines with per
cylinder displacement below 30 liters that use residual fuel. We expect
to revisit this issue in the context of our upcoming rulemaking for
Category 3 marine diesel engines.
(9) Duty Cycles for Marine Engines
Manufacturers pointed out two inconsistencies between the proposal
and existing requirements for marine engines related to the proposed
duty cycles for marine propulsion engines less than 37 kW and the
proposed duty cycle for propeller-law auxiliary engines. We agree that
the existing 4-mode duty cycle (E3) should be used for these
applications and have corrected this in the final rule.
We received comment that the 8-mode (C1) duty cycle was not
designed to represent variable-speed propulsion engines intended for
use with variable-pitch or electrically-coupled propellers. Caterpillar
provided an example of a power curve for a variable-speed engine
designed to operate with a controllable pitch propeller where the
operation is limited at low and mid-range speeds. In this case, we
agree that the constant speed (E2) test duty cycle, combined with the
NTE requirements, is more representative of the operation of this
engine than the proposed C1 cycle. For this engine, the power and
torque at the C1 intermediate speed is relatively low, leading to a
heavy weighting of low power operation. In addition, the power limit
curve, for overload protection, is at lower power than even the E3 duty
cycle.
Controllable pitch propellers are also used with variable speed
engines that have power curves that are more similar to those seen for
nonroad engines or marine engines used with fixed pitch propellers. We
are concerned that the E2 duty cycle would not be representative of the
operation of these engines. Therefore, we are finalizing the E3 duty
cycle for variable-speed propulsion engines intended for use with
variable-pitch or electrically-coupled propellers. In the case where
the engine is not capable of operating over the E3 duty cycle in-use,
the E2 duty cycle would be used. For the purposes of this requirement,
we consider an engine capable of operating over the E3 duty cycle if
the engine can safely achieve more than 1.15 times the power specified
in the E3 duty cycle at 63, 80, and 91 percent of maximum test speed.
(10) Definition of Recreational Marine Diesel Vessel
We are adopting a revised the definition of recreational marine
diesel vessel in part 1042 that will essentially return to the
definition we originally adopted in 1999. This revision will
effectively rescind that change we made in our 2003 recreational engine
rule (68 FR 9745, February 28, 2003). As is described later, in that
rulemaking we revised the definition of recreational vessel by adding a
reference to the Coast Guard definition in 46 U.S.C. 2101. However,
since then, it has become clear that the revision resulted in
significant confusion for industry.
As described above, the Tier 3 standards that apply to recreational
marine diesel engines are different than those that apply to standard
power density commercial engines and recreational engines are not
subject to the Tier 4 standards. Recreational engines are also subject
to different compliance requirements, notably the duty cycle for
certification testing and their useful life. These programmatic
differences reflect the different way in which these engines are used,
with recreational engines generally having a higher power/density
ratio, operating at a higher load, and being used for fewer hours over
their life than commercial engines.
Recreational engines are defined based on whether or not they are
intended by the engine manufacturer to be installed on a recreational
vessel. In our 1999 Tier 2 marine diesel engine rule, we defined
recreational vessel as a vessel intended by the vessel operator to be
operated primarily for pleasure or leased to another for the latter's
pleasure, with the exception of (i) vessels less than 100 gross tons
that carry more than six passengers; and (ii) vessels more than 100
gross tons that carry one or more passengers, where passenger means
someone who pays to be on the vessel.
The goal of this definition was to exclude so-called recreational
vessels that are in fact operated like commercial vessels: Those that
are operated many hours a year (for example, charter fishing vessels
and smaller tour vessels that are rented on an individual basis, with
or without a crew). A personal vessel owned by an individual for his
personal use and not for hire was intended to be considered to be a
recreational vessel. For smaller vessels, this is achieved by requiring
that there be fewer than six paying passengers; this allows an
individual to invite friends onboard his or her vessel in return for
some pecuniary arrangement (e.g., paying for the gas). For larger
vessels, above 100 gross tons, the presence of any paying passenger
prevents the vessel from being characterized as recreational; this is
intended to cover luxury yachts that recover costs by taking paying
passengers onboard. The specified paying passenger thresholds are high
enough to make them likely to be known at the time the vessel is
purchased.
In the 2003 rule, we revised the definition of recreational vessel,
by adding a reference to the Coast Guard definition. However, the Coast
Guard definition and EPA's definition have different intents. Coast
Guard's requirements are safety related to ensure adequate lifesaving
equipment is onboard a recreational vessel. For example, the Coast
Guard definitions differentiate between charter and noncharter vessels
based on whether vessels are operated with or without a crew. The
intent of EPA's approach is to identify those vessels that are intended
for pleasure as opposed to commercial applications. Thus our definition
needs to rely on features that can be known at the time of manufacture.
For example, by setting a six passenger threshold for small vessels our
intent was to identify those vessels clearly identified by the
manufacturer as being intended for charter use and not used as a
charter either incidentally or unintentionally.
Since the Coast Guard definitions do not reflect the intent of
EPA's program and are inconsistent with EPA's definitions, we are
revising the definitions to remove the references to the Coast Guard
definitions and reverting back to the original definitions adopted in
1999. While the new definition is being adopted in part 1042, Sec.
94.12(i) of part 94 will allow manufacturers to use this new definition
for certification under part 94. Commercial vessels that were
categorized as recreational prior to that time due to confusion about
the meaning of the definitions will not be affected by the revised
definitions.
(11) Engine Stockpiling by Vessel Builders
Our existing marine diesel engine program specifies in Sec.
94.1103(a)(5) that it is a prohibited act to introduce into commerce a
new vessel containing an engine not covered by a certificate of
conformity applicable for an engine model year the same as or later
than the calendar year in which the manufacture

