Federal Register, Volume 62 Issue 1 (Thursday, January 2, 1997)

[Federal Register Volume 62, Number 1 (Thursday, January 2, 1997)]
[Proposed Rules]
[Pages 200-208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32970]

[[Page 199]]

_______________________________________________________________________

Part III

Environmental Protection Agency

_______________________________________________________________________

40 CFR Part 89

Control of Emissions of Air Pollution from Nonroad Diesel Engines;
Proposed Rule

Federal Register / Vol. 62, No. 1 / Thursday, January 2, 1997 /
Proposed Rules

[[Page 200]]

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 89

[AMS-FRL-5670-3]
RIN 2060-AF76

Control of Emissions of Air Pollution From Nonroad Diesel Engines

AGENCY: Environmental Protection Agency.

ACTION: Supplemental advance notice of proposed rulemaking.

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SUMMARY: EPA, the California Air Resources Board, and members of the
nonroad diesel engine industry recently signed a Statement of
Principles (``Nonroad SOP'') calling for significantly more stringent
standards for emissions of oxides of nitrogen, hydrocarbons, and
particulate matter from compression-ignition, or diesel, engines used
in most land-based nonroad equipment and some marine applications. In
addition, members of the nonroad equipment manufacturing industry that
utilize these engines have also signed in support of the SOP. If these
standards are implemented, the resulting emission reductions would
translate into significant, long-term improvements in air quality in
many areas of the U.S. For engines in this large category of pollution
sources, NOx and PM emissions would be reduced by up to two-thirds from
current standards. Overall, the proposed program would provide much-
needed assistance to states and regions facing ozone and particulate
air quality problems that are causing a range of adverse health effects
for their citizens, especially in terms of respiratory impairment and
related illnesses.
EPA is issuing this Supplemental Advance Notice of Proposed
Rulemaking (Supplemental ANPRM) to make available the text of the
Nonroad SOP and to invite comment from all interested parties on EPA's
plans to propose new emission standards and other related provisions
for these engines consistent with the Nonroad SOP. This action
supplements an earlier Advance Notice published on August 31, 1995,
which provides additional context for EPA's plans regarding nonroad
engines.

DATES: EPA requests comment on this Supplemental ANPRM no later than
February 3, 1997. Should a commenter miss the requested deadline, EPA
will try to consider any comments that it receives prior to publication
of the Notice of Proposed Rulemaking (NPRM) that the Agency expects to
follow this Supplemental ANPRM. There will also be an opportunity for
oral and written comment when EPA publishes the NPRM.

ADDRESSES: Materials relevant to this action are contained in Public
Docket A-96-40, located at room M-1500, Waterside Mall (ground floor),
U.S. Environmental Protection Agency, 401 M Street, S.W., Washington,
DC 20460. The docket may be inspected from 8:00 a.m. until 5:30 p.m.,
Monday through Friday. A reasonable fee may be charged by EPA for
copying docket materials.
Comments on this notice should be sent to Public Docket A-96-40 at
the above address. EPA requests that a copy of comments also be sent to
Tad Wysor, U.S. EPA , 2565 Plymouth Road, Ann Arbor, MI 48105.

FOR FURTHER INFORMATION CONTACT: Tad Wysor, U.S. EPA, Engine Programs
and Compliance Division, 2565 Plymouth Road, Ann Arbor, MI 48105.
Telephone: (313) 668-4332.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose for This Supplemental Advance Notice

With this notice EPA announces the signing of a Statement of
Principles (SOP) between EPA, the California Air Resources Board, and
members of the nonroad diesel engine manufacturing industry. Members of
the nonroad equipment manufacturing industry that utilize these engines
also signed in support of the SOP. EPA announced its intent to pursue
an SOP for nonroad engines in an Advance Notice of Proposed Rulemaking
(ANPRM) on August 31, 1995 (60 FR 45580). This 1995 ANPRM discussed the
need for further reductions of NOX, PM, and HC from highway heavy-
duty engines (HDEs) and nonroad engines and presented for public
comment an SOP focusing on highway HDEs. Today's Supplemental Advance
Notice includes the text of the Nonroad SOP as an appendix to this
preamble.
It is the Agency's intent to issue a Notice of Proposed Rulemaking
(NPRM) in the near future in accordance with the Nonroad SOP. Such a
proposal will be subject to the full public process of any proposed
rulemaking. By publishing the text of the SOP in advance of the NPRM,
EPA hopes to receive early comments and suggestions which can inform
the development of the proposal. In addition, in the August 1995 ANPRM
EPA discussed a number of reasons why the Agency places a high priority
on considering new emission standards for both highway heavy-duty
engines and nonroad engines. EPA encourages comment on this rationale
as it applies to nonroad engines and on all aspects of the Nonroad SOP
published here.
As discussed in the August 31, 1995 ANPRM, EPA believes that the
Nonroad SOP represents a constructive framework for stringent new
standards for a class of engines which contribute heavily to the
nation's air quality problems. Emissions of oxides of nitrogen
(NOX) are a major part of the ozone problem facing many areas (due
to local emissions as well as the transport of ozone and its precursors
from upwind areas); these emissions add to the NOX-related
problems of acid rain, eutrophication of estuaries, and the formation
of secondary nitrate PM; and NOX emissions are directly harmful to
human health and the environment. NOX emissions from compression-
ignition (CI) nonroad engines (commonly called nonroad diesels)
represent a large fraction of total nationwide NOX emissions,
about 10 percent, or about 20 percent of nationwide mobile-source
NOX emissions.^{1 EPA expects that emission reductions from
current standards will be largely offset in the future by growth in
this sector. Figure 1 illustrates EPA's current projection of the
emissions of NOX from nonroad diesels covered by this Supplemental
ANPRM as compared to total mobile source emissions.^{2
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\1\ The discussion of the contribution of nonroad engines in the
1995 ANPRM was general and included some categories of nonroad
engines not covered in the recent Nonroad SOP. Today's action is
limited to the Nonroad SOP categories.
\2\ The ``Nonroad Diesel'' emissions presented in Figure 1 are
the sum of all diesel-powered source categories listed in the memo
``Nonroad Diesel and Mobile Source NOX Emission Projections''
(found in Docket Number A-96-40) except highway vehicles, commercial
marine vessels, and locomotives. The ``All Mobile Sources''
emissions in Figure 1 are the total of all source categories listed
in the memo except stationary sources.
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BILLING CODE 6560-50-P

