[Code of Federal Regulations]
[Title 40, Volume 16]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR86.004-15]
[Page 42-47]
TITLE 40--PROTECTION OF ENVIRONMENT
CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES AND ENGINES--Table of Contents
Subpart A--General Provisions for Emission Regulations for 1977 and
Sec. 86.004-15 NOX plus NMHC and particulate averaging, trading, and banking for heavy-duty engines.
(a)(1) Heavy-duty engines eligible for NOX plus NMHC and
particulate averaging, trading and banking programs are described in the
applicable emission standards sections in this subpart. All heavy-duty
engine families which include any engines labeled for use in clean-fuel
vehicles as specified in 40 CFR part 88 are not eligible for these
programs. For manufacturers not selecting Options 1 or 2 contained in
Sec. 86.005-10(f), the ABT program requirements contained in
Sec. 86.000-15 apply for 2004 model year Otto-cycle engines, rather than
the provisions contained in this Sec. 86.004-15. Participation in these
programs is voluntary.
(2)(i) Engine families with FELs exceeding the applicable standard
shall obtain emission credits in a mass amount sufficient to address the
shortfall. Credits may be obtained from averaging, trading, or banking,
within the averaging set restrictions described in this section.
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(ii) Engine families with FELs below the applicable standard will
have emission credits available to average, trade, bank or a combination
thereof. Credits may not be used for averaging or trading to offset
emissions that exceed an FEL. Credits may not be used to remedy an in-
use nonconformity determined by a Selective Enforcement Audit or by
recall testing. However, credits may be used to allow subsequent
production of engines for the family in question if the manufacturer
elects to recertify to a higher FEL.
(b) Participation in the NOX plus NMHC and/or particulate
averaging, trading, and banking programs shall be done as follows:
(1) During certification, the manufacturer shall:
(i) Declare its intent to include specific engine families in the
averaging, trading and/or banking programs. Separate declarations are
required for each program and for each pollutant (i.e., NOX
plus NMHC, and particulate).
(ii) Declare an FEL for each engine family participating in one or
more of these two programs.
(A) The FEL must be to the same level of significant digits as the
emission standard (one-tenth of a gram per brake horsepower-hour for
NOX plus NMHC emissions and one-hundredth of a gram per brake
horsepower-hour for particulate emissions).
(B) In no case may the FEL exceed the upper limit prescribed in the
section concerning the applicable heavy-duty engine NOX plus
NMHC and particulate emission standards.
(iii) Calculate the projected emission credits (positive or
negative) based on quarterly production projections for each
participating family and for each pollutant, using the applicable
equation in paragraph (c) of this section and the applicable factors for
the specific engine family.
(iv)(A) Determine and state the source of the needed credits
according to quarterly projected production for engine families
requiring credits for certification.
(B) State where the quarterly projected credits will be applied for
engine families generating credits.
(C) Credits may be obtained from or applied to only engine families
within the same averaging set as described in paragraph (d) or (e) of
this section. Credits available for averaging, trading, or banking as
defined in Sec. 86.090-2, may be applied exclusively to a given engine
family, or reserved as defined in Sec. 86.091-2.
(2) Based on this information each manufacturer's certification
application must demonstrate:
(i) That at the end of model year production, each engine family has
a net emissions credit balance of zero or more using the methodology in
paragraph (c) of this section with any credits obtained from averaging,
trading or banking.
(ii) The source of the credits to be used to comply with the
emission standard if the FEL exceeds the standard, or where credits will
be applied if the FEL is less than the emission standard. In cases where
credits are being obtained, each engine family involved must state
specifically the source (manufacturer/engine family) of the credits
being used. In cases where credits are being generated/supplied, each
engine family involved must state specifically the designated use
(manufacturer/engine family or reserved) of the credits involved. All
such reports shall include all credits involved in averaging, trading or
banking.
(3) During the model year manufacturers must:
(i) Monitor projected versus actual production to be certain that
compliance with the emission standards is achieved at the end of the
model year.
(ii) Provide the end-of-model year reports required under
Sec. 86.001-23.
(iii) For manufacturers participating in emission credit trading,
maintain the quarterly records required under Sec. 86.091-7(c)(8).
(4) Projected credits based on information supplied in the
certification application may be used to obtain a certificate of
conformity. However, any such credits may be revoked based on review of
end-of-model year reports, follow-up audits, and any other compliance
measures deemed appropriate by the Administrator.