[[Page 37162]]

of the new vessel is initiated.\169\ However, as an exception, we allow
vessel manufacturers to use up their normal inventory of engines not
certified to new, more stringent emission standards if they were built
before the date on which the new standards apply (subject to
stockpiling prohibitions). With the adoption of the Tier 3 and 4
emission standards, the location of this provision transfers to Sec.
1068.101(a)(1), including the exception noted above, now being located
in Sec. 1068.105(a).
---------------------------------------------------------------------------

\169\ The manufacture of a vessel is initiated when the keel is
laid, or the vessel is at a similar stage of construction. ``A
similar stage of construction'' means: (1) the stage at which
construction identifiable with a specific vessel begins, and (2)
assembly of that vessel has commenced comprising at least 50 tons or
one percent of the estimated mass of all structural material,
whichever is less.
---------------------------------------------------------------------------

The normal inventory approach above was developed in response to
traditional business practice in automotive and other industries where
vehicles and equipment are serially manufactured. Although this scheme
works well for most manufacturers of small, serially-produced marine
vessels, its application to manufacturers of large, commercial marine
vessels may not be so straightforward. In this latter case there are
typically long lead-time build schedules and low production volumes,
which translate to vessel manufacturers maintaining lean inventory
onsite at the shipyard. Vessel manufacturers usually order engines from
dealers upon entering into a vessel construction agreement with an end
customer. Due to lengthy build schedules, which for many projects can
be counted in years, and the location of some shipyards in low-lying
coastal areas subject to seasonal flooding, engines are often delivered
and warehoused at the dealers' offsite location until such time as the
vessels are ready to receive them for installation. Especially in
projects where construction agreements involve multiple vessels,
engines for all vessels may be ordered and delivered to the dealer
during the same year in which construction of the first vessel is
initiated. Due to this type of business practice, we will allow vessel
manufacturers to consider as part of their normal inventory those
engines that are warehoused at offsite dealerships and for which the
vessel manufacturer entered into a purchase agreement prior to a change
in applicable emission standards, provided this practice is consistent
with the vessel manufacturers past engine ordering practices. We will
allow this normal inventory of engines to be used up after new emission
standards apply. It should be noted, however, that this clarification
does not extend to engines that are not the subject of a prior purchase
agreement, and would not allow a vessel manufacturer to search for a
previous tier engine among engine dealers to evade the standards. Also,
if a dealer has previous tier engines that are not the subject of a
prior purchase agreement after a new tier of standards goes into
effect, those engines may be used only as replacement engines, subject
to Sec. 1042.615; those engines may not be sold for use in new
vessels.
(12) Other Issues
Several commenters, including the United States Coast Guard, raised
questions regarding the possibility that advanced aftertreatment based
emission control systems for marine diesel engines may need to be by-
passed or otherwise modified or disabled in order to guarantee safe
operation under emergency conditions. In general terms, the commenters
speculated that the catalyst systems could fail in such a manner as to