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[GRAPHIC] [TIFF OMITTED] TP02JA97.000

BILLING CODE 6560-50-C

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Available evidence shows that PM caused by diesel engines
contributes to a variety of respiratory problems and diseases. Nonroad
diesels covered by the Nonroad SOP contribute a large fraction of the
diesel PM emissions to which Americans are exposed--nearly half of the
total PM from diesel engines. Finally, nonroad diesel engines are also
significant contributors to hydrocarbon emissions, a key precursor to
ozone formation.^{3
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\3\ The reader will find more discussion of the health and
environmental impacts of NOX, PM, and HC, the contribution of
nonroad engines to these emissions, and EPA's conclusion that new
emission controls are appropriate in the August 31, 1995 ANPRM
referenced above.
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A first set of emission standards, called ``Tier 1'' standards, was
previously issued for new land-based nonroad diesel engines rated at or
above 37 kW (50 hp) (59 FR 31306, June 17, 1994). As a result,
manufacturers of these engines are now beginning to address the
emissions of their products. For nonroad diesel engines rated below 37
kW, no emission standards currently exist. All diesel nonroad engine
and equipment manufacturers are at a much earlier stage in the
development and incorporation of emission control technologies than are
their counterparts in the highway engine and truck/bus industries.
Also, in contrast to the relatively small number of large,
domestically-focused companies that dominate the heavy-duty highway
engine and truck/bus industries, the nonroad diesel industry is made up
of a large number of engine and equipment manufacturers, many of which
do business internationally.

II. Summary of the Nonroad SOP and EPA Plans

The Nonroad SOP concerns most diesel nonroad engines and the
equipment they power. Nonroad engine categories not addressed in this
SOP and being addressed in other federal programs are those used in
aircraft, underground mining equipment, locomotives, marine vessels
over 37 kW, and all spark-ignition (SI) nonroad engines, including
gasoline engines. As discussed in the Nonroad SOP, EPA will pursue a
separate SOP with manufacturers of land-based SI engines rated at over
19 kW (25 hp) regarding standards for this class of engines. Other SI
engines are being addressed in separate EPA initiatives.
The approach to new emission standards is somewhat different in the
Nonroad SOP than in the Heavy-duty Highway SOP, where a single set of
standards was proposed. Specifically, the Nonroad SOP involves a tiered
approach to reducing the standards. For engines rated at 37 kW and
above, which are subject to the Tier 1 regulations, the SOP discusses a
Tier 2 set of standards for the early years of the next decade and Tier
3 standards 3 to 5 years later for engines rated between 37 kW and 560
kW (750 hp). The Tier 2 nonroad NOX standards for engines rated at
37 kW and above are similar in stringency to the heavy-duty highway
engine NOX standards that will apply in 1998; the Tier 3 nonroad
NOX standards are similar in stringency to the highway heavy-duty
NOX standards proposed for 2004 (see 61 FR 33421, June 27, 1996).
As discussed in the SOP, EPA plans to propose a second tier of PM
standards for nonroad engines rated at 37 kW and above, but does not
plan to immediately propose a third tier of standards for PM. Recent
health studies have raised new concerns about exposure to diesel and
other PM, and EPA has proposed a revision of the existing PM NAAQS and
is currently taking comment. At this time, the Agency believes it is
premature to address diesel nonroad PM standards beyond the second tier
contained in the SOP, and would take any further reductions that might
be proposed in the future into account in the below-discussed review of
the feasibility of the proposed Tier 3 NMHC+NOX standards.
For nonroad diesel engines rated under 37 kW, EPA plans to propose
federal standards for the first time.^{4 The SOP contains a set of
Tier 1 standards for the 1999-2000 time frame and Tier 2 standards in
the 2004-5 time frame.
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\4\ The State of California currently regulates nonroad diesel
engines under 19 kW (25 hp).
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For the Tier 3 over 37 kW engine standards and the Tier 2 under 37
kW engine standards, the Nonroad SOP calls for EPA to conduct a review,
including opportunity for public comment, of any rule adopting these
standards to assess whether these standards are technologically
feasible and otherwise appropriate under the Clean Air Act. This review
is to be completed by the end of 2001. The SOP describes a number of
issues to be covered in this review, including the cost of engine and
equipment redesigns.
There are some program areas for which the SOP does not contain
detailed provisions, as discussed below. EPA particularly solicits
comment on these areas in its preparation of the proposal.
The SOP participants are interested in establishing a program that,
in real-world operating experience, achieves the emission control
levels implied in the SOP standards. To this end, the Agency is
evaluating whether the provisions adopted in the Tier 1 program that
impact emission controls' durability, such as the length of the
regulatory useful life, should be revised. Comment is solicited on the
need for and form of such changes.
In addition, the SOP discusses a program to encourage clean
alternative fuels and innovative diesel emission control technologies
through optional standards and test procedures. EPA solicits
suggestions on the appropriate standards and procedures for this
program, as well as on any other concepts which might help accomplish
this goal.
Because many manufacturers of nonroad diesel engines and equipment
market their products on an international scale, the industry places a
very high value on globally harmonized emission standards. Therefore,
the Nonroad SOP states that harmonized standards and test procedures
will be pursued to the maximum extent possible, provided that these
measures do not compromise either the SOP's other provisions or the air
quality needs of the U.S. The Agency requests comment on specific
program elements by which fuller harmonization might be achieved.
Finally, the SOP includes detailed provisions for a proposal giving
flexibility to equipment manufacturers in incorporating the cleaner
engines envisioned in the SOP into their products. The SOP also
expresses the signatories' intent to develop alternative flexibility
proposals that will not compromise the environmental benefits. EPA
encourages commenters to provide suggestions for such alternatives.

