[Federal Register Volume 63, Number 238 (Friday, December 11, 1998)]
[Proposed Rules]
[Pages 68508-68594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32304]



[[Page 68507]]

_______________________________________________________________________

Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 94



Control of Emissions of Air Pollution From New CI Marine Engines at or 
Above 37 kW; Proposed Rule

  Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 / 
Proposed Rules  

[[Page 68508]]


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PART II

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 94

[AMS-FRL-6196-3]
RIN 2060-AI17


Control of Emissions of Air Pollution From New CI Marine Engines 
at or Above 37 kW

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: In this action, EPA is proposing an emission control program 
for new compression-ignition marine engines rated at or above 37 
kilowatts. The affected engines are used for propulsion and auxiliary 
purposes in a wide variety of marine applications. The standards 
proposed for these engines would require substantial reductions in 
oxides of nitrogen and particulate matter emissions to correspond with 
the next round of emission standards for comparable land-based engines. 
The proposed standards are expected to provide a significant reduction 
in oxides of nitrogen and particulate matter emissions from this 
source. When combined with other mobile source emission control 
programs, the program described in this action will help provide long-
term improvements in air quality in many port cities and other coastal 
areas. Overall, the proposed program would provide much-needed 
assistance to states facing ozone and particulate air quality problems, 
which can cause a range of adverse health effects for their citizens, 
especially in terms of respiratory impairment and related illnesses.
    The persons potentially affected by this action are those who 
manufacture new compression-ignition marine engines or marine vessels 
or other equipment using such engines. Additional requirements apply to 
companies that rebuild or maintain these engines.

DATES: EPA will hold a hearing on the proposed rulemaking on January 
19, 1999. EPA requests comments on the proposed rulemaking by February 
26, 1999. More information about commenting on this action and on the 
public hearing and meeting may be found under Public Participation in 
SUPPLEMENTARY INFORMATION, below.

ADDRESSES: Materials relevant to this proposal, including the Draft 
Regulatory Impact Analysis, are contained in Public Docket A-97-50. 
Additional materials relevant to EPA's earlier proposal, which was 
published in 1994 and supplemented in 1996 but not finalized, can be 
found in Public Docket A-92-28 (Control of Air Pollution; Emission 
Standards for New Gasoline Spark-Ignition and Diesel Compression-
Ignition Marine Engines). Both of these dockets are located at room M-
1500, Waterside Mall (ground floor), U.S. Environmental Protection 
Agency, 401 M Street, S.W., Washington, DC 20460. The docket may be 
inspected from 8:00 a.m. until 5:30 p.m., Monday through Friday. A 
reasonable fee may be charged by EPA for copying docket materials.
    Comments on this proposal should be sent to Public Docket A-97-50 
at the above address. EPA requests that a copy of comments also be sent 
to Jean Marie Revelt, U.S. EPA, Engine Programs and Compliance 
Division, 2000 Traverwood Dr., Ann Arbor, MI 48105.
    The public hearing will be held at the National Vehicle and Fuel 
Emissions Laboratory, 2000 Traverwood Drive, Ann Arbor, Michigan. The 
public hearing will begin at 10 a.m. and will continue until all 
testimony has been presented. People who wish to testify will be 
requested to register on the day of the hearing. Time limits may be 
imposed for each speaker, depending on the number of people who request 
to testify. A transcript of the hearing will be placed in the docket. 
Arrangements for copies may also be made directly with the court 
reporter, on the day of the hearing. The court reporter may charge a 
fee for this service.
    For further information on electronic availability of this 
proposal, see SUPPLEMENTARY INFORMATION below.

FOR FURTHER INFORMATION CONTACT: Margaret Borushko, U.S. EPA, Engine 
Programs and Compliance Division, (734) 214-4334; 
Borushko.M[email protected].

SUPPLEMENTARY INFORMATION:

Regulated entities

    Persons or companies potentially regulated by this action are those 
that manufacture or introduce into commerce new compression-ignition 
marine engines and those that make vessels or other equipment using 
such engines. Further requirements apply to companies that rebuild or 
maintain marine engines. Regulated categories and entities include:

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                  Category                      Examples of regulated entities      NAICS code       SIC code
----------------------------------------------------------------------------------------------------------------
Industry...................................  Manufacturers of new marine diesel           333618            3519
                                              engines.
Industry...................................  Manufacturers of marine vessels....            3366            3731
                                                                                                            3732
Industry...................................  Engine repair and maintenance......          811310            7699
----------------------------------------------------------------------------------------------------------------

    This list is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. To determine whether particular activities may be regulated by 
this action, the reader should carefully examine the proposed 
regulations, especially the applicability criteria in Sec. 94.1. 
Questions regarding the applicability of this action to a particular 
entity may be directed to the person listed in FOR FURTHER INFORMATION 
CONTACT.

Obtaining Electronic Copies of the Regulatory Documents

    The preamble, regulatory language and Draft Regulatory Impact 
Analysis are also available electronically from the EPA Internet Web 
site. This service is free of charge, except for any cost already 
incurred for internet connectivity. The electronic version of this 
proposed rule is made available on the day of publication on the 
primary Web site listed below. The EPA Office of Mobile Sources also 
publishes Federal Register notices and related documents on the 
secondary Web site listed below.

1. http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired 
date or use Search feature)
2. http://www.epa.gov/OMSWWW/ (look in What's New or under the specific 
rulemaking topic)

    Please note that due to differences between the software used to 
develop the document and the software into which the document may be 
downloaded, changes in format, page length, etc., may occur.

[[Page 68509]]

Table of Contents

I. Introduction
II. Background
    A. Air Quality Problems Addressed in the Proposed Rule
    1. Ozone
    2. Particulate Matter
    3. Carbon Monoxide
    4. Contribution of Marine Diesel Engines to NOX, HC, 
PM, and CO Levels
    B. Legislative and Regulatory History
    1. Statutory Authority
    2. Regulatory History
    3. MARPOL Annex VI
    4. State Activities
    5. European Commission Action
    C. Industry Characterization
    1. Marine Diesel Engine Manufacturers
    2. Commercial Vessel Builders
    3. Recreational Vessel Builders
III. Engines Covered
    A. General Scope of Application
    B. Propulsion and Auxiliary Engines
    C. Exemptions
    1. Recreational Engines
    2. Modified New Land-Based Engines
    3. Other Exemptions
IV. Engine Categories
V. Description of Proposed Standards and Related Provisions
    A. Standards and Dates
    1. Marine Tier 2 Emission Limits
    2. Marine Tier 3 Emission Limits
    3. Interim Emission Limits
    4. Total Hydrocarbons
    B. Crankcase Emissions
    C. Smoke Requirements
    D. Alternative Fuels
    E. Test Procedures
    1. Duty Cycles
    2. In-Use Testing
    3. Test Fuel
    4. Adjustable Parameters
    5. Definition of Rated Speed
    F. Not-to-Exceed Requirements
    G. Voluntary Low-Emitting Engine Program
    H. Durability
    1. Useful Life
    2. Warranty Periods
    3. Deterioration Factors
    4. Allowable Maintenance Intervals
    5. Rebuilt Engines
    6. Replacement Engines
    I. Certification
    1. Engine Family Definition
    2. Emission Data Engine Selection
    J SEA, Recall, and Production Line Testing
    K. Miscellaneous Compliance Issues
    L. Averaging, Banking and Trading Program
    M. Special Provisions
    1. Post-Manufacture Marinizer Provisions
    2. Vessel Builder Flexibilities
    N. Application of Provisions to Marine Diesel Engines Less than 
37 kW
VI. Category 3 Engine Provisions
    A. Emission Limits
    B. Category 1 and 2 Engines Aboard Vessels Engaged in Foreign 
Trade
VII. Technological Feasibility
    A. Category 1 Engines
    1. Development of Implementation Schedule
    2. Development of Numerical Standards
    3. Technological Approaches
    4. Conclusions Regarding Technological Feasibility
    B. Category 2 Engines
    1. Development of Implementation Schedule
    2. Development of Numerical Standards
    3. Technological Approaches
    4. Conclusions Regarding Technological Feasibility
    B. Category 2 Engines
    1. Development of Implementation Schedule
    2. Development of Numerical Standards
    3. Technological Approaches
    4. Conclusions Regarding Technological Feasibility
    C. Category 3 Engines
    1. Rationale for Relying on MARPOL Annex VI Requirements
    2. Technological Approaches
    3. Conclusions Regarding Technological Feasibility
VIII. Projected Impacts
    A. Environmental impacts (including noise)
    1. Category 1 Engines
    2. Category 2 Engines
    3. Category 3 Engines
    4. Other impacts
    B. Economic impacts
    1. Methodology
    2. Engine Technologies
    3. Estimated Costs
    4. Aggregate Costs to Society
    5. Sensitivity Analysis
    C. Cost-effectiveness
    1. Tier 2
    2. Tier 3
    3. Comparison to Other Programs
IX. Public participation
    A. Comments and the Public Docket
    B. Public Hearing
X. Administrative requirements
    A. Administrative Designation and Regulatory Analysis
    B. Regulatory Flexibility
    C. Paperwork Reduction Act
    D. Unfunded Mandates Reform Act
    E. National Technology Transfer and Advancement Act
    F. Protection of Children
    G. Enhancing Intergovernmental Partnerships
    H. Consultation and Coordination with Indian Tribal Governments
    XI. Statutory Authority

List of Tables

Table 1  Comparison of Numerical Emission Limits: EPA's Nonroad Tier 
1 Levels and MARPOL Annex VI Levels
Table 2  Locomotive Standards (line-haul only)
Table 3  Proposed European Emission Limits for Recreational Marine 
Diesel Engines
Table 4  Engine Category Definitions
Table 5  Category 1 Engine Groups
Table 6  Proposed Tier 2 Marine Diesel Emission Limits and 
Implementation Dates
Table 7  Land-Based Nonroad Tier 2 Emission Limits and 
Implementation Dates
Table 8  Proposed Tier 3 Marine Diesel HC+NOX Emission 
Limits and Implementation Dates
Table 9  Land-Based Nonroad Tier 3 Emission Limits and 
Implementation Dates
Table 10  Voluntary Emission Standards
Table 11  Proposed Useful Life and Warranty Periods
Table 12  Category 1 Emissions Inventory
Table 13  Category 2 Emissions Inventory
Table 14  Category 3 Baseline and Projected Emissions Inventory 
under Varying Implementation of MARPOL Annex VI controls
Table 15  Emission Inventory Impacts of the Proposed Rule
Table 16  Projected Incremental Costs by Power Rating
Table 17  Cost-Effectiveness of the Proposed Marine Tier 2 Standards 
for HC and NOx
Table 18  Aggregate Cost-Effectiveness for the Proposed Marine Tier 
2 Standards for HC and NOx
Table 19  Cost-Effectiveness of the Proposed Marine Tier 3 Standards 
for HC and NOx
Table 20  Aggregate Cost-Effectiveness for the Proposed Marine Tier 
3 Standards for HC and NOx

I. Introduction

    Air pollution is a serious threat to the health and well-being of 
millions of Americans, and imposes a large burden on the U.S. economy. 
As discussed below, ground-level ozone and PM have been linked to 
potentially serious respiratory health problems and environmental 
degradation. Over the past two decades, emission control programs 
established at the state and federal levels have significantly reduced 
emissions from individual sources, and many of these sources now 
pollute at only a fraction of their precontrol rates. These programs 
have concentrated on reducing ground-level ozone levels, with a focus 
on its main precursors, oxides of nitrogen (NOX) and 
volatile organic compounds (VOCs).1 In addition, steps have 
been taken to reduce airborne particulate matter (PM), which is also a 
major air quality concern in many regions.
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    \1\ VOCs consist mostly of hydrocarbons (HC), including 
nonmethane hydrocarbons (NMHC).
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    However, continued industrial growth and expansion of motor vehicle 
usage threaten to reverse these past achievements. Today, many states 
are finding it increasingly difficult to meet the current ozone and 
particulate matter National Ambient Air Quality Standards (NAAQS) by 
the deadlines established in the Clean Air Act (the 
``Act'').2 In addition, even those states that are 
approaching or have reached attainment of the current ozone and PM 
NAAQS are likely to see these gains lost if current trends persist.
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    \2\ See 42 U.S.C. 7401, et seq.
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    National mobile source emission control programs have been 
successful in reducing NOX, HC, and PM emissions

[[Page 68510]]

from new regulated engines. These programs have resulted in reductions 
of more than 90 percent on a per-vehicle basis for new gasoline-fueled 
passenger cars. Emissions from light-duty trucks have also been reduced 
to very low levels. The more recent diesel engine programs, as 
supplemented by new, more stringent requirements for highway and 
nonroad diesel engines, will significantly reduce emissions from that 
category as well. As a result of these programs, emission reductions on 
a per-vehicle or per-engine basis have greatly offset emission 
increases due to the rising mobile source population and usage rates.
    Until now, EPA's effort to control emissions from marine sources 
has been limited to outboard and personal watercraft engines and marine 
diesel engines rated under 37 kW. EPA's analysis of national 
NOX and PM levels suggests that marine diesel engines are a 
considerable source of these pollutants. The inventory contribution of 
marine diesel engines is presented under Background (Section II.A.4.), 
and is described in greater detail in the Draft Regulatory Impact 
Analysis. Consequently, emission controls for these engines may yield 
important reductions in national NOX and PM inventories. At 
the same time, designing an emission control program for marine diesel 
engines at or above 37 kW poses certain challenges. The tremendous 
range of engine sizes in this category, from small generators used on 
board fishing or recreational vessels to large propulsion engines used 
on board ocean-going vessels, suggests a need to set different 
requirements for different groups of engines. In addition, 
technological challenges inherent to nonroad diesel-cycle engine design 
must be addressed.\3\ Traditional NOX control approaches 
tend to increase PM emissions, and vice versa. However, methods to 
achieve simultaneous NOX and PM control are being developed 
for land-based diesel engines, and EPA believes similar solutions can 
be applied to marine diesel engines due to similarities among the 
engines. A more complete discussion of technology issues is presented 
under Technological Feasibility (Section VII). Finally, the large 
number of ship and boat builders and their relative inexperience with 
emission control requirements suggest a need for a flexible 
implementation process. A more detailed discussion of the 
characteristics of this industry is included under Industry 
Characterization (Section II.C.).
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    \3\ References to diesel-cycle engines, also referred to as 
``diesel engines'' in this document, are intended to cover a 
particular kind of engine technology, i.e., compression ignition 
combustion. Compression-ignition engines are typically operated on 
diesel fuel, although other fuels, such as compressed natural gas, 
may also be used. This contrasts with otto-cycle engines (also 
called spark-ignition or SI engines), which typically operate on 
gasoline. The requirements set out in this notice are intended to 
apply to all combustion-ignition engines.
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    In this document, EPA is proposing to extend the federal emission 
control program to the marine segment of the nonroad industry by 
proposing an emission control program for all new marine diesel engines 
rated over 37 kW.\4\ The program described in this action follows EPA's 
Supplemental Advance Notice of Proposed Rulemaking (Supplemental 
ANPRM), published on May 22, 1998 (63 FR 28309), and the comments 
received on that notice and other new information provide the framework 
for its provisions.
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    \4\ This proposal is based on metric units. To convert to 
English units, one kilowatt equals 1.341 horsepower.
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II. Background

A. Air Quality Problems Addressed in the Proposed Rule

    The emission standards proposed in this document will provide 
important reductions of ground-level ozone and particulate matter (PM) 
nationally, as well as carbon monoxide (CO) control. This section 
summarizes the air quality rationale for these new emission standards 
and their anticipated impact on marine diesel engines.
1. Ozone
    Ground-level ozone is formed by complex photochemical reactions 
involving HC and NOX in the presence of sunlight.\5\ 
According to a growing body of research, ground-level ozone can have 
harmful physical effects on humans. It severely irritates the mucous 
membranes of the nose and throat, which can lead to coughing and even 
choking. It also impairs normal functioning of the lungs, and chronic 
exposure may cause permanent lung damage. The risk of suffering these 
effects is particularly high for children and for people with 
compromised respiratory systems. Ground-level ozone has also been shown 
to injure plants and building materials.
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    \5\ Ground-level ozone should not be confused with stratospheric 
ozone, a protective layer of the upper atmosphere that filters the 
sun's harmful ultraviolet rays.
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    Diesel engines contribute to ground-level ozone levels primarily 
through their NOX emissions, which are a much higher portion 
of total NOX+HC emissions than for most gasoline engines. 
This is of significant concern not only because of ozone impacts but 
also because NOX has important independent effects on human 
health and general environmental conditions. NOX includes 
several gaseous compounds that are lung irritants and can increase 
susceptibility to respiratory illness and pulmonary infection. 
NOX also contributes to the secondary formation of PM 
(nitrates), acid deposition, and the overgrowth of algae in coastal 
estuaries. Additional information on these environmental and health 
effects may be found in EPA staff papers and air quality criteria 
documents for ozone and nitrogen oxides. 6, 7, 
8, 9
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    \6\ U.S. EPA, ``Review of National Ambient Air Quality Standards 
for Ozone, Assessment of Scientific and Technical Information,'' 
OAQPS Staff Paper, EPA-452/R-96-007, 1996 (Air docket A-95-58).
    \7\ U.S. EPA, ``Air Quality Criteria for Ozone and Related 
Photochemical Oxidants,'' EPA/600/P-93/004aF, 1996 (Air Docket A-95-
58).
    \8\ U.S. EPA, ``Review of National Ambient Air Quality Standards 
for Nitrogen Dioxide, Assessment of Scientific and Technical 
Information,'' OAQPS Staff Paper,'' EPA-452/R-95-005, 1995 (Air 
Docket A-93-06).
    \9\ U.S. EPA, ``Air Quality Criteria for Oxides of Nitrogen,'' 
EPA/600/8-91/049aF, 1993 (Air Docket A-93-06).
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    Acceptable levels of ground-level ozone have been set by EPA 
pursuant to the Act. States are divided into areas for air quality 
planning purposes, and these areas are categorized as to whether they 
meet the current National Ambient Air Quality Standard for ozone by the 
deadlines established in the Act.\10\ As of October, 1997 there are 59 
areas designated as in ``nonattainment'' for ozone.
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    \10\ See 42 U.S.C. 7401, et seq.
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    The state and local governmental organizations charged with 
designing and implementing emission control programs to bring these 
areas into attainment have mounted significant efforts in recent years 
to reduce ozone concentrations. Their state implementation plans, 
combined with federal mobile source emission control programs, have 
yielded encouraging signs of success. The main precursors of ozone, 
NOX and VOCs (including HC), have been reduced in many 
areas, and average ozone levels are beginning to decrease. However, 
this progress is in jeopardy. EPA projects that emission increases that 
accompany economic expansion will eventually outpace per-

[[Page 68511]]

source reductions in ozone precursors. Increases in the number of 
sources, as well as increased use of existing sources, mean that even 
full implementation of current emission control programs will fall 
short of what will be needed to achieve and maintain ozone attainment. 
By the middle of the next decade, the Agency expects that, without 
additional controls, the downward trends in overall ground-level ozone 
will be reversed. Consequently, it is important to develop new 
strategies that improve, or at least maintain, the progress in ozone 
reductions that have been achieved to date.
2. Particulate Matter
    Particulate matter, like ozone, has been linked to a range of 
serious respiratory health problems. Particulate matter is a collection 
of small particles emitted by diesel engines. Many different organic 
pollutants are adsorbed on these particles. The size and chemical 
composition of particulate matter are the main reasons for concern 
about the effects of PM on human health. Their small size increases the 
likelihood that the particles will reach and lodge in the deepest and 
most sensitive areas of human lungs. This can lead to severe lung 
problems and increases susceptibility to respiratory infection, such as 
pneumonia, aggravation of acute and chronic bronchitis, and asthma. It 
can also lead to decreased lung function (particularly in children and 
individuals with asthma) and alterations in lung tissue and structure 
and in respiratory tract defense mechanisms. Additional information on 
these effects may be found in an EPA staff paper and an air quality 
criteria document for particulate matter.11, 12
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    \11\ U.S. EPA, ``Review of National Ambient Air Quality 
Standards for Particulate Matter, Assessment of Scientific and 
Technical Information,'' OAQPS Staff Paper, EPA-452/R-96-013, 196 
(Air Docket A-95-54).
    \12\ U.S. EPA, ``Air Quality Criteria for Particulate Matter,'' 
EPA/60/P-95/001aF, 1996 (Air Docket A-95-54).
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    Acceptable levels of PM have also been set by EPA. Currently, there 
are 80 PM-10 nonattainment areas across the U.S. (PM-10 refers to 
particles smaller than 10 microns in diameter.) As is the case with 
NOX, levels of PM caused by stationary and mobile sources 
are expected to rise in the future, not only because of the increase in 
number of sources and activity levels of these sources, but also 
because elevated NOX levels can lead to increased PM levels. 
This is because NOX from diesel engines and other sources is 
transformed in the atmosphere into fine secondary nitrate particles. 
Secondary nitrate PM, consisting mostly of ammonium nitrate, accounts 
for a substantial fraction of the airborne particulate in some areas of 
the country. EPA believes that mobile sources contribute substantially 
to the fraction of ambient PM that is generally considered 
controllable.\13\ Consequently, EPA has been developing new mobile 
source strategies to control PM emissions.
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    \13\ The largest fraction of ambient PM is attributed to 
``miscellaneous'' and ``natural'' sources, including wind erosion, 
wildfires, and fugitive dust, which are difficult or impossible to 
control.
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3. Carbon Monoxide
    Along with NOX, HC, and PM, carbon monoxide (CO) is 
another mobile source pollutant that is addressed by the program 
proposed in this document. CO has long been known to have substantial 
adverse effects on human health and welfare, including toxic effects on 
blood and tissues, and effects on organ functions. CO has been linked 
to fetal brain damage, reduced visual perception, cognitive functions 
and aerobic capacity, and increased risk of heart problems for people 
with heart disease. There are currently approximately 20 serious or 
moderate CO nonattainment areas in the United States.
4. Contribution of Marine Diesel Engines to NOX, HC, PM and 
CO Levels
    EPA's inventory analysis suggests that marine diesel engines are a 
significant source of NOX and PM emissions. This inventory 
analysis, presented in more detail in the Draft Regulatory Impact 
Analysis prepared for this action, suggests that marine diesel engines 
currently contribute approximately one million tons of NOX 
per year, representing 8.1 percent of mobile source NOX and 
4.8 percent of total NOX emissions. Marine diesel engines 
also contribute approximately 42,000 tons of PM per year, representing 
4.4 percent of the directly emitted PM from mobile sources and 1.0 
percent of total directly emitted PM emissions.\14\ In addition to 
directly emitted PM, EPA estimates that, as a national average, marine 
diesel engines contribute approximately 40,000 tons of PM in the form 
of secondary nitrate particles, based on the estimated one million tons 
of NOX emitted by these engines. In addition, emissions from 
marine diesel engines tend to be concentrated in specific areas of the 
country (ports, coastal areas, and rivers), and so local levels of 
these pollutants can be much higher. Consequently an emission control 
program that addresses NOX and PM emissions from marine 
diesel engines can be an important tool toward the goal of reducing the 
health and environmental hazards associated with these and other 
pollutants.
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    \14\ Excluding erosion or fugitive dust.
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    The contribution of marine diesel engines to national HC and CO 
levels is much less than for NOX and PM. EPA estimates that 
marine diesel engines contribute less than two-tenths of one percent of 
the national levels of these pollutants. Nevertheless, the program 
being proposed in this rule includes limits for HC and CO emissions. 
These limits will provide a small, positive, air quality benefit.

B. Legislative and Regulatory History

1. Statutory Authority
    Section 213(a)(1) of the Clean Air Act directed the Agency to study 
emissions from nonroad engines and vehicles to determine, among other 
things, whether these emissions ``cause, or significantly contribute 
to, air pollution that may reasonably be anticipated to endanger public 
health or welfare.'' Section 213(a)(2) further required EPA to 
determine whether the emissions of CO, VOC, and NOX found in 
the above study significantly contribute to ozone or CO emissions in 
more than one nonattainment area. With an affirmative determination of 
significance, section 213(a)(3) requires the Agency to establish 
emission standards regulating CO, VOC, and NOX emissions 
from new nonroad engines and vehicles. EPA may also promulgate emission 
standards under section 213(a)(4) regulating any other emissions from 
nonroad engines that EPA finds contribute significantly to air 
pollution.
    The Nonroad Engine and Vehicle Emission Study required by section 
213(a)(1) was completed in November 1991. 15 On June 17, 
1994, EPA made an affirmative determination under section 213(a)(2) 
that nonroad emissions are significant contributors to ozone or CO in 
more than one nonattainment area. 16 In the same document, 
EPA set a first phase of emission standards (``Tier 1 standards'') for 
land-based nonroad diesel engines rated at or above 37 kW. 
17 These requirements were recently augmented by a new 
rulemaking that sets more stringent Tier 2 emission levels for new 
land-based nonroad diesel engines at or above 37 kW as well as Tier 1 
standards for nonroad diesel engines less than 37 kW. 18 EPA 
has also initiated additional rulemakings to set

[[Page 68512]]

emission standards for other subgroups of nonroad engines, including 
spark-ignition (SI, typically gasoline) engines less than 19 kW, 
19 spark-ignition (SI, typically gasoline) marine engines 
(outboards and personal watercraft), 20 and locomotives. 
21 This action takes another step toward the comprehensive 
nonroad engine emission control strategy envisioned in the Act by 
proposing an emission control program for marine diesel engines at or 
above 37 kW.
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    \15\ This study is available in docket A-92-28.
    \16\ See 59 FR 31306, June 17, 1994.
    \17\ Ibid.
    \18\ See 63 FR 56967, October 23, 1998.
    \19\ See 60 FR 34582 (July 3, 1995) for the final rule 
establishing Tier 1 standards and 62 FR 14740 (March 27, 1997) for 
the ANPRM discussing Tier 2 standards.
    \20\ See 61 FR 52087 (October 4, 1996) for the final rule. EPA 
did not set numerical emission standards for sterndrive and inboard 
gasoline marine engines in this rule.
    \21\ See 62 FR 6365 (February 11, 1997); the final rule was 
signed December 17, 1997 and is available electronically (see 
Section VI below).
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2. Regulatory History
    Numerical emission standards for marine diesel engines were 
originally proposed in 1994, as part of a proposed rule for control of 
emissions from both spark-ignition and compression-ignition marine 
engines. 22 At that time, EPA had a limited understanding of 
the marine diesel industry and, relying on the similarities between 
land-based nonroad and marine diesel engines, proposed to apply the 
same emission levels as those in the then just-finalized land-based 
nonroad rule. The nonroad Tier 1 standards are set out in Table 1. EPA 
proposed that these standards for marine diesel engines take effect 
January 1, 1999 for engines less than 560 kW, and January 1, 2000, for 
engines 560 KW and above. Although no upper limit on engine size was 
proposed for application of these standards to marine diesel engines, 
EPA requested comment on whether an upper limit should be established 
above which the emission control program being developed concurrently 
under the auspices of the International Maritime Organization (IMO) 
should apply. The IMO is the Secretariat for the International 
Convention on the Prevention of Pollution from Ships (that convention 
is also referred to as MARPOL 73/78). Annex VI to that Convention, 
adopted on September 27, 1997 (but not yet in force) contains, among 
other provisions, requirements to limit NOX emissions from 
marine diesel engines, but sets no limits for other engine pollutants 
(i.e., HC, CO, PM). 23 A more detailed discussion of the 
MARPOL 73/78 Annex VI NOX requirements is included in 
Section II.B.3. below. Table 1 also contains the Annex VI 
NOX limits, which would apply to new engines greater than 
130 kW installed on vessels constructed on or after January 1, 2000, or 
which undergo a major conversion after that date.
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    \22\ See 59 FR 55929 (November 9, 1994).
    \23\ Other provisions of Annex VI include requirements for 
ozone-depleting substances, sulfur content of fuel, incineration, 
VOCs from refueling, and fuel quality. The United States has signed 
Annex VI, but the Annex has not yet been forwarded to the Senate for 
its advice and consent.

                                            Table 1.--Comparison of Numerical Emission Limits: EPA's Nonroad Tier 1 Levels and MARPOL Annex VI Levels
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                 Agency                                            Engine speed                            HC (g/kW-hr)    CO (g/kW-hr)                NOX (g/kW-hr)               PM (g/kW-hr)
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EPA (Proposed)..........................  All...........................................................             1.3            11.4  9.2...................................            0.54
MARPOL Annex VI (n =engine speed, rpm)..  =130 rpm......................................................            None            None  17.0..................................            None
                                          130 rpmn2000 rpm........................            None            None  45*n(-0.2)............................            None
                                          n  2000............................................            None            None  9.8...................................            None
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    In response to the 1994 NPRM, several commenters requested that EPA 
harmonize domestic emission standards for marine diesel engines to the 
levels being then considered at the IMO, in effect, applying the draft 
Annex VI limits domestically. Because the draft Annex VI standards 
(which are the same as those finalized in 1997) were not as stringent 
as the proposed domestic standards, this was a significant issue. On 
February 7, 1996, EPA published a Supplemental NPRM to address this and 
other concerns in more detail. 24 Specifically, EPA 
identified and requested comment on three alternative harmonization 
approaches: (1) Adopt the draft Annex VI NOX emission 
standard instead of the standard proposed in the NPRM; (2) retain the 
average NOX emission standard of 9.2 g/kW-hr proposed by EPA 
and also adopt the MARPOL Annex VI NOX limit as a cap that 
no engine could exceed; or (3) determine an appropriate engine speed or 
engine power output cutoff point such that engines of high horsepower 
and low and medium speeds would be subject to the draft Annex VI 
NOX emission limits and engines of low horsepower and high 
speed would be subject to the 9.2 g/kW-hr average standard proposed by 
EPA with the 9.8 g/kW-hr Annex VI level as a cap that no engine could 
exceed. EPA also sought comment on harmonizing the numerical emission 
limits for other pollutants. Options considered were to drop, retain, 
or alter the proposed standards for HC, CO, PM, and smoke.
---------------------------------------------------------------------------

    \24\ See 61 FR 4600 (February 7, 1996).
---------------------------------------------------------------------------

    While the development of the national marine rule and the 
negotiations at the International Maritime Organization continued, EPA 
began a new action for land-based nonroad diesel engines as part of a 
new Agency initiative to reduce national NOX and PM 
emissions from mobile sources. This action, subsequently finalized 
September 27, 1998, sets more stringent standards for land-based 
nonroad engines, known as Tier 2 standards (see Section V.A., below). 
25 These Tier 2 standards will come into effect as early as 
2001 for some engine categories. The rule also includes more stringent 
Tier 3 standards, which will go into effect subject to a review to be 
conducted in 2001. That review will be conducted through the normal 
public rulemaking process. Finally, marine diesel engines less than 37 
kW were included with their land-based counterparts in this diesel 
land-based nonroad rule, with standards to come into effect as early as 
1999 for Tier 1 and 2004 for Tier 2.
---------------------------------------------------------------------------

    \25\ See 62 FR 50152 (September 24, 1997).
---------------------------------------------------------------------------

    Also during this time, EPA finalized a rule setting emission 
standards for new locomotive engines. 26 The locomotive 
program consists of three separate sets of standards, with 
applicability of the standards dependent on the date a locomotive is 
first manufactured. The first set of standards (Tier 0) applies to 
locomotives and locomotive engines originally manufactured from 1973 
through 2001.

[[Page 68513]]

The Tier 0 standards will be phased in over a two-year period beginning 
in 2000, and will apply at the time of each remanufacture (as well as 
at the time of original manufacture for locomotives originally 
manufactured in 2000 and 2001). The next set of standards (Tier 1) 
apply to locomotives and locomotive engines originally manufactured 
from 2002 through 2004. Such locomotives and locomotive engines will be 
required to meet the Tier 1 standards at the time of original 
manufacture and at each subsequent remanufacture. The final set of 
standards (Tier 2) apply to locomotives and locomotive engines 
originally manufactured in 2005 and later. Such locomotives and 
locomotive engines will be required to meet the Tier 2 locomotive 
standards at the time of original manufacture and at each subsequent 
remanufacture. The numerical standards are contained in Table 2.
---------------------------------------------------------------------------

    \26\ See 62 FR 6365 (February 11, 1997); the final rule was 
signed December 17, 1997 and is available electronically (see 
Section VI below).

                                         Table 2.--Locomotive Standards
                                                [Line-haul only]
----------------------------------------------------------------------------------------------------------------
                      Tier                         HC (g/kW-hr)    CO (g/kW-hr)    NOX (g/kW-hr)   PM (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
Tier 0..........................................             1.3             6.7            12.7            0.80
Tier 1..........................................             0.7             2.9             9.9            0.6
Tier 2..........................................             0.4             2.0             7.4            0.27
----------------------------------------------------------------------------------------------------------------

    The land-based nonroad diesel engine and locomotive rules led EPA 
to reconsider its approach to the control of emissions from marine 
diesel engines at or above 37 kW. Because of the similarities among 
land-based nonroad, locomotive, and marine diesel engines, EPA began to 
consider an alternative program for marine diesel engines based on the 
technologies that will be used to meet the land-based requirements. As 
a result, EPA did not take final action on marine diesel engines when 
it finalized the original marine rule. 27 Instead, EPA 
published an Advance Notice of Proposed Rulemaking advising interested 
parties of the change in approach for marine diesel engine emission 
controls and asking for comment on various aspects of the program under 
consideration. The program proposed in this action follows from the 
approach described in the ANPRM, the comments submitted by interested 
parties, and information gathered by EPA in the meantime.
---------------------------------------------------------------------------

    \27\  See 61 FR 52087 (October 4, 1996).
---------------------------------------------------------------------------

3. MARPOL Annex VI
    In response to growing international concern about air pollution 
and in recognition of the highly international nature of maritime 
transportation, the parties to the International Maritime Organization 
called upon the organization, in 1990, to develop a program to reduce 
emissions from marine vessels. The IMO's Marine Environmental 
Protection Committee (MEPC) was instructed to design a program, to 
become a new Annex VI to the International Convention for the 
Prevention of Pollution from Ships (MARPOL 73/78), that would achieve a 
30 percent reduction in NOX and a 50 percent reduction in 
SOX emissions when fully phased in. Requirements for ozone-
depleting substances, VOCs from cargo compartments on oil tankers, 
shipboard incinerators, and fuel oil quality rounded out the scope of 
the program. From the beginning, the engine-specific provisions of 
proposed Annex VI covered only NOX emissions. No 
restrictions on PM, HC, or CO emissions were considered. Reductions in 
SOX emissions were to be pursued through limiting the sulfur 
content of fuel.
    After several years of negotiation, a final version of Annex VI was 
adopted by the Member States of the IMO at a diplomatic conference on 
September 26, 1997. However, pursuant to Article 6 of the Annex, it 
will not go into force until fifteen States, the combined merchant 
fleets of which constitute not less than 50 percent of the gross 
tonnage of the world's merchant shipping, have ratified it. The Annex 
in its entirety will acquire the force of law in the United States only 
after the Senate (by a vote of two-thirds) concurs in the treaty and 
the United States deposits its instrument of ratification. 
Nevertheless, it is expected that ship owners will begin installing 
compliant engines on relevant ships to comply with the dates set forth 
in the Annex. Specifically, the NOX provisions contained in 
Regulation 13 provide that each diesel engine with a power output of 
more than 130 kW installed on a ship constructed on or after January 1, 
2000, or that undergoes a major conversion on or after January 1, 2000, 
must meet the NOX emission limits described in Table 1, 
above. This specification of an effective date in Regulation 13 means 
that, once the Annex goes into effect, Member States will be able to 
require compliance by any ship constructed on or after January 1, 2000 
or by any engine that undergoes a major conversion on or after that 
date. In other words, once the Annex goes into effect, it will be 
enforceable back to the dates specified in Regulation 13.
    Two other features of Annex VI NOX requirements are 
noteworthy. First, while the requirements set out in Regulation 13 are 
expected to extend to all vessels used in the marine environment, a 
special provision has been included in paragraph 1(b)(ii) to allow 
Member States to set different standards for engines installed on ships 
used domestically. EPA intends in this action to take advantage of this 
provision by setting more stringent national requirements. Second, 
Regulation 13 is augmented with a separate document, called the 
NOX Technical Code, which sets out some compliance 
requirements and test procedures. Through reference in the Annex, the 
provisions of this Code are made mandatory on Parties to the Annex. A 
more detailed discussion of the NOX curve and the 
NOX Technical Code are included in the Draft Regulatory 
Impact Analysis.
4. State Activities
    Section 209 of the Act allows EPA to authorize California to 
regulate emissions from new motor vehicles and new motor vehicle 
engines, as well as nonroad engines with the exception of new engines 
used in locomotives and new engines used in farm and construction 
equipment rated under 130 kW.28 So far, the California Air 
Resources Board (California ARB) has adopted requirements for three 
groups of nonroad engines: (1) Diesel-and otto-cycle small off-road 
engines rated under 19 kW; (2) new land-based nonroad diesel engines 
rated over 130 kW; and (3) land-based nonroad recreational engines, 
including all-terrain vehicles, snowmobiles, off-road motorcycles, go-
carts, and other similar vehicles. New

[[Page 68514]]

requirements that apply to new nonroad SI engines rated over 19 kW were 
completed by CARB in October 1998. California ARB has also approved a 
voluntary registration and control program for existing portable 
equipment, and is currently considering an emission program for 
recreational gasoline marine engines that may be more stringent than 
the program finalized by EPA in 1996.
---------------------------------------------------------------------------

    \28\ The Clean Air Act limits the role states may play in 
regulating emissions from new motor vehicles and nonroad engines. 
California is permitted to establish emission standards for new 
motor vehicles and most nonroad engines; other states may adopt 
California's programs (sections 209 and 177 of the Act).
---------------------------------------------------------------------------

    EPA has been in consultation with California state officials and 
various interest groups to pursue operational measures that would 
reduce marine engine emissions without setting emission standards. 
Under investigation are defined traffic lanes, restrictions on engine 
operation while in port, and other measures that could be tailored to 
the situation at each port.
5. European Commission Action
    The European Commission has proposed emission limits for 
recreational marine engines, including diesel engines. These 
requirements would apply to all new engines sold in member countries. 
The numerical emission limits, shown in Table 3, consist of the Annex 
VI NOX limit for small marine diesel engines and the rough 
equivalent of Tier 1 nonroad emission levels for HC and CO. The PM 
limits, however, are more stringent than Tier 1 nonroad levels, 
reflecting Europe's greater concern for the visual impacts of diesel 
emissions. Emission testing is to be conducted using the ISO D2 duty 
cycle for constant-speed engines and the ISO E5 duty cycle for all 
other engines. At the current time, the EU has not initiated a separate 
action for commercial marine diesel engines.

   Table 3.--Proposed European Emission Limits for Recreational Marine
                             Diesel Engines
------------------------------------------------------------------------
                                                              Emission
                         Pollutant                          limit (g/kW-
                                                                 hr)
------------------------------------------------------------------------
NOX.......................................................          9.8
PM........................................................          0.14
HC........................................................         *1.5
CO........................................................          5.0
------------------------------------------------------------------------
*Increases slightly with increasing engine power rating.