(5) Compliance under averaging, banking, and trading will be
determined at the end of the model year. Engine families without an
adequate
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amount of NOX, NOX plus NMHC, and/or particulate
emission credits will violate the conditions of the certificate of
conformity. The certificates of conformity may be voided ab initio for
engine families exceeding the emission standard.
(6) If EPA or the manufacturer determines that a reporting error
occurred on an end-of-year report previously submitted to EPA under this
section, the manufacturer's credits and credit calculations will be
recalculated. Erroneous positive credits will be void. Erroneous
negative balances may be adjusted by EPA for retroactive use.
(i) If EPA review of a manufacturer's end-of-year report indicates a
credit shortfall, the manufacturer will be permitted to purchase the
necessary credits to bring the credit balance for that engine family to
zero, using the discount specified in paragraph (c)(1) of this section
on the ratio of credits purchased for every credit needed to bring the
balance to zero. If sufficient credits are not available to bring the
credit balance for the family in question to zero, EPA may void the
certificate for that engine family ab initio.
(ii) If within 180 days of receipt of the manufacturer's end-of-year
report, EPA review determines a reporting error in the manufacturer's
favor (i.e., resulting in a positive credit balance) or if the
manufacturer discovers such an error within 180 days of EPA receipt of
the end-of-year report, the credits will be restored for use by the
manufacturer.
(c)(1) For each participating engine family, NOX plus
NMHC, and particulate emission credits (positive or negative) are to be
calculated according to one of the following equations and rounded, in
accordance with ASTM E29-93a (incorporated by reference at Sec. 86.1),
to the nearest one-tenth of a Megagram (Mg). Consistent units are to be
used throughout the equation.
(i) For determining credit need for all engine families and credit
availability for engine families generating credits for averaging
programs only:
Emission credits = (Std - FEL) x (CF) x (UL) x (Production) x
(10-6)
(ii) For determining credit availability for engine families
generating credits for trading or banking programs:
Emission credits = (Std - FEL) x (CF) x (UL) x (Production) x
(10-6) x (Discount)
(iii) For purposes of the equation in paragraphs (c)(1)(i) and (ii)
of this section:
Std = the current and applicable heavy-duty engine NOX plus
NMHC or particulate emission standard in grams per brake horsepower hour
or grams per Megajoule.
FEL = the NOX plus NMHC, or particulate family emission limit
for the engine family in grams per brake horsepower hour or grams per
Megajoule.
CF = a transient cycle conversion factor in BHP-hr/mi or MJ/mi, as given
in paragraph (c)(2) of this section.
UL = the useful life described in Sec. 86.004-2, or alternative life as
described in Sec. 86.004-21(f), for the given engine family in miles.
Production = the number of engines produced for U.S. sales within the
given engine family during the model year. Quarterly production
projections are used for initial certification. Actual production is
used for end-of-year compliance determination.
Discount = a one-time discount applied to all credits to be banked or
traded within the model year generated. Except as otherwise allowed in
paragraphs (k) and (l) of this section, the discount applied here is
0.9. Banked credits traded in a subsequent model year will not be
subject to an additional discount. Banked credits used in a subsequent
model year's averaging program will not have the discount restored.
(2)(i) The transient cycle conversion factor is the total
(integrated) cycle brake horsepower-hour or Megajoules, divided by the
equivalent mileage of the applicable transient cycle. For Otto-cycle
heavy-duty engines, the equivalent mileage is 6.3 miles. For diesel
heavy-duty engines, the equivalent mileage is 6.5 miles.
(ii) When more than one configuration is chosen by EPA to be tested
in the certification of an engine family (as described in Sec. 86.085-
24), the conversion factor used is to be based upon a production
weighted average value of the configurations in an engine family to
calculate the conversion factor.
(d) Averaging sets for NOX plus NMHC emission credits.
The averaging and trading of NOX plus NMHC emission credits
will only be allowed between heavy-duty engine families in the same
[[Page 45]]
averaging set. The averaging sets for the averaging and trading of
NOX plus NMHC emission credits for heavy-duty engines are
defined as follows:
(1) For NOX+NMHC credits from Otto-cycle heavy-duty
engines:
(i) Otto-cycle heavy-duty engines constitute an averaging set.