III. Potential Impacts of the SOP Standards

Because of the large reduction in the levels of emissions standards
contained in the SOP and the large number of engines that would be
subject to the standards, EPA and the other signatories of the Nonroad
SOP expect major reductions in emissions to occur if the standards are
implemented. As a part of the planned rulemaking, EPA will include
detailed analyses of the emissions reductions and air quality benefits
that would result from implementing the SOP standards in the planned
NPRM. Based on preliminary assessments, EPA expects that the emission
control program described in the SOP will reduce NOX emissions on
the order of 800,000 tons per year. Large reductions in PM would result
as well, both from reducing the carbonaceous PM that is directly
emitted by nonroad diesel engines and from reducing

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secondary nitrate PM as a result of the NOX reductions described
above. Overall, the emission reductions the Agency believes will result
from the standards contained in the SOP would rank this program among
the most significant single mobile-source emission control programs EPA
has ever implemented.
EPA also will include in the NPRM an analysis of the expected costs
of meeting the emission standards of the Nonroad SOP. A very
approximate indication of possible cost impacts can be gained from the
cost analyses developed by the Agency in the past for similar levels of
emissions control on highway HDEs. EPA estimated the per-engine cost of
reducing the highway HDE NOX standard from 6.0 to 5.0 g/bhp-hr
(effective in 1991) at less than $100 (50 FR 10653, March 15, 1985);
from 5.0 to 4.0 g/bhp-hr (1998) at less than $100 (58 FR 15801, March
24, 1993); and from 4.0 g/bhp-hr NOX to 2.5 g/bhp-hr NOX+NMHC
(proposed for 2004) at less than $500 (61 FR 33421, June 27, 1996).
Thus EPA's estimate of the overall cost for reducing emissions from 6.0
g/hp-hr NOX to 2.5 g/bhp-hr NOX+NMHC is in the range of
several hundred dollars per highway HDE. This emission reduction is
similar to the reduction from 6.9 g/bhp-hr NOX (the nonroad Tier 1
level) to 3.0 g/hp-hr NOX+HC (the Nonroad SOP Tier 3 level for
larger engines). The Agency recognizes that comparisons of this sort do
not account for such differences as the potential costs of nonroad
equipment redesign, relative penetration of electronic fuel controls
and turbocharging, relative market sizes and degree of product
diversity, special factors in small engine design, and costs of
controlling other pollutants. These factors will, of course, be
included in the NPRM analysis.

IV. Public Participation

The Agency is committed to a full and open regulatory process and
looks forward to input from a wide range of interested parties as the
rulemaking process develops. If EPA proceeds as expected with a
proposed rule, these opportunities will include a formal public comment
period and a public hearing. EPA encourages all interested parties to
become involved in this process as it develops.
With today's action, EPA opens a comment period for this
Supplemental ANPRM. Comments will be accepted through February 3, 1997.
The Agency strongly encourages comment on all aspects of the SOP and
the overall emission control program it lays out. The most useful
comments are those supported by appropriate and detailed rationales,
data, and analyses. All comments, with the exception of proprietary
information, should be directed to the EPA Air Docket Section, Docket
No. A-96-40 before the date specified above.
Commenters who wish to submit proprietary information for
consideration should clearly separate such information from other
comments by (1) labeling proprietary information ``Confidential
Business Information'' and (2) sending proprietary information directly
to the contact person listed (see FOR FURTHER INFORMATION CONTACT) and
not to the public docket. This will help ensure that proprietary
information is not inadvertently placed in the docket. If a commenter
wants EPA to use a submission of confidential information as part of
the basis for an NPRM, then a nonconfidential version of the document
that summarizes the key data or information should be sent to the
docket.
Information covered by a claim of confidentiality will be disclosed
by EPA only to the extent allowed and in accordance with the procedures
set forth in 40 CFR part 2. If no claim of confidentiality accompanies
the submission when it is received by EPA, it will be made available to
the public without further notice to the commenter.

V. Copies of Documents

This Supplemental Advance Notice and the Nonroad SOP, as well as
the August 31, 1995 ANPRM, are available in the public docket as
described under ADDRESSES above. These documents are also available
electronically on the Internet and on the Technology Transfer Network
(TTN).

A. Internet

This Supplemental Advance Notice and related documents may be found
on the Internet as follows:

World Wide Web

http://www.epa.gov/omswww

FTP

ftp://ftp.epa.gov Then CD to the /pub/gopher/OMS/ directory

Gopher

gopher://gopher.epa.gov:70/11/Offices/Air/OMS
Alternatively, go to the main EPA gopher, and follow the menus:
gopher.epa.gov

EPA Offices and Regions
Office of Air and Radiation
Office of Mobile Sources

B. Technology Transfer Network (TTN)

The Technology Transfer Network (TTN) is an electronic bulletin
board system (BBS) operated by EPA's Office of Air Quality Planning and
Standards. Users are able to access and download TTN files free of
charge (except for the cost of the phone call) on their first call
using a personal computer and modem as follows:
TTN BBS: 919-541-5742 (1200-14400 bps, no parity, 8 data bits, 1
stop bit)
Voice Helpline: 919-541-5384
Also accessible via Internet: TELNET ttnbbs.rtpnc.epa.gov Off-line:
Mondays from 8:00 AM to 12:00 Noon ET

VI. Statutory Authority

Section 213 of the amended Clean Air Act, 42 USC 7547(a), EPA
conducted a study of emissions from nonroad engines, vehicles and
equipment in 1991. Based on the results of that study, EPA determined
that emissions of NOX, volatile organic compounds (including HC),
and CO from nonroad engines and equipment contribute significantly to
ozone and CO concentrations in more than one NAAQS nonattainment area
(see 59 FR 31306, June 17, 1994). Having made these determinations,
Section 213(a)(3) of the Act requires EPA to promulgate (and from time
to time revise) emissions standards for those classes or categories of
new nonroad engines, vehicles, and equipment that in EPA's judgment
cause or contribute to such air pollution.
Where EPA determines that other emissions from new nonroad engines,
vehicles, or equipment significantly contribute to air pollution which
may reasonably be anticipated to endanger public health or welfare,
Section 214(a)(4) authorizes EPA to establish (and from time to time
revise) emission standards from those classes or categories of new
nonroad engines, vehicles, and equipment that EPA determines cause or
contributor to such air pollution.

VII. Unfunded Mandates Reform Act

Under Section 202 of the Unfunded Mandates Reform Act of 1995
(UMRA), Public Law 104-4, EPA must prepare a budgetary impact statement
to accompany any general notice of proposed rulemaking or final rule
that includes a Federal mandate which may result in estimated costs to
State, local, or tribal governments in the aggregate, or to the private
sector, of $100 million or more. Under Section 205, for any rule
subject to Section 202 EPA generally must select the least costly, most
cost-effective, or least burdensome

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alternative that achieves the objectives of the rule and is consistent
with statutory requirements. Under Section 203, before establishing any
regulatory requirements that may significantly or uniquely affect small
governments, EPA must take steps to inform and advise small governments
of the requirements and enable them to provide input.
EPA has determined that the requirements of UMRA do not extend to
advance notices of proposed rulemaking such as this Supplemental
Advance Notice.