C. Industry Characterization

    The two groups of companies most likely to be affected by the 
proposed emission control program are engine manufacturers and vessel 
manufacturers. This section contains a brief discussion of these 
entities. A more complete discussion is included in the Draft 
Regulatory Impact Assessment, which can be found in its entirety in EPA 
Air Docket A-97-50.
1. Marine Diesel Engine Manufacturers
    As discussed in Section IV, the proposed emission control program 
applies to three categories of marine diesel engines. This discussion 
reflects those categories.
    Category 1 and Category 2 marine diesel engines are often derived 
from land-based engines. Their production is often referred to as 
marinization, meaning the land-based engine is modified for use in the 
marine environment. Marinization can be a very complex process or may 
be relatively simple. Depending on the degree of change to the base 
engine, marinization can significantly affect the emission 
characteristics of an engine. Some of the more complex changes 
associated with marinization are performed by large engine 
manufacturers. For these companies, marinization may involve a 
significant redesign of their land-based product. A less intensive type 
of marinization is performed by post-manufacturer marinizers. These 
companies purchase a complete or semi-complete land-based engine from 
an engine manufacturer and finish or modify it using specially designed 
parts. The most basic type of marinization is performed by companies 
that purchase a completed engine from an engine manufacturer and modify 
it to make it compatible for installation on a marine vessel, without 
changing the underlying design characteristics or engine calibration. 
These companies are referred to in this rulemaking as engine dressers. 
In contrast to the other marinization processes, these changes do not 
typically affect the emission characteristics of the engine.
    Category 3 engines have no land-based mobile source equivalents. 
These engines are typically designed exclusively for marine purposes. 
They are often designed for unique applications or unique vessels.
    (a) Category 1 Engine Manufacturers. Total annual production of 
Category 1 marine diesel engines in the U.S. is about 15,000 units per 
year. Of these, commercial propulsion and auxiliary marine engines make 
up about 30 percent and 10 percent, respectively, of the total 
production. The remaining engines are used for propulsion in 
recreational vessels. While the recreational engines are produced in 
greater quantities, commercial propulsion and auxiliary engines 
contribute more to air pollution on account of their much greater use.
    Commercial applications for these engines are widely varied. Most 
of these boats are relatively small and operate near the home port. 
Primary examples of such vessels include fishing boats, crew boats, 
tour boats, and small tugboats and ferries. Recreational vessels are 
usually either yachts or are used for recreational fishing. These 
recreational vessels may in some cases be used for commercial purposes.
    Engine manufacturers produce the large majority of marine diesel 
engines, with the remaining engines being produced by post-manufacture 
marinizers. About a dozen engine manufacturers offer Category 1 
engines, though Caterpillar, Cummins, and Detroit Diesel together sell 
about 80 percent of all marine diesel engines. Fifteen or more 
companies are either post-manufacture marinizers or engine dressers. 
Most of these are small businesses with very low sales volumes.
    Due to the wide range of companies and their operations, engine 
maintenance and rebuild practices are far from uniform. Some are 
serviced regularly by authorized distributors, others are maintained by 
local for-hire mechanics. Some companies that operate vessels choose to 
reduce expenses by keeping a staff of mechanics to conduct preventive 
and routine engine maintenance and, in some cases, complete engine 
rebuilds. Depending on the size of an operator's fleet, which may run 
from one to several dozen vessels, and on the strength of the company, 
there may or may not be an adequate ongoing investment in maintaining 
engines to maximize long-term engine performance.
    (b) Category 2 Engine Manufacturers. Large tugboats and fishing 
boats are the principal applications for Category 2 marine engines. 
These high-powered engines are used for carrying greater loads, a 
greater degree of off-shore use and, in many cases, more intensive 
operations. It is common for companies to own and operate small fleets 
of these vessels. In addition, multiple Category 2 engines are commonly 
used for auxiliary power on an ocean-going vessel.
    Category 2 engines are derived from or use the same technology as 
locomotive engines. Not surprisingly, Category 2 engines are produced 
by the same companies that make locomotive engines, and the segment is 
characterized by a very small number of manufacturers. General Motors 
Electromotive Division (EMD) sells the greatest number of Category 2 
engines, with additional sales from Caterpillar and a few other 
companies (mostly from foreign manufacturers).

[[Page 68515]]

    Post-manufacture marinizers play a role in producing Category 2 
marine engines. For example, three authorized EMD distributors take on 
the responsibility of marinizing engines, overseeing sales 
distribution, and managing installation and service as needed. Unlike 
post-manufacture marinizers for Category 1 engines, these companies 
have sufficient volumes and diversified operations to the point that 
they are not small businesses.
    With prices approaching $1 million for a new engine, there is a 
strong motivation to maintain and remanufacture engines in the field. 
Preventive maintenance programs are common, often including extensive 
ongoing diagnostics for oil quality, fuel consumption, and other engine 
performance parameters. Engines are often completely remanufactured 
every five years. Procedures have improved to the point that engine 
durability on remanufactured engines is no different than on new 
engines. Since engine remanufacturing costs only 20 to 30 percent as 
much as buying a new engine, even twenty- or thirty-year-old engines 
are frequently overhauled to provide dependable power.
    (c) Category 3 Engine Manufacturers. Category 3 marine diesel 
engines are the largest mobile source engines addressed by EPA. They 
are similar in size to land-based power plant generators, and are used 
primarily for propulsion of ocean-going vessels. There are currently no 
U.S. manufacturers of Category 3 marine engines. The Agency, however, 
has identified 22 foreign manufacturers of these engines, a large 
fraction of which are located in Germany and Japan. In addition, of the 
Category 3 engine manufacturers identified, only 12 produce engines of 
their own design. The remainder of the manufacturers produce engines 
under licensing agreements with other companies that control engine 
design.
2. Commercial Vessel Builders
    The industry characterization for the commercial marine vessel 
industry was developed by ICF, Incorporated under contract with EPA. A 
summary of their findings can be found in the Chapter 2 of the Draft 
RIA. The full report is available from EPA Air Docket A-97-50. The 
report makes a distinction between two broad groups of commercial 
vessels, ``ships'' and ``boats,'' based on a vessel's basic dimensions, 
mission, and area of operation.
    (a) Commercial Ships. This category is comprised of large merchant 
vessels, usually exceeding 120 meters (400 feet) in length, that engage 
in waterborne trade or passenger transport. These ships tend to operate 
in Great Lakes, coastwise, inter-coastal, noncontiguous, or 
transoceanic routes. Principal commercial ship types are dry cargo 
ships, tankers, bulk carriers and passenger ships. Passenger ships 
include cruise ships and larger ferries. The large majority of 
commercial ships are foreign-built. There are currently 18 major 
shipbuilding facilities in the United States, most of which focus on 
military construction.
    (b) Commercial Boats. This category is comprised of smaller service 
and industrial vessels that provide service to commercial ships, 
industrial vessels, or barges or that perform specialized marine 
functions. Commercial boats are found mainly in inland or coastal 
waters. Principal commercial boat types are tugboats, towboats, 
offshore supply boats, fishing and fisheries vessels, passenger boats, 
and industrial boats. Passenger boats include crewboats, excursion 
boats, and smaller ferries. The vast majority of boats used in the 
United States are also built in the United States. In contrast to the 
highly concentrated shipbuilding industry, there are several hundred 
yards that build many different types of boats.
3. Recreational Vessel Builders
    While not as numerous as commercial boat builders, there is still a 
considerable number of recreational boat builders. EPA identified 
approximately 75 boat builders, not including those that build 
sailboats. Most of these companies also produce vessels that use 
gasoline engines. In fact, diesel engines represent a small portion of 
the overall product offerings for these companies. A small number of 
recreational boat builders concentrate on diesel engine products. Most 
companies, however, sell as few as one per month or even one per year. 
The analysis shows that recreational boat building is concentrated in 
coastal states with the largest presence in the state of Florida.
    Recreational boat building relies more on serial production than 
does commercial boat building. Users have little, if any, choice in the 
mechanical features of the vessel and the engine specifically. This is 
in part due to the way in which these boats are built. Recreational 
boats are typically made of fiberglass to minimize vessel weight and to 
facilitate planing. Fiberglass construction has the disadvantage of not 
offering much flexibility for installing a different engine than that 
which the vessel was designed to take. Also, planing requires a precise 
match between the engine and its location in the vessel. Engines are 
usually purchased from factory authorized distribution centers. The 
boat builder provides the specifications to the distributor, which 
helps match an engine for a particular application.

III. Engines Covered

A. General Scope of Application

    The scope of application of the proposed emission control program 
is broadly set by Sec. 213(a)(3) of the CAA, which instructs EPA to 
promulgate regulations containing standards applicable to emissions 
from those classes or categories of new nonroad engines and new nonroad 
vehicles that are found to cause or contribute to ozone or carbon 
monoxide concentrations in more than one nonattainment area. Generally 
speaking, then, the proposed rule is intended to cover all new marine 
diesel engines and new marine vessels that use those engines.
    For the purpose of interpreting this scope of application for both 
engines and vessels, EPA is proposing to generally extend the 
definition of ``new'' contained in 40 CFR 89.2 to marine diesel engines 
at or above 37 kW. Under that definition, an engine is considered new 
until its legal or equitable title has been transferred and the engine 
has been placed into service. Because the definition of new in 40 CFR 
89.2 applies to both engines and equipment, its extension to the marine 
sector would extend as well to vessels which, starting with the 
implementation dates of the proposed emission limits, would be 
considered new until their equitable or legal title has been 
transferred to an ultimate purchaser.
    EPA seeks comment on whether to augment this definition of ``new'' 
by following the approach used in the recently finalized locomotive 
rule. That rule expands the definition of ``new'' to also include ``a 
locomotives or locomotive engine which has been remanufactured, but has 
not been placed back into service.'' \29\ This approach was designed to 
respond to the very long useful lives of locomotives. Because 
locomotive engines remain in service for as long as 40 or 50 years, 
with periodic rebuilds, it was deemed advisable to require 
remanufactured locomotives to meet a special set of emission standards, 
depending on the date of their original manufacture. Because marine 
diesel engines are also kept in service for very long periods of time, 
such an approach would also lead to additional emission

[[Page 68516]]

benefits through the application of emission standards on engines that 
have been put into service but that have subsequently been 
remanufactured. In fact, this approach may be technologically easier to 
apply to marine diesel engines than locomotives because of their 
greater cooling potential. In addition, while not identical, the MARPOL 
Annex VI provisions contain a similar requirement, which requires 
engines to meet the NOX emission limits when the engine 
undergoes a major conversion after January 1, 2000.
---------------------------------------------------------------------------

    \29\ See 40 CFR 92.2.
---------------------------------------------------------------------------

    At the same time, important obstacles may prevent application of 
this approach to marine diesel engines. Setting emission limits for 
remanufactured existing engines may be very disruptive to a large 
number of small businesses. Also, unlike the railroad industry, 
companies operating Category 2 marine diesel engines do not rely on a 
small number of engine remanufacturers to work on their engines. In 
fact, many of these operators employ their own mechanics to do all 
maintenance and remanufacturing work. There is accordingly little 
uniformity in remanufacturing practices across the industry. EPA would 
need to conduct a major outreach effort to educate the industry about 
the implications of such a requirement on their business. EPA seeks 
comment on the feasibility and potential costs and benefits of 
remanufacturing provisions for existing marine diesel engines. EPA also 
seeks comment on its authority to establish such programs for each 
marine engine category, including comment regarding whether marine 
engines are ever remanufactured to ``as new'' condition, like 
locomotive engines.
    For the purpose of further clarifying the definition of ``new,'' 40 
CFR 89.2 specifies that a nonroad engine, vehicle, or equipment is 
placed into service when it is used for its functional purposes. For 
the purpose of applying this criteria to marine diesel engine and new 
vessels, EPA is proposing that a marine diesel engine is used for its 
functional purpose when it is installed on a marine vessel. This 
clarification is needed because some marine diesel engines are made by 
modifying a highway or nonroad engine that has already been installed 
on a vehicle or other equipment. In other words, the engine has been 
transferred to an ultimate purchaser after it is used for its 
functional purpose as a land-based nonroad engine (for example, on a 
truck or a backhoe) and is therefore no longer new, but it is later 
removed for marinization and installation on a marine vessel. While the 
40 CFR part 89 requirements for land-based nonroad diesel engines do 
not contain such a requirement, EPA believes it is reasonable to treat 
these engines as new marine engines when they are installed on a 
vessel. While the practice of marinizing used highway or nonroad 
engines may be infrequent, it could become more common if these engines 
are not subject to the standards in this proposal.
    New marine engines are either made in the United States or imported 
here. It should be noted that not all engines produced in the United 
States will be subject to the proposed emission limits. Consistent with 
other mobile source emission control programs, engines intended for 
sale abroad would be exempt from the requirements.
    Engines imported for use in the United States would be covered by 
the proposed program whether they are imported as loose engines or 
already installed on a vessel constructed elsewhere. All imported 
engines would be required to have a certificate of conformity issued by 
EPA before they could be entered into commerce in the United States, 
subject to limited exemptions. In addition, EPA proposes to apply the 
approach contained in its other on-highway and nonroad engine programs, 
according to which any engine or vessel that is imported into the 
United States that does not have a currently valid, unexpired 
certificate of conformity and that was built after the effective date 
of the applicable standards, would be considered to be new at the time 
it is imported into the United States and would have to comply with the 
relevant emission limits in effect at that time. Thus, for example, a 
marine vessel manufactured in a foreign country in 2004 that is 
imported into the United States in 2007 would be considered to be new, 
and its engine would have to comply with the proposed emission limits 
that would be in effect for MY2007. This provision is important to 
prevent manufacturers from avoiding the emission requirements by 
building vessels abroad, transferring their title, and then importing 
them as used vessels.
    Finally, while engines that are intended for export will not be 
subject to the requirements of the proposed emission control program, 
marine engines that are exported but that are subsequently re-imported 
into the United States are intended to be covered. This would be the 
case when a foreign company purchases marine engines manufactured in 
the United States for installation on a vessel that will be 
subsequently exported to the United States. It would also be the case 
when a foreign company purchases marine engines manufactured in the 
United States for dressing and subsequent re-exportation to the United 
States. Engines that are intended for export but that will be re-
imported into the United States are intended to be subject to the 
proposed rule at the time of manufacture, unless the vessel 
manufacturer, engine dresser, or marinizer intends to re-certify the 
engines as complying with the proposed emission limits before they 
enter the United States. Consequently, foreign purchasers who do not 
wish to recertify the engines will need to make sure they purchase 
complying engines for those marine vessels or engines they intend to 
subsequently offer for sale in the United States. Engines intended for 
export and sale in a foreign country should be easily distinguishable 
from complying engines because complying engines are required to be 
labeled as such. Any person who introduces into commerce in the United 
States a noncomplying engine that is intended for export and use in a 
foreign country would be subject to civil penalties.
    To determine when an engine or vessel will be considered 
``imported'' for the purposes of determining compliance with the 
proposed emission control program, EPA proposes to follow the approach 
contained in the Harmonized Tariff Schedule of the United States 
(HTSUS). According to HTSUS, vessels used in international trade or 
commerce or vessels brought into the territory of the United States by 
nonresidents for their own use in pleasure cruising are admitted 
without formal customs consumption entry or payment of 
duty.30 This approach is consistent with the Treasury 
Department's ruling, which concluded that vessels coming into the 
United States temporarily as carriers of passengers or merchandise are 
not subject to customs entry or duty, but if brought into the United 
States permanently they are to be considered and treated as imported 
merchandise.
---------------------------------------------------------------------------

    \30\ HTSUS (1994), Additional U.S. Note 1. In particular, cruise 
ships, ferry boats, cargo ships, barges and ``similar vessels for 
the transportation of persons or goods'' are duty free. HTSUS (1994) 
8901.
---------------------------------------------------------------------------

    Practically, the above discussion means that engines installed on 
vessels flagged in another country that come into the United States 
temporarily will not be subject to the proposed emission limits. This 
approach is consistent with typical international practices, whereby 
countries do not generally impose restrictions on the flag vessels of 
other countries. In recognition of this practice, the numerous Member 
States of the IMO

[[Page 68517]]

recently concluded an international agreement stipulating limits for 
the emission of nitrogen oxides applicable to ships engaged in 
international voyages. The above discussion also means that engines 
installed on vessels that are brought into the United States 
permanently would be subject to the proposed emission control program. 
EPA seeks comment on this implication and seeks information concerning 
the frequency with which this situation would occur.

B. Propulsion and Auxiliary Engines

    The proposed scope of application is intended to cover all new 
marine diesel engines at or above 37 kW. This universe of engines 
includes both propulsion and auxiliary marine diesel engines. 
Consistent with the definitions in 40 CFR 89, a propulsion engine is 
intended to be one that moves a vessel through the water or assists in 
guiding the direction of the vessel (for example, bow thrusters). 
Auxiliary engines are intended to be all other marine engines.
    In the final land-based nonroad rule, EPA determined that a 
portable auxiliary engine that is used onboard a marine vessel would 
not be considered to be a marine engine.31 Instead, a 
portable auxiliary engine is considered to be a land-based auxiliary 
engine and is subject to the requirements of 40 CFR 89. To distinguish 
a marine auxiliary engine installed on a marine vessel from a land-
based portable auxiliary engine used on a marine vessel, EPA specified 
in that rulemaking that an auxiliary engine is installed on a marine 
vessel if its fuel, cooling, or exhaust system are an integral part of 
the vessel or require special mounting hardware. All other auxiliary 
engines are considered to be portable and therefore land-based.
---------------------------------------------------------------------------

    \31\ See 63 FR 56967, October 23, 1998.
---------------------------------------------------------------------------

    It has become clearer that the differences between marine auxiliary 
engines and their land-based counterparts may be so small as to suggest 
that these engines should not be treated differently at all. An 
alternative approach is to consider all auxiliary engines to be the 
same and subject them to the land-based nonroad diesel emission 
requirements and implementation dates (40 CFR Part 89). These two 
groups of engines are often technologically similar, if not identical, 
and are dressed for their applications in the same way. The main 
advantage of this alternative approach is that engine manufacturers 
would not have to certify these engines twice, once for land-based 
applications and once for marine applications. A consequence of 
treating these auxiliary engines as land-based nonroad diesel engines 
is that there would be some adjustments in emission limits, 
implementation date, and other provisions. EPA seeks comment on whether 
the land-based and marine distinctions are necessary for auxiliary 
engines and on whether EPA should adopt the alternative approach 
described above.

C. Exemptions

1. Recreational Engines
    Marine diesel engines used in recreational and commercial 
applications are different in several respects. Commercial vessels are 
designed primarily to efficiently move cargo, either in their own hold 
or by pushing or pulling other vessels. Consequently, they are 
typically displacement vessels, which means the vessel is pushed 
through the water. Optimal operations are more a function of hull 
characteristics, which are designed to reduce drag, than engine size, 
and these vessels can be powered by engines with power ratings 
analogous to land-based applications. Commercial vessels are also often 
heavily used, and their engines are designed to operate for as many as 
2,000 to 5,000 hours a year at the higher engine loads needed to push 
the vessel and its cargo through the water. In addition, these vessels 
are often designed for specific purposes, and many characteristics, 
including the choice of engine, are set by the purchaser.
    Recreational vessels, in contrast, are designed primarily for 
speed. To reach high speeds, it is necessary to reduce the surface 
contact between the vessel and the water, and consequently these 
vessels typically operate in a planing mode. Planing, in turn, imposes 
two requirements on vessel design. First, the vessel needs to have a 
very high power, but lightweight engine to achieve the speeds necessary 
to push the vessel onto the surface of the water. Consequently, 
recreational engine manufacturers have focused on achieving higher 
power output with lighter engines (this is also referred to as high 
power density). The tradeoff is less durability, and recreational 
engines are warranted for fewer hours of operation than commercial 
marine engines. The shorter warranty period is not a great concern, 
however, since recreational vessels, and therefore their engines, are 
typically used for fewer hours per year than commercial engines, and 
spend much less time operating at higher engine loads.
    Second, the vessel needs to be as light as possible, with vertical 
and horizontal centers of gravity precisely located to allow the hull 
of the vessel to be lifted onto the surface of the water. Consequently, 
recreational vessel manufacturers have focused on designing very 
lightweight hulls. They are typically made out of fiberglass, using 
precisely designed molds. The tradeoff is a reduced ability to 
accommodate any changes to the standard design. In other words, 
purchasers are not given much choice as to the design of the vessel 
and, more particularly, the engine that will be used to power it. 
Recreational vessels are typically designed around a specific engine or 
group of engines, and engines that are heavier or that are physically 
larger cannot be used without jeopardizing the vessel's planing 
abilities.
    EPA has learned that many recreational engines already use the 
types of technologies that will be necessary to reach the proposed 
standards. These technologies are typically used to increase the power 
density of recreational engines. EPA is concerned that redirecting the 
impact of these technologies toward emission reduction may reduce 
engine power density. This, in turn, means that recreational vessel 
builders may have to resort to larger, heavier engines to achieve the 
same engine power. They may also have to redesign their hulls, and 
fiberglass molds, to accommodate larger, heavier engines. This can be a 
costly requirement, since most vessel manufacturers destroy their 
master hulls once the fiberglass molds are produced.
    To allow more time to evaluate the potential impact of the proposed 
emission limits on the recreational vessel industry, EPA is not 
proposing to include recreational propulsion marine diesel engines in 
the proposed emission control program. Instead, EPA intends to consider 
requirements for those engines in a separate rulemaking. The Notice of 
Proposed Rulemaking for that recreational marine diesel rule is 
expected to be signed by November 23, 1999, and the Final Rule is 
expected to be signed in October, 2000.
    EPA considered various methods to distinguish commercial and 
recreational marine diesel engines for the purpose of this exemption, 
including relying on physical differences between recreational and 
commercial engines or their warranty periods. These methods were found 
to be unsatisfactory. Relying on physical differences between 
recreational and commercial engines would be difficult, especially 
since these engines are likely to become more similar as Tier 2 
technologies are applied to commercial engines. Relying

[[Page 68518]]

on warranty periods would be difficult because not all engine 
manufacturers have the same product ratings with the same warranty 
periods. Imposing such requirements would unnecessarily impose a degree 
of uniformity across the industry that may hinder engine design or 
marketing strategies.
    Consequently, EPA is proposing to take a more flexible approach and 
is proposing to define a recreational marine engine as a marine 
propulsion engine intended by the engine manufacturer to be installed 
on a recreational vessel. In other words, a recreational engine would 
be defined by the engine manufacturer. EPA is also proposing that 
installation of a new recreational engine on a new nonrecreational 
vessel would be prohibited, and that all recreational engines be 
clearly labeled with language that specifies the engine is intended for 
use only on recreational vessels. Specifically, EPA is proposing the 
following label language:
    THIS RECREATIONAL ENGINE DOES NOT COMPLY WITH FEDERAL MARINE 
ENGINE EMISSION REQUIREMENTS FOR NONRECREATIONAL VESSELS. 
INSTALLATION OF THIS ENGINE IN ANY NONRECREATIONAL VESSEL IS A 
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    Thus, EPA intends that recreational engines can be used only in 
recreational vessels. It should be noted that the converse of this 
provision is not true, and that EPA does not intend to prohibit the use 
of a certified engine on a recreational vessel. In fact, EPA encourages 
recreational vessel manufacturers to use certified engines due to the 
beneficial impact it would have on the environment. It should also be 
noted that this prohibition does not prevent someone from installing an 
old marine engine in an old vessel.
    EPA seeks comment on using a labeling requirement to distinguish 
recreational engines from commercial engines for the purpose of the 
exemption, and on whether this approach will be sufficient for 
preventing the installation of noncertified recreational engines on 
commercial vessels. EPA also seeks comment on whether a power or 
displacement cutoff should be also specified, above which engines could 
no longer be designated as recreational. For example, a power cutoff of 
560 kW may be appropriate because larger engines are installed on 
custom-built recreational vessels that are not subject to the same 
design constraints as smaller serially-built fiberglass vessels.
    For the purpose of the exemption, EPA is proposing to adopt the 
definition of recreational vessel as that term is defined in 46 U.S.C. 
2101. According to that definition, a recreational vessel is a vessel 
(A) being manufactured or operated primarily for pleasure; or (B) 
leased, rented or chartered to another for the latter's pleasure. EPA 
further proposes that, for the purposes of part (B) of this definition, 
the vessel cannot be leased, rented, or chartered for more than six 
passengers. EPA is proposing that vessels for hire that can carry more 
than six passengers, whether or not they ever actually do, be deemed 
nonrecreational vessels. This is consistent with the definition of 
recreational vessel for certain Coast Guard safety requirements (See 33 
CFR 183.3, 33 CFR 175.3). At the same time, EPA is concerned that 
including vessels used for hire in the definition of recreational 
vessel may be inappropriate, since vessels used for hire may be used 
far more extensively than recreational vessels owned by individuals 
solely for their own pleasure. Therefore, EPA seeks comment on whether 
the definition of recreational engine should be extended to vessels for 
hire.
    In addition, to avoid any ambiguities inherent in the term 
``pleasure,'' vessels used solely for competition or used at any time 
in any other way to generate income or revenue in any way not 
associated with the hiring out of the vessel to other people for their 
pleasure will not be considered recreational. In other words, if a boat 
is used for both recreational and commercial purposes, it will be 
considered a commercial vessel. Thus, for example, a vessel that is 
used for several weeks a year for lobster fishing and at other times of 
the year used for recreational purposes will not be considered to be a 
recreational vessel for the purpose of the proposed program.
2. Modified New Land-Based Engines
    A small segment of the marine diesel engine market consists of 
companies that take a new, land-based engine and modify it for 
installation on a marine vessel. However, unlike post-manufacture 
marinizers (described in Section V.L.1., below), some of the companies 
that modify an engine for installation on a marine vessel do not change 
it in ways that may affect emissions. Instead, the modifications may 
consist of adding mounting hardware and a generator or propeller gears. 
It can also involve installing a new marine cooling system that meets 
original manufacturer specifications and duplicates the cooling 
characteristics of the land-based engine, but with a different cooling 
medium (i.e., water). In many ways, these manufacturers are similar to 
nonroad equipment manufacturers that purchase certified nonroad engines 
to make auxiliary engines. This simplified approach of producing an 
engine can more accurately be described as dressing an engine for a 
particular application. Because the modified land-based engines are 
subsequently used on a marine vessel, however, these modified engines 
would be considered marine diesel engines, which would then fall under 
the requirements proposed in this document.
    To clarify the responsibilities of engine dressers under this rule, 
EPA is proposing to exempt them from the requirement to certify engines 
to the proposed standards, provided the following conditions are met.
    (i) The engine being dressed, (the ``base'' engine) must be a 
highway, land-based nonroad, or locomotive engine, certified pursuant 
to 40 CFR 86, 40 CFR 89, or 40 CFR 92, respectively, or a marine diesel 
engine certified pursuant to this part.
    (ii) The base engine's emissions, for all pollutants, must be at 
least as good as the otherwise applicable marine diesel emission 
limits. In other words, starting in 2004, a dressed nonroad Tier 1 
engine will not qualify for this exemption, since the more stringent 
standards for marine diesel engines go into effect at that time.
    (iii) The dressing process must not involve any modifications that 
can change engine emissions.
    (iv) All components added to the engine, including cooling systems, 
must follow base engine manufacturer specifications.
    (v) The original emissions-related label must remain clearly 
visible on the engine.
    (vi) The engine dresser must notify purchasers that the marine 
engine is a dressed highway, nonroad, or locomotive engine and is 
exempt from the requirements of 40 CFR 94.
    (vii) The engine dresser must report annually to EPA the models 
that are exempt pursuant to this provision and such other information 
as EPA deems necessary to ensure appropriate use of the exemption.
    EPA is proposing to consider any engine dresser that does not meet 
these conditions to be an engine manufacturer, and the engine to be a 
new marine diesel engine, and require their engines to be certified to 
comply with the provisions of this proposed rule.
    It should be noted that an engine dresser that violates the above 
criteria could be liable under anti-tampering

[[Page 68519]]

provisions for any change made to the land-based engine that affects 
emissions. The dresser could also be subject to a compliance action, 
for selling new marine engines that are not certified to the required 
emission standards. In addition, the base engine manufacturer could be 
subject to a compliance action if the engine is found to be out of 
compliance.
    EPA seeks comments on three aspects of this proposed exemption. 
First, EPA seeks comment on whether highway engines should be included 
in the set of base engines that can be modified by an engine dresser 
for marine application without needing further certification. EPA made 
a previous decision not to allow certified highway engines to be used 
in nonroad applications without recertifying. This decision was in 
response to claims that highway engines may not be able to meet 
applicable emission requirements on the steady-state test cycles 
applicable to nonroad engines. EPA is nevertheless proposing to allow 
engine dressers to modify certified highway engines without 
recertifying them as marine engines, because EPA believes that engine 
dressers would be unfairly penalized by the constraint that was 
originally intended for manufacturers selling two versions of their own 
engines. EPA requests comment on whether it is appropriate to include 
highway base engines in this exemption.
    Second, EPA seeks comment on how to ensure that exempted dressed 
engines comply with the not-to-exceed requirements described in Section 
V.F. of this proposal. The base engines certified under 40 CFR 86, 40 
CFR 89, or 40 CFR 92 are not subject to these provisions at the present 
time. Engines that are not subject to the off-cycle emission program 
may not have test data demonstrating compliance with this requirement.
    Finally, EPA seeks comment on whether land-based engines that are 
credit users (those which have an FEL higher than the standard) should 
be allowed to benefit from the exemption. According to the above 
proposed criteria, the base engine's emissions must be at least as good 
as the otherwise applicable marine diesel emission limits. However, it 
may be the case that the base engine is a credit user, and that in fact 
its emissions are not as good as the otherwise applicable marine diesel 
emission limits, even though it is certified to the same or more 
stringent emission limits. This is of concern because engine dressers 
often prepare engines for marine vessels that are used in a particular 
area of the country. This means that high-emitting dressed engines may 
be concentrated in just a few port areas. In addition, it is unlikely 
that enough credit generators will be dressed for marine purposes that 
will offset the higher emitting credit users. The obvious solution to 
this problem is to specify that land-based nonroad or locomotive 
engines whose certification relied on the use of credits cannot benefit 
from this exemption. However, it is not clear that engine dressers will 
be able to identify these engines, or to modify their production 
practices if they happen to rely heavily on them for their own 
production. EPA seeks comment on this, as well as on any other 
solutions that will ensure that engines dressed for marine applications 
do not exceed the marine diesel emission limits.
3. Other Exemptions
    EPA is proposing to extend other basic nonroad exemptions to marine 
diesel engines. These include the testing exemption, the manufacturer-
owned exemption, the precertification exemption, the display exemption, 
the national security exemption, and the export exemption described in 
40 CFR 89 Subpart J. In addition, EPA seeks comment on an additional 
exemption for racing and on the scope of the national security 
exemption. It should be remembered that these exemptions are not 
necessarily automatic, and that the engine or vessel manufacturer, or 
ultimate engine owner, may need to apply for them. As part of its 
approval, EPA may require exempted engines to be labeled.
    With regard to the national security exemption, EPA is proposing to 
apply the approach used in the Agency's existing land-based nonroad and 
gasoline marine programs (40 CFR 89.908 and 40 CFR 91.1008). According 
to this exemption, only marine engines used in vessels that exhibit 
substantial features ordinarily associated with military combat, such 
as armor and/or permanently affixed weaponry, and which will be owned 
and/or used by an agency of the federal government with responsibility 
for national defense, will be considered exempt from the proposed 
emission control program. No request for an exemption would be 
necessary for these engines. Thus, according to this approach, engines 
used on vessels such as aircraft carriers, destroyers, and submarines 
would automatically be exempt from the proposed program. EPA believes 
extending the nonroad national security exemption to diesel marine 
engines is appropriate because the vessels on which these engines are 
used are designed for specific national security missions, and the 
exemption will ensure that emission controls do not compromise the 
ability of these vessels to achieve their military missions. However, 
it is EPA's understanding that the Department of Defense, and the Navy 
in particular, adopt emission control technology to the extent it is 
practical and feasible.
    It is EPA's understanding that other public vessels, such as some 
vessels operated by the Coast Guard or Maritime Administration or 
vessels used for general cargo purposes by the Navy or other armed 
service branches, may not have features ordinarily associated with 
military combat. Such vessels would not qualify for the automatic 
exemption under the proposed national security exemption. EPA seeks 
comment on the nature and uses of vessels in such fleets and on the 
appropriate delineation of the national security exemption. EPA does 
not believe that application of the emission control technology that 
will be used to achieve the diesel marine Tier 2 emission limits will 
hinder the design and use of these vessels. Nevertheless, there may be 
situations in which an exemption from the emission controls may be 
necessary. To address this possibility, manufacturers can request a 
special national security exemption. A manufacturer requesting such an 
exemption would be required to explain why the exemption is required, 
and the request would need to be endorsed by an agency of the federal 
government charged with responsibilities for national defense. EPA 
requests comment on applying the land-based nonroad and gasoline marine 
military exemption approach to diesel marine engines or whether these 
engines are sufficiently different in application from land-based 
military equipment as to require a different approach. If another 
approach is more appropriate, EPA requests comment on what that 
approach should be.
    With regard to racing engines, EPA is proposing to allow an 
exemption for marine diesel engines that are installed on vessels used 
solely in competition. To limit the application of this requirement to 
professional racing, EPA is also proposing that the racing exemption 
may not be given to any vessel that is used for recreational purposes. 
In other words, high-powered recreational vessels that are not used 
solely in competition will not be eligible for the racing exemption. 
The proposed approach is different from the approach used by EPA for SI 
marine engines (40 CFR Part 91) and land-based nonroad diesel engines 
(40 CFR Part 89). In those regulations, EPA defined ``used solely

[[Page 68520]]

for competition'' based on physical features of the vessel. However, 
EPA does not believe that marine diesel vessels used solely for 
competition will necessarily have physical features that are not found 
on other high performance marine vessels. Thus, in this rulemaking, EPA 
is proposing to interpret ``used solely for competition'' literally, 
such that the exemption would apply only to engines that are, in fact, 
used solely for competition. The Agency requests comment regarding 
whether it should also use this literal approach for SI marine engines 
or land-based nonroad engines.

IV. Engine Categories

    The engines that are the subject of this action are very diverse in 
terms of physical size, emission technology, control hardware, and 
costs associated with reducing emissions. These differences make it 
difficult to design one set of emission requirements for all marine 
diesel engines. For example, numerical emission limits that may be 
reasonable and feasible for a 37 kW engine used on an 5.5-meter (18-
foot) boat may not be reasonable or feasible for a 1,500 kW engine 
installed on a tug or a 20,000 kW engine installed on an ocean-going 
container ship. Similarly, numerical emission limits appropriate for 
very large engines may be not be appropriately stringent for smaller 
engines, requiring little or no emission reduction.
    Consequently, it is necessary to divide marine diesel engines into 
categories for the purposes of applying emission limits and duty 
cycles. In developing these categories, EPA had two criteria. First, 
the categories should allow EPA to take advantage of existing control 
programs that apply to the base engines from which marine engines are 
derived. Second, the categories should minimize category straddlers. In 
choosing how to distinguish between groups of marine diesel engines, 
EPA considered using rated power, rated speed, total displacement, and 
several other factors. However, after reviewing the engine parameters 
of the range of diesel engine models currently being produced, EPA 
concluded that per-cylinder displacement was the best way to 
distinguish engine groupings. Per-cylinder displacement is an engine 
characteristic that is not easily changed and is constant for a given 
engine model or series of engine models. More specifically, EPA is 
considering the following categorization scheme, which is summarized in 
Table 4. EPA requests comment on this categorization scheme.

                                      Table 4.--Engine Category Definitions
----------------------------------------------------------------------------------------------------------------
             Category                Displacement per cylinder                  Basic engine type
----------------------------------------------------------------------------------------------------------------
1.................................  Disp. < 5 liters (and power  Land-based Nonroad Diesel.
                                      37 kW).
2.................................  5  disp. < 20     Locomotive.
                                     liters.
3.................................  Disp.  20 liters  Unique, ``Cathedral.''
----------------------------------------------------------------------------------------------------------------

    EPA proposes to define Category 1 engines as those marine diesel 
engines that are rated above 37 kW, but have a per-cylinder 
displacement of less than 5 liters. This definition is intended to 
break out the class of marine engines that are serially produced and 
generally derived from land-based nonroad configurations or use the 
same emission control technologies. These engines are typically used as 
propulsion engines on recreational vessels as well as small commercial 
vessels (fishing vessels, tugboats, towboats, dredgers, etc.) They are 
also used as auxiliary engines on vessels of all sizes and 
applications.
    EPA proposes to define Category 2 engines as those marine diesel 
engines with per-cylinder displacement at or above 5 liters and up to 
20 liters. This category is intended to include engines that are of 
similar size and configurations as locomotive engines and use the same 
or similar emission control technologies. These engines are widely used 
as propulsion engines in harbor and coastal vessels, and can be used as 
auxiliary engines on ocean-going vessels and larger tugs.
    EPA proposes to define Category 3 engines as those marine diesel 
engines with a displacement at or above 20 liters per cylinder. These 
are very large high-power engines that are used almost exclusively for 
propulsion on vessels engaged in Great Lakes or trans-oceanic trade.
    EPA is further proposing to divide Category 1 engines into several 
subgroups. These subgroups are similar to the land-based nonroad diesel 
engine subgroups, with one significant change: EPA is proposing to base 
the marine subgroups on engine displacement rather than engine power. 
EPA believes this is a more appropriate scheme for two reasons. First, 
manufacturers sometimes offer different engine models that are the same 
except for the number of cylinders. These engines may fall into 
different power groupings by virtue of the added power from adding 
cylinders. Second, marine engines are often available in a wider range 
of power than their land-based counterparts. While it may be possible 
to define wider power bands for marine diesel engine subgroups, it may 
not be possible to do so without creating phase-in disadvantages for 
particular companies, especially in comparison to their land-based 
phase-in schedule. A displacement scheme should minimize these 
inequities. Consequently, EPA is proposing a displacement approach to 
defining engine groups, as described in Table 5.