Averaging and trading among all Otto-cycle heavy-duty engine families is
allowed. There are no subclass restrictions.
(ii) Otto-cycle heavy-duty vehicles certified under the chassis-
based provisions of Subpart S of this Part may not average or trade with
heavy-duty Otto-cycle engines except as allowed in Sec. 86.1817-05(o).
(2) For NOX plus NMHC credits from diesel-cycle heavy-
duty engines:
(i) Each of the three primary intended service classes for heavy-
duty diesel engines, as defined in Sec. 86.004-2, constitute an
averaging set. Averaging and trading among all diesel-cycle engine
families within the same primary service class is allowed.
(ii) Urban buses are treated as members of the primary intended
service class where they otherwise would fall.
(e) Averaging sets for particulate emission credits. The averaging
and trading of particulate emission credits will only be allowed between
diesel cycle heavy-duty engine families in the same averaging set. The
averaging sets for the averaging and trading of particulate emission
credits for diesel cycle heavy-duty engines are defined as follows:
(1) Engines intended for use in urban buses constitute a separate
averaging set from all other heavy-duty engines. Averaging and trading
between diesel cycle bus engine families is allowed.
(2) For heavy-duty engines, exclusive of urban bus engines, each of
the three primary intended service classes for heavy-duty diesel cycle
engines, as defined in Sec. 86.004-2, constitute an averaging set.
Averaging and trading between diesel-cycle engine families within the
same primary service class is allowed.
(3) Otto cycle engines may not participate in particulate averaging,
trading, or banking.
(f) Banking of NOX plus NMHC, and particulate emission
credits. (1) Credit deposits. (i) NOX plus NMHC, and
particulate emission credits may be banked from engine families produced
in any model year.
(ii) Manufacturers may bank credits only after the end of the model
year and after actual credits have been reported to EPA in the end-of-
year report. During the model year and before submittal of the end-of-
year report, credits originally designated in the certification process
for banking will be considered reserved and may be redesignated for
trading or averaging.
(2) Credit withdrawals. (i) NOX plus NMHC and particulate
credits generated in 2004 and later model years do not expire.
NOX plus NMHC credits generated by Otto-cycle engines in the
2003 model year for manufacturers selecting Option 1 contained in
Sec. 86.005-10(f)(1) also do not expire.
(ii) Manufacturers withdrawing banked NOX plus NMHC, and/
or particulate credits shall indicate so during certification and in
their credit reports, as described in Sec. 86.091-23.
(3) Use of banked emission credits. The use of banked credits shall
be within the averaging set and other restrictions described in
paragraphs (d) and (e) of this section, and only for the following
purposes:
(i) Banked credits may be used in averaging, or in trading, or in
any combination thereof, during the certification period. Credits
declared for banking from the previous model year but not reported to
EPA may also be used. However, if EPA finds that the reported credits
can not be proven, they will be revoked and unavailable for use.
(ii) Banked credits may not be used for NOX plus NMHC or
particulate averaging and trading to offset emissions that exceed an
FEL. Banked credits may not be used to remedy an in-use nonconformity
determined by a Selective Enforcement Audit or by recall testing.
However, banked credits may be used for subsequent production of the
engine family if the manufacturer elects to recertify to a higher FEL.
(iii) NOX credits banked under paragraph Sec. 86.098-
15(j) or Sec. 86.000-15(k) may be used in place of NOX plus
NMHC credits in 2004 and later model years provided that they are used
in the correct averaging set. NOX credits banked
[[Page 46]]
under paragraph Sec. 86.000-15(k) may also be used in place of
NOX plus NMHC credits in the 2003 model year for
manufacturers selecting Option 1 contained in Sec. 86.005-10(f)(1),
provided that they are used in the correct averaging set.
(iv) Except for early credits banked under Sec. 86.000-15(k),
NOX credits banked in accordance with Sec. 86.000-15 may not
be used to meet the Otto-cycle engine standards contained in
Sec. 86.005-10.
(g)(1) This paragraph (g) assumes NOX plus NMHC, and
particulate nonconformance penalties (NCPs) will be available for the
2004 and later model year HDEs.
(2) Engine families using NOX plus NMHC and/or
particulate NCPs but not involved in averaging:
(i) May not generate NOX plus NMHC or particulate credits
for banking and trading.
(ii) May not use NOX plus NMHC or particulate credits
from banking and trading.