restrict exhaust flow reducing engine power and potentially endangering
vessel safety.
Marine vessels that lose power to a main propulsion engine or
generating engine providing essential power to main propulsion engine
auxiliaries could go adrift with almost no control. Unlike trucks and
locomotives, marine vessels have no brakes and can literally ``coast''
for miles and due to their enormous tonnage have an incredible amount
of momentum and can cause catastrophic damage via collisions,
allisions, and groundings. In the past, main propulsion failures on
marine vessels have resulted in severe loss of life, property, and
damage to the marine environment. Due to this precedent, a loss of main
propulsion is defined as a ``marine casualty or accident'' in 46 CFR
4.03-1(b)(2)(ix) and 46 CFR 4.05-1 requires the occurrence to be
immediately reported to the Coast Guard. To avoid potential loss of
propulsion 46 CFR 58.01-35 effectively requires that main propulsion
auxiliary machinery be provided in duplicate to prevent single point of
failure.
Our discussions with the engine manufacturers regarding the
technologies they expect to use to comply with the rules we are
finalizing today, lead us to conclude that such failure mechanisms are
extremely unlikely given the robust nature of the technologies.\170\
However, reflecting the high priority everyone places on safety and the
reality that no one can say today with absolute certainty how emission
control systems will be designed in the future, we are continuing
several regulatory provisions that further ensure safe vessel operation
under all circumstances. Consistent with Coast Guard's requirements for
main propulsion auxiliary machinery, we feel these provisions address
the single point of failure concern in the design of emission control
systems.
---------------------------------------------------------------------------

\170\ We should note here that the standards in our rules are
performance-based rather than a prescription for the application of
a specific technology. Our rules do not prevent a manufacturer from
developing and applying new or different technology at some future
time as long as it meets the performance basis in the rules (e.g., a
0.04 g/kW-hr standard PM).
---------------------------------------------------------------------------

First, we are continuing our general regulatory requirement found
in Sec. 1042.115(e) stating that a manufacturer may not design engines
with emission-control devices, systems, or elements of design that
cause or contribute to an unreasonable risk to public health, welfare,
or safety while operating. Likewise, our regulations continue to make
clear that actions taken by the operators of marine vessels in order to
respond to a temporary emergency will not be considered tampering under
Sec. 1068.101(b)(1) provided the system is returned to its proper
function as soon as possible. Lastly, in evaluating auxiliary emission
control devices (AECDs) for marine diesel engines we will continue to
recognize that AECDs, such as those that eliminate a single point of
failure, are not defeat devices as defined under Sec. 1042.115(f) if
the AECDs are necessary to prevent engine (or vessel) damage or
accidents. In the case of AECD approval, we will continue our current
practice of reviewing manufacturer certification applications to ensure
that these provisions are only used when necessary. Further, it is our
general expectation that engine manufacturers will provide diagnostic
systems to alert vessel operators when such AECDs are active and if the
AECD requires the operator to take an action, the diagnostic system
should give the vessel operator as much advance warning as reasonably
possible.