                   Table 5.--Category 1 Engine Groups
------------------------------------------------------------------------
                                  Approximate corresponding power band
                                   from land-based nonroad rulemaking
Displacement (liters/cylinder) -----------------------------------------
                                          kW                   hp
------------------------------------------------------------------------
Displ.<0.9....................  37kW<75     50hp<1
                                                        00
0.9displ.<1.2......  75kW<130    100hp<
                                                        175
1.2displ.<1.5......  130kW<225   175hp<
                                                        300
1.5displ.<2........  225kW<450   300hp<
                                                        600
2.0displ.<2.5......  450kW<560   600hp<
                                                        750

[[Page 68521]]

 
2.5displ.<5.0......  kW560       hp750
------------------------------------------------------------------------

    In selecting the displacement values corresponding with the nonroad 
power ranges, EPA examined the engine displacement and power 
characteristics of a wide range of existing engines. The listed 
displacement values were selected to provide the greatest degree of 
consistency with the established land-based nonroad engine power 
groups. The wide range in power ratings for engines with a given per-
cylinder displacement, however, led to a high degree of overlap in the 
attempted correlation between displacement and power rating. As a 
result, some nonroad engine models that were spread across different 
power groupings are brought together under a single displacement 
grouping. This has the potential to move an engine model into a group 
with somewhat more or less stringent requirements, but in almost all 
cases there was sufficient overlap to avoid moving a family of engines 
into an entirely new grouping. The observed overlap highlights the 
benefit of relying on displacement for a simplified approach. This 
should give manufacturers opportunity to more sensibly plan an R&D 
effort to a family of engines that must meet a single set of 
requirements with a common implementation date.
    The most important aspect of defining sub-groups relates to which 
engines are treated like nonroad diesel engines rated above 560 kW. 
Emission limits and implementation dates for smaller marine engines are 
relatively uniform; however, the biggest group of Category 1 engines 
are subject to less stringent emission limits (for Tier 3) and have 
more lead time, which makes it especially important to properly 
separate engines. Investigation of engine models led to three key 
observations. First, of the engines lines with per-cylinder 
displacement between 2.5 and 5.0 liter, all had configurations with 
available power ratings above 560 kW; several of these were much 
greater than 560 kW. Second, except for one instance, all engines with 
displacements less than 2.5 liter had configurations with available 
power ratings below 560 kW; this means that the manufacturers of these 
engines would have to meet the more aggressive requirements for some of 
those engines. The only exception is the DDC 149 series engines, which 
is being replaced with a new engine model. Third, the common practice 
of bolting two marine engines together would often place the combined 
engine artificially into the less stringent regime. For example, with 
respect to emissions and performance, two six-cylinder 300 kW engines 
bolted together would operate the same as each individual engine. Yet, 
by doubling the power at the crankshaft, the engine would be subject to 
less challenging requirements.
    The net effect of changing to a displacement-based grouping is hard 
to quantify. Somewhat greater emission reductions would likely result 
for the reasons described above, though it is difficult to identify the 
relative sales volumes of engines that would fall above and below the 
threshold under both scenarios. The effect on costs is expected to be 
small. As described above, no engines would be subject to the more 
stringent standards that would not have a subset of the engine line 
already subject to those same standards under a power-based grouping 
arrangement. As a result, there should be no increase in R&D expenses. 
Variable costs would be incurred for a greater number of engines, but 
the costs analysis in the Draft RIA makes clear that variable costs 
play a relatively small role in the overall cost impact of emission 
requirements. The Draft RIA lists various engine models with their 
displacement groups. EPA requests comment on this approach to defining 
Category 1 engine groups. Also, EPA requests comment on whether it 
would be appropriate to pursue redefinition of the nonroad diesel 
emission standards into these displacement-based groupings as part of a 
separate, future rulemaking.

V. Description of Proposed Standards and Related Provisions

    In developing this proposal, EPA has developed a comprehensive 
program to reduce emissions from marine diesel engines. This section 
describes the proposed emission limits for Category 1 and Category 2 
engines. It also sets out provisions that will ensure that engines 
comply with the emission limits across all engine speed and load 
combinations, as well as throughout their useful life. Proposed 
requirements related to test procedures and fuel specifications are 
also discussed, as well as several certification and compliance 
provisions. Standards and related provisions for Category 3 engines are 
described in Section VI, below.

A. Standards and Dates

1. Marine Tier 2 Emission Limits
    The Agency's general goal in designing emission control 
requirements for Category 1 and Category 2 marine diesel engines is to 
develop a long-term program that will achieve significant emission 
reductions. In developing such a program, the Agency is guided by 
Sec. 213(a)(3) of the CAA, which instructs EPA to set standards for 
nonroad engines that ``achieve the greatest degree of emission 
reduction achievable through application of technology the 
Administrator deems will be available for the engines or vehicles to 
which such standards apply, giving appropriate consideration to the 
cost of applying such technology within the period of time available to 
manufacturers and to noise, energy, and safety factors associated with 
the application of such technology.'' The Act also instructs EPA to 
first consider standards equivalent in stringency to standards for 
comparable motor vehicles or engines (if any) regulated under Sec. 202, 
taking into consideration technological feasibility, costs, and other 
factors.
    The relevant engines regulated under Sec. 202 are on-highway truck 
engines, both light-duty and heavy-duty. The most recent NOX 
emission limits set by EPA for these engines range from approximately 
2.5 g/kW-hr for heavy-duty trucks to less than 2.0 g/kW-hr for light-
duty trucks. After consideration, EPA determined that it is not 
appropriate to extend the on-highway limits to diesel marine engines 
for three reasons. First, these emission limits reflect a history of 
emission control that is not shared by marine diesel engines, which are 
currently uncontrolled, and it is not clear that marine diesel engines 
can achieve such stringent emission

[[Page 68522]]

limits. In comparison, EPA estimates the baseline emission rates of 
marine diesel engines to be approximately 10.5 g/kW-hr for the smaller 
marine diesel engines. Second, the duty cycle demands for marine 
engines are considerably different than those for on-highway trucks, 
which must be reflected in any choice of emission limits for marine 
engines. Finally, engines used in marine applications cover a much 
broader power range. As described elsewhere in this preamble, the 
marine engines covered by this rule vary in size from 37 kW to in 
excess of 90,000 kW--much larger than any on-highway engines, which 
vary from approximately 50 kW to 500 kW. It may not be possible for the 
larger marine diesel engines to achieve the limits that were set for a 
smaller universe of on-highway engines.
    Instead of basing the proposed emission limits on on-highway 
engines, EPA believes it is more appropriate to consider the standards 
for land-based nonroad diesel engines already promulgated pursuant to 
Sec. 213. This approach is favorable because the vast majority of 
marine diesel engines are derived from or use the same technologies as 
land-based engines. As described in the Draft Regulatory Impact 
Assessment, manufacturers of marine diesel engines typically start with 
a partially- or fully-completed land-based nonroad diesel engine or, in 
some cases, a highway diesel engine, and adapt it for use in the marine 
environment (this process is typically called ``marinization'').
    EPA initially considered extending the land-based nonroad diesel 
Tier 1 emission limits, as described in the NPRM for new gasoline 
spark-ignition and diesel compression-ignition engines.\32\ These 
limits are contained in Table 1, above. However, after further 
consideration, EPA has concluded that those emission limits do not meet 
the Sec. 213 criteria. Available data suggests that marine diesel 
engines already perform at or near the NOX emission limits 
(9.2 g/kW-hr). This is not surprising, given that the Tier 1 levels 
required the application of very simple emission control technology, 
primarily timing retard and better cooling. In addition, engine 
manufacturers have been exploring better engine cooling for quite some 
time in an effort to boost engine power.
---------------------------------------------------------------------------

    \32\ See, 59 FR 55929, November 9, 1994.
---------------------------------------------------------------------------

    Tier 2 nonroad technologies have been applied to marine diesel 
engines with good results. As described in the Draft Regulatory Impact 
Analysis, engine manufacturers participating in several California 
demonstration programs experimented with applying Tier 2 technologies, 
including electronic controls, better turbocharging, and raw-water 
aftercooling, to various commercially used engines. These programs have 
shown that NOX emissions can be reduced by 40 to 60 percent. 
These results suggest that application of the land-based nonroad Tier 1 
emission limits will not achieve the greatest degree of emission 
reduction achievable, taking into account technological feasibility, 
costs and other factors, as required by the Clean Air Act. Therefore, 
EPA is not proposing to extend the land-based nonroad Tier 1 emission 
limits to marine diesel engines.
    At the same time, EPA is concerned about directly applying the 
land-based nonroad Tier 2 emission limits to marine diesel engines, for 
at least three reasons. First, the results obtained in the 
demonstration projects may be better than could be expected over a more 
general application of these Tier 2 technologies. Specifically, the 
demonstration projects were carefully controlled programs, and the 
engines were specially adapted for the participating vessels. These 
engines may have seen better maintenance or fewer extremes in use than 
typical marine diesel engines.
    Second, manufacturers have indicated that there may be some 
hardware problems that would have to be worked out before land-based 
nonroad Tier 2 technologies can be applied to marine diesel engines. 
For example, achieving Tier 2 emission limits will require a higher use 
of raw-water aftercooling, which may present some problems for 
commercial marine engines. As currently designed, these systems can 
require more frequent maintenance, and may pose some reliability 
problems. In addition, it is not clear whether split-housing 
turbochargers can be used extensively with raw-water aftercooling, 
since the temperature differences between the interior and exterior of 
the turbocharger can cause material failure.
    Finally, and perhaps most importantly, the demonstration projects 
gathered emissions data primarily for NOX. It is not clear 
what effect application of these technologies had on PM emissions. This 
is an important concern because of the NOX/PM tradeoff (as 
NOX emissions are decreased, PM emissions tend to rise due 
to the change in combustion temperatures).
    To address these concerns while still encouraging the use of land-
based nonroad technologies on marine diesel engines, EPA is proposing a 
two-step approach for Category 1 and 2 marine diesel emission limits. 
Reflecting the above-described concerns, this approach assumes less 
than optimal transfer of land-based nonroad technologies to marine 
engines in the short run. In the long run, however, this approach 
assumes engine manufacturers will develop ways to fully optimize the 
transfer of land-based nonroad Tier 2 and Tier 3 emission control 
technologies to marine diesel engines. This two step approach will also 
give engine manufacturers more time to resolve mechanical barriers that 
prevent marine engines from more completely exploiting the water 
cooling potential of the environment in which they operate (water). 
Specifically, as described in the technological feasibility section 
below and the Draft Regulatory Impact Assessment, greater use of raw 
water and separate system aftercooling will permit marine engines to 
greatly reduce NOX emissions. Taken as a whole, the proposed 
emission limits are expected to yield the greatest degree of emission 
reduction achievable through the application of technology that is 
expected to be readily available during the time frame covered by the 
proposal taking into account technological feasibility, costs and other 
factors, as required by the Clean Air Act.
    Table 6 contains the proposed emission limits for marine diesel 
Category 1 and Category 2 engines. In the first step, which EPA is 
calling Tier 2 due to the similarity to land-based Tier 2 emission 
limits, EPA proposes a 7.2 g/kW-hr NOX+HC limit, to apply to 
both categories of engines. Again, this limit is intended to result in 
short-term NOX reductions while not requiring manufacturers 
to completely resolve the transfer of land-based Tier 2 technologies to 
marine engines. These marine Tier 2 emission limits are proposed to 
apply beginning in 2004 for engines up to 5 liters per cylinder and 
2006 for engines up to 20 liters per cylinder. The staggered dates 
reflect the added complexities of applying these limits to larger 
engines. The MARPOL Annex VI NOX limits are also provided in 
this table for comparison.

[[Page 68523]]



                Table 6.--Proposed Tier 2 Marine Diesel Emission Limits and Implementation Dates
----------------------------------------------------------------------------------------------------------------
                                                                                                  Implementation
           Subcategory                    HC+NOX g/kW-hr            PM g/kW-hr      CO g/kW-hr         date
----------------------------------------------------------------------------------------------------------------
Power  37 kW 0.5  disp < 0.9.
0.9  disp < 1.2......  7.2...........................            0.30             5.0            2004
1.2  disp < 1.5......  7.2...........................            0.20             3.5            2004
1.5  disp < 2.0......  7.2...........................            0.20             3.5            2004
2.0  disp < 2.5......  7.2...........................            0.20             3.5            2004
2.5  disp < 5.0......  7.2...........................            0.20             3.5            2006
5.0  disp < 20.0.....  7.2...........................            0.27             2.0            2006
----------------------------------------------------------------------------------------------------------------
                               MARPOL Annex VI, for comparison purposes (NOX only)
----------------------------------------------------------------------------------------------------------------
n  2000 rpm..........  9.8...........................            None            None        1/1/2000
130 rpmn<2000 rpm....  45*n(-0.2)....................            None  ..............        1/1/2000
n <130 rpm......................  17.0..........................            None            None        1/1/2000
----------------------------------------------------------------------------------------------------------------

    It is expected that marine diesel engines can achieve this emission 
limit through the application of electronic controls and better 
cooling, perhaps supplemented by some degree of timing retard. EPA is 
also proposing emission controls for PM and CO, that are equal to the 
land-based nonroad and locomotive limits for these pollutants, 
depending on the size of the engine. EPA does not believe it is 
necessary to relax these limits relative to the land-based programs. 
Due to the NOX/PM tradeoff, the higher NOX 
emission limit should ensure the feasibility of achieving the PM limits 
as well. Diesel engines inherently have low CO emissions, and the 
proposed limits are intended to serve as a cap.
    EPA is proposing new requirements designed to ensure that the 
standards are met during real world operation as well as under 
laboratory tests (see Section V.F. ``Not-to-Exceed Requirements''). 
According to these requirements, marine engines may not exceed the 
applicable emission limits by more than 25 percent while the engine is 
operated in any load/speed combination contained in a specified not-to-
exceed (NTE) zone. EPA believes that the technology listed above that 
will be used to meet the proposed standards will be sufficient to meet 
the combined emission limits and NTE requirements. While the NTE 
transient operation requirements have an effect on PM emissions, this 
is not expected to pose any design difficulties. Marine operations 
typically have only limited transience and the NTE requirements are 
designed so that a short transience can be averaged into a minimum 
operating period.
    EPA believes the proposed marine diesel emission limits set out in 
Table 6 strike the appropriate balance, taking into consideration the 
recently finalized Tier 2 emission limits that apply to the land-based 
nonroad engines from which many if not most diesel marine engines are 
derived and the special characteristics of marine diesel engines that 
may make achievement of those limits difficult. EPA requests comments 
on these proposed marine diesel Tier 2 limits. Specifically, it may be 
the case that the barriers to applying land-based technologies to 
marine diesel engines, including recreational engines, are smaller than 
expected, and that the land-based nonroad emission control program is, 
in fact, technologically feasible. In that case, extension of the land-
based programs would be the appropriate approach according to the 
criteria set out in the Clean Air Act. The land-based Tier 2 emission 
limits are contained in Table 7. EPA also seeks comment on whether the 
superior cooling potential of marine diesel engines would permit even 
lower emission standards for NOX and PM at an acceptable 
cost.

                  Table 7.--Land-Based Nonroad Tier 2 Emission Limits and Implementation Dates
----------------------------------------------------------------------------------------------------------------
                                                                                                  Implementation
           Subcategory                    HC+NOX g/kW-hr            PM g/kW-hr      CO g/kW-hr         date
----------------------------------------------------------------------------------------------------------------
Power  37 kW 0.5  disp < 0.9.
0.9  disp < 1.2......  6.6...........................            0.3              5.0            2003
1.2  disp < 1.5......  6.6...........................            0.2              3.5            2003
1.5  disp < 2.0......  6.4...........................            0.2              3.5            2001
2.0  disp < 2.5......  6.4...........................            0.2              3.5            2002
2.5  disp < 5.0......  6.4...........................            0.2              3.5            2006
5.0  disp < 20.0.....  0.4, 7.4......................            0.27             2.0            2005
----------------------------------------------------------------------------------------------------------------

2. Marine Tier 3 Emission Limits
    In the long run, it is anticipated that greater experience with 
emission controls and the transfer of land-based technologies to marine 
engines will make more stringent emission limits feasible. For this 
second step, which EPA is calling Tier 3 due to the similarity to land-
based Tier 3 emission limits, EPA proposes a 3.0 g/kW-hr 
NOX+HC limit, to apply to marine diesel engines up to 2.5 l/
cyl beginning in 2008. EPA believes this emission limit should be 
achievable within the time available through more aggressive engine 
cooling and use of electronic engine controls. At the same time, and 
similar to the Tier 2 limits, there are uncertainties regarding the 
transferability of land-based Tier 3 technologies to these marine 
diesel engines. Because more complete information on the technologies 
that will be used to achieve these limits for land-based engines will 
not be available for several years, EPA intends to reconsider these 
marine Tier 3 limits as part of a feasibility review, to take place in 
2003. At that time, EPA will examine the extent to which the proposed 
Tier 3 standards are technologically feasible and otherwise appropriate 
under the

[[Page 68524]]

Clean Air Act. The marine diesel Tier 3 NOX+HC limits are 
set out in Table 8.

   Table 8.--Proposed Tier 3 Marine Diesel HC+NOX Emission Limits and
                          Implementation Dates*
------------------------------------------------------------------------
                                               HC+NOX g/  Implementation
                 Subcategory                     kW-hr         date
------------------------------------------------------------------------
Power  37 kW 0.5  disp
 < 0.9.......................................        4.0          2008
0.9  disp < 1.2...................        4.0          2008
1.2  disp < 1.5...................        4.0          2008
1.5  disp < 2.0...................        4.0          2008
2.0  disp < 2.5...................        4.0          2008
2.5  disp < 5.0...................        5.0          2010
5.0  disp < 20.0..................        5.0         2010
------------------------------------------------------------------------
* Note: These limits are subject to a 2003 Feasibility Review.

    EPA also seeks comment on whether the marine diesel Tier 3 limits 
should follow the land-based nonroad limits, set out in Table 9. As 
discussed under the Tier 2 limits, above, it could be the case that 
transferring land-based nonroad Tier 3 technologies will be easier than 
anticipated. This, in combination with the superior cooling potential 
of marine engines, may make achievement of the land-based Tier 3 
standards feasible. If adopted, these land-based limits would be 
subject to review in the 2003 feasibility study.

 Table 9.--Land-Based Nonroad Tier 3 Emission Limits and Implementation
                                 Dates*
------------------------------------------------------------------------
                                               HC+NOX g/  Implementation
                 Subcategory                     kW-hr         date
------------------------------------------------------------------------
Power  37 kW 0.5  disp
 < 0.9.......................................        4.7          2008
0.9  disp < 1.2...................        4.0          2007
1.2  disp < 1.5...................        4.0          2006
1.5  disp < 2.0...................        4.0          2006
2.0  disp < 2.5...................        4.0         2006
------------------------------------------------------------------------
*Note: These limits are subject to a 2003 Feasibility Review.

    As noted in Table 8, EPA is also proposing Tier 3 emission limits 
for Category 1 marine diesel engines at or above 2.5 l/cyl. and 
Category 2 marine diesel engines. Tier 3 emission controls are 
necessary for these engines because of the importance of their 
emissions to local ozone inventories. Marine diesel engines at or above 
2.5 l/cyl are an important part of the emission inventory of many 
cities with commercial ports.33 While the population of 
engines in these areas may be smaller than land-based nonroad equipment 
or locomotives, it is also the case that their use is much more 
concentrated, being limited to port areas. In addition, many cities 
with commercial ports are in nonattainment areas, and the second phase 
emission limits will be an important tool to help them reduce local 
ozone levels.
---------------------------------------------------------------------------

    \33\ Category 1 and 2 marine diesel engines make up 
approximately 6 percent of the NOX emission inventory for 
San Diego, 5 percent for San Francisco and 2 percent for Los 
Angeles-South Coast, Baltimore, and Chicago. See Commercial Marine 
Vessel Contributions to Emission Inventories, Final Report, 
Submitted by Booz-Allen & Hamilton, Inc., October 7, 1991.
---------------------------------------------------------------------------

    EPA did not set Tier 3 emission limits for land-based nonroad 
engines at or above 560 kW or for locomotives, due to the limited 
cooling potential of those engines. These engines are typically 
installed in relatively restrictive spaces, and are unable to take full 
advantage of air-to-air cooling systems. However, EPA believes that 
marine diesel engines at or above 2.5 l/cyl should be able to meet more 
stringent Tier 3 emission limits because they can take advantage of the 
medium in which they operate, water, to achieve better engine cooling 
and additional NOX reductions. At the same time, the ability 
of these larger engines to take full advantage of raw water 
aftercooling or separate system aftercooling is complicated by the same 
constraints that must be overcome for the smaller engines. To 
accommodate concerns about overcoming this constraint, as well as 
uncertainty over the transferability of more efficient cooling 
technology from the smaller to the larger marine diesel engines, EPA 
intends to review the Tier 3 emission limits for engines at or above 
2.5 liters per cylinder as part of the 2003 Feasibility Review. EPA 
seeks comment on the proposed Tier 3 limits for these engines, 
concerning both their stringency and implementation dates.
    Finally, EPA will also examine the need to set more stringent PM 
limits as part of the 2003 Feasibility Review. Consideration of more 
stringent PM standards will be a function of, but not depend 
exclusively on, the ease with which engines are expected to reach the 
NOX+HC limits, the extent to which the higher sulfur content 
of marine diesel fuel can be accommodated, whether the land-based 
nonroad diesel engine PM limits are revised as part of that category's 
2001 feasibility review, and the cost of such limits.
    Before making a final decision in the 2003 review, EPA intends to 
issue a proposal and offer an opportunity for public comment on whether 
the Tier 3 standards continue to be consistent with the requirements of 
the Act and continue to be technologically feasible for implementation 
according to the proposed schedule. Any Tier 3 PM standards would also 
be proposed in such a notice. Following the close of the comment 
period, EPA intends to issue a final Agency decision.
    If by 2003 EPA finds the emission standards are not feasible 
according to the proposed schedule, or are otherwise not appropriate 
under the Act, EPA will propose changes to the program, possibly 
including adjustments to the levels of the standards. The adjusted 
standards may be more or less stringent than those already established, 
including the possibility of a new emission standard for particulate 
matter. The standards finalized in the rulemaking initiated by this 
proposal would stay in effect unless revised by the subsequent 
rulemaking procedure.
3. Interim Emission Limits
    As noted above, EPA considered but rejected proposing land-based 
nonroad Tier 1 emission limits to marine diesel engines. Such emission 
limits would not be cost-effective because marine diesel engines often 
already meet the Tier 1 emission limits, and a Tier 1 program would 
simply impose a certification burden for minimal emission benefits.
    At the same time, however, EPA is concerned about leaving these 
engines uncontrolled until the implementation dates of the marine Tier 
2 standards (2004 for engines up to 2.5 l/cyl and 2006 for engines 
between 2.5 and 20 l/cyl). As noted above, these engines can be a 
considerable source of NOX and PM emissions in port and 
coastal areas, many of which are in nonattainment zones.
    This problem may be alleviated, however, by the MARPOL Annex VI 
emission control program. Regulation 13 of Annex VI to the 
International Convention on the Prevention of Pollution from Ships 
calls for engines installed on ships constructed on or after January 1, 
2000, to meet emission limits similar in stringency to the land-based 
nonroad Tier 1 limits. Although the Annex VI emission limits are not 
enforceable until the Annex goes into effect (12 months after it is 
ratified by 15 countries representing at least 50 percent of the gross 
tonnage of the world's merchant shipping), it is expected that ship 
owners will begin to comply with these emission limits in 2000 to avoid 
future enforcement actions. According to Regulation 13(1)(b)(ii), the 
Annex requirements will apply even to ships operated in domestic waters 
unless a country takes action to the contrary. It is expected that the 
MARPOL Annex VI program will act as a cap on NOX emissions, 
since engine manufacturers will have to make

[[Page 68525]]

compliant engines available for installation on ships beginning January 
1, 2000. At the same time, however, there is some concern about 
compliance with these limits because they will not be enforceable until 
the Annex goes into effect. In addition, the international inspection 
program, when it goes into effect, will cover only engines installed on 
ships at or above 400 gross tons.34
---------------------------------------------------------------------------

    \34\ See Regulation 5, Surveys and Inspections, of the Annex.
---------------------------------------------------------------------------

    EPA seeks comment on whether it is appropriate to rely on the 
MARPOL Annex VI program as an interim cap on NOX emissions, 
with no formal emission limits or certification program set by EPA. 
Also, EPA seeks comment on how to verify that engine manufacturers are, 
in fact, complying with the MARPOL Annex VI program prior to the 
implementation date of Annex VI.
4. Total Hydrocarbons
    EPA proposes to use total hydrocarbons (HC) rather than nonmethane 
hydrocarbons in its emission standards for marine diesel engines. This 
is consistent with locomotive standards but inconsistent with land-
based nonroad standards. Methane was considered to be removed from the 
regulated pollutants since it is significantly less reactive than other 
hydrocarbons in the formation of ozone. However, for diesel engines, 
methane only makes up about two percent of the total hydrocarbons. In 
addition, HC generally makes up less than five percent of the combined 
HC+NOX from a marine diesel engine. The combination of these 
two factors renders the methane fraction of the exhaust insignificant 
when compared to the significant digits in the proposed 
HC+NOX standard.
    The advantage of using total hydrocarbons rather than nonmethane 
hydrocarbons in the proposed standard is that it simplifies the 
emission measurement. To determine NMHC, both HC and methane must be 
measured. Methane is generally measured by speciating total 
hydrocarbons using a gas chromatograph, which can be time consuming and 
costly. In addition, by using total hydrocarbons for the standard for 
all marine diesel engines, the standards are consistent for Category 1 
and Category 2.

B. Crankcase Emissions

    EPA is proposing to require that all marine diesel engines either 
have closed crankcases (where blowby gases are routed into the engine 
intake air stream), or route all blowby gases into the engine exhaust 
stream for inclusion in all exhaust emission measurements. 
Manufacturers would be allowed flexibility for routed blowby gases in 
in-use configurations, provided that the blowby gases could be readily 
routed into the exhaust for any in-use test. This approach is similar 
to the approach used by EPA for locomotives. The purpose of this 
proposed requirement is to provide manufacturers the incentive to 
reduce crankcase emissions to the maximum extent possible, or to 
eliminate them all together.

C. Smoke Requirements

    EPA is not proposing smoke requirements for marine diesel engines. 
Marine diesel engine manufacturers have stated that many marine diesel 
engines, even though currently unregulated, are manufactured with smoke 
limiting controls at the request of the engine purchasers. Users seek 
low smoke emissions both because they dislike the residue smoke 
emissions leave on decks and because they can be subject to penalties 
in ports that have smoke emission requirements. In many cases, marine 
engine exhaust gases are mixed with water prior to being released. This 
practice reduces the significance of smoke emissions since smoke 
becomes significantly less visible. Moreover, the Agency believes that 
the PM standards being proposed here will have the effect of limiting 
smoke emissions as well. EPA requests comment on these views and, 
specifically, on whether there is a need at this time for additional 
control of smoke emissions from Category 1 marine engines, and if so, 
what the appropriate limits should be.
    If a smoke limit is desirable, EPA also requests comment on what 
the test procedure should be. There is currently no test procedure that 
can be used to measure compliance with a smoke limit. Most propulsion 
marine engines operate over a torque curve governed by the propellor. 
Consequently, a vessel with an engine operating at a given speed will 
have a narrow range of torque levels. Some large propulsion marine 
engines have variable-pitch propellers, in which case the engine 
operates much like constant-speed engines. It should be noted, however, 
that ISO is working on a proposal for marine diesel engine smoke test 
procedures. A copy of a recent draft is being placed in the docket for 
this rulemaking. As this procedure is finalized by ISO, and emission 
data become available, EPA may review the issue of smoke requirements 
for all marine diesel engines. EPA requests comment on this overall 
approach to smoke emissions from marine diesel engines, as well as 
comment on the draft ISO procedures.

D. Alternative Fuels

    EPA has determined that the proposed standards should apply to 
marine diesel engines, without regard to the type of fuel that they 
use. This is consistent with nonroad diesel engine regulations of 40 
CFR part 89. It is also generally consistent with the locomotive 
regulations; however, the locomotive regulations apply even more 
broadly because they also include spark-ignited engines. EPA recognizes 
that few, if any, alternative-fueled marine engines are currently being 
manufactured, but believes that it is appropriate to make clear to 
manufacturers what standards will apply to such engines should they be 
produced.
    The broad applicability of the proposed standards raises two 
potential issues. The first issue is related to the form of the HC 
standards. In its regulation of highway vehicles and engines (59 FR 
48472, September 21, 1994), the Agency determined that it is not 
appropriate to apply total hydrocarbon standards to engines fueled with 
natural gas (which is comprised primarily of methane), but rather that 
nonmethane hydrocarbon (NMHC) standards should be used. Thus, EPA is 
setting NMHC+NOX standards for compression-ignition natural 
gas-fueled marine engines. These NMHC+NOX standards are 
numerically equivalent to the HC+NOX standards proposed for 
diesel engines. Similarly, EPA has determined that alcohol-fueled 
engines should be subject to HC-equivalent (HCE) standards instead of 
HC standards (54 FR 14426, April 11, 1989). HC-equivalent emissions are 
calculated from the oxygenated organic components and non-oxygenated 
organic components of the exhaust, summed together based on the amount 
of organic carbon present in the exhaust. (The reader is referred to 
the April 11, 1989 final rule for more information regarding the 
determination of HC-equivalence.) EPA is proposing these approaches 
because it has previously determined that these approaches will result 
in the most equivalent stringency for all fuel types.
    The second issue raised by the regulation is related to the need 
for slightly different test procedures for alternative-fueled engines. 
This issue is being resolved in this rulemaking by referencing the test 
procedures found in 40 CFR Parts 89 and 92, both of which include 
flexibility for testing alternative-fueled engines. EPA requests 
comment

[[Page 68526]]

on whether more specific regulation is needed for marine engines.

E. Test Procedures

    For this marine regulation, EPA is proposing to use previously 
established test procedures for diesel nonroad engines. Specifically, 
EPA is proposing that Category 1 marine engines be tested using the 
land-based nonroad test procedures of 40 CFR Part 89, and that Category 
2 marine engines be tested using the locomotive test procedures of 40 
CFR Part 92. There are two reasons for using this approach. First, most 
manufacturers of marine compression-ignition engines also manufacture 
land-based engines and will be equipped to test engines using these 
test procedures. Second, marine compression-ignition engines are 
fundamentally similar to their land-based counterparts, and it is 
therefore appropriate to measure their emissions in the same way. At 
the same time, some changes are necessary, EPA is proposing the 
modifications to these test procedures described below.
1. Duty cycles
    The duty cycle used to measure emissions is intended to simulate 
operation in the field. Testing an engine for emissions consists of 
exercising it over a prescribed duty cycle of speeds and loads, 
typically using an engine dynamometer. The nature of the duty cycle 
used for determining compliance with emission standards during the 
certification process is critical in evaluating the likely emissions 
performance of engines designed to those standards.
    To address operational differences between engines, EPA is 
proposing different duty cycles for different types of compression-
ignition marine propulsion engines. EPA is proposing that propulsion 
engines that operate on a fixed-pitch propeller curve be certified 
using the International Standards Organization (ISO) E3 duty cycle. 
This is a four-mode steady-state cycle developed to represent in-use 
operation of marine diesel engines on vessels 24 meters in length and 
larger. The four modes lie on an average propeller curve based on the 
vessels surveyed in the development of this duty cycle. Another duty 
cycle, ISO E5, was developed to represent in-use operation of smaller 
marine diesel engines; this cycle is similar to the E3 except that an 
idle mode is added and the cycle is more heavily weighted towards lower 
power modes. The E3 is designed for engines used to propel vessels 
greater than 24 meters in length while the E5 is designed for engines 
used to propel vessels less than 24 meters in length. The 
attractiveness of the E3 duty cycle is that, according to EPA's 
inventory analysis, the majority of HC+NOX emissions from 
marine diesel engines are generated by engines on vessels more than 24 
meters in length. By choosing a single cycle to represent all 
propeller-curve marine diesel engines, EPA hopes to reduce 
certification burdens for marine engines that are used in vessels both 
over and under 24 meters in length.
    EPA is proposing that fixed-speed marine propulsion engines with 
variable-pitch propellers be certified on the ISO E2 duty cycle. This 
duty cycle is also a four-mode steady-state cycle. It uses the same 
power and weighting factors as the E3 cycle, but the engine is operated 
in each mode at rated speed.
    EPA is also proposing that variable-speed marine propulsion engines 
with variable-pitch propellers be certified on the ISO E2 duty cycle. 
These engines are designed to operate near their power curve to 
maximize fuel efficiency. In general, these engines will operate at a 
constant speed except when maneuvering in port. Because of the expense 
of the system, variable-speed engines are rarely used with variable-
pitch propellers. ISO does not have a test duty cycle specifically 
designed for these engines. However, because most of their operation is 
at constant speed, EPA is proposing that these engines certify using 
the E2 duty cycle. EPA proposes that the speed setting for testing 
should coincide with the speed setting at which the engine would spend 
most of its time in use.
    For auxiliary engines, EPA is proposing that constant-speed 
auxiliary engines be certified to the ISO D2 duty cycle and that 
variable-speed auxiliary engines be certified to the ISO C1 duty cycle. 
These duty cycles are consistent with the requirements for land-based 
nonroad diesel engines. More detail on the proposed duty cycles is 
contained in the Draft Regulatory Impact Analysis (Draft RIA) 
associated with this proposal. EPA requests comment on the 
appropriateness of the proposed duty cycles.
    Under the provisions of the land-based nonroad rule, engine 
manufacturers have the option to petition for their marine engines to 
be included in land-based engine families. EPA is not proposing this 
flexibility for propulsion marine engines because the ``not-to-exceed'' 
provisions described below require the use of the marine duty cycles.
    For larger marine engines, conventional emission testing on a 
dynamometer becomes more difficult because of the size of the engine. 
Often engine mock ups are used for the development of these engines 
where a single block is used for many years and only the power assembly 
is changed out. EPA proposes that for Category 2 engines, certification 
tests may be performed on these engine mock ups provided that their 
configuration is the same as that of the production engines. In 
addition, for larger Category 2 marine engines, EPA requests comment on 
whether or not single-cylinder tests should be allowed for 
certification testing. Assuming that each cylinder in an engine is 
equivalent, a single-cylinder test should give the same brake-specific 
emission results as a full engine test.
2. In-Use Testing
    As with its other federal mobile source programs, EPA retains the 
authority to perform in-use testing on marine engines to ensure 
compliance in use. This testing may include taking in use marine diesel 
engines out of the vessel and testing them in a laboratory, as well as 
field testing of in use engines in the vessel, in a marine environment. 
EPA's proposal specifies the equipment and related procedures for use 
in laboratory based testing. EPA is not at this time, however, 
specifying similar provisions for field testing. EPA expects that the 
capabilities of field testing equipment will increase over time, and it 
is better to allow this to occur without attempting to pick testing 
technologies at this time, or interfere with this development process.
    Field testing data will be used by EPA in two ways. First, it may 
be used as a screening tool, with follow up laboratory testing where 
appropriate. Second, it may be used directly as a basis for compliance 
determinations, when the field testing itself provides reliable 
information from which conclusions can be drawn regarding what 
laboratory based emissions levels would be. The probative value of 
field test data is expected to increase over time, as the capabilities 
of field testing equipment are developed. The flexibility in testing 
that these approaches provide will allow EPA to most efficiently 
conduct in use testing, and will also address those situations where it 
is physically or otherwise impossible to remove an engine from a marine 
vessel for testing in a laboratory.
    For compression-ignition marine engines that expel exhaust gases 
under water or mix their exhaust with water, EPA proposes to require 
that the engines be equipped with an exhaust sample port where a probe 
can be inserted for in-use exhaust emission testing. It is important 
that the location of this port

[[Page 68527]]

allow a well mixed and representative sample of the exhaust. The 
purpose of this proposed provision is to simplify in-use testing. EPA 
requests comment on the proposed in-use testing provisions.
3. Test Fuel
    Section 206(h) of the Clean Air Act requires EPA to ensure that the 
test procedure, including the test fuel, adequately represent in-use 
operation. To facilitate the testing process, EPA specifies a test fuel 
that is intended to be representative of in-use fuels. Engines would 
have to meet the standard on any fuel that meets the proposed test fuel 
specifications, with one modification as described later. This section 
describes the test fuel EPA is proposing for Category 1 and Category 2 
engines. This test fuel is to be used for all testing associated with 
the regulations proposed in this document, to include certification, 
production line and in-use testing, as well as any NTE testing.
    EPA is proposing that the recently finalized test fuel 
specifications for nonroad diesel engines be applied, with a 
modification to the sulfur specification as described later, to both 
Category 1 and 2 marine diesel engines. EPA believes that largely 
adopting the nonroad fuel will simplify development and certification 
burdens for marine engines that are developed from land-based 
counterparts. The proposed test fuel for marine diesel engine testing 
has a sulfur specification range of 0.03 to 0.80 weight-percent (wt%), 
which covers the range of sulfur levels observed for most in-use fuels. 
Manufacturers are generally responsible for ensuring compliance with 
the emission standards using any fuel within this range. Thus, they 
will be able to harmonize their marine test fuel with U.S. highway 
(<0.05 wt%), nonroad (0.03 to 0.40 wt%), locomotive (0.2 to 0.4 wt%) 
and European testing (0.1 to 0.2 wt%). The full range of proposed test 
fuel specifications are presented in Chapter 3 of the Draft RIA.
    EPA is proposing a higher upper limit for the marine diesel engine 
sulfur specification (0.8 wt%) than was recently finalized for land-
based nonroad engines (0.4 wt%) because there is some information 
available that suggests that marine fuels may have higher sulfur 
contents than land-based diesel fuels.35 Using ASTM 
specification D 2069 as a guide, EPA considered choosing an upper limit 
of 1.5 wt% sulfur. Although 1.5 wt% may be appropriate based on the 
ASTM specification, EPA is proposing that this upper limit on sulfur 
content be 0.8 wt% because PM can not accurately be measured using the 
proposed testing procedures using fuels with a sulfur content higher 
than 0.8 wt%.36 EPA requests comment on whether it is 
appropriate to limit the test fuel specification in this way due to 
this testing constraint.
---------------------------------------------------------------------------

    \35\ ``Final Report: 1996 American Petroleum Institute/National 
Petroleum Refiners Association Survey of Refining Operations and 
Product Quality'' suggests that actual marine diesel fuels may have 
sulfur contents somewhat higher than general nonroad diesel fuels. 
ASTM specification D 2069 includes a specification for general 
purpose marine distillate fuel with a maximum sulfur content of 1.5 
wt%.
    \36\ ``Exhaust Gas Emission Measurements: A Contribution to a 
Realistic Approach,'' D. Bastenhof, dieselMAC, May, 1995.
---------------------------------------------------------------------------