VIII. Small Business Regulatory Enforcement Fairness Act (SBREFA)

The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), Public Law 104-121, amended the Regulatory Flexibility Act
and is intended to assure that concerns about small entities are
adequately considered during the development of new regulations which
affect them. SBREFA does not formally apply to advance notices like
this Supplemental ANPRM. However, EPA has begun to consider how small
entities would be affected by the potential new standards of the SOP.
In contrast to the relatively small number of fairly large
companies that dominate the heavy-duty highway engine and truck/bus
industries and the primarily domestic market these industries serve,
the nonroad diesel industry is made up of a large number of engine
manufacturers and a still larger number of equipment manufacturers,
many of which do business internationally. Some of these equipment
manufacturers are relatively small businesses that may be impacted
differently than larger equipment manufacturers as new technologies are
incorporated into nonroad diesel engines.
Equipment manufacturers were involved in the Nonroad SOP
discussions and, as discussed above, the final SOP includes several
provisions which will provide flexibility to nonroad equipment
manufacturers, especially smaller manufacturers, without harming the
overall emission benefits of the program. EPA plans to minimize any
disproportionate impact on smaller nonroad equipment manufacturers and
will work with representatives of such entities as the formal proposal
is developed, including the preparation of a Regulatory Flexibility
Analysis. EPA requests comment on the impacts of the program outlined
in the SOP on small entities; such comments will help the Agency meet
its obligations under SBREFA.

IX. Administrative Designation and Regulatory Analysis

Under Executive Order 12866 (58 FR 51735 (Oct. 4, 1993)), the
Agency must determine whether this regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The order defines
``significant regulatory action'' as any regulatory action (including
an advanced notice of proposed rulemaking) that is likely to result in
a rule that may:
(1) have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or,
(4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
This Supplemental Advance Notice was submitted to OMB for review as
required by Executive Order 12866. Any written comments from OMB and
any EPA response to OMB comments are in the public docket for this
Notice.

List of Subjects in 40 CFR Part 89

Environmental protection, Administrative practice and procedure,
Air pollution control, Diesel fuel, Motor vehicles, Motor vehicle
pollution, Reporting and recordkeeping requirements, Research.

Dated: December 20, 1996.
Carol M. Browner,
Administrator.

Appendix--Nonroad Compression-Ignition Engine Statement of
Principles

Nonroad Compression-Ignition Engine Statement of Principles

Members of the nonroad compression-ignition (CI) engine and
equipment industry, the U.S. Environmental Protection Agency (EPA)
and the California Air Resources Board (ARB) (collectively, the
Signatories) recognize the importance of preserving the environment
while maintaining a strong industry. This Statement of Principles
(SOP) increases certainty and stability for the nonroad CI engine
and equipment industry which is vital for their business planning.
It also ensures cleaner air in a manner which is both realistic for
industry and responds to environmental needs. With this SOP the
nonroad CI engine and equipment industry has stepped forward to
become a leader in environmental protection, and industry and
government will work as partners to bring about cleaner air.
EPA and ARB have recently established programs to control
emissions from nonroad engines. EPA and ARB recognize these engines
are sources of ozone-forming oxides of nitrogen (NOX) and
hydrocarbons (HC), as well as of particulate matter (PM) and other
pollutants, all of which raise concerns for public health and the
environment. The current Tier 1 regulations for large CI nonroad
engines are primarily focused on achieving significant NOX
reductions as early as possible and are being phased in by
horsepower level beginning in 1996. At the time of finalizing the
Tier 1 regulations, EPA and ARB recognized that more stringent
standards for these engines, and further evaluation of the test
procedure by which compliance with the standards is measured, would
likely be needed in the future to help meet air quality goals. These
agencies also recognized the need to control emissions from spark-
ignited (SI) and other CI nonroad engines as well.
Although recent progress in improving the nation's air quality
has been encouraging, EPA and ARB believe there is strong evidence
that currently adopted measures are insufficient to offset such
factors as the growth in vehicle and equipment sales and usage. The
states and others have strongly urged EPA to undertake new programs
to achieve further cost-effective emission reductions in a time
frame consistent with the Clean Air Act attainment goals. In
response, among other initiatives, EPA and ARB have initiated a
program to further reduce emissions from heavy-duty on-highway
vehicles and nonroad engines.
The industries that produce these engines have also stepped
forward, expressing a desire to develop and use cost-effective
emission control technologies to help meet the nation's air quality
goals. EPA and ARB have consulted with these industries to help
craft proposals that provide the needed air quality benefit. The
effectiveness of this approach is evidenced by the issuance of a
joint Statement of Principles (SOP) on July 11, 1995, outlining a
proposal for stringent new nationwide standards for on-highway heavy
duty engines. EPA followed up that SOP with an Advanced Notice of
Proposed Rulemaking (ANPRM) and a Notice of Proposed Rulemaking
(NPRM). The 1995 SOP expressed an intent by the Signatories to
pursue a similar SOP for heavy-duty nonroad engines.
After considerable discussion between EPA, ARB, and the nonroad
engine and equipment industries, this SOP has been completed. The
Signatories expect major reductions in emissions from the standards
set forth in this SOP. For nonroad CI engines rated at 50 hp (37 kW)
and higher, the Tier 2 and Tier 3 standards together will achieve
about a 75 percent reduction in NOX from uncontrolled levels.
The Tier 2 standards for PM represent about a 40 percent reduction
from current levels. For nonroad CI engines rated at less than 50
hp, the Tier 2 standards are expected to result in NOX and PM

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reductions similar to those from the Tier 2 standards for engines
rated at 50 hp and higher.
The Signatories agree that EPA should issue an ANPRM in 1996 and
an NPRM in 1997 consistent with the points outlined in this
document. A final rule would follow by February 1998. However, this
SOP does not change the importance of EPA demonstrating the need for
the standards described below and EPA's obligation to meet the
criteria of the Clean Air Act in finalizing any rule, including
complying with all applicable rulemaking procedures.