(3) If a manufacturer has any engine family to which application of
NCPs and banking and trading credits is desired, that family must be
separated into two distinct families. One family, whose FEL equals the
standard, must use NCPs only while the other, whose FEL does not equal
the standard, must use credits only.
(4) If a manufacturer has any engine family in a given averaging set
which is using NOX plus NMHC and/or particulate NCPs, none of
that manufacturer's engine families in that averaging set may generate
credits for banking and trading.
(h) In the event of a negative credit balance in a trading
situation, both the buyer and the seller would be liable.
(i) Certification fuel used for credit generation must be of a type
that is both available in use and expected to be used by the engine
purchaser. Therefore, upon request by the Administrator, the engine
manufacturer must provide information acceptable to the Administrator
that the designated fuel is readily available commercially and would be
used in customer service.
(j) Credit apportionment. At the manufacturer's option, credits
generated under the provisions described in this section may be sold to
or otherwise provided to another party for use in programs other than
the averaging, trading and banking program described in this section.
(1) The manufacturer shall pre-identify two emission levels per
engine family for the purposes of credit apportionment. One emission
level shall be the FEL and the other shall be the level of the standard
that the engine family is required to certify to under Sec. 86.005-10 or
Sec. 86.004-11. For each engine family, the manufacturer may report
engine sales in two categories, ``ABT-only credits'' and
``nonmanufacturer-owned credits''.
(i) For engine sales reported as ``ABT-only credits'', the credits
generated must be used solely in the ABT program described in this
section.
(ii) The engine manufacturer may declare a portion of engine sales
``nonmanufacturer-owned credits'' and this portion of the credits
generated between the standard and the FEL, based on the calculation in
(c)(1) of this section, would belong to the engine purchaser. For ABT,
the manufacturer may not generate any credits for the engine sales
reported as ``nonmanufacturer-owned credits''. Engines reported as
``nonmanufacturer-owned credits'' shall comply with the FEL and the
requirements of the ABT program in all other respects.
(2) Only manufacturer-owned credits reported as ``ABT-only credits''
shall be used in the averaging, trading, and banking provisions
described in this section.
(3) Credits shall not be double-counted. Credits used in the ABT
program may not be provided to an engine purchaser for use in another
program.
(4) Manufacturers shall determine and state the number of engines
sold as ``ABT-only credits'' and ``nonmanufacturer-owned credits'' in
the end-of-model year reports required under Sec. 86.001-23.
(k) Additional flexibility for diesel-cycle engines. If a diesel-
cycle engine family meets the conditions of either paragraph (k)(1) or
(2) of this section, a Discount of 1.0 may be used in the trading and
banking calculation, for both NOX plus NMHC and for
particulate, described in paragraph (c)(1) of this section.
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(1) The engine family certifies with a certification level of 1.9 g/
bhp-hr NOX plus NMHC or lower for all diesel-cycle engine
families.
(2) All of the following must apply to the engine family:
(i) Diesel-cycle engines only;
(ii) 2004, 2005, and 2006 model years only;
(iii) Must be an engine family using carry-over certification data
from prior to model year 2004 where the NOX plus the HC
certification level prior to model year 2004 is below the NOX
plus NMHC or NOX plus NMHCE standard set forth in
Sec. 86.004-11. Under this option, the NOX credits generated
from this engine family prior to model year 2004 may be used as
NOX plus NMHC credits.
(l) Additional flexibility for Otto-cycle engines. If an Otto-cycle
engine family meets the conditions of paragraph (l)(1) or (2) of this
section, a discount of 1.0 may be used in the trading and banking
credits calculation for NOX plus NMHC described in paragraph
(c)(1) of this section, as follows:
(1) The engine family has a FEL of 0.5 g/bhp-hr NOX plus
NMHC or lower;
(2) All of the following conditions are met:
(i) For first three consecutive model years that the engine family
is certified to a NOX plus NMHC standard contained in
Sec. 86.005-10;
(ii) The engine family is certified using carry-over data from an
engine family which was used to generate early NOX credits
per Sec. 86.000-15(k) where the sum of the NOX FEL plus the
HC (or hydrocarbon equivalent where applicable) certification level is
below 1.0 g/bhp-hr.
[62 FR 54722, Oct. 21, 1997, as amended at 65 FR 59946, Oct. 6, 2000]