    The proposed PM standards were largely determined to be feasible 
based on the feasibility of the corresponding standards for land-based 
nonroad and locomotive applications, which have a 0.4 wt% sulfur upper 
limit for the test fuel. Since PM emissions are somewhat fuel sulfur-
dependent, EPA does not believe that it is appropriate to require 
compliance with the PM standards using fuel with a sulfur content above 
0.4 wt%. It is for this reason that EPA is proposing to allow a 
correction of PM emissions for tests that are run using fuel with a 
sulfur content greater than 0.4 wt%. Thus, the measured PM emissions 
for any test performed using fuel with a sulfur content of greater than 
0.4 wt% would be corrected to the level that would have been measured 
if the fuel had a sulfur content of 0.4 wt%. The proposed correction 
method is that used for land-based nonroad engine testing. EPA requests 
comment on whether this correction method is accurate and appropriate 
for this application.
    It is EPA's intent that engines be designed for the whole range of 
in-use fuels and that any testing conducted by EPA would use test fuels 
typical of in-use fuels. Unfortunately, the test procedure currently 
limits the Agency from reaching this objective for marine diesel 
engines if in-use fuels do in fact have sulfur levels as high as the 
current ASTM specifications allow. EPA requests comment on whether 
currently available marine fuel has a sulfur content significantly 
higher than land-based nonroad fuel. EPA will be investigating marine 
fuel further and is requesting information on the specifications that 
are used in use. It is EPA's intent to develop test procedures that 
will allow for the accurate measurement of PM emission over the entire 
range of in-use fuel characteristics. If successful, the Agency would 
intend to broaden the range of certification fuel to reflect the full 
range of in-use fuels. Any efforts to do so would consider the impacts 
on the appropriateness and feasibility of the PM standards and would 
likely be undertaken in the planned 2003 technology review for the Tier 
3 standards.
    EPA requests comment on all aspects of its proposed test fuel 
provisions. EPA is also interested in obtaining more information on the 
specifications of marine fuel used in Category 2 marine engines. 
Essentially, this proposal assumes that Category 2 marine engines are 
operating on a distillate fuel. The Agency requests comments on this 
approach and on how often residual fuels or residual fuel blends are 
burned in Category 2 engines.
4. Adjustable Parameters
    Marine diesel engines are often designed with adjustable 
components, to allow the engine to be adjusted for maximum efficiency 
when used in a particular application. This practice simplifies marine 
diesel engine production, since the same basic engine can be used in 
many applications. While EPA recognizes the need for this practice, EPA 
is also concerned that the engine meet the proposed emission limits 
throughout the range of adjustment. Therefore, and consistent with the 
locomotive rule, the Agency is proposing that manufacturers specify in 
their applications for certification the range of adjustment for these 
components across which the engine is certified to comply with the 
applicable emission standards, and demonstrate compliance across that 
range.
    Practically, this requirement means that a manufacturer would 
specify a range of fuel injection timing, for example, over which the 
engine would comply with the emission standards. This range could be 
designed to account for differences in fuel quality. Operators would 
then be prohibited by the anti-tampering provisions from adjusting 
engines outside of this range.
    Ideally, to ensure that engines are always operated within the 
specified range of adjustment, marine diesel engine manufacturers 
should be required to design their engines to prevent adjustments 
outside the specified range. However, EPA recognizes that it may be 
necessary to adjust injection timing or other adjustable parameters 
outside the originally specified control range during engine 
remanufacture to accommodate engine wear. There are at least two 
alternative solutions to this problem. First, engine manufacturers 
could be

[[Page 68528]]

required to set a range of adjustments that would accommodate changes 
necessary at the time the engine will be remanufactured. Alternatively, 
compliance with the range of adjustments could be ensured through anti-
tampering provisions, with the requirement that the new range of 
adjustments be specified at the time of remanufacture. EPA seeks 
comments on these and other approaches to ensure that engines with 
adjustable parameters meet the proposed emission requirements.
5. Definition of Rated Speed
    The definition of rated speed, where speed is the angular velocity 
of an engine's crankshaft (usually expressed in revolutions per minute, 
or rpm) is an important aspect of the test cycles and ``not-to-exceed'' 
(NTE) zones proposed in this document. In the past, EPA has expected 
engine manufacturers to declare reasonable rated speeds for their 
engines; however, EPA is concerned that some manufacturers may have 
declared rated speeds that are not really representative of the 
operating characteristics of a particular engine in order to influence 
the parameters under which their engines could be certified. Under 
EPA's highway transient duty cycle, manufacturers would likely receive 
a NOX emission benefit if they declared a rated speed that 
was higher than the actual rated speed of the engine. Under EPA's 
nonroad and proposed marine steady-state duty cycles, manufacturers 
would likely receive a NOX emission benefit if they declared 
a lower rated speed. In addition, a low declared rated speed would 
shrink a marine engine's NTE zone.
    Currently, U.S. highway and nonroad diesel engine regulations 
specify two slightly different ways to determine rated speed. EPA's 
highway heavy-duty diesel regulation defines rated speed as the 
manufacturer's specified rated speed, as defined at 40 CFR 86.082-2, or 
calculated speed, whichever yields the higher speed. The calculated 
speed in the highway rule is determined by averaging the minimum and 
maximum speeds at which 98% of maximum power is generated. This 
calculation can yield unreasonable speeds in some high-torque-rise 
engines. EPA's nonroad rule defines rated speed as the maximum full-
load governed speed for governed engines and the speed of maximum 
horsepower for ungoverned engines. The International Standards 
Organization (ISO-8178) defines a diesel engine's rated speed as the 
speed at which, according to the statement of the engine manufacturer, 
rated power is delivered. This is similar to the International Maritime 
Organization's definition; the crankshaft revolutions per minute at 
which the rated power occurs as specified on the nameplate and in the 
Technical File of the marine diesel engine.
    To determine a single rated speed definition that encompasses the 
complete range of engine operation, EPA analyzed the maximum-power 
versus speed curves from eleven highway and nonroad engines. These 
engines were all similar to marine engines and they may be used in 
marine applications. EPA observed that most mechanically governed 
engines had distinct governor droops at speeds slightly higher than the 
speed at maximum power. High-torque-rise engines, however, had gradual 
decreases in power beyond the maximum-power speed, followed by a steep 
rate of governor droop. Furthermore, some electronically governed 
engines had multiple rates of power decrease between the maximum-power 
speed and the onset of governor droop. See Figure 1 for an illustration 
of four different maximum-power versus speed curves.
    Based on this analysis, EPA proposes that the rated speed of any 
engine shall be defined at the single point on an engine's maximum-
power versus speed curve that lies farthest away from the zero-power, 
zero-speed point on a normalized maximum-power versus speed plot. In 
other words, consider straight lines drawn between the origin (speed = 
0, load = 0) and each point on an engine's maximum-power versus speed 
curve (see Figure 1). Note that the maximum-power versus speed curve is 
normalized so that 100% power and 100% speed are set at the maximum 
power and maximum-power speed point. Under this proposal, rated speed 
would be defined at that point where the magnitude (length) of this 
line reaches its maximum value. The magnitude of this line, called 
Rated__Speedfactor in this rule, is calculated by using the 
following equation:
[GRAPHIC] [TIFF OMITTED] TP11DE98.000

    Rated speed shall be the speed value of the data point that returns 
the maximum value of Rated__Speedfactor.
    EPA proposes the following procedure to determine rated speed:
    1. Generate maximum-power versus speed data points by using the 
appropriate method defined in 40 CFR 86.1332-90. EPA recognizes that 40 
CFR 86.1332-90 does not address the issue of electronic engines that 
vary injection timing, rate shaping, exhaust gas recirculation, and 
variable-nozzle turbocharging with respect to their operating 
conditions. These engines' maximum-power versus speed curves can vary 
as a function of the method in which the curves are determined (i.e., 
transient curve generation versus steady-state curve generation). EPA 
proposes that the engine operation generating the maximum 
Rated__Speedfactor shall be the operation under which rated 
speed is determined. EPA seeks comment on this proposal.
    2. Compare power values to determine the point where power is a 
maximum.
    3. Normalize power values with respect to maximum power.
    4. Normalize speed with respect to the speed at which maximum power 
is generated.
    5. Calculate the Rated__Speedfactor for each normalized 
data point.
    6. Compare all Rated__Speedfactor values to determine 
the maximum value of Rated--Speedfactor.
    7. The speed at which maximum Rated__Speedfactor occurs 
shall be the rated speed for certification and NTE zone testing.
    Examples of results from this calculation are illustrated by 
circles superimposed on four maximum-power versus speed curves in 
Figure 1. EPA seeks comment on this proposal.

[[Page 68529]]

[GRAPHIC] [TIFF OMITTED] TP11DE98.001



F. Not-to-Exceed Requirements

    EPA's goal is to achieve control of emissions over the broad range 
of in-use speed and load combinations that can occur on a vessel so 
that real-world emission control is achieved, rather than just 
controlling emissions under certain laboratory conditions. An important 
tool for achieving this goal is an in-use program with an objective 
standard and an easily implemented test procedure. Historically, EPA's 
approach has been to set a numerical standard on a specified test 
procedure and rely on the prohibition of defeat devices to ensure in-
use control over a broad range of operation not included in the test 
procedure.
    No single test procedure can cover all real world applications, 
operations, or conditions. Yet to ensure that emission standards are 
providing the intended benefits in use, the Agency must have a 
reasonable expectation that emissions under real world conditions 
reflect those measured on the test procedure. The defeat device 
prohibition is designed to ensure that emissions controls are employed 
during real world operation and not just under laboratory or test 
procedure conditions. However, the defeat device prohibition is not a 
quantified standard and does not have an associated test procedure, so 
it does not have the clear objectivity and ready enforceability of a 
numerical standard and test procedure. As a result, the current focus 
on a standardized test procedure makes it harder to ensure that engines 
will operate with the same level of control in the real world as in the 
test cell.
    Because the E3 duty cycle uses only four modes on an average 
propeller curve to characterize marine diesel engine operation, EPA is 
concerned that an engine designed to the duty cycle would not 
necessarily perform the same way over the range of speed and load 
combinations seen on a vessel. The E3 duty cycle is based on an average 
propeller curve, but a propulsion marine engine may never be fitted 
with an ``average propeller.'' For instance, a light vessel with a 
planing hull may operate at lower torques than average while the same 
engine operated on a heavy vessel with a deep displacement hull may 
operate at higher torques than average. This can largely be a function 
of how well the propeller is matched to the engine and vessel. A 
planing hull vessel can operate at high torques at low speed prior to 
planning. In addition, the E3 duty cycle only includes steady-state 
operation while some transience is seen in use.
    To ensure that propulsion emissions are controlled from marine 
diesel engines over the full range of speed and load combinations seen 
on vessels, EPA proposes to establish a zone under the engine's power 
curve where the engine may not exceed a specified emissions limit, for 
any of the regulated pollutants, under any operation that could 
reasonably be expected to be seen in the real world. In addition, EPA 
proposes that the whole range of real ambient conditions be included in 
this ``not-to-exceed'' (NTE) zone testing. The NTE zone, limit, and 
ambient conditions are described below.
    EPA believes that there are significant advantages to taking this 
sort of approach. The test procedure is very flexible so it can 
represent any and all in-use conditions (ambient and operation). 
Therefore, the NTE approach takes all of the benefits of a numerical 
standard and test procedure and expands it to cover a broad range of 
conditions. Also, laboratory testing makes it harder to perform in-use 
testing since either the engines would have to be removed from the 
vessel or care would have to be taken that laboratory-type conditions 
can be achieved on the vessel. With the NTE approach, in-use testing 
and compliance become much easier since emissions may be sampled during 
normal vessel use. Because this approach is objective, it makes 
enforcement easier and provides more certainty to the industry of what 
is expected in use versus over a fixed laboratory test procedure.
    Even with the NTE requirements, EPA believes that it is still 
important to retain standards based on the steady-state duty cycles. 
This is the standard that EPA expects the certified marine diesel 
engines to meet on average in use. The NTE testing is more focused on 
maximum emissions for segments of operation and should not require 
additional technology beyond what is used to meet the proposed 
standards. EPA believes that basing the emissions standards on a 
distinct cycle and using the NTE zone to ensure in-use control creates 
a comprehensive program. In addition, the steady-state duty cycles

[[Page 68530]]

give a basis for calculating credits for use in the averaging, banking, 
and trading program.
    The proposed NTE zone for marine diesel engines that would certify 
using the E3 duty cycle is illustrated in Figure 1 and is defined by 
the power curve of the engine up to rated speed. This zone is based on 
the range of conditions that a marine diesel propulsion engine could 
typically see in use. EPA is proposing a similar approach for engines 
certified using the constant-speed E2 duty cycle. In this case, the 
``not-to-exceed'' zone is at the speed for which the engine is designed 
to operate for loads ranging from 25 to 100 percent of maximum load at 
that speed. More detail on the development of the boundaries and 
conditions associated with the proposed NTE zones may be found in 
Chapter 3 of the Draft RIA. EPA requests comment on the NTE zones.
[GRAPHIC] [TIFF OMITTED] TP11DE98.002

    EPA proposes the limit on emissions within the NTE zones to be 1.25 
times the standard (or FEL if ABT is used) for all of the regulated 
pollutants (HC, NOX, CO, PM). The standard itself is 
intended to represent the average emissions under steady-state 
conditions. Since it is an average, some points can be higher, some 
lower, and the manufacturer will design to maximize performance and 
still meet the engine standard. The NTE limit is on top of this. It is 
designed to make sure that no part of the engine operation and that no 
application goes too far from the average level of control. Data 
presented in Chapter 3 of the Draft RIA shows that the proposed limit 
of 1.25 times the standard is feasible for marine diesel engines, yet 
challenging because of variations in emissions at high versus low 
speeds and loads for some engines. The proposed limit is consistent 
with the enforcement policy currently in place for the highway heavy-
duty diesel program.37 However, the proposed marine NTE 
zones are much smaller than for highway heavy-duty diesel engines due 
to the smaller range of operation typically seen in use.
---------------------------------------------------------------------------

    \37\ ``Heavy-duty Diesel Engines Controlled by Onboard 
Computers: Guidance on Reporting and Evaluating Auxiliary Emission 
Control Devices and the Defeat Device Prohibition of the Clean Air 
Act,'' U.S. EPA, October 15, 1998.
---------------------------------------------------------------------------

    Although transient operation would be included in the NTE testing, 
only operation that would reasonably be expected to be seen in use 
would be included. Therefore, engine testing may include transient 
speed and load operation. Examples of this type of transience would be 
bringing a vessel to plane or changing speeds. Because the majority of 
marine operation is fairly steady, EPA believes that the NTE testing 
should allow for short emissions spikes under transience. Engine 
testing may not include transient operation that cannot be replicated 
by similar engines as installed on actual vessels in use, since those 
are operations that the engine is not designed for and is not expected 
to see in-use. Therefore, there would be no in-use emission impact from 
such operations. To ensure that a short transience does not unfairly 
give high results, EPA proposes that the emissions sampling must be at 
least over a 30 second time period. This 30 second sampling period 
should be long enough to allow an emissions spike to be averaged out 
while still retaining a short enough period to look at a specific type 
of operation. EPA proposes that an acceleration associated with 
bringing a vessel to plane be eligible for inclusion in any NTE type 
testing regardless of whether it falls within the NTE zone shown in 
Figure 1.
    The NTE standards are proposed to apply under any ambient air 
conditions. Within the following air temperature and humidity ranges, 
no corrections will be allowed to account for the effects

[[Page 68531]]

of temperature or humidity on emissions: 13-35 deg.C for ambient air 
temperature and 7.1-10.7 grams water per kilogram of dry air for 
humidity. Ambient water temperature must be in the range of 5-32 deg.C 
during NTE testing. In addition, the engines must comply with the 
standards for the full range of test fuel specifications.
    The defeat device provisions established for highway and nonroad 
engines are proposed to apply to marine diesel engines in addition to 
the NTE requirements. A design in which an engine met the standard at 
the steady-state test points but was intentionally designed to approach 
the NTE limit everywhere else would be considered to be defeating the 
standard. Electronic controls that recognize when the engine is being 
tested for emissions and adjust the emissions from the engine would be 
another example of a defeat device, regardless of the emissions 
performance of the engine.
    EPA is aware that marine diesel engines may not be able to meet the 
emissions limit under all conditions. Specifically, there are times 
when emissions control must be compromised for startability or safety. 
EPA is not proposing that engine starting be included in the NTE 
testing. In addition, EPA manufacturers would have the option of 
petitioning the Administrator to allow emissions to increase under 
engine protection strategies such as when an engine overheats.
    EPA proposes to allow manufacturers to petition to adjust the size 
and shape of the NTE zone for certain engines if they can certify to 
the Agency that the engine will not see operation outside of the 
revised NTE zone in use. This way, manufacturers could avoid having to 
test their engines under operation that they would never see in use. 
However, manufacturers would still be responsible for all operation of 
an engine on a vessel that would reasonably be expected to be seen in-
use and would be responsible for ensuring that their specified 
operation is indicative of real-world operation. In addition, if a 
manufacturer designs an engine for operation at speeds and loads 
outside of the proposed NTE zone (i.e., variable-speed engines used 
with variable-pitch propellers), the manufacturer would be responsible 
for notifying EPA so that their NTE zone can be modified appropriately 
to include this operation.
    EPA is interested in refining the NTE concept for marine diesel 
engines prior to the final rule where appropriate. One concern may 
exist for mechanically controlled engines that are only capable of a 
fixed injection timing. It may be difficult for these engines to 
achieve a flat emissions profile, especially at low speeds and loads 
where brake-specific emissions are often higher. One potential option 
for addressing this problem would be to split the NTE zone into two 
subzones with a relaxed cap at lower speeds and loads. EPA requests 
comment on this option and on any other technical options and 
improvements to the off-cycle provisions as proposed.
    The Engine Manufacturers Association has presented an off-cycle 
concept to EPA in response to concerns and concepts raised by the 
Agency. This concept is in a briefing format and may be found in the 
docket.38 In the EMA concept, the NTE zone emissions limit 
is based on the emissions at individual steady-state test modes with 
limits on the interpolated values between the modes rather than a flat 
cap. In the highway policy, EPA uses a concept similar to this but it 
is in addition to a flat emissions limit. The NTE zone described by EMA 
is smaller than the proposed zone, and the emissions limit is higher on 
average. EPA requests comment on this approach and on whether or not it 
is needed in addition to the proposed approach as in the on-highway 
program.
---------------------------------------------------------------------------

    \38\ Engine Manufacturers Association, ``EMA Alternative 
Proposal for Controlling `Off-Cycle' Emissions from Marine 
Engines,'' September 25, 1998.
---------------------------------------------------------------------------

    EPA is not proposing an NTE limit, at this time, for engines 
certified using the D2 or C1 test duty cycles. EPA does not yet have 
enough data on the operating characteristics of auxiliary engines to 
determine NTE zones and associated limits for these engines. However, 
EPA is gathering data and intents to evaluate the NTE concept for 
auxiliary engines. This effort will likely be combined with the efforts 
begun to evaluate off-cycle emission for land-based nonroad engines. 
EPA requests comment on appropriate NTE zones and limits for auxiliary 
engines.

G. Voluntary Low-Emitting Engine Program

    Officials representing certain cities, states, or regions in the 
U.S. have expressed interest in developing incentive programs to 
encourage the use of engine technologies that go beyond federal 
emission standards. Some of these technologies have already undergone 
significant development. In the final rule for land-based nonroad 
diesel engines, EPA included a program of voluntary standards for low-
emitting engines, referring to these as ``Blue Sky Series'' engines (63 
FR 56967, October 23, 1998). EPA is proposing similar voluntary 
standards as part of this rulemaking. The program, if successful, will 
lead to the introduction and more widespread use of these low-emission 
technologies.
    Ongoing research has led to much improved prospects for a variety 
of low-emitting diesel engine technologies. Technology developments to 
meet upcoming emission requirements for highway diesel engines are 
expected to substantially reduce emissions without relying on exhaust 
aftertreatment. Much of this technology development forms the basis for 
setting the emission limits described in this proposal, but EPA 
believes that manufacturers may be prepared to more aggressively 
transfer some of these advanced technologies to marine engines. The 
motivation to exceed emission requirements could either be to gain 
early experience with certain technologies as a strategy to ensure 
long-term control of quality, or as a response to external incentives.
    In addition, alternative fuels and exhaust aftertreatment options 
continue to expand as companies further develop technologies for 
reaching very low emission levels. For example, some particulate traps 
are now designed for regeneration without an active control system, 
sometimes using fuel-based catalyst materials to reduce regeneration 
temperature requirements. Selective catalytic reduction, long used very 
effectively in stationary source applications, is now in several 
demonstration marine vessels. Plasma and thermoelectric techniques are 
also under consideration for large particulate and NOX 
reductions. EPA is very interested in seeing a demonstration of the 
emission-control potential for these engines in marine applications, 
especially related to the capability of maintaining low emission levels 
over extended in-use operation.
    As with the land-based rule, EPA proposes that Tier 3 emission 
levels, where applicable, are the appropriate level for defining Blue 
Sky Series engines. For PM emissions, a calculated level corresponding 
to a 40 percent reduction beyond Tier 2 levels is proposed as a 
qualifying level for Blue Sky Series engines (see Table 10). While the 
Blue Sky Series emission limits are voluntary, a manufacturer choosing 
to certify an engine under this program would be required to meet all 
the provisions established to demonstrate compliance with these limits, 
including allowable maintenance, warranty, useful life, rebuild, and 
deterioration factor provisions.

[[Page 68532]]



            Table 10.--Voluntary Emission Standards (g/kW-hr)
------------------------------------------------------------------------
              Rated Brake Power (kW)                  HC+NOX       PM
------------------------------------------------------------------------
power  37 kW displ.<0.9................        4.0       0.24
0.9displ.<1.2..........................        4.0       0.18
1.2displ.<2.5..........................        4.0       0.12
2.5displ.<5.0..........................        5.0       0.12
5.0displ.<20...........................        5.0       0.16
------------------------------------------------------------------------

    The Blue Sky Series program would begin immediately upon 
promulgation and would continue through the 2007 model year. EPA would 
evaluate the program to determine if it should be continued for 2008 
and later engines, and if so, whether any changes are needed. This 
evaluation will be considered as part of the 2003 Feasibility Review.
    Creating a program of voluntary standards for low-emitting engines, 
including testing and durability provisions to help ensure adequate in-
use performance, will be a major step forward in advancing innovative 
emission control technologies, because EPA certification will provide 
protection against false claims of environmentally beneficial products. 
For the program to be most effective, however, incentives for the 
production of these engines must be created as well.
    The Agency is concerned that such incentive programs not lead to a 
net detriment to the environment through the double-counting of 
benefits. EPA has therefore concluded that manufacturers choosing to 
sell an engine with the Blue Sky Series designation should not generate 
averaging, banking, and trading credits for demonstrating compliance 
with EPA programs. Other groups would then be free to design credit 
programs without concern for any double-counting or other unintended 
effect of overlapping programs. EPA solicits comment on the Blue Sky 
Series approach for marine diesel engines generally and on its 
interaction with the ABT program.
    In addition to credit-based programs, the Agency sees substantial 
potential for users and state and local governments to establish 
incentive programs. For example, state or local governments or 
individual ports may be able to add incentives for introducing low-
emitting engine technologies in harbor and other coastal vessels. The 
Agency solicits ideas that could encourage the creation of these 
incentive programs by users and state and local governments. EPA also 
solicits comment on additional measures that could be taken at a 
federal level to encourage development and introduction of these 
engines.

H. Durability

    To achieve the full benefit of the emissions standards, 
manufacturers must design and build engines with durable emission 
controls. This means that manufacturers are responsible for the 
emission results for the engines they produce throughout their useful 
life.39 It is also necessary to encourage the proper 
maintenance and repair of engines throughout their lifetime. The goal 
is for engines to maintain good emission performance throughout their 
in-use operation. Therefore, EPA believes it is necessary to adopt 
measures to address concerns about possible in-use emission performance 
degradation. The proposed durability provisions, described below, are 
intended to help ensure that engines are still meeting applicable 
standards in use. The specific areas of the durability program focused 
on here are useful life, warranty periods, deterioration factors, 
allowable maintenance intervals, and rebuilding requirements. Most of 
these provisions are carried over from the land-based or locomotive 
programs. EPA seeks comments on all aspects of this durability program.
---------------------------------------------------------------------------

    \39\ This is different from the approach used in MARPOL Annex 
VI, according to which manufacturers must ensure their engines meet 
the emission limits at the time of certification but ship owners 
become responsible for their continued compliance with the limits. 
Under that program, compliance is verified during flag-state and 
port-state inspections.
---------------------------------------------------------------------------

1. Useful Life
    Useful life is the period during which the marine engine is 
required to meet the emission standards. For Category 1 engines, EPA is 
proposing a useful life of 10 years or 10,000 hours of operation. This 
proposal is slightly different from the 10 years or 8,000 hours of 
operation finalized for land-based nonroad engines, to reflect the 
different usage pattern for marine engines. Specifically, the 10,000-
hour requirement is based on an expected five-year period until the 
first time the engine is rebuilt, and an expected usage rate of 2,000 
hours per year. EPA requests comment on this proposed useful life for 
Category 1 engines.
    For Category 2 engines, EPA is proposing a useful life of 10 years 
or 20,000 hours of operation. This proposal differs from the 10 years 
or 7.5 MW-hours per horsepower useful life recently finalized for 
locomotive engines to reflect the hours of operation instead of MW-per-
horsepower requirement for locomotive engines. This is because marine 
engine operation is typically monitored using hour meters rather than 
MW-hour meters. In this case, the 20,000-hour requirement for marine 
engines is calculated based on an operating rate of 4,000 hours of use 
per year, with five years between rebuilds. This hour value is less 
than would be obtained from 7.5 MW-hrs per horsepower and an average 
duty cycle for a locomotive. Using these values would result in a 
useful life value of about 30,000 hours. This is nevertheless 
appropriate, since locomotives typically receive significantly more 
maintenance in use, and are operated for longer periods between 
rebuilds. EPA requests comment on the proposed useful life for Category 
2 engines.

                              Table 11.--Proposed Useful Life and Warranty Periods
----------------------------------------------------------------------------------------------------------------
                                                            Useful life                   Warranty period
                    Category                     ---------------------------------------------------------------
                                                       Hours           Years           Hours           Years
----------------------------------------------------------------------------------------------------------------
Category 1......................................          10,000              10           5,000               5
Category 2......................................          20,000              10          10,000               5
----------------------------------------------------------------------------------------------------------------

    The above approach of basing useful life on time to first rebuild 
was chosen because it is difficult to justify holding the engine 
manufacturer responsible for an engine's emissions after the engine is 
rebuilt. The original engine manufacturer has little, if any, control 
over the rebuild process, and the rebuilding process often includes 
changes to the engine that may have an effect on emissions. At the same 
time, however, these engines are often kept in service much longer than 
the proposed useful life. Median values for service lives are 15 years 
for Category 1

[[Page 68533]]

propulsion engines and 23 years for Category 2 engines. These longer 
service lives mean that the engine may be exempt from in-use testing 
for more than half its service life. EPA therefore believes it is 
important to be able to conduct recall testing on these engines 
throughout the established useful life period. Also, EPA requests 
comment on whether useful life should be based on the average time to 
first rebuild, or whether EPA should attempt to regulate emissions 
beyond the anticipated point of first rebuild, either through an 
extended useful life specification or some other means.
2. Warranty Periods
    Tied to the useful life is the minimum warranty period imposed 
under the Clean Air Act. The proposed warranty periods for marine 
diesel engines are based on the ratio of useful life and warranty 
periods established for land-based nonroad engines. Specifically, EPA 
is proposing a warranty period of 5,000 hours or 5 years for Category 1 
engines, and 10,000 hours or 5 years for Category 2 engines. EPA 
requests comment on this approach, or whether the locomotive approach 
based on one-third of the engine's useful life should be used.
    EPA is also proposing defect reporting requirements. Consistent 
with the provisions that apply to highway and land-based nonroad 
engines, these provisions require Category 1 engine manufacturers to 
report to EPA whenever a manufacturer identifies a specific emission-
related defect in 25 or more engines. However, EPA is proposing to 
specify a lower threshold of 10 engines for Category 2 marine engines, 
which is the same limit as applies to locomotives.
3. Deterioration Factors
    To further ensure that the proposed emission limits are met in use, 
EPA proposes to require the application of a deterioration factor (DF) 
to Category 1 and Category 2 marine diesel engines in evaluating 
emission control performance during the certification and production-
line testing process. The emissions from new engines are adjusted using 
the DF to account for potential deterioration in emissions over the 
life of the engine due to aging of emission control technologies or 
devices. The resulting emission level is intended to represent the 
expected emissions at the end of the useful life period. Specifically, 
EPA believes that the ability of new emission control technologies, 
such as aftertreatment, sophisticated fuel delivery controls, and some 
cooling systems, to reduce emissions declines as these systems age. The 
DF is applied to the certification emission test data to represent 
emissions at the end of the useful life of the engine. Currently, DFs 
are required for highway heavy-duty engines, nonroad land-based 
engines, and locomotive engines. EPA is proposing to extend this 
approach to marine diesel engines as well. EPA requests comment on all 
aspects of the proposed DF provisions, described below.
    EPA is proposing that marine diesel engine DFs be determined by the 
engine manufacturers in accordance with good engineering practices. 
Consistent with the land-based nonroad and locomotive programs, EPA is 
not proposing a specified procedure. The DFs, however, would be subject 
to EPA approval, and must be consistent with in-use test data. 
Additionally, the DF should be calculated for the worst-case engine 
calibration offered within the engine family.40
---------------------------------------------------------------------------

    \40\ The worst case would be the engine calibration expected to 
generate the highest level of emmission deterioration over the 
useful life, using good engineering judgment.
---------------------------------------------------------------------------

    It is not EPA's intent to require a great deal of data gathering on 
engines that use established technology for which the manufacturers 
have the experience to develop appropriate DFs. New DF testing may not 
be needed where sufficient data already exists. However, EPA is 
proposing to apply the DF requirement to all engines so that EPA can be 
sure that reasonable methods are being used to ascertain the capability 
of engines to meet standards throughout their useful lives.
    Consistent with the land-based engine programs, EPA proposes to 
allow marine diesel engine manufacturers the flexibility of using 
carryover and carryacross of durability emission data from a single 
engine that has been certified to the same or more stringent standard 
for which all of the data applicable for certification has been 
submitted. In addition, EPA seeks comment on whether this flexibility 
should be extended to allow deterioration data from highway or nonroad 
engines to be used for similar marine diesel engines. EPA is concerned 
that DFs calculated for land-based engines may not be the same as for 
marine engines, due to their different operating environments and duty 
cycles.
    Finally, EPA is proposing that DFs be calculated as an additive 
value (i.e., the arithmetic difference between emission level at full 
useful life and the emission level at the test point) for engines 
without exhaust aftertreatment devices. In contrast, DFs should be 
calculated as a multiplicative value (i.e., the ratio of the emission 
level at full useful life to the emission level at the test point) for 
engines using exhaust aftertreatment devices. This is consistent with 
the DF requirements applicable to other diesel engines, based on 
observed patterns of emission deterioration.
4. Allowable Maintenance Intervals
    In the highway, land-based, and locomotive rules, EPA requires 
manufacturers to furnish the ultimate purchaser of each new nonroad 
engine with written instructions for the maintenance needed to ensure 
proper functioning of the emission control system. Generally, 
manufacturers require the owners to perform this maintenance as a 
condition of their emission warranties. If such required maintenance is 
more than the engine owner is likely to perform due to cost or 
inconvenience, then in-use emissions deterioration can result. 
Consequently, in both the nonroad and highway rules, EPA imposes limits 
on the frequency of maintenance that can be required of the engine 
owners for emission-related components; these limits also apply to the 
engine manufacturer during engine certification and durability testing. 
Further, the performance of maintenance would be considered during any 
in-use recall testing conducted by the Agency.
    Consistent with the land-based nonroad rule, EPA is proposing 
minimum allowable maintenance intervals for Category 1 and Category 2 
marine diesel engines, to ensure that their emission control 
technologies are practical in use. The proposed minimum intervals are 
very similar to those required for nonroad and highway diesel engines 
(40 CFR 89.109; 40 CFR 86.094-25). Alternatively, EPA could adopt the 
locomotive approach of not precisely defining minimum intervals for 
adjustment, cleaning, repair, or replacement of various components but, 
instead, merely requiring engine manufacturers to specify these minimum 
maintenance intervals at the time of certification, subject to EPA 
approval. EPA is not, however, proposing the locomotive approach in 
which locomotive owners who fail to properly maintain a locomotive will 
be subject to civil penalties for tampering. EPA requests comment on 
these approaches for allowable maintenance intervals and the 
appropriateness of extending the land-based intervals to marine diesel 
engines.

[[Page 68534]]

5. Rebuilt Engines
    It is common for marine diesel engines to be rebuilt several times 
during the course of their lifetimes. Similar to land-based nonroad 
engines, EPA has two concerns regarding the rebuilding of marine diesel 
engines. First, EPA is concerned that during engine rebuilding, there 
may not be an incentive to check and repair emission controls that do 
not affect engine performance. Second, EPA is concerned that there may 
be an incentive to rebuild engines to an older configuration due to 
real or perceived performance penalties associated with technologies 
that would be used to meet the standards proposed in this notice. Such 
practices would likely result in increased emissions.
    To address these concerns, EPA is proposing to extend the land-
based nonroad rebuild requirements to marine diesel engines. 
Specifically, EPA proposes that the parties involved in the process of 
rebuilding or remanufacturing engines must follow specific provisions 
to avoid tampering with the engine and emission controls. Like the 
nonroad requirements, the applicability of these provisions is based on 
the build date of the engine. The rebuild requirements would apply to 
any engine built on or after the date that new standards apply to that 
engine's specific category or group, regardless of the emission levels 
that the individual engine is designed to achieve. The proposed 
provisions for rebuilding are as follows:
    (1) EPA proposes that, during engine rebuilding, parties involved 
must have a reasonable technical basis for knowing that the rebuilt 
engine is equivalent, from an emissions standpoint, to a certified 
configuration (i.e., tolerances, calibrations, and specifications).
    (2) When an engine is being rebuilt and remains installed or is 
reinstalled in the same vessel, it must be rebuilt to a configuration 
of the same or later model year as the original engine. When an engine 
is being replaced, the replacement engine must be an engine of (or 
rebuilt to) a configuration of the same or later model year as the 
original engine.
    (3) At the time of rebuild, emission-related codes or signals from 
on-board monitoring systems may not be erased or reset without 
diagnosing and responding appropriately to the diagnostic codes. 
Diagnostic systems must be free of all such codes when the rebuilt 
engines are returned to service. Further, such signals may not be 
rendered inoperative during the rebuilding process.
    (4) When conducting an in-frame rebuild or the installation of a 
rebuilt engine, all emission-related components not otherwise addressed 
by the above provisions must be checked and cleaned, repaired, or 
replaced where necessary, following manufacturer recommended practices.
    Under this proposal, any person or entity engaged in the process, 
in whole or part, of rebuilding engines who fails to comply with the 
above provisions may be liable for tampering. Parties would be 
responsible for the activities over which they have control, so there 
may be more than one responsible party for a single engine in cases 
where different parties perform different tasks during the engine 
rebuilding process (e.g., engine rebuild, full engine assembly, 
installation). EPA is not proposing any certification or in-use 
emissions requirements for the rebuilder or engine owner. EPA requests 
comment on the appropriateness of applying this rebuild program to 
marine diesel engines.
    EPA is proposing to adopt modest record keeping requirements that 
EPA believes are in line with customary business practices. The records 
would be kept by persons involved in the process of marine diesel 
engine rebuilding or remanufacturing and would include the hours of use 
accumulated on the engine at time of rebuild and a list of the work 
performed on the engine and related emission control systems, including 
a list of replacement parts used, engine parameter adjustments, design 
element changes, and work performed as described in item (4) of the 
rebuild provisions above. EPA proposes that such records be kept for 
two years after the engine is rebuilt.
    Under this proposal, parties would be required to keep the 
information for two years but would be allowed to use whatever format 
or system they choose, provided that the information can be readily 
understood by an EPA enforcement officer. EPA proposes that parties 
would not be required to keep information that they do not have access 
to as part of normal business practice. In cases where it is customary 
practice to keep records for engine families rather than specific 
engines, where the engines within that family are being rebuilt or 
remanufactured to an identical configuration, such record keeping 
practices are proposed to be satisfactory. Rebuilders would be able to 
use records such as build lists, parts lists, and engineering 
parameters that they keep of the engine families being rebuilt rather 
than on individual engines, provided that each engine is rebuilt in the 
same way to those specifications. EPA requests comments on the 
appropriateness of the proposed record keeping requirements, including 
whether the records should be kept for a longer period of time, such as 
for five years.
6. Replacement Engines
    As noted elsewhere in this discussion, an important constraint on 
the ability to replace a marine diesel engine concerns the ability to 
remove the engine from the vessel. In many cases, the vessel is built 
around the engine and removal is difficult if not impossible. 
Nevertheless, there may be situations in which a marine diesel can or 
must be removed from a vessel, to be replaced with a different engine. 
Under these requirements, whenever a compliant engine is removed from a 
vessel, the replacement engine must meet the emission requirements that 
were in effect at the time the vessel was built. For example, any 
engine installed on a vessel built in 2008 must comply with the 
requirements proposed in this action, regardless of whether it is 
installed in 2008 or any year thereafter. The intent of this 
requirement is to ensure that vessel owners cannot evade the proposed 
emission requirements by installing a noncomplying engine on their 
vessel after the vessel is placed into service. These provisions also 
allow, in some cases, engine manufacturers to produce new replacement 
engines of an older model that do not comply with the otherwise 
applicable standards, provided that the new engines meet the emission 
standards that applied to the engines being replaced. However, 
manufacturers would only be allowed to produce such engines in cases 
where it was necessary for reasons such as space constraints. 
Consistent with replacement engine provisions in other programs, some 
additional constraints ensure that companies do not circumvent the 
regulations (see 40 CFR 89, Subpart J). EPA seeks comment on the 
necessity of such a provision.

I. Certification

    As discussed previously, EPA expects technology to be shared 
between land-based engines and marine engines. EPA expects some engine 
manufacturers to produce engines of the same basic design for sale in 
both areas. Specifically, Category 1 marine engines are expected to 
share the technology developed for land-based nonroad engines, and 
Category 2 engines are expected to share technology developed for 
locomotive engines. To account for this product overlap, EPA is 
proposing

[[Page 68535]]

to base certification data and administration requirements for Category 
1 on the existing program for land-based nonroad engines, and for 
Category 2 marine engines on the existing program for locomotive 
engines.41, 42 Specific certification provisions 
are discussed more fully in the following sections.
---------------------------------------------------------------------------

    \41\ See 40 CFR 89 Supart B for the provison of the land-based 
nonroad engine program.
    \42\ See 40 CFR 92 Supart C for the provison of the locomotive 
program.
---------------------------------------------------------------------------

1. Engine Family Definition
    EPA is proposing that engine grouping for the purpose of 
certification be accomplished through the application of an ``engine 
family'' definition. Engines expected to have similar emission 
characteristics throughout the useful life are proposed to be 
classified in the same engine family. Separate engine family 
classification is also required for each marine engine category (i.e., 
Categories 1, 2, and 3 will be in separate engine families).
    EPA is proposing specific parameters to define engine family for 
each category of marine engine. To provide for administrative 
flexibility in the proposal, the Administrator will have the authority 
to separate engines normally grouped together or to combine engines 
normally grouped separately based upon a manufacturer's request 
substantiated with an evaluation of emission characteristics over the 
engine's useful life.
    For Category 1, EPA is proposing to use the engine family 
definition for land-based nonroad engines with the addition of the fuel 
system type and fuel injection control used (mechanical versus 
electrical).43 For Category 2, EPA is proposing to use the 
engine family definition for locomotive engines.44
---------------------------------------------------------------------------

    \43\ See 40 CFR 89.116 for the engine family definition used for 
land-based nonroad engines.
    \44\ See 40 CFR 92.204 for the engine family definition for 
locomotives.
---------------------------------------------------------------------------

    These definitions are proposed to provide consistency between land-
based and marine engines of the same basic type. The fuel system type 
and control type were added to the land-based nonroad engine family 
definition to reduce the variability of emissions within an engine 
family. This change will aid manufacturers in selecting the ``worst-
case'' engine for emission testing. It will lessen the chance of 
noncompliance in use by ensuring that the highest emitting engine is 
tested during certification.
    The engine family definition is fundamental to the certification 
process and to a large degree determines the amount of testing required 
for certification. As proposed, manufacturers would be required to 
estimate the rate of deterioration for each engine family (see the 
discussion of deterioration factors in Section V.G.3. for further 
details). Compliance with the emission standard will also be 
demonstrated for each engine family based upon required testing and the 
application of the deterioration factor. Separate certificates of 
conformity would be required for each engine family.
2. Emission Data Engine Selection
    EPA is proposing that manufacturers select the highest emitting 
engine (i.e., ``worst-case'' engine) in a family for certification 
testing. In making that determination, the manufacturer shall use good 
engineering judgement (considering, for example, all engine 
configurations and power ratings within the engine family and the range 
of installation options allowed). By requiring the worst-case engine to 
be tested, EPA is assured that all engines within the engine family are 
complying with emission standards for the least cost in test engines 
run. If manufacturers feel that the engine family is grouped too 
broadly or that the worst-case emission data engine would underestimate 
the emission credits available under the ABT provisions, they may 
request the separation of the dissimilar calibrations (based on an 
evaluation of emission characteristics over the engine's useful life) 
into separate engine families.