1. Scope

This SOP concerns CI nonroad engines as defined in 40 CFR 89.2,
and the nonroad equipment powered by these engines, with the
exception of engines used in aircraft, underground mining equipment,
locomotives, and marine vessels. However, propulsion and auxiliary
marine CI engines rated at less than 50 hp (37 kW) are
included.^{1 EPA is addressing marine CI engines rated at 50 hp
and higher separately from this SOP.
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\1\ Currently, EPA is required under a court order to take final
action on proposed regulations for CI marine engines by December 18,
1996. EPA will seek appropriate changes to this order regarding
final action on CI marine engines less than 50 hp (37 kW) to conform
to this SOP.
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Although EPA and ARB have made significant progress in SOP
discussions with the manufacturers of nonroad SI engines rated at
above 25 hp (19 kW) (as well as the manufacturers of equipment using
these engines), these discussions have not yet reached a stage that
would allow inclusion of these engines in this SOP. EPA and ARB will
pursue the development of an SOP for nonroad SI engines above 25 hp
by the end of 1996. Such an SOP would assist the nonroad engine and
equipment manufacturers in their product planning. The Signatories
recognize the possible competitive effects of regulating CI and SI
engines separately, and EPA and ARB will take those effects into
account in the development of an SI engine SOP.

2. National Standards for CI Nonroad Engines

This SOP seeks to establish a nationwide program that, in real-
world operating experience, achieves the emission control levels
indicated below. Recognizing that real-world control is closely
linked to the test procedure by which conformance with standards is
measured, the following discussion of standards should be read in
the context of the test procedure discussion that follows it. The
Signatories' goal is a combination of emission standards and test
procedures that achieves real-world emission reductions
corresponding to these standards, provided that such standards are
technologically feasible and cost effective, taking into
consideration both engine and equipment manufacturer costs.

a. NMHC, NOX, CO and PM Standards

EPA will propose combined standards for nonmethane hydrocarbons
(NMHC) and NOX, and separate standards for carbon monoxide (CO)
and PM. These standards would apply to any affected engine that is
newly manufactured on or after January 1 of the year indicated in
the following table, except as provided in Section 5, Implementation
Flexibility, below. While this SOP does not specify PM standards in
Tier 3, the Signatories acknowledge that there is, in general, an
inverse relationship in controlling certain pollutants (e.g.,
NOX and PM). The Signatories recognize that the manufacturer
signatories have agreed to the Tier 3 NMHC+NOX standards set
forth below on the condition that there would be no further
reduction in PM or CO from Tier 2 levels. If such reductions should
be proposed, EPA will take the reductions into account in its review
of the feasibility of the proposed Tier 3 NMHC+NOX standards
(see Section 4, Feasibility Review, below). The Signatories
recognize the role that direct injection engine technology plays in
the less than 50 hp nonroad engine market and expect the standards
set forth in this SOP to allow for the continued existence of that
technology. As part of the feasibility review (see Section 4 below),
EPA will assess the progress in meeting Tier 2 standards for those
engines using direct injection technology.

b. Smoke

The Signatories support the completion and worldwide adoption of
the new smoke test being developed by the International Standards
Organization (ISO 8178-9). EPA intends to propose to replace its
current smoke test with the ISO test procedure for the sake of
harmonization and improved control of smoke, provided that it
provides for a level of smoke control at least as adequate as the
current test. EPA will also propose to extend the smoke standards
that were adopted in the Tier 1 rule to the under 50 hp engine
category, and will evaluate the appropriateness of any changes to
the smoke standards for all engine size categories in formulating
the proposal.

c. Crankcase Emissions

For several years, emission regulations for on-highway engines
have required that crankcase emissions be eliminated, except in the
case of turbocharged diesel engines, which present special
difficulties in designing for closed crankcase. EPA will propose to
extend this requirement to covered nonroad engines (including the
provision for excepting turbocharged diesel engines).

--------------------------------------------------------------------------------------------------------------------------------------------------------
NMHC+NOX / CO / PM in g/hp-hr (g/kW-hr)
---------------------------------------------------------------------------------------------------------------------------------------------------------
hp(kW) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------

(5)Tier 1 Tier 2*
<11 (8)......................... .......... 7.8 (10.5) .......... .......... .......... .......... 5.6 (7.5)
.......... 6.0 (8.0) .......... .......... .......... .......... 6.0 (8.0)
.......... 0.74 (1.0) .......... .......... .......... .......... 0.60
.......... .......... .......... .......... .......... .......... (0.80)
11 (8)............... .......... 7.0 (9.5) .......... .......... .......... .......... 5.6 (7.5)
<25 (19)........................ .......... 4.9 (6.6) .......... .......... .......... .......... 4.9 (6.6)
.......... 0.60
(0.80) .......... .......... .......... .......... 0.60
.......... .......... .......... .......... .......... .......... (0.80)
25 (19).............. 7.0 (9.5) .......... .......... .......... .......... 5.6 (7.5)
<50 (37)........................ 4.1 (5.5) .......... .......... .......... .......... 4.1 (5.5)
0.60
(0.80) .......... .......... .......... .......... 0.44
.......... .......... .......... .......... .......... (0.60)

(4)Tier 2
(2)Tier 3*
50 (37).............. .......... .......... .......... .......... .......... 5.6 (7.5) .......... .......... .......... 3.5 (4.7)
<100 (75)....................... .......... .......... .......... .......... .......... 3.7 (5.0) .......... .......... .......... 3.7 (5.0)
.......... .......... .......... .......... .......... 0.30
(0.40) .......... .......... .......... **
100 (75)............. .......... .......... .......... .......... 4.9 (6.6) .......... .......... .......... 3.0 (4.0)
<175 (130)...................... .......... .......... .......... .......... 3.7 (5.0) .......... .......... .......... 3.7 (5.0)
.......... .......... .......... .......... 0.22
(0.30) .......... .......... .......... **
175 (130)............ .......... .......... .......... .......... 4.9 (6.6) .......... .......... 3.0 (4.0)
<300 (225)...................... .......... .......... .......... .......... 2.6 (3.5) .......... .......... 2.6 (3.5)
.......... .......... .......... .......... 0.15
(0.20) .......... .......... **
300 (225)............ .......... .......... 4.8 (6.4) .......... .......... .......... .......... 3.0 (4.0)
<600 (450)...................... .......... .......... 2.6 (3.5) .......... .......... .......... .......... 2.6 (3.5)
.......... .......... 0.15
(0.20) .......... .......... .......... ..........
600 (450)............ .......... .......... .......... 4.8 (6.4) .......... .......... .......... 3.0 (4.0)
<750 (560)...................... .......... .......... .......... 2.6 (3.5) .......... .......... .......... 2.6 (3.5)
.......... .......... .......... 0.15
(0.20) .......... .......... .......... **

[[Page 206]]

750 (560)............ .......... .......... .......... .......... .......... .......... .......... 4.8 (6.4)
.......... .......... .......... .......... .......... .......... .......... 2.6 (3.5)
.......... .......... .......... .......... .......... .......... .......... 0.15
(0.20)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These standards are subject to a feasibility review as discussed in Section 4.
** See above discussion on PM standards.