V. Costs and Economic Impacts

In this section, we present the projected cost impacts and cost
effectiveness of the standards, and our analysis of the expected
economic impacts on affected markets. The projected benefits and
benefit-cost analysis are presented in Section VI. The benefit-cost
analysis explores the net yearly economic benefits to society of the
reduction in mobile source emissions expected to be achieved by

[[Page 37163]]

this rulemaking. The economic impact analysis explores how the costs of
the rule will likely be shared across the manufacturers and users of
the engines and equipment that will be affected by the standards.
Unless noted otherwise, all costs are in 2005 dollars.
The annual monetized health benefits of this rule in 2030 will
range from $9.2 and $11 billion, assuming a 3 percent discount rate, or
between $8.4 billion to $10 billion, assuming a 7 percent discount
rate. The social costs of the new standards are estimated to be
approximately $738 million in 2030.\171\ The impact of these costs on
society are estimated to be small, with the prices of rail and marine
transportation services estimated to increase by about 1 percent.
---------------------------------------------------------------------------

\171\ The estimated 2030 social welfare cost of $738 million is
based on draft compliance costs for this final rule of $740 million
for that year. The final compliance cost estimate for 2030 is
somewhat higher, at $759 million; see section VI.C for an
explanation. This difference is not expected to have an impact on
the results of the market analysis or on the expected distribution
of social costs among stakeholders.
---------------------------------------------------------------------------

Further information on these and other aspects of the economic
impacts of our final rule are summarized in the following sections and
are presented in more detail in the Final RIA for this rulemaking.

A. Engineering Costs

The following sections briefly discuss the various engine and
equipment cost elements considered for this cost analysis and present
the total engineering costs we have estimated for this rulemaking; the
reader is referred to Chapter 5 of the final RIA for a complete
discussion of our engineering cost estimates. When referring to
``equipment'' costs throughout this discussion, we mean the locomotive
and/or marine vessel related costs as opposed to costs associated with
the diesel engine being placed into the locomotive or vessel. Estimated
freshly manufactured engine and equipment engineering costs depend
largely on both the size of the piece of equipment and its engine, and
on the technology package being added to the engine to ensure
compliance with the standards. The wide size variation of engines
covered by this program (e.g., small marine engines with less than 37
kW (50 horsepower, or hp) through locomotive and marine C2 engines with
over 3000 kW (4000 hp) and the broad application variation (e.g., small
pleasure crafts through large line haul locomotives and cargo vessels)
that exists in these industries makes it difficult to present an
estimated cost for every possible engine and/or piece of equipment.
Nonetheless, for illustrative purposes, we present some example per
engine/equipment engineering cost impacts throughout this discussion.
This engineering cost analysis is presented in detail in Chapter 5 of
the final RIA.
Note that the engineering costs here do not reflect changes to the
fuel used to power locomotive and marine engines. Our Nonroad Tier 4
rule (69 FR 38958) controlled the sulfur level in all nonroad fuel,
including that used in locomotives and marine engines. The sulfur level
in the fuel is a critical element of the locomotive and marine program.
However, since the costs of controlling locomotive and marine fuel
sulfur have been considered in our Nonroad Tier 4 rule, they are not
considered here. This analysis considers only those costs associated
with the locomotive and marine program being finalized today. Also, the
engineering costs presented here do not reflect any savings that are
expected to occur because of the engine ABT program and the various
flexibilities included in the program which are discussed in section IV
of this preamble. As discussed there, these program features have the
potential to provide savings for both engine and locomotive/vessel
manufacturers.
(1) Freshly Manufactured Engine and Equipment Variable Engineering
Costs
Engineering costs for exhaust emission control devices (i.e.,
catalyzed DPFs, SCR systems, and DOCs) were estimated using a
methodology consistent with the one used in our 2007 heavy-duty highway
rulemaking. In that rule, surveys were provided to nine engine
manufacturers seeking information relevant to estimating the
engineering costs for and types of emission-control technologies that
might be enabled with ultra low-sulfur diesel fuel (15 ppm S). The
survey responses were used as the first step in estimating the
engineering costs of advanced emission control technologies anticipated
for meeting the 2007 heavy-duty highway standards. We then built upon
these engineering costs using input from members of the Manufacturers
of Emission Controls Association (MECA). We also used this information
in our recent nonroad Tier 4 (NRT4) rule. Because the anticipated
emission control technologies expected to be used on locomotive and
marine engines are the same as or similar to those expected for highway
and nonroad engines, and because the expected suppliers of the
technologies are the same for these engines, we have used that analysis
as the starting point for estimating the engineering costs of these
technologies in this rule.\172\ Importantly, the analysis summarized
here and detailed in the final RIA takes into account specific
differences between the locomotive and marine products when compared to
on-highway trucks (e.g., engine size).
---------------------------------------------------------------------------