J. SEA, Production Line Testing

    One of the challenges of serial engine production is ensuring that 
each engine produced has the same emission characteristics as the 
original certification engine. The more traditional approach used for 
ensuring that the engines are produced as designed is called Selective 
Enforcement Auditing (SEA). In the SEA program, EPA audits the 
emissions of new production engines by requiring manufacturers to test 
engines pulled off the production line on short notice. This spot 
checking approach relies largely on a deterrence strategy. 
Manufacturers prefer to design their engines and production processes 
and take other steps necessary to make sure their engines are produced 
as designed in order to avoid the penalties associated with failing SEA 
tests.
    However, EPA does not believe that an SEA-type approach is 
practical for the marine diesel engine industry, primarily because of 
the low production volumes. The small production volumes mean that on 
any given day that EPA would choose to do an SEA there may be no marine 
engines being produced, or there may not be enough to provide a 
representative sample of production.
    Therefore, to ensure compliance of production engines, EPA is 
proposing an alternative approach, called Production Line Testing 
(PLT). The general object of a PLT program is the same as an SEA-based 
program, which is to enable manufacturers and EPA to determine, with 
reasonable certainty, whether certification designs have been 
translated into production engines that meet applicable standards (or 
FELs) at the time of production, before excess emissions are generated 
in use. The main difference between the two approaches is that PLT is 
performed on a regular basis during the year by the engine manufacturer 
according to criteria set by the Agency, while SEA is performed through 
periodic unannounced spot checks by EPA.
    Under the proposed marine diesel engine PLT, a manufacturer would 
select engines from its production line for confirmatory testing. In 
general, one percent of a manufacturer's total projected annual U.S. 
marine diesel engine sales (propulsion and auxiliary) for each category 
would be required to be tested each year. EPA believes that a one 
percent sampling rate is appropriate for the marine diesel engine 
industry because of its low production volumes, and that a higher 
sampling rate would be unduly burdensome for this industry. EPA is not 
proposing a minimum number of tests for Category 1 engines and is 
proposing that if a manufacturer sells fewer than 100 units in the 
United States in a given year, it would not be required to do any PLT 
testing for its Category 1 engines that year. EPA requests comment on 
whether it would be more appropriate, in light of its proposed one 
percent sampling rate, to adopt a production trigger for Category 1 PLT 
testing of 50 engines per year, rather than 100 engines per year as 
proposed. EPA also requests comment on an approach whereby a 
manufacturer's cumulative production over time would be used to 
determine when PLT testing would be required for these Category 1 
manufacturers. Under such an approach a test would be required under 
the PLT program when a manufacturer's cumulative Category 1 production 
over more than one model year reached 100 units. For Category 2 
engines, EPA is proposing a minimum of one PLT test per year. Thus, for 
manufacturers with sales of less than

[[Page 68536]]

100 Category 2 engines a year, one test would be required. For purposes 
of calculating the number of tests required, EPA is proposing that 
Category 1 and Category 2 annual engine sales be considered separately.
    EPA proposes that the choice of the engines to be tested pursuant 
to this program will be left to the manufacturer, but should be a 
random sample that is representative of annual production. EPA reserves 
the right to reject any engines selected by the manufacturers if it 
determines that such engines are not representative of actual 
production. Engines selected should cover the broadest range of 
production possible, and from year to year should be varied to cover 
all engine families if possible. Tests should also be distributed 
evenly throughout the model year, to the extent possible.
    EPA proposes that emission testing of the PLT engines be conducted 
in accordance with the applicable federal testing procedures, and 
compliance with the proposed NTE provisions must be demonstrated as 
part of PLT testing. The results would be reported to EPA in periodic 
reports that would summarize emissions results, test procedures, and 
events such as the date, time, and location of each test. These reports 
will allow EPA to monitor continually the PLT data. If no testing is 
performed during the period, no report would be required. EPA is 
proposing that reports be submitted each quarter. EPA requests comment 
on whether quarterly reporting is too frequent, given the low 
production volumes of these engines, and whether a semester or 
trimester approach is more appropriate.
    Under this testing scheme, if an engine fails a production line 
test, the manufacturer would test two additional engines out of either 
the next two days' production or the next fifteen engines produced in 
that engine family in accordance with the applicable federal testing 
procedures. EPA is proposing the dual approach to testing additional 
engines to account for variations in production volumes. If production 
volumes are high, then EPA believes that the two-day provision will 
allow for the orderly selection of additional test engines. Likewise, 
if production volumes are low, then the provision allowing the engines 
to be selected from the next fifteen produced will allow for orderly 
selection. When the average of the three test results, for any 
pollutant, are greater than the applicable standard or FEL for any 
pollutant, the manufacturer fails the PLT for that engine family. Such 
failures must be reported to EPA within two working days of the 
determination of a failure. It should be noted that, as proposed, 
compliance with the standards would be required of every covered 
engine. Thus, every engine that failed a PLT test would be considered 
in noncompliance with the standards and must be brought into 
compliance. EPA's proposal to use the average of three tests to 
determine compliance with the PLT program is intended only as a tool to 
decide when it is appropriate to suspend or revoke the certificate of 
conformity for that engine family, and is not meant to imply that not 
all engines have to comply with the standards.
    In the proposed PLT program, the Administrator could suspend or 
revoke the manufacturer's certificate of conformity in whole or in part 
fifteen days after an EPA noncompliance determination for an engine 
family that fails the PLT, or if the engine manufacturer's submittal 
reveals that the PLT tests were not performed in accordance with the 
applicable testing procedure. During the fifteen day period following a 
determination of noncompliance, EPA would coordinate with the 
manufacturer to facilitate the approval of the required production line 
remedy in order to eliminate the need to halt production, to the 
greatest extent possible. The manufacturer must then address (i.e., 
bring into compliance, remove from service, etc.) the engines produced 
prior to the suspension or revocation of the certificate of conformity. 
EPA could reinstate the certificate of conformity subsequent to a 
suspension, or reissue one subsequent to a revocation, after the 
manufacturer demonstrates (through its PLT program) that improvements, 
modifications, or replacement have brought the engine family into 
compliance. The proposed regulations include hearing provisions that 
provide a mechanism to resolve disputes between EPA and manufacturers 
regarding a suspension or revocation decision based on noncompliance 
with the PLT. It is important to point out that the Agency would retain 
the legal authority to inspect and test engines should problems arise 
in the PLT program. It is also important to note that the definition of 
``failure'' of the PLT is limited to the PLT program, and does not 
define failure or noncompliance for other purposes. It is based in part 
on the severity of the result of a failure (suspension or revocation of 
a certificate) and is not meant to limit in any way the overall 
obligation of the manufacturer to produce engines that meet the 
standard.
    EPA recognizes the need to develop a PLT scheme that does not 
impose an unreasonable burden on the manufacturers. Therefore, 
consistent with the requirement that testing be required on one percent 
of total marine diesel engine production for each category, EPA is 
proposing that no PLT be required for manufacturers whose Category 1 
marine diesel engines sales are less than 100 per year. This is because 
companies with such low sales are unlikely to have in-house testing 
facilities, and requiring such companies to send an engine to an 
independent test facility for PLT purposes may be too burdensome. EPA 
seeks comment on whether to extend this exemption to companies with 
fewer than 500 employees across all operations. It should be noted that 
companies that are exempt from the PLT program are not exempt from the 
other certification and compliance provisions described in this 
proposal. Engines exempt from the PLT program will still be required to 
meet the emission limits as produced and in use, and EPA reserves the 
right to conduct an SEA on any diesel engine manufacturer. In addition, 
EPA is not proposing to extend this flexibility provision to the 
Category 2 marine diesel engine PLT program, since those engines are 
typically produced in very small volumes.
    Finally, while EPA believes that it has developed a PLT program 
that takes into account the circumstances of this industry, it also 
understands that alternative plans may be developed that better account 
for the individual needs of a manufacturer. Thus, provisions are 
proposed to allow a manufacturer to submit an alternative plan for a 
PLT program, subject to approval of the Administrator. A manufacturer's 
petition to use an alternative plan should address the need for the 
alternative, and should include justifications for the number and 
representativeness of engines tested, as well as having specific 
provisions regarding what constitutes a PLT failure for an engine 
family.
    The Agency requests comment on all aspects of this proposed PLT 
program. Specifically, EPA requests comment on whether it should select 
the individual engines to be tested, or whether this should be done by 
the manufacturer, subject to EPA approval.

K. Miscellaneous Compliance Issues

    EPA is proposing to extend the general compliance provisions for 
land-based nonroad engines to Category 1 and Category 2 marine diesel 
engines. These include the tampering, defeat device, imported engines 
and vessels, and general prohibition provisions. EPA seeks comment on 
extending these provisions to marine diesel engines, and

[[Page 68537]]

on any modifications that should be made to these provisions to 
accommodate special features of these engines.

L. Averaging, Banking, and Trading Program

    Along with the proposed standards, EPA is proposing a marine 
averaging, banking, and trading (ABT) program. An ABT program allows 
the Agency to propose and finalize a more stringent set of marine 
diesel engine emission standards than might otherwise be appropriate 
under section 213 of the Clean Air Act. ABT reduces the cost and 
improves the technological feasibility of achieving the standards, 
helping to ensure the attainment of the proposed standards earlier than 
would otherwise be possible. Manufacturers gain flexibility in product 
planning and the opportunity for a more cost-effective introduction of 
product lines meeting a new standard. ABT also creates an incentive for 
the early introduction of new technology, which allows certain engine 
families to act as trail blazers for new technology. This can help 
provide valuable information to manufacturers on the technology before 
manufacturers need apply the technology throughout their product line. 
This early introduction of clean technology improves the feasibility of 
achieving the standards and can provide valuable information for use in 
other regulatory programs that may benefit from similar technologies. 
EPA views the effect of the ABT program itself as environmentally 
neutral because the use of credits by some engines is offset by the 
generation of credits by other engines. However, when coupled with the 
new standards, the ABT program would be environmentally beneficial 
because it would allow the new standards to be implemented earlier than 
would otherwise be appropriate under that Act. In addition, to the 
extent that any credits are not used, then there is an additional 
environmental benefit.
    The voluntary ABT program allows the certification of one or more 
engine families within a given manufacturer's product line at emission 
levels above the applicable emission standards, provided that the 
increased emissions are offset by one or more families certified below 
the emission standards. The average of all emissions for a particular 
manufacturer's production (weighted by sales-weighted average power, 
production volume and useful life) must be at or below the level of the 
applicable emission standards. In addition to the averaging program 
just described, the proposed ABT program contains a banking and trading 
provision, which allows a manufacturer to generate emission credits and 
bank them for future use in its own averaging program or sell them to 
another entity. Compliance is determined on a total mass emissions 
basis to account for differences in production volume, power and useful 
life among engine families.
    The ABT program EPA is proposing for marine diesel engines over 37 
kW is based on the corresponding ABT programs recently adopted for 
land-based nonroad engines (63 FR 56967, October 23, 1998) and 
locomotives (63 FR 18978, April 16, 1998), which roughly correspond to 
the proposed Categories 1 and 2, respectively. When a manufacturer 
chooses to participate in the ABT program, it would be required to 
certify each participating engine family to a family emission limit 
(FEL) determined by the manufacturer during certification testing. A 
separate FEL would need to be determined for each pollutant the 
manufacturer is including in the ABT program. EPA is proposing that the 
ABT program be limited to HC+NOX and PM emissions. Thus, 
only two different FELs could be generated for a given engine family.
    Consistent with the recently finalized land-based nonroad engine 
program, marine engine credits are proposed to be calculated based on 
the difference between the applicable standard(s) and FEL(s). However, 
credit calculation for marine engines is somewhat different than that 
for land-based nonroad engines, in that a load factor is inserted in 
the equation. This term is necessary because, contrary to land-based 
nonroad case, not all marine engines are expected to operate at the 
same load. EPA seeks comment on the credit calculation equation, which 
is as follows:

Emission credits = (Std-FEL)  x  (UL)  x  (Production)  x  (AvgPR)  x  
(10-6)  x  (LF)

Where:

 Std = the applicable cycle-weighted marine engine 
THC+NOX and/or PM emission standard in grams per kilowatt-
hour.
 (ii) FEL = the family emission limit for the engine family in 
grams per kilowatt-hour. (The FEL may not exceed the limit established 
in Sec. 94.304(m) for each pollutant.)
 UL = the useful life in hours.
 Production = the number of engines participating in the 
averaging, banking, and trading program within the given engine family 
during the calendar year (or the number of engines in the subset of the 
engine family for which credits are being calculated). Quarterly 
production projections are used for initial certification. Actual 
applicable production/sales volumes are used for end-of-year compliance 
determination.
 AvgPR = average power rating of all of the configurations 
within an engine family, calculated on a sales-weighted basis, in 
kilowatts.
 LF = the load factor, dependent on whether the engine is 
intended for propulsion or auxiliary applications, as follows:

A. 0.69 for propulsion engines
B. 0.51 for auxiliary engines.

    Consistent with EPA's recently finalized land-based nonroad diesel 
engine rule, and because of the inherent trade-off between 
NOX and PM emissions in diesel engines, EPA is proposing to 
adopt for marine diesel engines the provision in the land-based nonroad 
ABT program prohibiting the generation of credits for one pollutant and 
the simultaneous use of credits for the other pollutant within the same 
engine family. In other words, a manufacturer would not be allowed to 
simultaneously generate HC+NOX credits and use PM credits on 
the same engine family, and vice versa. EPA requests comment on whether 
an engine should be allowed to generate credits on one pollutant while 
using credits on another, and whether allowing such an additional 
flexibility would necessitate a reconsideration of the stringency of 
the emission limits.
    EPA is proposing FEL upper limits in the same manner as those in 
the comparable land-based ABT programs to ensure that the emissions 
from any given family certified under this ABT program not be 
significantly higher than the applicable emission standards. In 
general, these FEL upper limits correspond to the existing previous 
tier of standards for the various classes. In other words, the FEL 
upper limits are generally the Tier 1 standards for engines certifying 
according to the ABT provisions relative to the Tier 2 standards, and 
the Tier 2 standards for engines certifying according to the ABT 
provisions relative to the Tier 3 standards. Since EPA is not including 
any Tier 1 standards for marine engines in this proposal, it is 
proposing to use the land-based Tier 1 standards as FEL upper limits 
for the proposed Tier 2 marine engine standards. When the ABT 
provisions for land-based nonroad engines were recently revised there 
were no Tier 1 standards in place for some land-based categories and 
pollutants. These cases correspond to some Category 1 marine engines. 
In

[[Page 68538]]

those cases EPA chose FEL upper limits based on typical in-use emission 
levels of precontrol engines, or existing California Air Resources 
Board emission standards. For a more complete discussion of the 
rationale for the Tier 2 FEL upper limits for Category 1 engines the 
reader is directed to the recent final rule concerning land-based 
nonroad engine emission standards. As an alternative to using the Tier 
1 land-based emission standards as FEL upper limits under the proposed 
Tier 2 standards, EPA is requesting comment on whether it should 
consider using the MARPOL Annex VI NOX standard as the 
appropriate NOX FEL upper limit. Under this approach EPA 
would continue to use the land-based Tier 1 PM standard as the Tier 2 
FEL upper limit. As part of this approach EPA would have to accommodate 
the fact that the MARPOL Annex VI standard is for NOX only 
and the proposed Tier 2 standards are HC+NOX. EPA requests 
comment under this approach as to how best to deal with this 
inconsistency.
    Consistent with the land-based ABT programs from which this 
proposed program is derived, EPA is proposing that ABT credits 
generated under this program have an infinite life, with no discounting 
applied. Also consistent with the recently finalized land-based nonroad 
diesel rule, EPA is proposing that credits generated on land-based 
engines not be allowed to be used for demonstrating compliance for 
marine diesel engines. EPA is concerned that manufacturers who produce 
engines used in both marine and land-based applications could 
effectively trade out of the marine portion of the program, thereby 
potentially obtaining a competitive advantage over small marinizers who 
sell only marine engines. For similar reasons, EPA is proposing that 
credit exchanges not be permitted between Categories 1 and 2 engines. 
EPA seeks comment on the need for these restrictions and on the degree 
to which imposing them may create barriers to low-cost emission 
reductions.
    EPA is also proposing that credits generated relative to the Tier 2 
standards not be allowed to be used toward Tier 3 compliance for either 
Category 1 or Category 2 engines based on concerns about the 
possibility of using such credits to ``trade out'' of compliance with 
the Tier 3 standards.
    EPA is proposing that the ABT program begin with the implementation 
of the Tier 2 standards, with no option for the early generation of 
credits. While the Agency believes that, on a total sales average 
basis, the Tier 2 standards as proposed will result in significant 
emission reductions from uncontrolled levels, it is aware of some 
engine configurations whose emissions are currently at or near the 
levels of the Tier 2 standards. EPA is concerned that the emissions 
from such engine families could be reduced below the proposed Tier 2 
standards without much effort and that easy credits could be generated 
if early banking were allowed. Such credits could then be used to 
significantly delay implementation of the Tier 2 standards for other 
engine families. EPA requests comment on whether it should consider an 
early credit banking option and what types of restrictions it should 
place on such early credits in order to address this concern. 
Commenters are requested to consider, among other options, restrictions 
such as early credits being calculated relative to levels more 
stringent than the Tier 2 standards, discounting of early credits 
(possibly only if above a set threshold level), and limited credit life 
for early credits.
    In the recent rule cited above which set emission standards for 
land-based nonroad diesel engines, EPA also set emission standards for 
marine diesel engines below 37 kW. These engines were also included in 
the land-based ABT program in that rule, with some restrictions. EPA is 
not proposing any changes to the way under 37 kW marine diesel engines 
are treated in this ABT program. EPA is not proposing to integrate the 
ABT program in that rule for under 37 kW marine engines with this 
proposed program. Thus, EPA is proposing that no trading be allowed for 
engines above and below 37 kW. EPA requests comment on whether it 
should allow trading between engine families above and below 37 kW. 
Comments in favor of removing this proposed restriction should address 
that fact that the stringency of the standards for marine diesel 
engines below 37 kW was determined in the absence of this ABT 
flexibility. Comments should address whether allowing trading between 
engine families above and below 37 kW would appropriately require EPA 
to reexamine the stringency of the standards for engines under 37 kW.
    EPA is proposing not to allow the exchange of credits between 
Category 1 marine engine families and land-based nonroad engine 
families. This restriction is proposed for the same reason that EPA is 
proposing to restrict credit exchanges between engine families above 
and below 37 kW (i.e., that the stringency of the land-based standards 
was determined in the absence of the availability of credit exchange 
between marine and land-based engines). In addition, there are 
differences in the way that marine and land-based credits are 
calculated that are implicit in the calculation and that make the 
credits somewhat incompatible. The first is that the difference in test 
duty cycles means there is an implicit difference in load factor 
between the two. The second is that there are provisions in this 
proposal for varying useful lives, which are not included in the land-
based nonroad regulations. In addition, as discussed above, the actual 
credit calculation equations for the two programs are different. EPA 
requests comment on whether it should allow credit exchanges between 
marine and land-based nonroad engine families and, if so, whether 
credits traded from one program would need to be adjusted to account 
for the different credit calculation equations. EPA also seeks comment 
on whether it would be necessary to reconsider the stringency of the 
land-based nonroad emission limits were such cross-program trading 
allowed.45
---------------------------------------------------------------------------

    \45\ It may be necessary to reconsider the stringency of the 
land-based nonroad engine emission standards because those limits 
were set based on an ABT program that is confined to land-based 
engines. Extending the universe of credits to include those 
generated by marine engines could increase the credits available to 
the land-based program, thus reducing the overall stringency of that 
program.
---------------------------------------------------------------------------

    EPA is also proposing to prohibit all trading between Category 2 
engines and locomotive engines because locomotive credits are 
calculated based on expected remaining service life (which could be 
many useful life periods, due to the inclusion of the remanufacturing 
provisions for locomotives), whereas Category 2 marine engine credits 
are only calculated on a single useful life basis.
    As discussed in the section on the recreational engine exemption 
earlier in this preamble, EPA is proposing to allow the use of 
certified engines in recreational applications. This allowance raises 
an issue with respect to credit generation in the ABT program. Engines 
used in recreational applications tend to have significantly lower 
usage rates than engines used in commercial applications. EPA is 
concerned that if an engine is certified as a credit generating 
configuration then it could, if used in a recreational application, 
generate credits on paper that will not have corresponding actual 
emission reductions in use. EPA requests comment on the likely 
frequency of certified engines being used in recreational applications. 
EPA also requests comment on whether it should take steps to prevent 
such

[[Page 68539]]

``false'' credits from being generated, such as by not allowing 
certified engines used in recreational applications from participating 
in the ABT program, or by prorating ABT credits according to expected 
usage rates.
    Participation in the proposed marine diesel ABT program would be 
voluntary. For those manufacturers that choose to utilize the program, 
compliance for participating engine families would be evaluated in two 
ways. First, compliance of individual engine families with their FELs 
would be determined and enforced in the same manner as compliance with 
the emission standards in the absence of an averaging, banking and 
trading program. Each engine family must certify to the FEL (or FELs, 
as applicable), and the FEL would be treated as the emission limit for 
certification, production-line and in-use testing (as well as for any 
other testing done for other enforcement purposes) for each engine in 
the family. Second, the final number of credits available to the 
manufacturer at the end of a model year after considering the 
manufacturer's use of credits from averaging, banking and trading must 
be greater than or equal to zero.
    When credits are generated and traded in the same model year, EPA 
proposes to make both buyers and sellers of credits potentially liable 
for any credit shortfalls, except in cases where fraud is involved. 
This provision is consistent with other mobile source ABT programs. The 
marine diesel engine certificates of both parties involved in the 
violating trading transaction could be voided ab initio (i.e. back to 
date of issue) if the engine family or families exceed emission 
standards as a result of a credit shortfall. Where cases involve a 
manufacturer being defrauded into purchasing non-existent credits, that 
manufacturer would only be expected to make up the credit shortfall 
that resulted from the lack of real credits.
    The integrity of the proposed marine diesel averaging, banking and 
trading program depends on accurate recordkeeping and reporting by 
manufacturers, and effective tracking and auditing by EPA. Failure of a 
manufacturer to maintain the required records would result in the 
certificates for the affected engine family or families being voided 
retroactively. Violations of reporting requirements could result in a 
manufacturer being subject to civil penalties as authorized by sections 
213 and 205 of the Clean Air Act. EPA proposes to allow positive 
reporting errors (i.e., those errors that result in an underestimation 
of the manufacturer's positive credit balance) to be corrected provided 
that the errors are identified within 180 days of EPA's receipt of the 
manufacturer's annual report.
    EPA requests comment on all aspects of the proposed ABT program. 
Specifically, the Agency requests comment on the various restrictions 
(averaging sets, etc.) proposed for the program and the lack of an 
early credit banking program, and the time limit for correcting 
reporting errors.

M. Special Provisions

    In general, EPA sets engine emission standards that take full 
effect at a set point in time, concurrently precluding the installation 
of engines not certified to the new standards in vehicles or equipment. 
The rigidity of this approach is lessened to some extent through 
averaging, banking, and trading programs, which allow engine 
manufacturers to produce engines that exceed the emission limits as 
long as the added emissions can be offset by engines that emit below 
the required levels. While this approach generally works well, 
additional flexibility provisions to help relieve compliance burdens 
may be needed in special cases. Consequently, EPA is proposing the 
following set of flexibility provisions. EPA seeks comment on all 
aspects of these flexibility provisions.
1. Post Manufacturer Marinizers Provisions
    Category 1 and Category 2 marine diesel engines are produced using 
one of three basic manufacturing methods. In the first, least common, 
method, marine engines are designed and built exclusively for marine 
applications. This is typically the case for very large Category 3 
engines as well as some smaller engines that are produced for special 
niche markets. In the second, more common, method, an engine 
manufacturer produces a marine diesel engine using a land-based nonroad 
or highway engine that was built by that same manufacturer. In the 
third method, an unrelated company, referred to as a ``post-manufacture 
marinizer'' produces a marine diesel engine by purchasing a completed 
or partially completed land-based nonroad or highway engine from an 
engine manufacturer and modifying it for use in the marine environment 
according to that manufacturer's own processes. Post-manufacturer 
marinizers (PMM) tend to be small companies, and their output is often 
designed for niche markets. PMMs often have only limited resources for 
engine certification, and several have indicated to EPA that burdensome 
certification requirements would put them out of business.
    To address the concerns of these companies, EPA is proposing 
several provisions that are intended to streamline the certification 
process for PMMs.
    (a) Application of Flexibility Provisions. The following 
flexibility provisions will be available only to PMMs. EPA has 
previously defined the term ``post-manufacture marinizer'' in 40 CFR 
89.2 as ``a person who produces a marine diesel engine by substantially 
modifying a certified or uncertified complete or partially complete 
engine; and is not controlled by the manufacturer of the base engine or 
by an entity that also controls the manufacturer of the base engine.'' 
That definition goes on to clarify that ``substantially modify means 
changing an engine in a way that could change engine emission 
characteristics.''
    EPA has become aware that the above definition may be too narrow. 
It implies that only those persons who substantially modify an engine 
will be considered PMM; those who do not modify the engine in ways that 
would change the engine's emission characteristics (i.e, the 
modifications are not ``substantial'') would not trigger the PMM 
designation. This was not meant to be the case. EPA intended that a 
person who modifies in any way an engine certified to a previous tier 
or who modifies in any way an uncertified engine would be considered a 
PMM and would have to recertify the engine to the marine emission 
limits in place at the time the engine is marinized. Therefore, EPA is 
proposing to revise the definition of PMM, to clarify that a PMM is a 
person who substantially modifies a land-based engine previously 
certified to the same or more stringent emission limits as the 
currently applicable marine emission limits, or a person who modifies 
in any way an uncertified engine or an engine certified to a previous 
tier of emission limits.
    This modification of the PMM definition will not affect the engine 
dresser exemption described in Section III.B.2 above, since one of 
those criteria is a requirement that the dressed engine be certified to 
emission limits at least as stringent as those applicable to marine 
diesel engines a the time the engine is dressed.
    Finally, EPA intends that a vessel manufacturer that substantially 
modifies a certified engine or that modifies an uncertified engine or 
an engine certified to a previous tier of emission limits would be 
considered a PMM and would have to comply with the certification and 
compliance provisions proposed in this document. This clarification is 
necessary because it is not uncommon

[[Page 68540]]

for vessel manufacturers to modify marine engines. This is often done 
to increase the power of an engine, to respond to the needs of a 
particular user. By considering such vessel manufacturers as PMM, EPA 
will ensure that the engine modifications do not also increase the 
emissions of an otherwise certified engine.
    (b) Broader Engine Families. EPA is proposing to allow PMMs to use 
a broader engine family definition. Under this provision a PMM may 
include any engines that have similar emission deterioration 
characteristics in one engine family. Thus, a PMM could conceivably 
group all marine engines into one marine engine family. The only 
restriction is that the engines are all in the same category. Separate 
engine families will be required for each category of marine engines.
    Note that all other provisions of the proposal shall apply to this 
broad engine family including, but not limited to, selection and 
testing of an emission data engine, application of a deterioration 
factor (DF), and compliance with the standards.
    (c) Carryover Provisions. This proposal makes provision for 
carryover of engine data, which allows engine manufacturers to use data 
generated in a previous model year's certification to certify for the 
current year. This provision will also apply to the broader PMM engine 
families, with the constraint that new data will need to be generated 
if any model in the broad family is modified in any way that will make 
it the highest emitter in the family.
    (d) Streamlined Certification for Subsequent Years. EPA is 
proposing a streamlined certification process for PMMs. This process 
would be applicable beginning with the year after the relevant 
implementation dates and continuing until engine design changes cause a 
different engine model to be the highest emitter in the broad PMM 
family. Recertification would be required at that point. Under this 
streamlined certification process, the manufacturer would submit its 
annual certification application stating that there have been no 
changes in the design or production of the engine models that make up 
the engine family. If there have been changes, the PMM could still 
avoid a complete certification submission with test data by 
demonstrating that there is no change in the identity of the highest 
emitter or its emissions. EPA requests comment on such a streamlined 
certification program for PMM.
    (e) NTE Flexibility. As noted above, EPA is including an off-cycle 
emission requirement whereby engine manufacturers would be required to 
demonstrate that marine diesel engine emissions do not exceed a 
specified cap at any point in a specified zone of operation (see 
Section V.E.2., above). EPA expects that demonstrating compliance with 
the NTE will call for additional R&D and testing to measure and control 
emissions under any speed and load combination that can occur on a 
vessel. These costs are included in EPA's analysis of economic impacts, 
but EPA believes that the costs would be disproportionately difficult 
for a PMM to bear. EPA therefore requests comment on alternative 
approaches to address in-use emissions for these small manufacturers to 
ensure in-use performance while minimizing the testing burden for PMMs.
    (f) Additional Compliance Time. Because of the nature of their 
business, marinizing partially or fully completed engines manufactured 
by another company, the ability of PMM to certify their engines as 
complying with the proposed emission limits may be affected by 
circumstances that are beyond their control. Consequently, there may be 
situations in which, despite its best efforts, a PMM cannot meet the 
implementation dates, even with the flexibility provisions described 
above. Such a situation may occur if an engine supplier without a major 
business interest in a PMM were to change or drop an engine model very 
late in the implementation process, or was not able to supply the PMM 
with an engine in sufficient time for the PMM to recertify the engine. 
Based on this concern, EPA is proposing to allow a one-year delay in 
the implementation dates for PMMs. EPA requests comment on the 
necessity of such a provision, whether its application should be 
limited only to small companies, and on whether the one-year delay 
should be automatic or subject to approval by EPA.
    (g) Special Hardship Provision. As a relief mechanism of last 
resort, EPA is also proposing to extend to PMM the hardship relief 
provisions contained in the recently finalized land-based nonroad rule 
(40 CFR 89.102(f)). Under this provision, PMM can petition EPA for 
additional time to demonstrate compliance with the emission limits. 
Under this hardship relief provision, appeals must be made in writing, 
be submitted before the earliest date of noncompliance, be limited to 
firms that fit the small business criteria established by the Small 
Business Administration (fewer than 500 employees), include evidence 
that failure to comply was not the fault of the PMM (such as a supply 
contract broken by the engine supplier, and include evidence that the 
inability to sell the subject engines will have a major impact on the 
company's solvency. The Agency would work with the applicant to ensure 
that all other remedies available under the flexibility provisions are 
exhausted before granting additional relief, and would limit the period 
of relief to no more than one year. Furthermore, the Agency proposes 
that applications for hardship relief only be accepted during the first 
year after the effective date of an applicable new emission standard. 
To avoid the creation of a self-fulfilling prophesy, by which the very 
existence of this provision prompts engine manufacturers to delay 
engine developments, EPA expects that this provision will be used only 
rarely. Each granting of relief would be treated as a separate 
agreement, with no prior guarantee of success, and with the inclusion 
of measures, agreed to in writing by the PMM, for recovering the lost 
environmental benefit. Comment is requested on all aspects of this 
proposal.
2. Vessel Builder Flexibilities
    As part of the land-based nonroad rule, EPA proposed a set of 
flexibility provisions for equipment manufacturers. These provisions 
were intended to give equipment manufacturers more time to comply with 
the requirement that they use only certified engines beginning with the 
implementation dates the engine standards. The additional time was 
necessary because the engine compartment on land-based nonroad 
equipment is relatively restricted, and changes to the physical 
characteristics of a nonroad engine could require extensive equipment 
redesign. However, equipment manufacturers may be unable to obtain a 
certified Tier 2 or Tier 3 engine before the implementation dates for 
those engines. The flexibility provisions were designed to give extra 
time for product redesign to equipment manufacturers that need it 
without postponing the emission benefits of the entire program.
    While recognizing the importance of such a transition program for 
land-based nonroad equipment manufacturers, EPA is not proposing a 
similar proposal for marine vessels. There are three reasons for this. 
First, EPA has learned that the commercial vessel production process is 
actually a very flexible process. Commercial marine vessels are 
generally designed for a specific purchaser, to meet specific 
operational requirements. This means that a vessel purchaser will 
typically tell a

[[Page 68541]]

manufacturer what kind of load the vessel is intended to carry, and 
what kind of engine to use. The vessel manufacturer then designs the 
vessel, or adapts an existing design, based on these requirements. EPA 
believes that this kind of design process can easily accommodate any 
changes to an engine that may occur as a result of the proposed 
program, regarding its physical dimensions or weight. Second, 
commercial marine vessels are not serially produced in the same way as 
land-based nonroad equipment. Sales volume by manufacturer is much 
smaller in the commercial marine industry. Therefore, marine vessel 
manufacturers do not need extra time to accommodate engine changes 
across a wide range of equipment offerings. Third, it typically takes a 
significant amount of time to design and build a commercial marine 
vessel. EPA believes that any design changes required as a result of 
engine changes can be accommodated in the normal vessel construction 
period. Nevertheless, there may be special situations in which vessel 
manufacturers may have difficulties producing vessels that use 
compliant engines. EPA seeks comment on any such circumstances, and the 
types of flexibility provisions that would be needed to address those 
concerns.

N. Application of Provisions to Marine Diesel Engines Less Than 37 kW

    Marine diesel engines less than 37 kW were included in the 
rulemaking for nonroad diesel engines and are subject to the emission 
control program contained in 40 CFR Part 89. That program has two tiers 
of emission limits, phased in from 1999 to 2000 for Tier 1 and 2004 to 
2005 for Tier 2. In general, marine diesel engines less than 37 kW are 
subject to the same certification and compliance program as land-based 
nonroad diesel engines. Exceptions to this general approach include the 
duty cycle (E3, but with a C1 option), ABT program restrictions (land-
based credits cannot be used to offset marine diesel emissions), and 
implementation flexibility provisions that would allow post-manufacture 
marinizers to phase in compliance with Tier 1 emission limits according 
to the schedule extended to nonroad equipment manufacturers.
    EPA is aware that some companies manufacture marine diesel engines 
above and below the 37 kW threshold. Most of these companies are small 
businesses with limited ability to devote staff to managing compliance 
with emission control requirements. One possible administrative change 
that may lessen this burden would be to move the provisions for marine 
diesel engines rated below 37 kW currently contained in 40 CFR Part 89 
to 40 CFR Part 94. Transferring the provisions for marine diesel 
engines rated below 37 kW in this way would ensure that engine 
manufacturers, vessel manufacturers, and the general public need 
consult only one area of the Code of Federal Regulations to identify 
the emission control programs applicable to all marine diesel engines.
    An important goal of any such change should be to avoid changing 
the level of stringency of the requirements for marine diesel engines 
less than 37 kW. EPA therefore does not intend to change the level or 
timing of emission limits or other provisions that may affect the 
emissions from these engines.
    EPA is, however, seeking comment on the extent to which the 
administrative portions of the certification and compliance 
requirements for marine diesel engines less than 37 kW should be 
harmonized with those proposed in this document. Commenters are 
encouraged to specify which provisions should be harmonized for these 
engines and to explain why this would be helpful. EPA believes that 
such harmonization would be appropriate for several reasons. First, 
harmonization of these provisions will ensure that engine manufacturers 
have only one set of administrative requirements to follow instead of 
two, thus simplifying the certification and approval process for both 
the manufacturers and EPA. Second, harmonization would formally extend 
the special compliance flexibility provisions of this proposal to post-
manufacture marinizers that modify smaller diesel engines, including 
the more relaxed definition of engine family and streamlined 
certification renewals. Third, this would clarify the requirements for 
engine dressers.