3. Test Procedures

In adopting a steady-state test cycle for its Tier 1 final rule,
EPA stated that further study will be required to better
characterize the nature and level of transient operation experienced
by nonroad engines in actual use. The Signatories recognize that
additional data would be beneficial in assessing the adequacy of the
steady-state test in achieving control of regulated emissions,
especially PM, in use. Other test parameters, such as the
composition of the test fuel, may also impact the program's success
in controlling in-use emissions.
The Signatories further recognize: (1) the crucial role that the
test procedure plays in ensuring real emissions control in use, (2)
the critical importance of in-use emission reductions in improving
air quality and in determining state implementation plan credits
under the Clean Air Act, (3) the effect that changes to test
procedures could have on industry's ability to design, test and
produce engines that comply with the applicable standards in the
time periods contemplated by the SOP, (4) the need for a well-
planned and well-coordinated test program to settle the issue of
test procedure adequacy, (5) the value of proceeding in concert with
international standard setting organizations in adopting a
harmonized test procedure, and (6) the potential for this to be a
lengthy process.
In order to achieve major NOx reductions as early as possible,
EPA will propose that the current steady-state test be retained in
the adoption of this SOP's standards. In addition, the Signatories
will initiate a comprehensive test program, coordinated by EPA and
cooperatively executed, to evaluate the adequacy of the current test
procedure for achieving in-use emissions control. The test program
will be initiated within six months of signing this SOP and will be
completed by December 1998. The Signatories will also engage
interested parties in the European Union (EU) in this comprehensive
test program with the goal of gaining their participation as
partners, if possible. Should the results of the testing program
indicate that the test procedure does not achieve adequate control
of emissions in use, EPA will initiate action to revise the test
procedure if another test procedure is expected to provide
significantly better control.
It is recognized that the standards in the SOP are based on the
current steady-state test procedure. Further, all Signatories
recognize that any test cycle changes or additions would likely
complicate and delay industry's ability to research, design, test,
and produce engines that comply with the standards contained in the
SOP. As a result, any proposal to revise the current test procedure
would propose that the revision not be implemented before Tier 3.
Any changes in the test procedure will be taken into consideration
as part of the Tier 3 feasibility review outlined below.
Engines rated at under 50 hp are not subject to the current Tier
1 standards and test procedure.
The Signatories recognize that the manufacturer signatories'
agreement to the standards for these engines set forth in Section 2
of this SOP is based on the assumption that the following test
cycles are adopted:

Land-based CI engines

Variable- and constant-speed <25 hp (19 kW)...............ISO 8178 G2
Variable-speed 25-50 hp
(19-37 kW)..............................................ISO 8178 C1
Constant-speed 25-50 hp
(19-37 kW)..............................................ISO 8178 D2

Auxiliary marine CI engines

Variable- and constant-speed <25 hp (19 kW)...............ISO 8178 G2
Variable-speed 25-50 hp
(19-37) kW..............................................ISO 8178 C1
Constant-speed 25-50 hp
(19-37) kW..............................................ISO 8178 D2
Propulsion marine CI engines <50 hp (37 kW).................ISO 8178 E3

In addition, the Signatories recognize that the manufacturer
signatories' agreement to the application of the standards set forth
in Section 2 of this SOP to land-based constant-speed engines rated
at over 50 hp is based on the assumption that the ISO 8178 D2 test
cycle is adopted for these engines as an optional alternative to the
current steady-state test. EPA will assess the adequacy of the above
cycles for the indicated engines and propose appropriate cycles in
the NPRM. If EPA should propose different cycles, then EPA will
reassess the feasibility of the standards in light of the proposed
cycles.

4. Feasibility Review

In order to assess the progress of the industry in meeting the
Tier 3 standards and effect dates for over 50 hp engines and Tier 2
standards and effect dates for under 50 hp engines (hereafter
collectively, the ``Later Standards''), and to ensure the lowest
appropriate standard levels at the earliest appropriate time, EPA
shall conduct a review of any rule adopting the Later Standards set
forth in this SOP. This review will conclude in 2001 and will
commence with a notice providing opportunity for public comment on
whether or not the standards are technologically feasible and
otherwise appropriate under the Clean Air Act. After the public
comment period, EPA will take final action on the review under
Section 307 of the Clean Air Act. Should the Agency conclude as a
result of this review that these standards are not technologically
feasible, or are otherwise not appropriate under the Clean Air Act,
it shall revise the rule as appropriate. In any such revision, the
NMHC+NOx standards are not expected to be raised more than 1.0 g/hp-
hr (1.3 g/kW-hr), assuming no change in the PM and CO standards.
In reviewing the rulemaking as set forth above, EPA shall review
the need for and feasibility and cost of the Later Standards,
including, but not limited to: (1) the need to provide engine and
equipment manufacturers an adequate period in which to recoup the
capital investment required to achieve the previous standards; (2)
the need to provide engine and equipment manufacturers no less than
four full years of leadtime ^{2 between the time the feasibility
review is finalized and the Later Standards become effective (while
maintaining the engine category phase-in set forth in Section 2
above); (3) the need to assess the suitability, effectiveness and
cost of transferring on-highway engine technology to nonroad engines
and equipment; and (4) the need to assess the costs associated with
redesigning equipment to accommodate the Later Standards.
---------------------------------------------------------------------------

\2\ In the case of engines rated at less than 50 hp, no less
than two full years of leadtime.
---------------------------------------------------------------------------