\172\ ``Economic Analysis of Diesel Aftertreatment System
Changes Made Possible by Reduction of Diesel Fuel Sulfur Content,''
Engine, Fuel, and Emissions Engineering, Incorporated, December 15,
1999, Public Docket No. A-2001-28, Docket Item II-A-76.
---------------------------------------------------------------------------

Engineering costs of control include variable costs (for new
hardware, its assembly, and associated markups) and fixed costs (for
tooling, research, redesign efforts, and certification). We are
projecting that the Tier 3 standards will be met by optimizing the
engine and emission controls that will exist on locomotive and marine
engines in the Tier 3 timeframe. Therefore, we have estimated no
hardware costs associated with the Tier 3 standards. For the Tier 4
standards, we are projecting that SCR systems and DPFs will be the most
likely technologies used to comply. Upon installation in a new
locomotive or a new marine vessel, these devices would require some new
equipment related hardware in the form of brackets, new sheet metal,
and a reductant storage and delivery system. The annual variable costs
for example years, the PM/NOX split of those engineering
costs, and the net present values that would result are presented in
Table V-1.\173\ As shown, we estimate the net present value for the
years 2006 through 2040 of all variable costs at $1.5 billion using a
three percent discount rate, with $1.3 billion of that being engine-
related variable costs.\174\ Using a seven percent discount rate, these
costs are $674 million and $575 million, respectively.
---------------------------------------------------------------------------

\173\ The PM/NOX+NMHC cost allocations for variable
costs used in this cost analysis are as follows: SCR systems
including marinization costs on marine applications are 100%
NOX+NMHC; DPF systems including marinization costs on
marine applications are 100% PM; and, equipment hardware costs are
split evenly.
\174\ Throughout our cost and economic impact analyses, net
present value (NPV) calculations are based on the period 2006-2040,
reflecting the period when the NPRM analysis was completed. This has
the consequence of discounting the current year costs, effectively
2007, and all subsequent years are discounted by an additional year.
The result is a slightly smaller NPV of engineering costs than by
calculating the NPV over 2007-2040 (3% smaller for 3% NPV and 7%
smaller for 7% NPV). The same convention applies for the emission
inventories as shown in Table V-7. We have used 2006 because we
intended to publish the proposal in 2006. For the final analysis, we
have chosen to continue with 2006 to make comparisons between
proposal and final analyses more clear.

[[Page 37164]]

Table V-1.--Freshly Manufactured Engine and Equipment Variable Engineering Costs
[Millions of 2005 dollars]
----------------------------------------------------------------------------------------------------------------
Engine Equipment
variable variable Total variable Total for
Year engineering engineering engineering Total for PM NOX+NMHC
costs costs costs
----------------------------------------------------------------------------------------------------------------
2008............................ $0 $0 $0 $0 $0
2009............................ $0 $0 $0 $0 $0
2010............................ $0 $0 $0 $0 $0
2011............................ $0 $0 $0 $0 $0
2012............................ $0 $0 $0 $0 $0
2015............................ $60 $11 $71 $37 $34
2020............................ $82 $14 $96 $50 $46
2030............................ $99 $18 $117 $61 $56
2040............................ $98 $17 $115 $60 $55
NPV at 3%....................... $1,255 $220 $1,475 $772