VI. Category 3 Engine Provisions

A. Emission Limits

    Category 3 engines are very large marine diesel engines, typically 
used for propulsion purposes on ocean-going vessels. Although these 
engines can achieve power ratings in excess of 75,000 kW, they are 
diesel engines and, with certain limitations, can benefit from the 
emission control technologies that are used on other diesel engines. 
Perhaps the most important of these limitations is the fuel on which 
they are operated, called residual fuel. This fuel is the by-product of 
distilling crude oil to produce lighter petroleum products such as 
gasoline, DM-grade diesel fuel (used in on-highway, land-based nonroad 
and smaller diesel marine engines), and kerosene. It possesses a high 
viscosity and density, which affects ignition quality, and it typically 
has high ash, sulfur and nitrogen content in comparison to marine 
distillate fuels. Furthermore, residual fuel parameters are highly 
variable because its content is not regulated. It is this high 
variability that makes it difficult to apply timing retard as a control 
strategy. Ship engineers will generally optimize engine timing to 
achieve peak pressures for each fuel blend and would not likely have 
the expertise or incentive to optimize for emissions. Residual fuel can 
increase engine NOX emissions from 20-50% and PM from 750% 
to 1250% when compared to distillate fuel.46
---------------------------------------------------------------------------

    \46\ D. Bastenhof. Exhaust Gas Emission Measurements: A 
Contribution to a Realistic Approach, 1995 (Air Docket A-97-50).
---------------------------------------------------------------------------

    In determining the appropriate emission limits for Category 3 
engines, EPA considered the application of existing diesel emission 
technologies. These engines are, for the most part, already employing 
Tier 1 and Tier 2 technologies, including turbocharging, injection 
improvements, electronics, and more efficient cooling. Application of 
these technologies has already been extremely optimized, with engines 
being supercharged as well as turbocharged, and with two-stage seawater 
aftercooling to reduce engine temperatures. The application of these 
technologies results in very high fuel efficiency and optimal engine 
operation.
    Because of the extensive use of Tier 2 technologies on Category 3 
engines, the opportunities for emission reductions are not as extensive 
as they are for smaller engines. The most likely set of next-generation 
technologies that could potentially be applied to these engines include 
EGR, SCR, and water injection. However, as discussed in the Draft 
Regulatory Impact Assessment, these technologies are still under 
development for marine diesel engines of this size and thus the Agency 
does not believe it is appropriate to set emission limits that would 
require their use at this time. In addition, their application to 
Category 3 engines is complicated by the quality of the fuel used in 
these engines.
    EPA believes it is appropriate to consider an emission limit that 
would rely largely on the use of injection rate shaping, with some 
retarded timing. By optimizing a variable fuel injection rate, a small 
amount of fuel can be delivered early to initiate combustion. Once 
combustion begins, the rest of the fuel

[[Page 68542]]

can be injected. Through this strategy, the peak temperature in the 
cylinder can be reduced by reducing the amount of fuel that is mixed 
with air prior to the start of combustion. This premixed fuel results 
in a large thermal spike when it burns when compared to diffusion 
burning. By reducing the peak temperatures, it is more difficult for 
NOX to form.
    EPA analysis indicates that the appropriate emission limits for 
Category 3 engines, that would require injection rate shaping but not 
extensive timing retard, are the limits that were recently adopted in 
MARPOL Annex VI. These NOX limits also take into account the 
special fuel used by these engines. Those limits are contained in Table 
1, above. EPA also believes that these emission limits would be the 
appropriate standards under the Clean Air Act, under the current 
circumstances. With respect to emission reductions, while MARPOL Annex 
VI targeted a 30% NOX emission decrease, EPA analysis 
indicated that a 17% NOX decrease could be expected. 
However, implementation of these NOX limits will prevent 
further increases in NOX resulting from further developments 
in Category 3 engine design. Because of Category 3 engines' 
characteristic design and operation for minimum BSFC (see the Draft 
RIA), further improvements in materials and engine design will only 
increase specific NOX emissions in the absence of these 
limits.
    Because the MARPOL Annex VI NOX limits would likely be 
implemented independently of any Clean Air Act requirement, assuming 
ratification by the United States of Annex VI, EPA believes it would be 
unnecessary and redundant to adopt the same program under the Clean Air 
Act. Therefore, EPA is not proposing to adopt emission limits for 
Category 3 engines as part of this rule. Instead, EPA expects U.S. 
vessel owners to begin installing engines certified to the MARPOL Annex 
VI limits beginning with the effective date set in Annex VI (January 1, 
2000), following the procedures otherwise applicable to that Annex. EPA 
requests comment on this approach, as well as the rationale behind its 
adoption. EPA seeks comment on how to ensure that U.S. vessel owners 
begin installing Category 3 engines beginning with ships constructed on 
or after January 1, 2000. EPA also seeks comment as to whether EPA 
should be required to examine implementation of the Annex domestically 
as part of the 2003 Feasibility Review, described in Section V.A.3., 
above.
    EPA seeks comment on the proposed approach to Category 3 engines. 
EPA also seeks comment on whether EPA should consider a longer terms 
strategy as well and, if so, what those long-term NOX 
emission limits should be. Finally EPA seeks comment on the need to 
adopt a PM limit for these engines. MARPOL Annex VI does not set a PM 
limit, presumably because of the fuel variability issue and the lack of 
an appropriate PM test method for residual fuels (see the Draft RIA). 
EPA seeks comment on the desirability to go beyond the Annex VI 
requirement by setting a PM standard for Category 3 engines and, if so, 
what that PM limit should be and how it shall be tested.
    Category 3 engines can switch between fuels, and, as stated above, 
residual fuel can increase NOX emissions by 20%-50% and PM 
emissions by 1000% (250%) compared to marine distillate 
fuel. Foreign vessels with Category 3 engines currently account for 45% 
of the NOX emissions from Category 3 engines (see the Draft 
Regulatory Impact Assessment). One mechanism to reduce NOX 
emissions from these engines would be restricting the use of residual 
fuel in or near port regions, perhaps utilizing remote CO2, 
SOX, and PM sensing technologies to non-intrusively 
discriminate the fuel burned by a ship. If such a technology can be 
demonstrated, enforcement could become as straightforward as 
determining automobile speed on a highway. EPA seeks comment on whether 
ports and states could effectively employ such a strategy, for example 
as a condition on use of ports. Comments provided on this question will 
assist EPA in assessing the extent to which such a locally-imposed 
emission control strategy would be practical. These comments, in turn, 
will also help EPA determine whether it would be useful to issue 
guidance on how to establish such programs, both for California's South 
Coast ports and ports located in other areas of the country.

B. Category 1 and 2 Engines Aboard Vessels Engaged in Foreign Trade

    EPA proposes an additional provision for Category 1 and 2 engines 
that are installed on U.S.-flagged vessels engaged in foreign trade 
that meet the criteria described below. This provision will allow these 
engines to be certified to the MARPOL Annex VI NOX curve 
instead of the EPA proposed limits provided certain conditions are met. 
This provision would go into effect at the same time as the 
implementation of the proposed domestic emission requirements for these 
engines. In other words, waivers would not be needed until 2004 for 
engines with a per cylinder displacement below 2.5 liters and until 
2006 for engines with a per cylinder displacement at or above 2.5 
liters but below 20 liters. Prior to these dates, it is assumed that 
engines installed on these vessels will be compliant with the MARPOL 
NOX limits.
    This special provision is intended to address the different 
circumstances in which these engines will be used, rather than any 
differences in their operation. Specifically, Category 1 and Category 2 
engines installed on foreign trade vessels are typically used for 
auxiliary purposes. These engines are often essential for the smooth 
functioning of the vessel, since they are used to generate electricity 
for navigational equipment (radar, gyrocompass, and 
telecommunications), maneuvering equipment (steering gear, bow 
thrusters), and crew services (lighting in the engine room, cooking in 
the galley). If these engines were to fail, a ship would be stranded 
and would most likely require a tow into port. Repairing engines to EPA 
requirements may be difficult in a foreign port because of availability 
of replacement parts. This may cause a ship owner to incur significant 
downtime costs to have the replacement part or a new engine delivered 
to a foreign port. Alternatively the ship owner may have to buy a 
noncomplying engine while overseas, only to replace it when the vessel 
returns to the United States. Allowing Category 1 and Category 2 
engines to meet the MARPOL Annex VI limits instead of the EPA's 
requirements will reduce if not eliminate any difficulties associated 
with the maintenance and repair of these engines while at sea, since 
vessels worldwide are expected to comply with those limits beginning in 
2000.
    EPA believes that this special provision for Category 1 and 
Category 2 engines will have minimal impact on U.S. air quality if it 
is limited to those vessels that engage in foreign trade. EPA proposes 
to define a U.S.-flagged vessel engaged in foreign trade as one that 
has solely a registry endorsement pursuant to Coast Guard regulations 
at 46 CFR 67.17. Vessels with multiple endorsements (e.g., foreign and 
coastwise) will need to demonstrate to the Administrator's satisfaction 
that the vessel will spend less than 25% of its operating time within 
320 nautical kilometers (200 nautical miles) of U.S. territory. This 
determination would need to be made during the ship's construction, 
based on the business plans of the ship owner. EPA does not believe 
application for this determination will be burdensome

[[Page 68543]]

because the vessel owner will have built the ship with a specific trade 
in mind.
    To ensure that only the appropriate vessels use this provision, EPA 
proposes that Category 1 and 2 engines be labeled to indicate that they 
have been certified only to the MARPOL Annex VI NOCX curve 
limits, and that they are not intended for use on domestic vessels. In 
addition, EPA proposes that any vessel owner who seeks this exemption 
obtain a waiver from EPA. Such a waiver would be issued upon 
satisfactory demonstration that the vessel will be used for foreign 
trade. EPA proposes that a vessel will be considered to be used for 
foreign trade if it spends less than 25 percent of its operating time 
within 200 nautical miles of the United States, and it does not operate 
solely between the United States, Canada, Mexico, Bermuda, or the 
Bahamas. Without this additional limit, EPA is concerned that ships 
whose engines do, in fact, have a significant impact on U.S. air 
quality would be exempt from the proposed domestic program. Also, 
because they operate in closer proximity to the United States these 
vessels are unlikely to experience problems with maintaining engines 
certified to EPA standards.
    EPA seeks comment on whether this special provision for Category 1 
and Category 2 engines installed on U.S.-flagged foreign trade vessels 
is necessary. EPA also requests comment on how best to define the group 
of vessels that should benefit from the provision while ensuring that 
those vessels operating in the United States meet the emission 
requirements proposed in this document. EPA requests comment on whether 
ships that operate solely between the United States, Mexico, the 
Bahamas, and Canada should be able to benefit from this provision.

VI. Technological Feasibility

    The emissions standards proposed in this action would apply to a 
large variety of marine diesel engine sizes and applications. Section 
213(a)(3) of the Clean Air Act calls for EPA to establish standards 
that provide for the ``greatest degree of emission reduction achievable 
through the application of technology which the Administrator 
determines will be available for the engines or vehicles to which such 
standards apply, giving appropriate consideration to the cost of 
applying such technology within the period of time available to 
manufacturers and to noise, energy, and safety factors associated with 
the application of such technology.''
    This section describes EPA's understanding of the range of 
technologies that will be available to manufacturers to comply with the 
proposed standards for Category 1 and 2 marine diesel engines and the 
technological approach anticipated for Category 3 marine engines. EPA 
believes that the technology discussed below will be sufficient for 
both the proposed standards and the NTE requirements. The costs 
associated with these technologies will be discussed in Section VII. 
EPA has concluded, as described in the Draft RIA, that the proposed 
standards will have no significant negative effect on noise, energy, or 
safety. The technological feasibility of the proposed standards is 
discussed below for each category.

A. Category 1 Engines

    EPA believes that the emission reduction strategies that are 
expected to be used on land-based nonroad diesel engines to meet the 
nonroad Tier 2 and Tier 3 standards can also be applied to Category 1 
marine diesel engines. This is because marine diesel engines are 
generally derivatives of land-based nonroad and highway engines. Marine 
engine manufacturers and marinizers make modifications to the engine to 
make it ready for use in a vessel. These modifications can range from 
basic engine mounting and cooling changes to a restructuring of the 
power assembly and fuel management system. The Draft RIA discusses this 
process in more detail.
1. Development of Implementation Schedule
    For Category 1 engines with specific displacements below 2.5 liters 
per cylinder, the proposed implementation dates for Tier 2 essentially 
represent a four year lead time beyond the scheduled implementation 
date of the MARPOL Annex VI NOX standard. Another four years 
of lead time is proposed for Tier 3. Having a single implementation 
date for several subcategories has an advantage for marine engines 
because it removes concerns associated with engine families that fall 
into several subcategories. This is important since marine engines may 
not fall into the same categories as their land-based nonroad 
counterparts. In some cases, using the same staggered approach for 
marine as for land-based nonroad engines could require the marine 
version to be certified before the land-based version of an engine. 
However, it is EPA's intent that marine engine designs have the benefit 
of being able to make use of the emission controls developed for land-
based nonroad engines.
    The proposed implementation schedule allows up to a three-year 
delay in standards for Category 1 marine engines relative to the 
implementation dates of the land-based nonroad standards. This should 
make this proposed regulatory scheme more cost-effective by allowing 
time for the carryover of technology from land-based nonroad to marine 
engines.
    For engines with specific displacements greater than or equal to 
2.5 liters per cylinder, EPA proposes an additional two years of lead 
time. This additional lead time would make the implementation date for 
the proposed marine Tier 2 standards consistent with the land-based 
nonroad Tier 2 implementation date for these engines. Therefore, the 
marine engines would be able to use technology developed for land-based 
applications. In addition, there are currently no Tier 3 standards for 
land-based nonroad engines of this size; therefore, the extra lead time 
may be necessary for the larger Category 1 marine engines to achieve 
Tier 3 levels. EPA requests comment on the proposed implementation 
dates.
2. Development of Numerical Standards
    Marine diesel engines are typically derived from or use the same 
technology as land-based nonroad diesel engines and should therefore be 
able to effectively use the same emission control strategies. In fact, 
marine engines can make use of the water they operate in as a cooling 
medium, which can help them reduce charge air intake temperatures more 
easily than land-based nonroad engines. By cooling the intake charge, 
formation of NOX emissions can be reduced. Also, as 
discussed in Chapter 3 of the Draft RIA, data on five marine engines 
show that emissions measured on the proposed ISO E3 marine duty cycle 
are roughly equivalent to those measured on the land-based nonroad ISO 
C1 duty cycle. Finally, several demonstration marine diesel engines 
have been in service for a couple years in California with emission 
levels that are very close to meeting the standards proposed in this 
document. These demonstration engines are all using established 
technology that EPA anticipates will be used to comply with this 
proposed rule. The Draft RIA provides more detail on the emissions 
levels achieved and the technology applied to these engines.
    Because of the lead time needed to transfer land-based technology 
to the marine environment, EPA believes that it is reasonable to 
propose near-term standards that are somewhat less stringent compared 
to land-based nonroad in the Tier 2 time frame. EPA

[[Page 68544]]

believes that more stringent Tier 3 standards are feasible in the long 
term especially given the technology being developed for land-based 
nonroad engines and the long lead time. Proposing a slightly less 
stringent numerical NOX emissions limit for Tier 2 marine 
than for Tier 2 land-based nonroad engines should allow marine engine 
manufacturers the flexibility to focus on Tier 3 technology and still 
reduce emissions in the interim without spending excessive resources on 
Tier 2.
3. Technological Approaches
    EPA anticipates that the proposed standards for marine engines will 
be met primarily with technology that will be applied to land-based 
nonroad engines to meet the proposed Tier 2 and Tier 3 emission 
standards. Much of this technology already has been established in 
highway applications and is already being used in limited land-based 
nonroad and marine applications. EPA's analysis of this technology is 
described in detail in Chapter 3 of the Draft RIA for this proposed 
rule and is summarized below.
    By proposing multiple levels of standards that extend well into the 
next decade, EPA is providing engine manufacturers with substantial 
lead time for developing, testing, and implementing emission control 
technologies. This lead time and the coordination of standards with 
those for land-based nonroad engines allows time for a comprehensive 
program to integrate the most effective emission control approaches 
into the manufacturers' overall design goals related to durability, 
reliability, and fuel consumption.
    Engine manufacturers have already shown some initiative in 
producing limited numbers of low NOX marine diesel engines. 
More than 80 of these engines have been placed into service in 
California through demonstration programs. The Draft RIA discusses, in 
detail, these engines and their emission results. Through the 
demonstration programs, EPA has been able to gain some insight into 
what technologies can be used to meet the proposed emission standards.
    Highway engines have been the leaders in developing new emission 
control technology for diesel engines. Because of the similar engine 
designs in land-based nonroad and marine diesel engines, it is clear 
that much of the technological development that has led to lower 
emitting highway engines can be transferred or adapted for use on land-
based nonroad and marine engines. Much of the improvement in emissions 
from these engines comes from ``internal'' engine changes such as 
variation in fuel injection variables (injection timing, injection 
pressure, spray pattern, rate shaping), modified piston bowl geometry 
for better air-fuel mixing, and improvements intended to reduce oil 
consumption. Introduction and ongoing improvement of electronic 
controls have played a vital role in facilitating many of these 
improvements.
    Other technological developments that are expected to be used on 
nonroad engines will require a greater degree of development before 
they can be applied to marine diesel engines. Turbocharging is widely 
used now in marine applications, especially in larger engines, because 
it improves power and efficiency by compressing the intake air. 
Turbocharging may also be used to decrease particulate emissions in the 
exhaust. Today, marine engine manufacturers generally have to rematch 
the turbocharger to the engine characteristics of the marine version of 
a nonroad engine and often will add water jacketing around the turbo 
housing to keep surface temperatures low. Once the Tier 2 nonroad 
engines are available to the marine industry, matching the 
turbochargers for the engines will be an important step in achieving 
low emissions.
    Aftercooling is a well established technology that can be used to 
reduce NOX by reducing the temperature of the charge air 
after it has been heated during compression. Reducing the charge air 
temperature directly reduces the peak cylinder temperature during 
combustion, which is the primary cause of NOX formation. 
Air-to-water and water-to-water aftercoolers are well established for 
land-based applications. For engines in marine vessels, there are two 
different types of aftercooling used: jacket-water and raw-water 
aftercooling. With jacket-water aftercooling, the coolant to the 
aftercooler is cooled through a heat exchanger by ambient water. This 
cooling circuit may be either the same circuit used to cool the engine 
or a separate circuit. By moving to a separate circuit, marine engine 
manufacturers would be able to achieve further reductions in the intake 
charge temperature. This separate circuit could result in even lower 
temperatures by using raw water as the coolant. This means that ambient 
water is pumped directly to the aftercooler. Raw-water aftercooling is 
currently being used widely in recreational applications. Because of 
the access that marine engines have to a large ambient water cooling 
medium, EPA anticipates that marine engine manufacturers will largely 
achieve the reductions in NOX emissions for this proposal 
through the use of aftercooling.
    To meet the proposed standards, Category 1 marine diesel engine 
manufacturers are expected to use many of the strategies discussed 
above. Electronic controls offer great potential for improved control 
of engine parameters for better performance and lower emissions. Unit 
pumps or injectors would allow higher-pressure fuel injection with rate 
shaping to carefully time the delivery of the whole volume of injected 
fuel into the cylinder. Marine engine manufacturers should be able to 
take advantage of modifications to the routing of the intake air and 
the shape of the combustion chamber of nonroad engines for improved 
mixing of the fuel-air charge. Separate circuit jacket- and raw-water 
aftercooling will likely gain widespread use in turbocharged engines to 
increase performance and lower NOX.
    To meet the proposed Tier 3 standards, EPA believes that two 
technologies would be especially useful. Common rail injection systems 
provide greater overall control of the fuel injection strategy by 
maintaining a constant supply of high-pressure fuel at the injectors. 
Also, exhaust gas recirculation is anticipated to be applied to land-
based nonroad diesel engines, which will provide valuable experience in 
applying this control strategy to marine engines. These technologies 
are not anticipated to be developed for land-based nonroad engines with 
specific displacements greater than or equal to 2.5 liters per 
cylinder. However, EPA believes that the concepts can be adapted from 
smaller land-based nonroad and highway engines. To account for 
difficulties of adapting common rail fuel injection and EGR to these 
larger engines, EPA is proposing a higher marine Tier 3 
HC+NOX standard than for engines with specific displacements 
less than 2.5 liters per cylinder. A more detailed treatment of the 
feasibility of these engines meeting the proposed standards is included 
in the Draft RIA.
4. Conclusions Regarding Technological Feasibility
    The standards in this proposal are the most challenging that can be 
set in this time frame. Category 1 marine diesel engine manufacturers 
will need to use the available lead time to develop the necessary 
emission control strategies, including transfer of technology from 
land-based nonroad diesel engines. This development effort will require 
not only achieving the targeted emission levels, but also ensuring that 
each engine will meet all performance and emission

[[Page 68545]]

requirements over its useful life. The proposed standards clearly 
represent significant reductions compared with baseline emission 
levels.
    Emission control technology for diesel engines is in a period of 
rapid development in response to the range of emission standards in 
place and anticipated for highway and land-based nonroad engines in the 
years ahead. This development effort will automatically transfer to 
some extent to marine engines, since marine engines are often 
derivatives of highway and land-based nonroad engines. Regardless, this 
development effort will need to expand to marine diesel engines as a 
result of this proposal. Because the technology development for highway 
and land-based nonroad engines will to a large extent constitute basic 
research of diesel engine combustion, the results should be applicable 
to marine engines.
    Based on information currently available, EPA believes that it is 
feasible for Category 1 marine diesel engine manufacturers to meet the 
proposed standards using combinations of technological approaches 
discussed above and in the Draft RIA. To the extent that the 
technologies described above may not yield the full degree of emission 
reduction anticipated, manufacturers could still rely on a modest 
degree of fuel injection timing retard as a strategy for complying with 
the proposed emission standards. As described under Economic Impacts 
below, injection timing retard may be associated with some decrease in 
fuel efficiency.
    In addition, EPA believes that the flexibilities incorporated into 
this proposal will permit marinizers and vessel builders to respond to 
engine changes in an orderly way. For these industries, EPA expects 
that meeting these requirements will pose a significant challenge, but 
one that is feasible taking into consideration the availability and 
cost of technology, time, noise, energy, and safety.

B. Category 2 Engines

    EPA believes that the emission reduction strategies that are 
expected to be used on locomotive diesel engines to meet the recently 
finalized standards can also be applied to Category 2 marine diesel 
engines. This is because the majority of Category 2 marine diesel 
engines are derivatives of locomotive engines. Similar to Category 1, 
marine engine manufacturers and marinizers then make modifications to 
the engine to make it ready for use in a vessel.
1. Development of Implementation Schedule
    EPA is proposing a similar approach as proposed for Category 1 
engines. Because of the marinization process, marine engine 
manufacturers will likely need some time to respond to changes in 
locomotive engine designs associated with their standards. This is why 
EPA is proposing that there be a one year delay between the 
implementation of the locomotive Tier 2 and the marine Tier 2 
standards. EPA believes that a four year additional lead time is 
sufficient for Category 2 marine engine manufacturers to achieve the 
additional reductions associated with the proposed Tier 3 standards. In 
any case, the Tier 3 standards are proposed to be subject to a 
feasibility review in 2003.
2. Development of Numerical Standards
    EPA proposes the marine Tier 2 emissions standards for Category 2 
marine diesel engines to be the same level as the locomotive line-haul 
Tier 2 emissions standards. The Draft RIA compares baseline marine 
emissions on the E2 and E3 cycles to baseline locomotive emissions on 
the line-haul cycle and shows that the baseline emissions for marine 
are about the same or slightly lower than for locomotives. Thus, EPA 
believes that no change in the standards is required due to the duty 
cycle. Although locomotives are required to meet standards for a line-
haul and a switch duty cycle, the line-haul standard was chosen for 
this comparison because it is more similar to the proposed marine duty 
cycles than the switch cycle.
    EPA believes that further reductions are possible from Category 2 
marine engines than are required for locomotive engines. This is why 
EPA is proposing Tier 3 standards for Category 2 marine engines. 
Technologically, marine engines do not have nearly the cooling 
constraints that locomotive engines have and they do not need to be 
designed for operation at high altitudes. In addition, under the lead 
time associated with the proposed Tier 3 standards, EPA believes that 
further emission control technology can be applied to these engines.
3. Technical Approach
    Most of the emission control strategies anticipated to be used on 
locomotive engine to meet the locomotive Tier 2 standards are similar 
to those expected to be used on nonroad engines to meet the land-based 
nonroad Tier 2 standards. These technologies include combustion chamber 
modifications, better oil control, improvements in fuel injector design 
(i.e., rate shaping, higher pressures, nozzle geometry), electronic 
engine management controls, and separate circuit aftercooling. In 
addition, the older two-stroke engine designs are already being 
replaced by four-stroke engine designs. EPA believes that these 
technological improvements can be directly applied to Category 2 marine 
diesel engines. Most likely, the marine engine manufacturers will need 
to rematch the turbochargers and cooling circuits to respond to the new 
locomotive engine designs.
    EPA believes that marine engines have two advantages over 
locomotive engines for reducing NOX. Marine engines have 
access to ambient water, which gives them the ability to achieve very 
low charge air temperatures with an aftercooler. Locomotives, on the 
other hand, have extreme packaging constraints, which minimize their 
ability to cool the charge air. Locomotive engines must also be 
designed to meet their standards at high altitudes while Category 2 
marine diesel engine operate at or near sea level. Because marine 
engines do not operate at high altitude, they have less of a concern 
for design tradeoffs between maintaining low NOX and low 
smoke levels.
    Similar to Category 1, EPA believes that the key technologies 
needed for Category 2 marine engines to meet the proposed marine Tier 3 
emissions standards are common rail fuel injection and exhaust gas 
recirculation. These technologies are not anticipated to be developed 
for locomotive engines for Tier 2. However, EPA believes that the 
concepts can be adapted from land-based nonroad and highway engines. As 
an alternative strategy, manufacturers may choose to rely on injection 
timing retard as a way of trimming NOX emissions. However, 
this may be associated with a fuel efficiency penalty. To account for 
difficulties of adapting common rail fuel injection and EGR to these 
larger engines, EPA is proposing the same marine Tier 3 
HC+NOX standard proposed for Category 1 engines with 
specific displacements greater than 2.5 liters per cylinder. This 
proposed standard is somewhat relaxed compared to the land-based 
nonroad Tier 3 standards.
4. Conclusions Regarding Technological Feasibility
    Based on information currently available, EPA believes that it is 
feasible for Category 2 marine diesel engine manufacturers to meet the 
proposed standards using combinations of technological approaches 
discussed above and in the Draft RIA. In addition,

[[Page 68546]]

EPA believes that the implementation schedule and the flexibilities 
incorporated into this proposal will permit marinizers and vessel 
builders to respond to engine changes in an orderly way. For these 
industries, EPA expects that meeting these requirements will pose a 
significant challenge, but one that is feasible taking into 
consideration technology, time, noise, energy, and safety.

C. Category 3 Engines

    EPA is not proposing national standards for Category 3 marine 
engines. However, emissions reductions are expected to be gained 
through the international NOX requirements adopted in MARPOL 
Annex VI.
1. Rationale for Relying on MARPOL Annex VI Requirements
    Because of the competitive nature of international maritime 
transport, ship owners and ship builders have been working for years on 
techniques to improve diesel engine fuel efficiency. These research 
efforts have been very successful, and the thermal efficiencies of new 
Category 3 marine diesel engines are very high, approaching 45 to 50 
percent. System efficiencies (i.e., the thermal efficiency for the ship 
as a whole) can be as high as 85 percent, for example, because of the 
use of engine heat to generate steam power. The competitive nature of 
the shipping industry continues to provide incentives for gaining 
further reductions in fuel consumption since fuel is the largest 
variable cost associated with shipping.
    Category 3 engines have two characteristics that require 
discussion. First, the same strategies that have been used over time to 
achieve these high thermal efficiencies have generally resulted in an 
increase in NOX emissions. Reducing NOX with the 
technology used today basically means calibrating the engines with a 
focus on emissions as well as fuel consumption. For instance, timing 
could be retarded to reduce NOX by reducing peak cylinder 
temperatures associated with the burning of fuel that is premixed with 
air prior to the start of combustion. Any resulting adverse impact on 
fuel consumption could be minimized through fuel injection strategies 
and charge air charging and cooling strategies. Consequently, EPA does 
not expect any significant increase in fuel consumption rates. Added 
emission control could be achieved using EGR, water in fuel emulsion, 
or SCR. The benefits and drawbacks of these technologies are discussed 
below.
    Second, Category 3 engines operate on bunker fuel. This fuel is 
also called residual fuel because it is the fuel left in a refinery 
after the lighter ends have been distilled. Although some distillate 
may be blended into this residual fuel, the resulting bunker fuel is 
considerably different than the fuel burned by any other diesel 
engines. For instance, the viscosity is so high, that the fuel must be 
melted before it can flow to the engine. The warmed fuel also needs to 
be passed through centrifuges to remove water, sludge, and other 
contaminants. Sulfur levels in this fuel may be as high as 5 percent by 
weight. Specifications even exist for the amount of cat bottoms (worn 
metal and catalyst from a hydro-cracker) in the fuel. The special 
characteristics and handling needs of bunker fuel make the application 
of new emission control technologies challenging.
    Because of the special fuels used by these engines and their 
international use, EPA is not proposing to set national emission limits 
for Category 3 engines beyond the MARPOL Annex VI requirements based on 
the types of technologies that are already used for fuel efficiency 
reasons on these engines today. EPA believes that this approach is 
reasonable given the Clean Air Act requirements that direct EPA to 
promulgate regulations that achieve the greatest degree of emission 
reduction achievable through the application of available technology 
giving appropriate consideration to cost, lead time, noise, energy, and 
safety concerns. Applicable technology for Category 3 engines is 
discussed below. EPA believes that the proposed limits will not only 
prevent future increases in NOX associated with historical 
design improvements, but actually reduce NOX from new 
engines by about 17 percent as discussed in the Draft RIA.
    EPA's main focus across all of its diesel engine emission control 
programs is to reduce NOX and PM emissions. HC and CO limits 
are of less importance because the contribution of diesel engines to 
the inventory of these pollutants is relatively low. With regard to 
Category 3 engines, high PM emissions are largely a result of the fuel 
used in these engines, as opposed to the technical characteristics of 
these engines. As discussed in the Draft RIA, the use of residual fuel 
or residual fuel blends in these engines can lead to PM emissions that 
are an order of magnitude higher than when distillate fuel is used. In 
addition, current established PM test methods show unacceptable 
variability when sulfur levels exceed 0.8 weight percent sulfur, and no 
PM test has been developed for these engines that corrects that 
variability. For these reasons, EPA is not proposing a PM standard for 
Category 3 engines. Similarly, EPA is not proposing HC or CO standards 
for these engines, but requests comment on whether adding such 
additional standards on top of the MARPOL Annex VI NOX 
standard is necessary, and if so at what levels.
2. Technological Approaches
    A number of technical designs and engine modifications are capable 
of reducing NOX emissions from compression-ignition engines 
and have the potential to be technologically feasible for Category 3 
marine engines. These technologies include retarded injection timing, 
engine fine tuning, exhaust gas recirculation, water emulsified fuel, 
and selective catalytic reduction. Benefits and challenges associated 
with these technologies are discussed below and were derived from CARB 
Mail-Out #91-42 and information gathered by the NOX working 
group of the Bulk Chemical Handling Subcommittee of the IMO.
    A feasible and simple means of reducing NOX from diesel 
engines is by retarding injection timing. This method lowers the peak 
combustion temperature and pressure in the cylinder, resulting in 10-30 
percent lower NOX. However, the disadvantages include higher 
specific fuel consumption, lower power, harder startability, and higher 
levels of HC, CO, PM, and smoke. In addition, injection timing 
generally has to be tailored to fuel quality for Category 3 engines 
operating on residual fuel. To recover the lost fuel economy and 
performance or to reduce the amount of injection timing retard, 
additional technologies that improve fuel atomization have been 
employed on other mobile source engines. Fuel atomization can be 
improved by increasing fuel pump pressure and advance strategies, and 
through nozzle geometry. Another fuel injection technique for reducing 
NOX is rate shaping. By injecting a small amount of fuel to 
begin combustion before injecting the majority of the fuel, high 
temperatures associated with the burning of premixed fuel can be 
reduced.
    Engine fine tuning includes modification of essential engine 
components and could result in a 20-40 percent reduction in 
NOX emissions. More specifically, engine fine tuning could 
include modifications in the injection system, charge air system, and 
combustion chamber design. Such changes on new highway engines have 
already achieved more than 50 percent NOX reductions.
    Exhaust gas recirculation (EGR) involves recirculating some of the

[[Page 68547]]

exhaust gas back into the intake manifold. This lowers the combustion 
temperature and therefore can lower NOX emissions by as much 
as 20-50 percent. For marine engines, the applicability of EGR is 
complicated by the quality of the fuel. Sulfur and soot from combustion 
gases can cause increased wear of piston rings, valves, and other 
components. Therefore, EGR is more likely to be useful for engines 
running on cleaner distillate fuels.
    Water emulsification of the fuel is another technique that lowers 
maximum combustion temperature, reducing NOX 20-50 percent 
without an increase in fuel consumption. There are at least two ways to 
accomplish the emulsification during combustion: in the combustion 
chamber or in the fuel tank. Combining water and fuel for the first 
time in the chamber requires significant changes to the cylinder head 
to add an injector. Combining water with fuel in the tank may introduce 
combustion problems due to unstable emulsion. Also, this technique 
requires a significantly redesigned fuel handling system to overcome 
the potential risk of corrosion and to maintain power output. In any 
event, extra liquid storage availability is necessary to retain similar 
range.
    Selective catalytic reduction (SCR) is one of the most effective, 
but also most complex and expensive, means of reducing NOX 
from large diesel engines. Emission reductions in excess of 90 percent 
can be achieved using SCR. In SCR systems, a reducing agent, such as 
ammonia, is injected into the exhaust and both are channeled through a 
catalyst where NOX emissions are reduced. These systems are 
being successfully used for large stationary source applications, which 
operate under constant, high-load conditions.
    A number of disadvantages are apparent for the use of current 
technology SCR systems on ships. The SCR system is effective only over 
a narrow range of exhaust temperatures. The effectiveness of the system 
is decreased at reduced temperatures exhibited during engine operation 
at partial loads. Most of the engine operation near port cities is 
likely to be at these partial loads. This sort of a system would 
require an additional tank to store ammonium (or urea to form ammonia). 
Also, excess ammonia in the exhaust can occur during transient 
operation, where control of optimum ammonia injection is difficult. 
However, Category 3 marine engines generally operate under steady-state 
conditions.
3. Conclusions Regarding Technological Feasibility
    Given the available emissions control technology for Category 3 
engines and the fuel quality issues, EPA believes that the MARPOL Annex 
VI standards for NOX are appropriate and sufficient for 
Category 3 marine diesel engines. EPA's main concern is that the range 
of adjustable parameters be set so that the engine will meet the 
proposed standards in this range. EPA proposes to use, and seeks 
comment on, the MARPOL Annex VI provisions designed to prevent 
tampering with the engine settings in such a way as will increase 
emissions. EPA believes that it may be appropriate to investigate PM 
standards and more stringent NOX standards for Category 3 
engines in the context of the MARPOL Convention in the future.

VIII. Projected Impacts

A. Environmental Impacts

    In Chapter 5 of the Draft Regulatory Impact Analysis, EPA provides 
a detailed explanation of the methodology used to determine the 
environmental benefits from marine diesel engines associated with this 
proposal. EPA requests comment on all aspects of the emissions 
inventory analysis. The following discussion gives a general overview 
of the methodology and the results.
1. Category 1 Engines
    For the purposes of the inventory analysis, Category 1 was divided 
into recreational, commercial, and auxiliary marine diesel engines. 
Although no standards are proposed in this document for recreational 
engines, uncontrolled emissions from these engines are included in the 
inventory analysis. Annual emissions were then calculated using engine 
populations, load factors, annual hours of use, rated power, emission 
factors, turnover, and growth rates. The sources for and the values of 
these factors are provided in the Draft RIA. It should be noted that 
EPA has received some indication that the annual use for recreational 
engines may be lower than assumed in the inventory analysis and 
calculations (Table 5-2 of the Draft Regulatory Impact Analysis). EPA 
seeks comment on annual usage rates for recreational, as well as 
commercial and auxiliary, engines.
    Table 12 presents the projected emissions inventory from Category 1 
marine engines with and without the proposed standards. Table 12 also 
presents the anticipated effects of the MARPOL Annex VI standards on 
the Category 1 NOX inventory. The proposed CO standard is 
intended as a cap, so no benefits are claimed here.
    Table 12 presents the projected emissions inventory from Category 1 
marine engines with and without the proposed standards. Table 12 also 
presents the anticipated effects of the MARPOL Annex VI standards on 
the Category 1 NOX inventory. The proposed CO standard is 
intended as a cap, so no benefits are claimed here.

                                                        Table 12.--Category 1 Emissions Inventory
                                                                  [Thousand short tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             HC                              NOX                              PM                  CO
                                                 -------------------------------------------------------------------------------------------------------
                      Year                                                                  MARPOL
                                                      Base       Control        Base       Annex VI     Control        Base       Control        Base
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000............................................         12.1         12.1          465          464          464         14.9         14.9           73
2005............................................         12.8         12.5          492          484          470         15.8         15.2           78
2010............................................         13.6         12.1          521          507          420         16.8         14.1           82
2020............................................         15.3         12.0          586          565          303         18.9         13.0           92
2030............................................         17.3         13.4          663          640          310         21.4         13.0          105
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Category 2 Engines
    Baseline emissions inventories for Category 2 marine engines were 
developed for the EPA under contract with Carnegie Mellon 
University.47 For the purposes of this analysis, emissions 
are included from all Category 2 engines

[[Page 68548]]

operated in the Great Lakes, inland waterways, and coastal waters up to 
320 kilometers (200 miles) offshore. Emissions from U.S. flagged 
vessels were determined using ship registry data, fuel consumption, 
rated power, operation assumptions, and fuel specific emission factors. 
Emissions from foreign flagged vessels were developed based on cargo 
movements and waterways data, vessel speeds, average dead weight 
tonnage per ship, and assumed cargo capacity factors.
---------------------------------------------------------------------------

    \47\ Corbett, J., Fischbeck, P., ``Commercial Marine Emissions 
Inventory and Analysis for United States Continental and Inland 
Waterways,'' Carnegie Mellon University, Order No. 8A-0516-NATX, 
September 1998.
---------------------------------------------------------------------------

    To model the benefits of the proposed standards, EPA applied an 
engine replacement schedule and new engine standards to the baseline 
inventory. In this case, no emission reductions are expected beyond the 
already low levels of HC. Table 13 shows the projected emissions for 
Category 2 vessels with and without the proposed standards. The 
anticipated NOX impacts for the application of MARPOL Annex 
VI standards to U.S. flagged vessels are also included.

                                                        Table 13.--Category 2 Emissions Inventory
                                                                  [Thousand short tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       HC                       NOX                              PM                        CO
                                                 -------------------------------------------------------------------------------------------------------
                      Year                                                     MARPOL
                                                      Base         Base       Annex VI     Control        Base       Control        Base       Control
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000............................................         11.1          267          265          265          6.1          6.1         34.1         34.1
2010............................................         12.3          295          275          255          6.8          6.6         37.7         36.3
2020............................................         13.6          325          387          206          7.5          6.9         41.7         37.0
2030............................................         15.0          360          309          167          8.3          7.3         46.0         38.3
2040............................................         16.5          397          339          162          9.1          7.9         50.8         41.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Category 3 Engines
    The emissions inventory for Category 3 was calculated using the 
same methodology as for Category 2. EPA believes that some 
NOX benefits may be achieved by adopting the MARPOL Annex VI 
NOX standard for engines used in U.S. flagged vessels. Table 
14 presents projected emissions from Category 3 engines operated in 
U.S. waters. Note that the reductions here present both the impacts, in 
the U.S., of U.S. flagged vessels meeting the MARPOL Annex VI 
NOX standard and the potential impacts if foreign flagged 
vessels were to meet the MARPOL Annex VI standard.

                Table 14.--Category 3 Baseline and Projected Emissions Inventory under Varying Implementation of MARPOL Annex VI controls
                                                                  [Thousand short tons]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  NOX                                    HC                 PM                 CO
                                       -----------------------------------------------------------------------------------------------------------------
                 Year                                       Annex VI applied
                                               base           to U.S.-flag     Annex VI applied         base               base               base
                                                              vessels only      to all vessels
--------------------------------------------------------------------------------------------------------------------------------------------------------
2000..................................                273                272                271                8.1               21.2               25.0
2010..................................                301                290                279                9.0               23.4               27.6
2020..................................                333                310                289                9.9               25.8               30.5
2030..................................                368                338                309               10.9               28.6               33.7
2040..................................                406                372                338               12.1               31.5               37.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. Total Impacts
    Table 15 contains the baseline annual emissions from marine diesel 
engines as a whole as well as projections of the annual emissions with 
the MARPOL Annex VI requirements and proposed standards in place. 
According to this analysis, the proposed emission limits would result 
in reductions, beyond the MARPOL Annex VI limits, of 10 percent HC, 28 
percent NOX, 12 percent PM, and 3 percent CO from marine 
diesel engines in 2020. Nationally, these reductions represents 
reductions of 1.3 percent NOX and 0.1 percent PM. Obviously, 
the percent reduction would be much higher for port areas. This is 
especially true for San Diego, Beaumont-Port Arthur, San Francisco and 
similar ports where marine diesel engines account for a large fraction 
of the NOX emissions.48
---------------------------------------------------------------------------

    \48\ Marine diesel engines make up about approximately 17% of 
the NOX on a summer day for San Diego, 15% for Beaumont-
Port Arthur, and 12% for San Francisco. See, Commercial Marine 
Vessel Contributions to Emission Inventories, Final Report, 
Submitted by Booz-Allen & Hamilton, Inc., October 7, 1991.