The Signatories acknowledge that the standards set forth in this
SOP will require a substantial investment for nonroad engine and
equipment manufacturers, and their customers, and that the affected
nonroad industry ordinarily requires a substantial period of
stability in which to recoup such an investment. The period of
stability between the previous and Later Standards ordinarily would
be too short a time in which to reasonably recoup the investment
needed to comply with the previous standards before imposing
additional costs to comply with the Later Standards. Thus, the
Signatories agree that the Later Standards in this SOP are based on
the premise that no significant equipment redesign beyond that
required to accommodate engines meeting the previous standards will
be required to accommodate engines meeting the Later Standards.
As part of the review discussed in this Section, EPA will
solicit information as to whether equipment redesign will be
required as a result of changes to engines that will be required to
meet the Later Standards. Should such equipment redesign be
required, EPA will assess its significance, taking into account the
cost and technical difficulty of such redesign, the need for a
period of stability to reasonably recoup the investment in equipment
redesign to meet the previous standards, the number of equipment
models affected, and other relevant factors. If significant
equipment redesign is required to accommodate engines meeting the
Later

[[Page 207]]

Standards, EPA will propose appropriate measures to address the
burden of such redesign. Such measures would include flexibilities
similar to those set forth in Section 5 below, a minimum two-year
^{3 adjustment of the time between the previous standards and
Later Standards for all engine families in each affected power
category, an adjustment to the Later Standards to address the need
for the redesign, or some combination thereof. EPA also may propose
additional measures as appropriate under the Clean Air Act. EPA and
ARB acknowledge that this SOP will require the industry to make a
commitment to meet the Later Standards that will require a
substantial period of stability.
---------------------------------------------------------------------------

\3\ Minimum three years and one year for engines in the 175-300
hp and 300-600 hp categories, respectively.
---------------------------------------------------------------------------

EPA's review and assessment of the feasibility and cost of the
Later Standards will include a review of the costs associated with
the Later Standards on a marginal cost basis, taking into
consideration total equipment production and operating costs, not
just engine costs. If this assessment shows that the nonroad
equipment industry will experience significant adverse impacts from
changes in standards that are too frequent, rapid, or costly, EPA
further commits to propose relaxing the standards and/or delaying
the effective date of the standards, consistent with relevant
provisions of the Clean Air Act.
The Signatories shall meet periodically to provide updates on
their efforts and progress in complying with this SOP.

5. Implementation Flexibility

The Signatories recognize that new emission standards may create
challenges for engine and equipment manufacturers beyond simply
developing low-emission technologies. The nonroad industry is
characterized by a diversity in engine models and equipment
applications, many of which have small markets, making it difficult
to rapidly and frequently implement design changes across wide
product lines. Even small changes in engine designs can create major
difficulties for equipment makers with low volume models, diverse
product lines, or inadequate leadtime to respond to the changes. If
engine makers were to discontinue engine models made in small
volumes, this could cause market disruptions, especially for small
manufacturers of equipment who buy these engines, and their
customers.
Problems of this sort could be dealt with by phasing new
standards in very gradually. However, in order to gain the desired
air quality benefits as early as possible, this SOP instead aims to
resolve the problem by broadening the flexibility granted to
equipment manufacturers by providing them implementation options.
Thus, EPA will propose programs whereby, on an annual basis, an
equipment manufacturer would be allowed to install engines not
meeting the otherwise applicable Tier 2 or 3 standards for engines
50 hp or higher in some of its equipment (Tier 1 standards for
engines less than 50 hp). The following subsection describes two
such programs that will be proposed, based on a percent-of-sales
approach. The Signatories agree to work together in developing
alternative flexibility proposals, with the understanding that these
alternatives will not involve a projected loss in overall emission
benefits over that entailed in the below-described program. One
alternative approach under consideration would exempt equipment on
an application-specific basis; EPA will, at a minimum, seek comment
on such an approach in the NPRM.

a. Equipment Manufacturer Phase-in

Engines 50 hp or higher. For engines rated at 50 hp or higher,
EPA will propose to allow each equipment manufacturer to install
engines certified to the Tier 1 standards in a maximum of 15 percent
of the equipment produced for sale in the United States during the
first year that a new Tier 2 standard applies, and in a maximum of 5
percent during each of the six years thereafter. This allowance
would continue for a total of seven years after Tier 2 standards
become effective for each engine category. At the end of this
allowance period, equipment manufacturers would be required to
install Tier 3 engines (or Tier 2 engines in any engine categories
without Tier 3 standards) in all new equipment using engines in the
category. However, if the effective dates of Tier 3 standards in any
engine category are delayed beyond those set forth in Section 2, the
allowance period for that engine category would be extended by the
same period of time. For manufacturers electing to take advantage of
the special flexibility provision for farm and logging equipment
described below, the above-described flexibility provision would
apply to just the non-farm/logging equipment the manufacturer sells.
To avoid disadvantaging smaller companies with limited product
offerings, manufacturers would be allowed to exceed the above
percent of production allowances during the same years affected by
the above allowance program, provided they limit the installation of
Tier 1 engines to a single equipment model with an annual production
level (for U.S. sales) of 100 pieces or less.
In addition to the above general flexibility allowances, EPA
will propose that manufacturers of farming or logging equipment will
be allowed to install Tier 1 engines in a maximum of 30 percent of
this equipment (produced for sale in the United States) during the
first year that a new Tier 2 standard applies, and in a maximum of
15 percent for each of the seven years thereafter. This allowance
would continue for a total of eight years after Tier 2 standards
become effective for each engine category. At the end of this
allowance period, equipment manufacturers would be required to
install Tier 3 engines (or Tier 2 engines in any engine categories
without Tier 3 standards) in all new farm or logging equipment using
engines in the category. However, if the effective dates of Tier 3
standards in any engine category are delayed beyond those set forth
in Section 2, the allowance period for that engine category would be
extended by the same period of time.
Nothing set forth above would change the rules established in
the Tier 1 standards which allow equipment manufacturers to use up
existing stocks of noncomplying engines at the time a new standard
takes effect.
Engines less than 50 hp. EPA will propose flexibilities as
described above for equipment manufacturers who install <50 hp
engines into their equipment, except as follows:
(1) Equipment manufacturers will be allowed to install
unregulated engines instead of Tier 1 engines.
(2) The flexibilities will expire after a total of four years.
When they expire manufacturers must install certified engines in all
equipment.
(3) A delay of the effective date for the <50 hp Tier 2
standards does not affect the expiration date of the flexibilities.
b. Engine Manufacturer ABT and Continued Sales of Previous-
Standard Engines
EPA finalized an averaging, banking, and trading (ABT) program
in its Tier 1 rule to help engine manufacturers meet the new
standards. Consistent with the NPRM for heavy-duty on-highway
engines, EPA will propose to modify the existing ABT program to
eliminate any limit on credit life, to eliminate any discounts in
the way credits are calculated, and to make ABT available for
NMHC+NOX and PM. These provisions will apply to all of the
standards set forth in Section 2 except as discussed below. In
recognition of the role ABT plays in facilitating the introduction
of new standards, EPA will reassess the appropriateness of these
provisions as part of the feasibility review discussed in Section 4.
The Signatories recognize that the manufacturers have agreed to the
standards set forth in this SOP on the condition that the changes
that EPA will propose in the ABT program are finalized and made a
part of these standards.
EPA will also propose three special provisions for the ABT
program for engines rated at less than 25 hp. First, no credits
generated from the sale of these engines would be allowed to be used
to demonstrate compliance for engines rated above 25 hp. Second, all
credits generated from the sale of Tier 1 under 25 hp engines would
expire at the end of 2007. Finally, credits from the sale of Tier 1
under 25 hp engines would only be generated by engine families with
family emission limits of less than 5.6 g/hp-hr (7.5 g/kW-hr) for
NMHC+NOX credits and 0.60 g/hp-hr (0.80 g/kW-hr) for PM
credits, and these credits would be calculated against these
baseline levels rather than against the actual Tier 1 standard
levels.
In addition to these ABT provisions, EPA will propose that
engine manufacturers be allowed to continue to build and sell the
engines needed to meet the market demand created by the equipment
manufacturer flexibility program set forth above. To avoid the
creation of unfair business advantages, the engine manufacturer
Signatories agree that, if they decide to continue the production of
such engines, they will make them available for sale at reasonable
prices to all interested buyers.
Finally, EPA also will propose to allow engine manufacturers to
produce unregulated, Tier 1, or Tier 2 engines, as the case may be,
to meet customer needs for replacement engines, so long as

[[Page 208]]

manufacturers comply with the replacement engine regulations that
EPA is developing.
6. Harmonization
The participants in this SOP recognize the value that
harmonizing standards within the United States would have on the
cost of producing engines and equipment. EPA and the California Air
Resources Board will pursue harmonized standards and test procedures
for nonroad engines covered by this SOP such that an engine family
tested and certified by EPA could be sold in California and,
similarly, an engine family tested and certified in California could
be sold in the rest of the country. California acknowledges that the
emission standards set forth in this SOP meet its needs for emission
reductions for the engines covered by this SOP. However, if these
standards should not be implemented as proposed, California's
obligations to comply with State and Federal law, including its
State Implementation Plan, take precedence over this SOP.
Furthermore, the global nature of the nonroad equipment and
engine markets argues for maximum harmonization between the U.S.
standards and test procedures and those of other nations. In
particular, the European Union has developed standards very similar
to EPA's Tier 1 standards and has proposed its own Tier 2 standards.
The Signatories support the goal of continued harmonization and
intend to work with the EU, Japan, and other regulatory bodies in
developing harmonized future standards, including provisions for
implementation flexibility. Harmonized standards and test procedures
will be pursued in the program developed under this SOP to the
maximum extent possible, provided that these measures do not
compromise the other provisions of this SOP or the primary purpose
of the program, which is to meet the air quality needs of the United
States.

7. Fuels and Lower Emitting Alternatives

The standards set forth above contemplate the possibility of
transferring on-highway technology to nonroad engines. The
Signatories recognize that: (1) on-highway engines currently are
operated on higher quality fuel than nonroad engines, (2) fuel
composition has a significant impact on emission performance, (3)
changes in the composition and improvements in the quality of
nonroad fuels may be needed to make the Tier 3 standards
technologically feasible and otherwise appropriate under the Act.
A number of states and other interested parties have expressed
strong interest in programs to reduce emissions from nonroad engines
beyond the levels established in this SOP. These parties believe
that if a program were in place to certify low emitting engines
(both diesel and alternative fuel engines), a market for these
engines could be created through a variety of incentives including,
but not limited to, marketable emission credits and the prominent
labeling of low-polluting equipment as such. This certification
program would be dependent on the establishment of a test procedure
which reasonably evaluates the effectiveness of these engines in
achieving real in-use emissions reductions.
Therefore, EPA shall propose an optional program for the
certification of very low-emitting engines. This program would
include, as needed, optional test procedures and standards that
would encourage the sale of engines providing benefits beyond those
corresponding to the program described elsewhere in this SOP. In
addition, EPA will consider other programs to encourage the use of
low-emitting engines and emission-reducing fuels.

8. Durability

All Signatories recognize that it is important that emissions
control be maintained throughout the life of the engine. The
Signatories will work together to develop appropriate measures which
ensure that emission improvements are maintained in use.

9. Certification and Compliance

All Signatories recognize that it is important to minimize the
costs associated with certification and they commit to working
together to streamline and simplify the certification process.
Further, the Signatories acknowledge that the standards set forth in
Section 2 of this SOP are based on the assumption that there will be
no changes to the enforcement program adopted as part of the Tier 1
rule, except as specifically set forth in this SOP. Finally, the
Signatories also recognize that engine manufacturers will be
required to undertake significant engineering challenges in
relatively short time frames in order to meet the Tier 2 and Tier 3
standards including the challenge of stabilizing initial production
variability. Therefore, EPA will only impose selective enforcement
audits (SEA's) during the first year in which a standard is in
effect for those engine families where strong evidence exists that
SEA failure would be likely.

10. Research Agreement

The Signatories recognize the benefits of a joint industry/
government research program with the goal of developing engine
technologies which can meet and exceed the standards for nonroad
engines outlined in this SOP. The Signatories will undertake
development of a separate research agreement with goals of reducing
NOX emissions to 1.5 g/hp-hr (2.0 g/kW-hr) and PM emissions to
0.05 g/hp-hr (0.07 g/kW-hr), while maintaining attributes of current
nonroad diesel engines such as performance, reliability, durability,
safety, efficiency, and compatibility with nonroad equipment. These
characteristics have allowed current nonroad diesel engines to serve
as the pillar of the international nonroad equipment industry. This
research agreement would include certain of the industry signatories
below, EPA, ARB, and other organizations, such as the U.S.
Department of Energy, as are approved by the participants.

[FR Doc. 96-32970 Filed 12-31-96; 8:45 am]
BILLING CODE 6560-50-P}}}}}}}