[[Page 68549]]



                                               Table 15.--Emission Inventory Impacts of the Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            2000             2010             2020             2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
HC 103 short tons......................  Baseline...................................             31.3             34.8             38.7             43.2
                                         Controlled.................................             31.3             33.3             35.4             39.3
                                         Reduction..................................             0%               4%               9%               9%
NOX 103 short tons.....................  Baseline...................................          1,005            1,117            1,244            1,390
                                         IMO........................................          1,001            1,072            1,162            1,287
                                         Controlled.................................          1,001              965              819              815
                                         Reduction..................................             0%              10%              28%              34%
PM 103 short tons......................  Baseline...................................             42.3             46.9             52.2             58.2
                                         Controlled.................................             42.3             44.1             45.7             50.2
                                         Reduction..................................             0%               6%              12%              14%
CO 103 short tons......................  Baseline...................................            133              147              165              184
                                         Controlled.................................            133              146              160              177
                                         Reduction..................................             0%               1%               3%               4%
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In addition to the effect of the proposed standards on direct PM 
emissions noted above, the proposed standards are expected to reduce 
the concentrations of secondary PM. Secondary PM is formed when 
NOX reacts with ammonia in the atmosphere to yield ammonium 
nitrate particulate. As described in Chapter 5 of the Draft RIA, each 
100 tons of NOX reduction results in about a 4-ton reduction 
in secondary PM. This conversion rate varies from region to region, and 
is greatest in the West. EPA estimates that the 425,000 tons per year 
total NOX reduction projected for marine engines in 2020 
would result in about a 17,000 tons per year reduction in secondary PM. 
This secondary PM reduction is more than double the direct PM 
reductions for 2020 projected for this proposed rule.
    EPA also believes the proposed regulations will tend to reduce 
noise. One important source of noise in diesel combustion is the sound 
associated with the combustion event itself. When a premixed charge of 
fuel and air ignites, the very rapid combustion leads to a sharp 
increase in pressure, which is easily heard and recognized as the 
characteristic sound of a diesel engine. The conditions that lead to 
high noise levels also cause high levels of NOX formation. 
Fuel injection changes and other NOX control strategies 
therefore typically reduce engine noise, sometimes dramatically.
    EPA does not anticipate any negative impacts on energy or safety as 
a result of this proposed rule. The impact of the proposed standards on 
energy is measured by the effect on fuel consumption from complying 
engines. Although it is not expected to be a primary compliance 
strategy, marine engine manufacturers could retard engine timing to 
comply with emission limits. This could lead to an increase in fuel 
consumption in the absence of other changes to the engines. Most of the 
technology changes anticipated in response to the proposed standards, 
however, have the potential to reduce fuel consumption as well as 
emissions. Therefore, on balance, no increase in energy consumption is 
expected. As far as safety is concerned, EPA believes that marine 
engine manufacturers will use only proven technology that is currently 
used in other engines such as nonroad land-based diesel applications, 
locomotives, and diesel trucks.

B. Economic Impacts

    EPA expects that in almost all cases, manufacturers will produce a 
complying marine engine by adapting an engine that has been designed 
and certified to meet highway or nonroad emission standards. This 
analysis considers the cost of these upgrades to the base engines as 
part of the impact of new marine emission standards; variable costs are 
applied directly, with an additional fixed cost added to apply the 
technologies to marine engines. The analysis arrives at the full cost 
impact by considering changes to turbocharging and aftercooling 
applicable to marine engines. Full details of EPA's cost analysis can 
be found in Chapter 4 of the Draft RIA.
1. Methodology
    In assessing the economic impact of setting emission standards, EPA 
has made a best estimate of the combination of technologies that an 
engine manufacturer might use to meet the new standards at an 
acceptable cost. In some cases, however, it is difficult to make a 
distinction between technologies needed to reduce emissions for 
compliance with emission standards and those technologies that offer 
other benefits for improved fuel economy, power density, and other 
aspects of engine performance. EPA believes that without new emission 
standards, manufacturers would continue research on and eventually 
deploy many technological upgrades to improve engine performance or 
more cost-effectively control emissions. Modifications to fuel 
injection systems and the introduction of electronic controls are 
expected to continue, regardless of any change in emission standards, 
to improve engine performance. This is especially true for marine 
engines, which generally benefit from the transfer of highway and land-
based engine technology improvements. Some further development with a 
focus on NOX, HC, and PM emissions will nevertheless play an 
important role in achieving emission reduction targets.
    Because several technology upgrades have benefits that go beyond 
reducing emissions, a difficulty in assessing the impact of new 
emission standards is establishing the appropriate technology baseline 
from which to make projections. Ideally, the analysis would establish 
the mix of technologies that manufacturers would have introduced absent 
the changes in emission standards, then make a projection for any 
additional changes in hardware or calibration required to comply with 
those standards. This is especially important for marine engines, since 
technology improvements are often carried over from counterpart land-
based engines. The costs of those projected technology and calibration 
changes would then most accurately quantify the impact of setting new 
emission standards. While it is difficult to take into account the 
effect of ongoing technology development, EPA is concerned that 
assessing the full cost of the anticipated technologies as an impact of 
the new emission standards would inappropriately exclude from 
consideration the observed benefits for engine performance, fuel 
consumption,

[[Page 68550]]

and durability.49 Short of having sufficient data to predict 
the future with a reasonable degree of confidence, EPA faces the need 
to devise an alternate approach to quantifying the true impact of the 
new emission standards. EPA requests comment on the most appropriate 
way of accounting for these non-emission benefits.
---------------------------------------------------------------------------

    \49\ While EPA does not anticipate widespread, marked 
improvements in fuel consumption, small improvements on some engines 
may occur.
---------------------------------------------------------------------------

    A variety of technological improvements are projected for complying 
with the new emission standards. Selecting these technology packages 
requires extensive engineering analysis and judgment. The fact that 
manufacturers will be applying extensive effort to improve diesel 
engine technologies across programs ensures that these technologies 
will develop significantly before reaching production. This ongoing 
research and development will lead to reduced costs in three ways. 
First, research will lead to enhanced effectiveness for individual 
technologies, allowing manufacturers to use simpler packages of 
emission control technologies than would otherwise be predicted given 
the current state of development. Similarly, the continuing effort to 
improve the emission control technologies will include innovations that 
allow lower-cost production. Finally, manufacturers will focus research 
efforts on any potential drawbacks, such as increased fuel consumption 
or maintenance costs, attempting to minimize or overcome any negative 
effects.
    Estimated cost increases are presented as incremental changes in 
purchase price. The incremental change in purchase price for new 
engines and equipment is comprised of variable costs (for hardware and 
assembly time) and fixed costs (for research and development, 
retooling, and certification). Total operating costs, including 
maintenance and fuel consumption, are considered as well. Cost 
estimates based on these projected technology packages represent an 
expected incremental cost of engines as they begin to comply with new 
emission standards. Costs in subsequent years are projected to decrease 
due to several factors, as described below. Separate projected costs 
were derived for engines used in five different ranges of rated power; 
costs were developed for engines near the middle of the listed ranges. 
All costs are presented in 1998 dollars.
    While the following analysis projects a relatively uniform emission 
control strategy for designing the different categories of engines, 
this should not suggest that EPA expects a single combination of 
technologies will be used by all manufacturers. In fact, depending on 
basic engine emission characteristics, EPA expects that control 
technology packages will gradually be fine-tuned to different 
applications. Furthermore, EPA expects manufacturers to use averaging, 
banking, and trading programs as a means to deploy varying degrees of 
emission control technologies on different engines. EPA nevertheless 
believes that the projections presented here provide a cost estimate 
representative of the different approaches manufacturers may ultimately 
take.
2. Engine Technologies
    The land-based engines that serve as the base engines for marine 
diesel applications will be changing as a result of new emission 
standards adopted for nonroad and locomotive engines. Most new land-
based nonroad and locomotive engines rated over 37 kW will be subject 
to two new tiers of standards spanning the next ten years. These 
engines will be designed, manufactured, and certified to have reduced 
emissions. The technological challenge for developing compliant marine 
engines is therefore to make the necessary engine modifications for 
marine applications without substantially increasing emission levels, 
while ensuring that these emission levels are maintained over the range 
of potential marine operation.
    Manufacturers of Category 1 engines are expected to comply with the 
proposed Tier 2 emission limits by conducting basic engine 
modifications, upgrading fuel systems, adding some degree of electronic 
controls, or improving aftercooling systems. Manufacturers of Category 
2 engines are expected to redesign combustion chambers, improve high-
pressure electronic fuel injection systems, and upgrade or add 
turbocharging and aftercooling. For Tier 3 emission limits, all 
manufacturers are expected to rely on some form of electronically 
controlled common rail fuel system with separate-circuit aftercooling 
and exhaust gas recirculation.
    Except for the aftercooling changes, hardware improvements for 
nonroad and locomotive engines should be transferrable to marine 
engines, in many cases with some degree of adaptation. The analysis 
includes a substantial amount of development time to make adjustments 
for turbocharger matching, reprogramming electronic control software, 
optimizing for emission performance over the not-to-exceed zone, and 
other changes that may be needed to prepare an engine for marine 
applications. Also, because manufacturers will in many cases be 
producing a new engine design outside of the normal product development 
cycle, extensive development costs are included to design a marine 
version of a base engine, taking into account not only direct expenses 
for controlling emissions, but also considering some need for re-
optimizing performance. Finally, since marine engines rely on seawater, 
not the ambient air, for rejecting heat from the engine and 
aftercooler, the cost of adding these systems are considered 
separately.
3. Estimated Costs
    The projected costs of these new technologies for meeting the new 
emission limits are itemized in the Draft RIA and summarized in Table 
16. Anticipated incremental cost impacts of the Tier 2 emission limits 
for the first years of production range from $2,600 to $54,000 per 
engine, in general with proportionally higher projected costs for 
larger engines. Estimated costs for Tier 3 emission limits, which are 
calculated incremental to the Tier 2 projections, are similar, with 
first-year costs ranging from $5,300 to $45,000. Long-term impacts on 
engine costs are expected to be much lower, dropping to levels between 
$1,100 and $11,000 for Tier 3 engines. Most of this cost reduction is 
accounted for by the fact that development time and other fixed costs 
dominate the cost analysis, but disappear after the projected five-year 
amortization period.
    The cost analysis also includes an estimated burden resulting from 
the need to do additional maintenance work during periodic rebuilds. 
Complying engines will be equipped with technologies that will require 
replacement of hardware that is either more expensive than from earlier 
models, or that is only used because of emission standards. Using 
typical rebuild schedules, the analysis projects incremental costs for 
multiple rebuilds, resulting in net-present-value costs that range from 
$700 to $12,000. In addition to rebuild cost impacts, Table 16 includes 
an estimated cost burden for conducting production line testing of 1 
percent of total industry-wide production.
    Ship and boat builders are not expected to face any increase in 
costs as a result of the new emission standards. Commercial vessels are 
built to accommodate a wide range of engines. Customers are therefore 
able to order a vessel by choosing from a broad selection of engine 
models. Because

[[Page 68551]]

there is a degree of customizing in the construction of commercial 
vessels, EPA does not expect that future production will be sensitive 
to the anticipated changes in engine design resulting from the new 
emission standards. EPA requests comment on the extent to which 
commercial vessel construction may be affected by new emission 
standards.

                           Table 16.--Projected Incremental Costs by Power Rating (kW)
----------------------------------------------------------------------------------------------------------------
                                                                                                    Incremental
                                                                                    Incremental   operating cost
             Power rating (kW)                               Tier                  engine cost*     per engine
                                                                                                       (npv)
----------------------------------------------------------------------------------------------------------------
37-225.....................................  Tier 2.............................          $2,577            $737
                                             Tier 3 (years 1-5).................           5,303             829
                                             Tier 3 (year 6 and later)..........           1,112             829
225-560....................................  Tier 2.............................           4,249           1,128
                                             Tier 3 (years 1-5).................           6,210           1,119
                                             Tier 3 (year 6 and later)..........           1,829           1,119
560-1000...................................  Tier 2.............................          25,319             207
                                             Tier 3 (years 1-5).................          25,507           2,647
                                             Tier 3 (year 6 and later)..........           5,601           2,647
1000-2000..................................  Tier 2.............................          22,725             635
                                             Tier 3 (years 1-5).................          26,537           4,519
                                             Tier 3 (year 6 and later)..........          10,659           4,519
2000-5000..................................  Tier 2.............................          54,103          12,430
                                             Tier 3 (years 1-5).................          44,583           2,874
                                             Tier 3 (year 6 and later)..........           3,169           2,874
----------------------------------------------------------------------------------------------------------------
*Tier 3 costs are calculated incremental to Tier 2 estimates.

    Characterizing these estimated costs in the context of their 
fraction of the total purchase price and life-cycle operating costs is 
helpful in gauging the economic impact of the new standards. Although 
the incremental cost projections in Table 16 increase dramatically with 
increasing power rating, they in fact represent a comparable price 
change relative to the total price of the engine. The estimated first-
year cost increases are all at most 3 percent of estimated vessel 
prices, with even lower long-term effects, as described above.
    Since vessel owners also decide between replacing and rebuilding 
existing engines, the cost impact relative to engine price is also 
relevant. EPA estimates that Tier 3 cost impacts will approach 10 or 15 
percent of total engine prices. Once fixed costs are amortized, the 
cost impact drops to a range between 1 and 5 percent of total engine 
prices. EPA requests comment on the likelihood that these costs will 
affect normal rates of turnover to new engines.
4. Aggregate Costs to Society
    The above analysis presents unit cost estimates for each power 
category. These costs represent the total set of costs borne by engine 
manufacturers to comply with emission standards. With current data for 
engine and vessel sales for each category and projections for the 
future, these costs can be translated into projected direct costs to 
the nation for the new emission standards in any year. Aggregate costs 
are estimated at about $19 million in the first year the new standards 
apply, increasing to a peak of about $57 million in 2008 as increasing 
numbers of engines become subject to the new standards. The following 
years show a drop in aggregate costs as the per-unit cost of compliance 
decreases, resulting in aggregate costs of about $14 million in 2015, 
followed by slowly growing costs due to increasing sales over time.
5. Sensitivity Analysis
    There has been some concern expressed that the technologies used to 
meet emission requirements for land-based engines will be less 
effective at controlling emissions from marine engines. Some of the 
reasons suggested for needing a more aggressive approach include the 
change in duty cycle, the effects of ``marinizing'' an engine, and the 
need to comply with emission limits across not-to-exceed zones. 
Manufacturers could rely on injection timing retard as a technology 
option for achieving an additional measure of NOX control. 
Also, manufacturers may choose, for example, to avoid the high R&D 
costs of implementing a new technology for an engine family with low 
sales volume by relying on timing retard as a lower-cost alternative. 
In addition, manufacturers using EGR may need to add exhaust gases 
during medium-and high-load operation to the point that there would be 
an increase in fuel consumption that cannot be offset by improvements 
such as better control of fuel injection. EPA therefore conducted a 
sensitivity analysis to show the costs associated with a fuel penalty 
resulting from relying on retarded timing or EGR.
    Because the requirement to control emissions throughout an engine's 
operating range poses the greatest challenge at low speeds and loads, 
EPA calculated the costs of increasing fuel consumption by one percent 
at modes 2 and 3 and by three percent at mode 4 (lightest load 
operation). Using the weightings for the composite duty cycle, 
increased life-cycle fuel consumption from this net 1.0 percent fuel 
penalty can be calculated and then discounted to the present at a 7 
percent rate. The resulting estimated net-present-value cost increase 
ranges from $400 for a 100 kW engine to $19,000 for a 3000 kW engine. 
Considering the established effectiveness of timing retard as a 
strategy to control NOX emissions, this may be considered a 
viable approach, either as a substitute or a supplemental technology.

C. Cost-effectiveness

    EPA has estimated the cost-effectiveness (i.e., the cost per ton of 
emission reduction) of the proposed marine standards for the same 
nominal power ratings of marine engines and vessels highlighted earlier 
in this section. This analysis has been performed only for Category 1 
and Category 2 marine engines, since the proposed regulation would not 
apply to Category 3 engines. Chapter 6 of the Draft RIA contains a more 
detailed discussion of the cost-effectiveness analysis.

[[Page 68552]]

    As described in the Draft RIA, neither costs nor emission benefits 
were attributed to the not-to-exceed provisions included in this 
proposal. The calculated cost-effectiveness of the proposed emission 
limits presented here therefore includes all the anticipated effects on 
costs and emission reductions.
1. Tier 2
    For determining the cost-effectiveness of the Tier 2 portion of 
this proposal, only benefits beyond those achieved by the MARPOL Annex 
VI standard are considered. EPA believes this is a conservative 
estimate because EPA attributed all of the costs of the technology 
associated with the Tier 2 levels to this action and did not attribute 
any of these costs to the MARPOL Annex VI standard. For the sake of 
this analysis, EPA assumed that all of the increased costs were 
incurred to achieve HC+NOX benefits. NOX 
reductions represent approximately 98 percent of the total 
HC+NOX emission reductions expected from the proposed 
standards. Table 17 presents the cost-effectiveness of the Tier 2 
standards.

              Table 17.--Cost-Effectiveness of the Proposed Marine Tier 2 Standards for HC and NOX
----------------------------------------------------------------------------------------------------------------
                                                                                                       Cost-
                                                                                    Discounted     effectiveness
               Nominal power (kW)                 NPV of total     NPV benefits        cost-       without non-
                                                 lifetime costs    (short tons)    effectiveness     emission
                                                                                                     benefits
----------------------------------------------------------------------------------------------------------------
100............................................          $1,938              4.3            $449            $738
400............................................           3,016             26               116             201
750............................................          22,713             80               283             317
1500...........................................          20,386            267                76              86
3000...........................................          47,754            829                58              76
----------------------------------------------------------------------------------------------------------------

    Weighting the projected cost and emission benefit numbers presented 
above by the populations of the individual power categories, EPA 
calculated the cost-effectiveness of the proposed HC+NOX 
standards for Category 1 and 2 both separately and combined. Table 18 
contains the resulting aggregate cost-effectiveness results for the 
proposed Tier 2 standards.

 Table 18.--Aggregate Cost-Effectiveness for the Proposed Marine Tier 2
                        Standards for HC and NOX
------------------------------------------------------------------------
                                       NPV of      NPV
                                       total     benefits    Discounted
                                      lifetime    (short       cost-
                                       costs      tons)    effectiveness
------------------------------------------------------------------------
Category 1.........................     $3,669         24         $156
Category 2.........................     47,754        829           58
Combined...........................      4,617         41          113
------------------------------------------------------------------------

    While the cost estimates described under the Economic Impacts do 
not take into account the observed value of performance improvements in 
the field, these non-emission benefits should be taken into account in 
the calculation of cost-effectiveness. EPA believes that an equal 
weighting of emission and non-emission benefits is justified for those 
technologies which clearly have substantial non-emission benefits, 
namely electronic controls, fuel injection changes, turbocharging, and 
engine modifications. For some or all of these technologies, a greater 
value for the non-emission benefits could likely be justified. This has 
the effect of halving the cost for those technologies in the cost-
effectiveness calculation. The cost-effectiveness values in this 
document are based on this calculation methodology. Cost-effectiveness 
values are shown without adjustment for non-emission benefits in Tables 
17 and 19 for comparison purposes. EPA requests comment on this 
approach.
2. Tier 3
    As described above in the preceding section, the projected costs of 
complying with the proposed standards will vary by the rated power and 
model year (i.e., year 1 versus year 6). Therefore, the cost-
effectiveness will also vary from model year to model year. For 
comparison purposes, the discounted costs, emission reductions, and 
cost-effectiveness of the marine Tier 3 HC+NOX standards are 
shown in Table 19 for the same model years discussed in the preceding 
section. The cost-effectiveness of the proposed Tier 3 standards has 
been calculated incrementally to the costs and benefits associated with 
the proposed Tier 2 standards. This analysis was performed similarly to 
the Tier 2 analysis. According to this analysis, the cost-effectiveness 
of the proposed Tier 3 program is roughly equivalent to that of the 
proposed Tier 2 program. Table 19 presents the cost-effectiveness 
results for the five nominal power ratings.

                                  Table 19.--Cost-Effectiveness of the Proposed Marine Tier 3 Standards for HC and NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                               Cost-
                                                                                                                            Discounted     effectiveness
             Nominal power (kW)                         Model  year  grouping             NPV of total     NPV benefits        cost-       without non-
                                                                                         lifetime costs    (short tons)    effectiveness     emission
                                                                                                                                             benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
100.........................................  1 to 5...................................          $4,831              4.2          $1,155          $1,407
                                              6+.......................................           1,166                              279             451
400.........................................  1 to 5...................................           5,804             30               196             236
                                              6+.......................................           1,726                               58              99
750.........................................  1 to 5...................................          23,834             77               308             351
                                              6+.......................................           4,831                               62             103
1500........................................  1 to 5...................................          24,279            136               178             216
                                              6+.......................................           8,402                               62             112

[[Page 68553]]

 
3000........................................  1 to 5...................................          36,652            290               127             163
                                              6+.......................................           4,553                               16              20
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As with Tier 2, EPA calculated the cost-effectiveness of the 
proposed Tier 3 HC+NOX standards for Category 1 and 2 both 
separately and combined by weighting the projected cost and emission 
benefits by the populations of the individual power categories. Table 
20 contains the resulting aggregate cost-effectiveness results for the 
proposed Tier 3 standards.

         Table 20.--Aggregate Cost-Effectiveness for the Proposed Marine Tier 3 Standards for HC and NOX
----------------------------------------------------------------------------------------------------------------
                                                                                                    Discounted
                                        Model year grouping        NPV of total    NPV benefits        cost-
                                                                  lifetime costs   (short tons)    effectiveness
----------------------------------------------------------------------------------------------------------------
Category 1......................  1 to 5........................          $6,503              20            $327
                                  6+............................           1,709                              87
Category 2......................  1 to 5........................          36,652             290             127
                                  6+............................           4,553                              16
Combined........................  1 to 5........................           7,151              26             278
                                  6+............................           1,799                              70
----------------------------------------------------------------------------------------------------------------

3. Comparison to Other Programs
    In an effort to evaluate the cost-effectiveness of the 
HC+NOX controls for marine engines, EPA has summarized the 
cost-effectiveness results for five other recent EPA mobile source 
rulemakings that required reductions in NOX (or 
NMHC+NOX) emissions. The heavy-duty vehicle portion of the 
Clean Fuel Fleet Vehicle Program yielded a cost-effectiveness of 
approximately $1,500 per ton of NOX. The most recent 
NMHC+NOX standards for highway heavy-duty diesel engines 
yielded a cost-effectiveness of $100-$600 per ton of 
NMHC+NOX. The newly adopted standards for locomotive engines 
yielded a cost-effectiveness of $160-$250 per ton of NOX. 
Finally, the recent standards for nonroad engines reported a cost-
effectiveness of $410-$600 per ton. The cost-effectiveness of the new 
HC+NOX standards for marine diesel engines presented above 
is more favorable than the cost-effectiveness than any of the other 
recent programs.
    EPA has also summarized the cost-effectiveness results for three 
other recent EPA mobile source rulemakings that required reductions in 
PM emissions. The cost-effectiveness of the most recent urban bus 
engine PM standard was estimated to be $10,000-$16,000 per ton, and the 
cost-effectiveness of the urban bus retrofit/rebuild program was 
estimated to be approximately $25,000 per ton. The nonroad FRM reported 
a cost-effectiveness for PM, using the same conservative method used 
here for marine, of $2,300 per ton. The PM cost-effectiveness of the 
new emission standards presented above is more favorable than that of 
either of the urban bus programs and is comparable to the nonroad rule.
    For comparison to other PM control strategies, EPA has also 
analyzed the PM cost-effectiveness of the new standards if any of the 
costs were attributed to PM. EPA conservatively made these calculations 
as if half of the increased costs were attributable to PM control. This 
approach effectively double-counts these costs, since the full cost of 
the program is assessed in the calculation of cost-effectiveness for 
NOX+HC. This aggregate discounted lifetime cost-
effectiveness represents the highest figure that could be expected for 
cost-effectiveness of the new standards and was calculated to provide 
an indication of the upper bound of PM cost-effectiveness values. The 
resulting fleet-wide discounted lifetime cost-effectiveness of the 
proposed PM standards is approximately $600-$2,600 per ton. This cost-
effectiveness is much better than for the urban bus PM standard and the 
urban bus retrofit/rebuild program and is comparable to the nonroad 
Tier 2 standards.
    In addition to the benefits of reducing ozone within and 
transported into urban ozone nonattainment areas, the NOX 
reductions from the new standards are expected to have beneficial 
impacts with respect to crop damage, secondary particulate formation, 
acid deposition, eutrophication, visibility, and forests, as described 
earlier. Because of the difficulty of quantifying the monetary value of 
these societal benefits, the cost-effectiveness values presented do not 
assign any numerical value to these additional benefits. However, based 
on an analysis of existing studies that have estimated the value of 
such benefits in the past, the Agency believes that the actual monetary 
value of the multiple environmental and public health benefits produced 
by large NOX reductions similar to those projected under 
this final rule will likely be greater than the estimated compliance 
costs.

IX. Public Participation

A. Comments and the Public Docket

    Publication of this document opens a formal comment period for this 
proposal. EPA will accept comments for the period indicated under DATES 
above. The Agency encourages all parties that have an interest in the 
program described in this document to offer comment on all aspects of 
this rulemaking. Throughout this proposal are requests for specific 
comment on various topics.
    EPA attempted to incorporate all the comments received in response 
to the ANPRM, though not all comments are addressed directly in this 
document. Anyone who has submitted comments on the ANPRM, or any of 
EPA's previous publications related to marine

[[Page 68554]]

diesel engines, and feels that those comments have not been adequately 
addressed is encouraged to resubmit comments as appropriate.
    The most useful comments are those supported by appropriate and 
detailed rationales, data, and analyses. The Agency also encourages 
commenters that disagree with the proposed program to suggest and 
analyze alternate approaches to meeting the air quality goals of this 
proposed program. All comments, with the exception of proprietary 
information, should be directed to the EPA Air Docket Section, Docket 
No. A-97-50 before the date specified above.
    Commenters wishing to submit proprietary information for 
consideration should clearly separate such information from other 
comments by (1) labeling proprietary information ``Confidential 
Business Information'' and (2) sending proprietary information directly 
to the contact person listed (see FOR FURTHER INFORMATION CONTACT) and 
not to the public docket. This will help ensure that proprietary 
information is not inadvertently placed in the docket. If a commenter 
wants EPA to use a submission of confidential information as part of 
the basis for the final rule, then a nonconfidential version of the 
document that summarizes the key data or information should be sent to 
the docket.
    Information covered by a claim of confidentiality will be disclosed 
by EPA only to the extent allowed and in accordance with the procedures 
set forth in 40 CFR part 2. If no claim of confidentiality accompanies 
the submission when it is received by EPA, it will be made available to 
the public without further notice to the commenter.

B. Public Hearing

    The Agency will hold a public hearing as noted under DATES above. 
Any person desiring to present testimony at the public hearing is asked 
to notify the contact person listed above at least five business days 
prior to the date of the hearing. This notification should include an 
estimate of the time required for the presentation of the testimony and 
any need for audio/visual equipment. EPA suggests that sufficient 
copies of the statement or material to be presented be available to the 
audience. In addition, it is helpful if the contact person receives a 
copy of the testimony or material prior to the hearing.
    The hearing will be conducted informally, and technical rules of 
evidence will not apply. A sign-up sheet will be available at the 
hearing for scheduling the order of testimony. A written transcript of 
the hearing will be prepared. The official record of the hearing will 
be kept open for 30 days after the hearing to allow submittal of 
supplementary information.

X. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866, the Agency must determine whether this 
regulatory action is ``significant'' and therefore subject to Office of 
Management and Budget (OMB) review and the requirements of the 
Executive Order (58 FR 51735, Oct. 4, 1993). The order defines 
``significant regulatory action'' as any regulatory action that is 
likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or,
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, EPA has determined 
that this proposal is a ``significant regulatory action.'' If 
implemented as proposed, EPA's estimates show total societal costs for 
most years between $15 million and $20 million, with peak costs 
reaching about $57 million in 2008. This action was submitted to the 
Office of Management and Budget for review and a Draft RIA has been 
prepared and is available in the docket associated with this 
rulemaking. Any written comments from OMB and any EPA response to OMB 
comments are in the public docket for this proposal.

B. Regulatory Flexibility

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment requirements, unless the Agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small not-for-profit enterprises, and small governmental jurisdictions. 
For the reasons set out below, this proposed rule would not have a 
significant impact on a substantial number of small entities.
    EPA has identified five types of entities that may be affected by 
the proposed rule: engine manufacturers, engine dressers, post-
manufacture marinizers, commercial vessel builders, and commercial boat 
builders. A sixth group of entities, recreational vessel builders, is 
not considered in this analysis because, as described in Section 
III.B.1, above, EPA is proposing to exempt these engines from the 
proposed emission control program.
    Using the Small Business Administration definition of small for 
this industry sector (fewer than 500 employees), one group of entities, 
marine engine manufacturers, presents no small business impacts 
concerns because all of the manufacturers are large.
    There are numerous entities with fewer than 500 employees that 
manufacture commercial vessels and commercial boats.50 
However, the proposed emission control program is expected to impose 
very little additional cost on these entities. This is because, 
according to discussions with several of these vessel and boat builders 
as well as with one of their trade associations, the production of 
commercial vessels is flexible enough to accommodate physical changes 
to the engine without vessel redesign.
---------------------------------------------------------------------------

    \50\ Commercial vessels are larger merchant vessels, typically 
exceeding 400 feet in length and generally used in waterborne trade 
and/or passenger transport. Commercial boats are smaller service, 
industrial, and fishing vessels generally used in inland and coastal 
waters. A more in-depth description of these industry sectors in 
contained in ``Industry Characterization: Commercial Marine Vessel 
Manufacturers'' prepared by ICF Incorporated for US Environmental 
Protection Agency, Contract No. 68-C5-0010, Work Assignment 211, 
September 1998 (Docket No. A-97-50).
---------------------------------------------------------------------------

    As described in Section III.C.2 above, engine dressers are 
companies that adapt a land-based diesel engine for use in the marine 
environment by adding mounting hardware, a marine cooling system, a 
generator, or propeller gears, but without changing the engine in ways 
that may affect emissions (see Section III.B.2, above). These companies 
are typically small, regional companies, with few employees and 
relatively small annual sales in terms of both dollars and units. 
Because these companies are proposed to be exempt from the 
certification and compliance programs set out in today's action, EPA 
believes that they will incur very minor costs as a result of the 
proposed program. Their only compliance burden consists of an annual 
report that must be submitted to

[[Page 68555]]

EPA to demonstrate that they meet the criteria for the engine dresser 
exemption described in Section III.B.2. This reporting requirement is 
expected to impose very little additional cost on these companies.
    The group of small entities likely to be affected by the proposed 
rule are post-manufacture marinizers (PMM). Unlike engine dressers, PMM 
modify a land-based engine for use in the marine environment by 
changing it in ways that may affect emissions. This includes, but is 
not limited to, changes to the fuel or cooling systems. The following 
discussion of the impacts on small post-manufacture marinizers is 
derived from an impact assessment prepared for this rulemaking by ICF 
Incorporated and discussions with small PMM.51
---------------------------------------------------------------------------

    \51\ Characterization and Small Business Impact Assessment for 
Small and Large Marine Compression Ignition Engine Manufacturers/
Marinizers, prepared by ICF Incorporated for U.S. Environmental 
Protection Agency, Contract Number 68-C5-0010, Work Assignment 
Number 211, September 1998 (Air Docket A-97-50).
---------------------------------------------------------------------------

    Through conversations with engine manufacturers and vessel 
builders, EPA initially identified twelve small post-manufacture 
marinizers. Four of these were subsequently eliminated from the 
Agency's PMM impact analysis (two were eliminated because there were 
subsidiary companies of other companies on the list; two others were 
eliminated because they do not produce Category 1 marine engines). The 
eight remaining companies were used to develop a model small company, 
for purposes of exploring the impact of this rulemaking. Using this 
model small company as a guide, it was estimated that average 
compliance costs would range from 1.3 percent to 3.9 percent, depending 
on the compliance cost scenario used.52 EPA thus concludes 
that, provided the compliance burdens of these companies can be 
reduced, an impact of approximately 1.3 percent can be anticipated. As 
discussed above, this proposal contains many flexibility provisions for 
small post-manufacture marinizers, including an expanded definition of 
engine family, which is expected to reduce the number of certification 
tests these companies will be required to do; a streamlined 
certification process, beginning the year after the implementation of 
the emissions limits provided the emissions of their highest emitting 
engine has not changed; an extra year for compliance; and special 
hardship provisions.
---------------------------------------------------------------------------

    \52\ Three cost scenarios were explored: $100,000, $200,000, and 
$300,000 per engine family.
---------------------------------------------------------------------------

    Because the number of companies examined is so small, EPA also 
performed an analysis using company-specific data instead of the model 
company. According to this data, in the least costly compliance 
scenario, four small PMM may be affected by more than 3 percent of 
sales, 2 companies by 1-3 percent of sales, and 2 companies less than 1 
percent of sales,. Of the four companies originally projected to be 
affected by more than 3 percent of sales, two were eliminated because 
they are, in fact, engine dressers; hence, the original estimate of 3 
percent is an overstatement of costs for these companies. As discussed 
above, engine dressers would only be subject to a reporting 
requirement, which is expected to impose very little additional cost. 
Consequently, it is expected that two small companies may be affected 
by more than 3 percent of annual sales. However, it may be possible for 
these companies to reduce the impacts of this rule further. For 
example, these companies could marinize a cleaner engine, thus reducing 
the design and development costs associated with bringing a previous 
tier engine to the proposed emission limits. Alternatively, they may be 
able to work more closely with the base engine manufacturer to reduce 
the need for extensive redesign of their marinization process.
    Subsequent to completion of the ICF impact assessment, EPA 
identified several other small PMM (see the Draft Regulatory Assessment 
for a complete list of small PMM). However, analysis of their financial 
data does not change the above conclusion that most small PMM could 
avoid high compliance costs by applying the proposed small PMM 
flexibility provisions. Therefore, EPA believes it is appropriate to 
certify this rulemaking as not having a significant economic impact on 
a substantial number of small companies.
    Therefore, I certify that this action will not have a significant 
economic impact on a substantial number of small entities.
    The Agency continues to be interested in the potential impacts of 
the proposed rule on small entities and welcomes additional comments 
during the rulemaking process on issues related to such impacts. The 
Agency is continuing its efforts to notify other small business engine 
and equipment manufacturers of this rule and inform them of their 
opportunities for providing feedback to the Agency.

C. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An 
Information Collection Request has been prepared by EPA, and a copy may 
be obtained from Sandy Farmer, OPPE Regulatory Information Division; 
U.S. Environmental Protection Agency (2137); 401 M St., S.W.; 
Washington, DC 20460 or by calling (202) 260-2740.
    The information being collected is to be used by EPA to ensure that 
new marine diesel engines comply with applicable emissions standards 
through certification requirements and various subsequent compliance 
provisions.
    The annual public reporting and recordkeeping burden for this 
collection of information is estimated to average 589 hours per 
response, with collection required annually. The estimated number of 
respondents is 32. Burden means the total time, effort, or financial 
resources expended by persons to generate, maintain, retain, disclose, 
or provide information to or for a federal agency. This includes the 
time needed to review instructions; develop, acquire, install, and 
utilize technology and systems for the purposes of collecting, 
validating, and verifying information, processing and maintaining 
information, and disclosing and providing information; adjusting the 
existing ways to comply with any previously applicable instructions and 
requirements; train personnel to be able to respond to a collection of 
information; search data sources; complete and review the collection of 
information; and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are displayed in 40 CFR Part 9 and 48 CFR Chapter 15.
    Comments are requested on the Agency's need for this information, 
the accuracy of the provided burden estimates, and any suggested 
methods for minimizing respondent burden, including through the use of 
automated collection techniques. Send comments on the ICR to the 
Director, OPPE Regulatory Information Division; U.S. Environmental 
Protection Agency (2137); 401 M St., S.W.; Washington, DC 20460; and to 
the Office of Information and Regulatory Affairs, Office of Management 
and Budget, 725 17th St., N.W., Washington, DC 20503, marked 
``Attention: Desk Officer for EPA.'' Include the ICR number in any 
correspondence. Since OMB is required to make a decision concerning the 
ICR between 30 and 60 days after December 11, 1998, a comment to OMB is 
best ensured of having its full effect if OMB

[[Page 68556]]

receives it by January 11, 1999. The final rule will respond to any OMB 
or public comments on the information collection requirements contained 
in this proposal.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 
P.L.104-4, establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``federal mandates'' that 
may result in expenditures to state, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective, or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective, or least burdensome alternative if the 
Administrator publishes with the final rule an explanation of why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any one year. The rule does not impose any enforceable duties 
on State, local, or tribal governments, i.e., they manufacture no 
engines and are therefore not required to comply with the requirements 
of this rule. For the same reason, EPA has determined that this rule 
also contains no regulatory requirements that might significantly or 
uniquely affect small governments. EPA projects that annual economic 
effects will be far less than $100 million. Thus, this proposed rule is 
not subject to the requirements of sections 202 and 205 of the UMRA.

E. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, Sec. 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless doing so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide Congress, through OMB, explanations when the Agency decides not 
to use available and applicable voluntary consensus standards.
    This proposed rule involves technical standards. As described in 
Section V.E. above, ISO standards are a potentially applicable 
voluntary consensus standard. The Agency has decided, however, not to 
propose ISO procedures in this rulemaking. The Agency has determined 
that these procedures would be impractical because they rely too 
heavily on reference testing conditions. Because the test procedures in 
these regulations need to represent in-use operation typical of 
operation in the field, they must be based on a range of ambient 
conditions. EPA has determined that the ISO procedures are not broadly 
usable in their current form, and therefore cannot be adopted by 
reference. EPA has instead chosen to rely on the procedures outlined in 
40 CFR Part 89, Subparts D and E. EPA is hopeful that future ISO test 
procedures will be developed that are usable for the broad range of 
testing needed, and that such procedures could then be adopted by 
reference. EPA also expects that any development of revised test 
procedures will be done in accordance with ISO procedures and in a 
balanced manner and thus include the opportunity for involvement of a 
range of interested parties (potentially including parties such as 
industry, EPA, state governments, and environmental groups) so that the 
resulting procedures can represent these different interests.

F. Protection of Children

    Executive Order 13045, entitled ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997), applies to a rule that is determined to be ``economically 
significant,'' as defined under Executive Order 12866, if the 
environmental health or safety risk addressed by the rule has a 
disproportionate effect on children. For these rules, the Agency must 
evaluate the environmental health or safety effects of the planned rule 
on children; and explain why the planned regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered by the Agency.
    This proposed rule is not subject to Executive Order 13045, because 
it does not involve decisions on environmental health or safety risks 
that may disproportionately affect children. Moreover, this rule is 
determined not to be economically significant under Executive Order 
12866.

G. Enhancing the Intergovernmental Partnership under Executive Order 
12875

    Under Executive Order 12875, EPA may not issue a regulation that is 
not required by statute and that creates a mandate upon a State, local 
or tribal government, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by those 
governments, or EPA consults with those governments. If EPA complies by 
consulting, Executive Order 12875 requires EPA to provide to the Office 
of Management and Budget a description of the extent of EPA's prior 
consultation with representatives of affected State, local and tribal 
governments, the nature of their concerns, copies of any written 
communications from the governments, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 12875 
requires EPA to develop an effective process permitting elected 
officials and other representatives of State, local and tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory proposals containing significant unfunded mandates.''
    This rule would not create a mandate on State, local or tribal 
governments. The rule would not impose any enforceable duties on these 
entities, because they do not manufacture any engines that are subject 
to this rule. This rule would be implemented at the federal level and 
impose compliance obligations only on private industry. Accordingly, 
the requirements of section 1(a) of Executive Order 12875 do not apply 
to this rule.

[[Page 68557]]

H. Consultation and Coordination with Indian Tribal Governments

    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies on matters 
that significantly or uniquely affect their communities.''
    This rule would not significantly or uniquely affect the 
communities of Indian tribal governments. As noted above, this rule 
would be implemented at the federal level and impose compliance 
obligations only on private industry. Accordingly, the requirements of 
section 3(b) of Executive Order 13084 do not apply to this rule.

XI. Statutory Authority

    In accordance with section 213(a) of the Clean Air Act, 42 U.S.C. 
7547(a), EPA conducted a study of emissions from nonroad engines, 
vehicles, and equipment in 1991. Based on the results of that study, 
EPA determined that emissions of NOX, VOCs (including HC), 
and CO from nonroad engines and equipment contribute significantly to 
ozone and CO concentrations in more than one nonattainment area (see 59 
FR 31306, June 17, 1994). Given this determination, section 213(a)(3) 
of the Act requires EPA to promulgate (and from time to time revise) 
emissions standards for those classes or categories of new nonroad 
engines, vehicles, and equipment that in EPA's judgment cause or 
contribute to such air pollution. EPA has determined that marine diesel 
engines rated over 37 kW ``cause or contribute'' to such air pollution. 
(See the June 1994 final rule and Section II.A. above).
    Where EPA determines that other emissions from new nonroad engines, 
vehicles, or equipment significantly contribute to air pollution that 
may reasonably be anticipated to endanger public health or welfare, 
section 213(a)(4) authorizes EPA to establish (and from time to time 
revise) emission standards from those classes or categories of new 
nonroad engines, vehicles, and equipment that EPA determines cause or 
contribute to such air pollution. In the June 1994 final rule, EPA made 
this determination for emissions of PM and smoke from nonroad engines 
in general and for diesel nonroad engines rated over 37 kW. With this 
document, EPA is making the same findings for marine diesel engines. 
(See Section II.A. above).

List of Subjects in 40 CFR Part 94

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Diesel fuel, Imports, Incorporation 
by reference, Motor vehicle pollution, Reporting and recordkeeping 
requirements, Research, Warranties.

    Dated: November 24, 1998.
Carol M. Browner,
Administrator.
    For the reasons set out in the preamble, title 40, chapter I, of 
the Code of Federal Regulations is proposed to be amended by adding 
part 94 as set forth below.

PART 94--CONTROL OF AIR POLLUTION FROM MARINE COMPRESSION-IGNITION 
ENGINES

Subpart A--General Provisions for Emission Regulations for Marine 
Compression-Ignition Engines

Sec.
94.1  Applicability.
94.2  Definitions.
94.3  Abbreviations.
94.4  Treatment of confidential information.
94.5  Reference materials.
94.6  Regulatory structure.
94.7  General standards and requirements.
94.8  Exhaust emission standards.
94.9  Compliance with emission standards.
94.10  Warranty period.
94.11  Requirements for rebuilding certified marine engines.

Subpart B--Test Procedures

94.101  Applicability.
94.102  General provisions.
94.103  Test procedures for Category 1 marine engines.
94.104  Test procedures for Category 2 marine engines.
94.105  Test cycles.
94.106  Supplemental test procedures.
94.107  Determination of rated speed.
94.108  Test fuels.

Subpart C--Certification Provisions

94.201  Applicability.
94.202  Definitions.
94.203  Application for certification.
94.204  Designation of engine families.
94.205  Prohibited controls, adjustable parameters.
94.206  Required information.
94.207  Special test procedures.
94.208  Certification.
94.209  Special provisions for post-manufacturer marinizers.
94.210  Amending the application and certificate of conformity.
94.211  Emission-related maintenance instructions for purchasers.
94.212  Labeling.
94.213  Submission of engine identification numbers.
94.214  Production engines.
94.215  Maintenance of records; submittal of information; right of 
entry.
94.216  Hearing procedures.
94.217  Emission data engine selection.
94.218  Deterioration factor determination.
94.219  Durability data engine selection.
94.220  Service accumulation.
94.221  Application of good engineering judgment.

Subpart D--Certification Averaging, Banking, and Trading Provisions

94.301  Applicability.
94.302  Definitions.
94.303  General provisions.
94.304  Compliance requirements.
94.305  Credit generation and use calculation.
94.306  Certification.
94.307  Labeling.
94.308  Maintenance of records.
94.309  Reports.
94.310  Notice of opportunity for hearing.

Subpart E--Emission-related Defect Reporting Requirements, Voluntary 
Emission Recall Program

94.401  Applicability.
94.402  Definitions.
94.403  Emission defect information report.
94.404  Voluntary emissions recall reporting.
94.405  Alternative report formats.
94.406  Reports filing: record retention.
94.407  Responsibility under other legal provisions preserved.
94.408  Disclaimer of production warranty applicability.

Subpart F--Production Line Testing

94.501  Applicability.
94.502  Definitions.
94.503  General requirements.
94.504  Right of entry and access.
94.505  Sample selection for testing.
94.506  Test procedures.
94.507  Sequence of testing.
94.508  Calculation and reporting of test results.
94.509  Maintenance of records; submittal of information.
94.510  Compliance with criteria for production line testing.
94.511  [Reserved]
94.512  Suspension and revocation of certificates of conformity.

[[Page 68558]]

94.513  Request for public hearing.
94.514  Administrative procedures for public hearing.
94.515  Hearing procedures.
94.516  Appeal of hearing decision.
94.517  Treatment of confidential information.

Subpart G--[Reserved]

Subpart H--Recall Regulations

94.701  Applicability.
94.702  Definitions.
94.703  Applicability of Part 85 Subpart S.

Subpart I--Importation of Nonconforming Engines

94.801  Applicability.
94.802  Definitions.
94.803  Admission.
94.804  Exemptions.
94.805  Prohibited acts; penalties.

Subpart J--Exclusion and Exemption Provisions

94.901  Purpose and applicability.
94.902  Definitions.
94.903  Exclusions.
94.904  Exemptions.
94.905  Testing exemption.
94.906  Manufacturer-owned exemption, display exemption, and 
competition exemption.
94.907  Non-marine-specific engine exemption.
94.908  National security exemption.
94.909  Export exemptions.
94.910  Granting of exemptions.
94.911  Submission of exemption requests.

Subpart K--[Reserved]

Subpart L--General Enforcement Provisions and Prohibited Acts

94.1101  Applicability.
94.1102  Definitions.
94.1103  Prohibited acts.
94.1104  General enforcement provisions.
94.1105  Injunction proceedings for prohibited acts.
94.1106  Penalties.
94.1107  Warranty provisions.
94.1108  In-use compliance provisions.

Appendix I to Part 94--Emission-Related Engine Parameters and 
Specifications

    Authority: 42 U.S.C. 7522, 7523, 7524, 7525, 7541, 7542, 7543, 
7545, 7547, 7549, 7550 and 7601(a).

Subpart A--General Provisions for Emission Regulations for 
Compression-ignition Marine Engines


Sec. 94.1  Applicability.

    (a) Except as noted in paragraphs (b) and (c) of this section, the 
provisions of this part apply to manufacturers, rebuilders, owners and 
operators of:
    (1) Marine compression-ignition propulsion engines manufactured on 
or after January 1, 2004;
    (2) Marine compression-ignition auxiliary engines manufactured on 
or after January 1, 2004; and
    (3) Marine vessels manufactured on or after January 1, 2004 and 
which include a compression ignition engine.
    (b) Notwithstanding the provision of paragraph (c) of this section, 
the requirements and prohibitions of this part do not apply with 
respect to the engines identified in paragraphs (a)(1) through (3) of 
this section where such engines are:
    (1) Category 3 marine engines;
    (2) Engines rated below 37 kW; or
    (3) Engines on foreign vessels.
    (c) The provisions of subpart L of this part apply to all persons 
with respect to the engines identified in paragraphs (a)(1) through (3) 
of this section.
    (d) The provisions of this part do not apply to any persons with 
respect to the engines not identified in paragraphs (a)(1) through (3) 
of this section.
    (e) The prohibition specified in Sec. 94.1103(a)(6) applies to all 
persons with respect to recreational marine engines. Notwithstanding 
the provision of paragraph (c) of this section, requirements or 
prohibitions other than the prohibition specified in Sec. 94.1103(a)(6) 
of this part do not apply with respect to recreational marine engines.


Sec. 94.2  Definitions.

    (a) The definitions of this section apply to this subpart. They 
also apply to all subparts of this part, except where noted otherwise.
    (b) As used in this part, all terms not defined in this section 
shall have the meaning given them in the Act:
    Act means the Clean Air Act as amended (42 U.S.C. 7401 et seq.).
    Adjustable Parameter means any device, system, or element of design 
which is physically or electronically capable of being adjusted 
(including those which are difficult to access) and which, if adjusted, 
may affect emissions or engine performance during emission testing.
    Administrator means the Administrator of the Environmental 
Protection Agency or his/her authorized representative.
    Aftertreatment system or aftertreatment component or aftertreatment 
technology means any system or component or technology mounted 
downstream of the exhaust valve or exhaust port whose design function 
is to reduce exhaust emissions.
    Applicable standard means a standard to which an engine is subject; 
or, where an engine is certified to another standard or FEL, applicable 
standard means the other standard or FEL to which the engine is 
certified, as allowed by Sec. 94.8. This definition does not apply to 
subpart D of this part.
    Auxiliary means relating to a marine engine that is not a 
propulsion engine.
    Auxiliary emission control device (AECD) means any element of 
design which senses temperature, vessel speed, engine RPM, atmospheric 
pressure, manifold pressure or vacuum, or any other parameter for the 
purpose of activating, modulating, delaying, or deactivating the 
operation of any part of the emission control system (including, but 
not limited to injection timing); or any other feature that causes in-
use emissions to be higher than those measured under test conditions.
    Averaging means the exchange of emission credits among engine 
families within a given manufacturer's product line.
    Banking means the retention of emission credits by a credit holder 
for use in future calendar year averaging or trading as permitted by 
the regulations in this part.
    Base engine means a land-based engine to be marinized, as 
configured prior to marinization.
    Blue Sky Series engine means an engine meeting the requirements of 
Sec. 94.7(e).
    Calibration means the set of specifications, including tolerances, 
specific to a particular design, version, or application of a 
component, or components, or assembly capable of functionally 
describing its operation over its working range. This definition does 
apply to subpart B of this part.
    Category 1 means relating to a marine engine with a rated power 
greater than or equal to 37 kilowatts and a specific engine 
displacement less than 5.0 liters per cylinder.
    Category 2 means relating to a marine engine with a specific engine 
displacement greater than or equal to 5.0 liters per cylinder but less 
than 20 liters per cylinder.
    Category 3 means relating to a marine engine with a specific engine 
displacement greater than or equal to 20 liters per cylinder.
    Commercial marine engine means a marine engine that is not a 
recreational marine engine.
    Compression-ignition means relating to a type of engine with 
operating characteristics significantly similar to the theoretical 
Diesel combustion cycle. The non-use of a throttle to regulate intake 
air flow for controlling power during normal operation is indicative of 
a compression-ignition engine.
    Configuration means any subclassification of an engine family which 
can be described on the basis of gross power, emission control system, 
governed speed, injector size, engine

[[Page 68559]]

calibration, and other parameters as designated by the Administrator.
    Constant-speed engine means an engine that is governed to operate 
only at a single rated speed.
    Crankcase emissions means airborne substances emitted to the 
atmosphere from any portion of the engine crankcase ventilation or 
engine lubrication system.
    Defeat device means an AECD or other control feature that reduces 
the effectiveness of the emission control system under conditions which 
may reasonably be expected to be encountered in normal engine operation 
and use, unless the AECD or other control feature has been identified 
by the manufacturer in the application for certification, and:
    (1) Such conditions are substantially represented by the portion of 
the applicable test cycle of Sec. 94.105 during which the applicable 
emission rates are measured;
    (2) The need for the AECD or other control feature is justified in 
terms of protecting the engine or vessel against damage or accident; or
    (3) The AECD or other control feature does not go beyond the 
requirements of engine starting.
    Deterioration factor means the difference between exhaust emissions 
at the end of useful life and exhaust emissions at the low hour test 
point expressed as either: the ratio of exhaust emissions at the end of 
useful life to exhaust emissions at the low mileage test point (for 
multiplicative deterioration factors); or the difference between 
exhaust emissions at the end of useful life and exhaust emissions at 
the low hour test point (for additive deterioration factors).
    Diesel fuel means any fuel suitable for use in diesel engines which 
is commonly or commercially known or sold as diesel fuel.
    Dress means to modify a land-based engine for use in a marine 
vessel, where such modification would not reasonably be expected to 
potentially affect emissions. This definition does not apply for 
engines that are not certified to Tier 2 or later standards.
    Dresser means any entity that dresses an engine.
    Emission control system means those devices, systems or elements of 
design which control or reduce the emission of substances from an 
engine. This includes, but is not limited to, mechanical and electronic 
components and controls, and computer software.
    Emission credits means the amount of emission reduction or 
exceedance, by an engine family, below or above the emission standard, 
respectively, as calculated under subpart D of this part. Emission 
reductions below the standard are considered as ``positive credits,'' 
while emission exceedances above the standard are considered as 
``negative credits.'' In addition, ``projected credits'' refer to 
emission credits based on the projected applicable production/sales 
volume of the engine family. ``Reserved credits'' are emission credits 
generated within a calendar year waiting to be reported to EPA at the 
end of the calendar year. ``Actual credits'' refer to emission credits 
based on actual applicable production/sales volume as contained in the 
end-of-year reports submitted to EPA.
    Emission-data engine means an engine which is tested for purposes 
of emission certification or production line testing.
    Emission-related defect means a defect in design, materials, or 
workmanship in a device, system, or assembly which affects any 
parameter or specification enumerated in Appendix I of this part.
    Emission-related maintenance means that maintenance which 
substantially affects emissions or which is likely to affect the 
deterioration of the engine or vessel with respect to emissions.
    Engine family means a group of engine configurations that are 
expected to have similar emission characteristics throughout the useful 
lives of the engines (see Sec. 94.204), and that are (or were) covered 
(or requested to be covered) by a specific certificate of conformity.
    Engineering analysis means a summary of scientific and/or 
engineering principles and facts that support a conclusion made by a 
manufacturer, with respect to compliance with the provisions of this 
part.
    EPA Enforcement Officer means any officer or employee of the 
Environmental Protection Agency so designated in writing by the 
Administrator or his/her designee.
    Exhaust emissions means substances (i.e., gases and particles) 
emitted to the atmosphere from any opening downstream from the exhaust 
port or exhaust valve of an engine.
    Exhaust gas recirculation means an emission control technology that 
reduces emissions by routing gases that had been exhausted from the 
combustion chamber(s) back into the engine to be mixed with incoming 
air prior to or during combustion. The use of valve timing to increase 
the amount of residual exhaust gas in the combustion chamber(s) that is 
mixed with incoming air prior to or during combustion is not considered 
to be exhaust gas recirculation for the purposes of this part.
    Family Emission Limit (FEL) means an emission level declared by the 
certifying manufacturer to serve in lieu of an otherwise applicable 
emission standard for certification and compliance purposes in the 
averaging, banking and trading program. FELs are expressed to the same 
number of decimal places as the applicable emission standard.
    Foreign trade vessel means a vessel that spends less than 25 
percent of its operating time within 320 nautical kilometers of U.S. 
territory, and which does not operate solely between the United States, 
Canada, Mexico, Bermuda, or the Bahamas.
    Foreign vessel means a vessel of foreign registry or a vessel 
operated under the authority of a country other than the United States.
    Fuel system means the combination of fuel tank(s), fuel pump(s), 
fuel lines and filters, pressure regulator(s), and fuel injection 
components, fuel system vents, and any other component involved in the 
delivery of fuel to the engine.
    Green Engine Factor means a factor that is applied to emission 
measurements from an engine that has had little or no service 
accumulation. The Green Engine Factor adjusts emission measurements to 
be equivalent to emission measurements from an engine that has had 
approximately 300 hours of use.
    Identification number means a specification (for example, model 
number/serial number combination) which allows a particular engine to 
be distinguished from other similar engines.
    IMO NOX Technical Code means the ``Technical Code on 
Control of Emission of Nitrogen Oxides From Marine Diesel Engines'', as 
adopted on September 26, 1997 by the International Maritime 
Organization in conference Resolution 2, Conference of the Parties to 
the International Convention for the Prevention of Pollution from Ship, 
1973 as modified by the protocol of 1978 relating thereto (reported in 
MP/Conf. 3/35, 22 October 1997). The IMO NOX Technical Code 
has been incorporated by reference at Sec. 94.5 of this part.
    Importer means an entity or person who imports engines from a 
foreign country into the United States (including its territories).
    Intermediate Speed means peak torque speed if peak torque speed 
occurs from 60 to 75 percent of rated speed. If peak torque speed is 
less than 60 percent of rated speed, intermediate speed means 60 
percent of rated speed.

[[Page 68560]]

If peak torque speed is greater than 75 percent of rated speed, 
intermediate speed means 75 percent of rated speed.
    Low hour engine means an engine during the interval between the 
time that normal assembly operations and adjustments are completed and 
the time that 300 additional operating hours have been accumulated 
(including hours accumulated during emission testing, if performed).
    Malfunction means a condition in which the operation of a component 
in an engine occurs in a manner other than that specified by the 
certifying manufacturer (e.g., as specified in the application for 
certification); or the operation of engine in that condition.
    Manufacturer means any person engaged in the manufacturing or 
assembling of new engines or importing such engines for resale, or who 
acts for and is under the control of any such person in connection with 
the distribution of such engines. The term manufacturer includes post-
manufacturer marinizers, but does not include any dealer with respect 
to new engines received by such person in commerce.
    Marine means relating to a vessel or an engine that is installed or 
intended to be installed on a vessel.
    Marine engine means a diesel engine that is installed or intended 
to be installed on a vessel. This definition does not include portable 
auxiliary engines for which the fueling, cooling and exhaust systems 
are not integral parts of the vessel.
    Marine vessel has the meaning specified in the General Provisions 
of the United States Code, 1 U.S.C. 3.
    Maximum rated power means the maximum brake power output of an 
engine.
    Method of aspiration means the method whereby air for fuel 
combustion enters the engine (e.g., naturally aspirated or 
turbocharged).
    Model year means the manufacturer's annual new model production 
period which includes January 1 of the calendar year, ends no later 
than December 31 of the calendar year, and does not begin earlier than 
January 2 of the previous calendar year. Where a manufacturer has no 
annual new model production period, model year means calendar year.
    New marine engine means:
    (1)(i) An engine, the equitable or legal title to which has never 
been transferred to an ultimate purchaser;
    (ii) An engine placed in a vessel, the equitable or legal title to 
which has never been transferred to an ultimate purchaser; or
    (iii) An engine that has not been placed into service on a vessel.
    (2) Where the equitable or legal title to an engine or vessel is 
not transferred to an ultimate purchaser prior to its being placed into 
service, the engine ceases to be new after it is placed into service.
    (3) With respect to imported engines, the term ``new marine 
engine'' means a engine that is not covered by a certificate of 
conformity under this part at the time of importation, and that was 
manufactured after the compliance date of the emission standards in 
this part which is applicable to such engine (or which would be 
applicable to such engine had it been manufactured for importation into 
the United States).
    New vessel means a vessel, the equitable or legal title to which 
has never been transferred to an ultimate purchaser. Where the 
equitable or legal title to a vessel is not transferred to an ultimate 
purchaser prior to its being placed into service, the vessel ceases to 
be new when it is placed into service.
    Nonconforming marine engine means a marine engine which is not 
covered by a certificate of conformity prior to importation or being 
offered for importation (or for which such coverage has not been 
adequately demonstrated to EPA); or a marine engine which was 
originally covered by a certificate of conformity, but which is not in 
a certified configuration, or otherwise does not comply with the 
conditions of that certificate of conformity. (Note: Domestic marine 
engines which are not covered by a certificate of conformity prior to 
their introduction into U.S. commerce are considered to be noncomplying 
marine engines.)
    Oxides of nitrogen means nitric oxide and nitrogen dioxide. Oxides 
of nitrogen are expressed quantitatively as if the nitric oxide were in 
the form of nitrogen dioxide (oxides of nitrogen are assumed to have a 
molecular weight equivalent to nitrogen dioxide).
    Post-manufacture marinizer means a person who produces a marine 
engine by substantially modifying an engine, whether certified or 
uncertified, complete or partially complete, and is not controlled by 
the manufacturer of the base engine or by an entity that also controls 
the manufacturer of the base engine. For the purpose of this 
definition, ``substantially modify'' means changing a Tier 2 or later 
engine in a way that could reasonably be expected to potentially change 
engine emission characteristics, or changing an uncertified or Tier 1 
in any way. Vessel manufacturers that substantially modify engines are 
post-manufacturer marinizers.
    Power assembly means the components of an engine in which 
combustion of fuel occurs, and consists of the cylinder, piston and 
piston rings, valves and ports for admission of charge air and 
discharge of exhaust gases, fuel injection components and controls, 
cylinder head and associated components.
    Presentation of credentials means the display of the document 
designating a person as an EPA enforcement officer.
    Primary fuel means that type of fuel (e.g., petroleum distillate 
diesel fuel) that is expected to be consumed in the greatest quantity 
(volume basis) when the engine is operated in use.
    Propulsion means relating to an engine that moves a vessel through 
the water or directs the movement of a vessel.
    Rated power means the maximum brakepower output of an engine.
    Rated speed is the maximum test speed defined in Sec. 94.107.
    Rebuilder means any person that rebuilds or remanufactures an 
engine.
    Recreational marine engine means a propulsion marine engine that is 
intended by the manufacturer to be installed on a recreational vessel, 
and which is permanently labeled as follows:
    ``THIS RECREATIONAL ENGINE DOES NOT COMPLY WITH FEDERAL MARINE 
ENGINE EMISSION REQUIREMENTS FOR NONRECREATIONAL VESSELS. 
INSTALLATION OF THIS ENGINE IN ANY NONRECREATIONAL VESSEL IS A 
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.''
    Recreational vessel means a vessel being manufactured or operated 
primarily for pleasure, or being leased, rented or chartered to another 
for the latter's pleasure (except where the vessel is leased, rented, 
or chartered for more than six passengers). Vessels for hire which can 
carry more than six passengers, whether or not they ever actually do, 
are not recreational vessels. For this definition the term ``operated 
primarily for pleasure,'' does not include vessels used solely for 
competition or used at any time in any other way to generate income or 
revenue in any way not associated with the hiring out of the vessel to 
other people for their pleasure.
    Service life means the total life of an engine. Service life begins 
when the engine is originally manufactured and continues until the 
engine is permanently removed from service.
    Small manufacturer means a manufacturer that is classified as a 
small business by the Small Business Administration.
    Specific emissions means emissions expressed on the basis of 
observed brake

[[Page 68561]]

power, using units of g/kW-hr. Observed brake power measurement 
includes accessories on the engine if these accessories are required 
for running an emission test (except for the cooling fan). When it is 
not possible to test the engine in the gross conditions, for example if 
the engine and transmission form a single integral unit, the engine may 
be tested in the net condition. Power corrections from net to gross 
conditions will be allowed with prior approval of the Administrator.
    Specified by a certificate of conformity or specified in a 
certificate of conformity means stated or otherwise specified in a 
certificate of conformity or an approved application for certification.
    Test engine means an engine in a test sample.
    Test sample means the collection of engines or vessels selected 
from the population of an engine family for emission testing.
    Tier 2 means relating to an engine subject to the Tier 2 emission 
standards listed in Sec. 94.8.
    Tier 3 means relating to an engine subject to the Tier 3 emission 
standards listed in Sec. 94.8.
    Total hydrocarbon equivalent means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, 
or other organic compounds that are measured separately as contained in 
a gas sample, expressed as petroleum-fueled engine hydrocarbons. The 
hydrogen-to-carbon ratio of the equivalent hydrocarbon is 1.85:1.
    Trading means the exchange of engine emission credits between 
credit holders.
    Ultimate purchaser means, with respect to any new engine or vessel, 
the first person who in good faith purchases such new engine or vessel 
for purposes other than resale.
    United States. United States includes the customs territory of the 
United States as defined in 19 U.S.C. 1202, and the Virgin Islands, 
Guam, American Samoa, and the Commonwealth of the Northern Mariana 
Islands.
    U.S.-directed production volume means the number of marine engine 
units, subject to this part, produced by a manufacturer for which the 
manufacturer has reasonable assurance that sale was or will be made to 
ultimate purchasers in the United States.
    Useful life means the period during which an engine is designed to 
properly function in terms of reliability and fuel consumption, without 
being remanufactured, specified as hours of use and years. It is the 
period during which a new engine is required to comply with all 
applicable emission standards. (Note: Sec. 94.9(a) specifies minimum 
requirements for useful life values.)
    Voluntary emission recall means a repair, adjustment, or 
modification program voluntarily initiated and conducted by a 
manufacturer to remedy any emission-related defect for which 
notification of engine or vessel owners has been provided.


Sec. 94.3  Abbreviations.

    The abbreviations of this section apply to all subparts of this 
part and have the following meanings:

AECD--Auxiliary emission control device
API--American Petroleum Institute
ASTM--American Society for Testing and Materials
 deg.C--Degrees celsius
CI--Compression ignition
CO--Carbon monoxide
CO2--Carbon dioxide
disp.--volumetric displacement of an engine cylinder
EGR--Exhaust gas recirculation
EP--End point
EPA--Environmental Protection Agency
FEL--Family emission limit
ft--foot or feet
FTP--Federal Test Procedure
g--gram(s)
g/kW-hr--Grams per kilowatt hour
gal--U.S. gallon
h--hour(s)
HC--hydrocarbon
Hg--Mercury
hp--horsepower
ICI--Independent Commercial Importer
in--inch(es)
K--Kelvin
kg--kilogram(s)
km--kilometer(s)
kPa--kilopascal(s)
kW--kilowatt
m--meter(s)
max--maximum
mg--milligram(s)
min--minute
ml--milliliter(s)
mm--millimeter
NIST--National Institute for Standards and Testing
NMHC-Non-methane hydrocarbons
NTIS--National Technical Information Service
NO--nitric oxide
NO2--nitrogen dioxide
NOX--oxides of nitrogen
No.--number
O2--oxygen
pct--percent
PM--particulate matter
PMM--post-manufacturer marinizer
ppm--parts per million by volume
ppmC--parts
per million, carbon
rpm--revolutions per minute
s--second(s)
SAE--Society of Automotive Engineers
SEA--Selective Enforcement Auditing
SI--International system of units (i.e., metric)
THC--Total hydrocarbon
THCE--Total hydrocarbon equivalent
U.S.--United States
U.S.C.--United States Code
vs--versus
W--watt(s)
wt--weight


Sec. 94.4  Treatment of confidential information.

    (a) Any manufacturer may assert that some or all of the information 
submitted pursuant to this part is entitled to confidential treatment 
as provided by 40 CFR part 2, subpart B.
    (b) Any claim of confidentiality must accompany the information at 
the time it is submitted to EPA.
    (c) To assert that information submitted pursuant to this part is 
confidential, a person or manufacturer must indicate clearly the items 
of information claimed confidential by marking, circling, bracketing, 
stamping, or otherwise specifying the confidential information. 
Furthermore, EPA requests, but does not require, that the submitter 
also provide a second copy of its submittal from which all confidential 
information has been deleted. If a need arises to publicly release 
nonconfidential information, EPA will assume that the submitter has 
accurately deleted the confidential information from this second copy.
    (d) If a claim is made that some or all of the information 
submitted pursuant to this part is entitled to confidential treatment, 
the information covered by that confidentiality claim will be disclosed 
by EPA only to the extent and by means of the procedures set forth in 
40 CFR part 2, subpart B.
    (e) Information provided without a claim of confidentiality at the 
time of submission may be made available to the public by EPA without 
further notice to the submitter, in accordance with 40 CFR 
2.204(c)(2)(i)(A).


Sec. 94.5  Reference materials.

    (a) The documents in paragraph (b) of this section have been 
incorporated by reference. The incorporation by reference was approved 
by the Director of the Federal Register in accordance with 5 U.S.C. 
552(a) and 1 CFR part 51. Copies may be inspected at U.S. EPA, OAR, 401 
M Street, SW., Washington, DC 20460, or at the Office of the Federal 
Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
    (b) The following paragraphs and tables set forth the material that 
has

[[Page 68562]]

been incorporated by reference in this part:
    (1) ASTM material. The following table sets forth material from the 
American Society for Testing and Materials that has been incorporated 
by reference. The first column lists the number and name of the 
material. The second column lists the section(s) of the part, other 
than this section, in which the matter is referenced. The second column 
is presented for information only and may not be all-inclusive. More 
recent versions of these standards may be used with advance approval of 
the Administrator. Copies of these materials may be obtained from 
American Society for Testing and Materials, 100 Barr Harbor Dr., West 
Conshohocken, PA 19428. The table follows:

------------------------------------------------------------------------
                                                       40 CFR part 94
             Document number and name                    reference
------------------------------------------------------------------------
ASTM D86-97:
    ``Standard Test Method for Distillation of     Sec.  94.108
     Petroleum Products at Atmospheric Pressure''.
ASTM D93-97:
    ``Standard Test Methods for Flash Point by     Sec.  94.108
     Pensky-Martens Closed Cup Tester''.
ASTM D129-95:
    ``Standard Test Method for Sulfur in           Sec.  94.108
     Petroleum Products (General Bomb Method)''.
ASTM D287-92:
    ``Standard Test Method for API Gravity of      Sec.  94.108
     Crude Petroleum and Petroleum Products''
     (Hydrometer Method).
ASTM D445-97:
    ``Standard Test Method for Kinematic           Sec.  94.108
     Viscosity of Transparent and Opaque Liquids
     (and the Calculation of Dynamic Viscosity)''.
ASTM D613-95:
    ``Standard Test Method for Cetane Number of    Sec.  94.108
     Diesel Fuel Oil''.
ASTM D1319-98:
    ``Standard Test Method for Hydrocarbon Types   Sec.  94.108
     in Liquid Petroleum Products by Fluorescent
     Indicator Adsorption''.
ASTM D2622-98:
    ``Standard Test Method for Sulfur in           Sec.  94.108
     Petroleum Products by Wavelength Dispersive
     X-ray Fluorescence Spectrometry''.
ASTM D5186-96: ``Standard Test Method for
    ``Determination of the Aromatic Content and    Sec.  94.108
     Polynuclear Aromatic Content of Diesel Fuels
     and Aviation Tubine Fuels By Supercritical
     Fluid Chromatography''.
ASTM E29-93a:
    ``Standard Practice for Using Significant      Secs.  94.9, 94.305,
     Digits in Test Data to Determine Conformance   94.509
     with Specifications''.
------------------------------------------------------------------------

    (2) IMO material. The following table sets forth material from the 
International Maritime Organization that has been incorporated by 
reference. The first column lists the name of the material. The second 
column lists the section(s) of the part, other than this section, in 
which the matter is referenced. The second column is presented for 
information only and may not be all-inclusive. More recent versions of 
these standards may be used with advance approval of the Administrator. 
Copies of these materials may be obtained from the International 
Maritime Organization, 4 Albert Embankment, London SE1 7SR,U.K. The 
table follows:

------------------------------------------------------------------------
                                                       40 CFR part 94
             Document number and name                    reference
------------------------------------------------------------------------
Technical Code on Control of Emission of Nitrogen  Sec.  94.105
 Oxides From Marine Diesel Engines, as adopted on
 September 26, 1997 by the International Maritime
 Organization in conference Resolution 2,
 Conference of the Parties to the International
 Convention for the Prevention of Pollution from
 Ship, 1973 as modified by the protocol of 1978
 relating thereto (reported in MP/Conf. 3/35, 22
 October 1997).
------------------------------------------------------------------------

Sec. 94.6  Regulatory structure.

    This section provides an overview of the regulatory structure of 
this part.
    (a) The regulations of this part 94 are intended to control 
emissions from in-use marine engines.
    (b) The engines for which the regulations of this part (i.e., 40 
CFR part 94) apply are specified by Sec. 94.1, and by the definitions 
of Sec. 94.2. The point at which an engine or vessel becomes subject to 
the regulations of this part is determined by the definitions of new 
marine engine and new marine vessel in Sec. 94.2. Subpart J of this 
part contains provisions exempting certain engines and vessels from the 
emission standards in this part under special circumstances.
    (c) To comply with the requirements of this part, a manufacturer 
must demonstrate to EPA that the engine meets the applicable standards 
of Secs. 94.7 and 94.8, and all other requirements of this part. The 
requirements of this certification process are described in subparts C 
and D of this part.
    (d) Subpart B of this part specifies procedures and equipment to be 
used for conducting emission tests for the purpose of the regulations 
of this part.
    (e) Subparts E, F, and H of this part specify requirements for 
manufacturers after certification; that is during production and use of 
the engines.
    (f) Subpart I of this part contains requirements applicable to the 
importation of marine engines covered by the provisions of this part.
    (g) Subpart L of this part describes prohibited acts and contains 
other enforcement provisions relating to marine engines and vessels 
covered by the provisions of this part.
    (h) Unless specified otherwise, the provisions of this part apply 
to all marine engines and vessels subject to the emission standards of 
this part.

[[Page 68563]]

Sec. 94.7  General standards and requirements.

    (a) Marine engines and vessels may not be equipped with a defeat 
device.
    (b) An engine may not be equipped with an emission control system 
for the purpose of complying with emission standards if such a system 
will cause or contribute to an unreasonable risk to public health, 
welfare, or safety in its operation or function.
    (c) An engine with an emission control system may not emit any 
noxious or toxic substance which would not be emitted in the operation 
of the engine in the absence of such a system, except as specifically 
permitted by regulation.
    (d) All engines subject to the emission standards of this part 
shall be equipped with a connection in the engine exhaust system that 
is located downstream of the engine and before any point at which the 
exhaust contacts water (or any other cooling/scrubbing medium) for the 
temporary attachment of gaseous and/or particulate emission sampling 
equipment. This connection shall be internally threaded with standard 
pipe threads of a size not larger than one-half inch, and shall be 
closed by a pipe-plug when not in use.
    (e) All engines subject to the emission standards of this part 
shall broadcast on engine's controller area networks actual engine 
percent torque and actual engine speed.


Sec. 94.8  Exhaust emission standards.

    (a) Exhaust emissions from marine compression-ignition engines 
shall not exceed the applicable exhaust emission standards contained in 
Table A-1 as follows:

                            Table A-1.--Primary Exhaust Emission Standards (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
                                                                  THC+NOX  g/kW-
  Subcategory  liters/cylinder         Tier        Model  year *        hr          CO  g/kW-hr     PM  g/kW-hr
----------------------------------------------------------------------------------------------------------------
Power  37 kW and      Tier 2.........            2004             7.2             5.0            0.40
 disp. <0.9.
                                 Tier 3.........            2008             4.0             5.0  ..............
0.9  disp. <1.2.....  Tier 2.........            2004             7.2             5.0            0.30
                                 Tier 3.........            2008             4.0             5.0  ..............
1.2  disp. <1.5.....  Tier 2.........            2004             7.2             3.5            0.20
                                 Tier 3.........            2008             4.0             3.5  ..............
1.5  disp. <2.0.....  Tier 2.........            2004             7.2             3.5            0.20
                                 Tier 3.........            2008             4.0             3.5  ..............
2.0  disp. <2.5.....  Tier 2.........            2004             7.2             3.5            0.20
                                 Tier 3.........            2008             4.0             3.5  ..............
2.5  disp. <5.0.....  Tier 2.........            2006             7.2             3.5            0.20
                                 Tier 3.........            2010             5.0             3.5  ..............
5.0  disp. <20......  Tier 2.........            2006             7.2             2.0            0.27
                                 Tier 3.........            2010             5.0             2.0  ..............
----------------------------------------------------------------------------------------------------------------
* The model years listed indicate the model years for which the specified tier of standards take effect.

    (b) Exhaust emissions of oxides of nitrogen, carbon monoxide, 
hydrocarbon, and particulate matter (and smoke, as applicable) shall be 
measured using the procedures set forth in subpart B of this part.
    (c) In lieu of the NOX standards, THC+NOX 
standards, and PM standards specified in paragraph (a) of this section, 
manufacturers may elect to include engine families in the averaging, 
banking, and trading program, the provisions of which are specified in 
subpart D of this part. The manufacturer shall then set a family 
emission limit (FEL) which will serve as the standard for that engine 
family.
    (d)(1) Naturally aspirated engines to which this subpart is 
applicable shall not discharge crankcase emissions into the ambient 
atmosphere, unless such crankcase emissions are permanently routed into 
the exhaust and included in all exhaust emission measurements.
    (2) For engines using turbochargers, pumps, blowers, or 
superchargers for air induction, if the engine discharges crankcase 
emissions into the ambient atmosphere in use, these crankcase emissions 
shall be included in all exhaust emission measurements.
    (e) Exhaust emissions from engines subject to the standards (or 
FELs) in paragraph (a), (c), or (f) of this section shall not exceed 
1.25 times the applicable standards (or FELs) when tested in accordance 
with the supplemental test procedures specified in Sec. 94.106.
    (f) The following paragraphs define the requirements for low-
emitting Blue Sky Series engines.
    (1) Voluntary standards. Engines may be designated ``Blue Sky 
Series'' engines through the 2007 model year by meeting the voluntary 
standards listed in Table A-2, which apply to all certification and in-
use testing.

           Table A-2.--Voluntary Emission Standards (g/kW-hr)
------------------------------------------------------------------------
              Rated brake power (kW)                 THC+NOX       PM
------------------------------------------------------------------------
power  37 kW disp. <0.9................        4.0       0.24
0.9  disp. <1.2........................        4.0       0.18
1.2  disp. <2.5........................        4.0       0.12
2.5  disp. <5.0........................        5.0       0.12
5.0  disp. <20.........................        5.0       0.16
------------------------------------------------------------------------

    (2) Additional standards. Blue Sky Series engines are subject to 
all provisions that would otherwise apply under this part.
    (3) Test procedures. Manufacturers may use an alternate procedure 
to demonstrate the desired level of emission control if approved in 
advance by the Administrator.
    (g) Standards for alternative fuels. The standards described in 
this section apply to compression-ignition engines, irrespective of 
fuel, with the following two exceptions:
    (1) Engines fueled with natural gas shall comply with 
NMHC+NOX standards that are numerically equivalent to the 
THC+NOX described in paragraph (a) of this section; and
    (2) Engines fueled with alcohol fuel shall comply with 
THCE+NOX standards that are numerically equivalent to the 
THC+NOX described in paragraph (a) of this section.


Sec. 94.9  Compliance with emission standards.

    (a) The general standards and requirements in Sec. 94.7 and the 
emission standards in Sec. 94.8 apply to each new engine throughout its 
useful life period. The useful life is specified as hours and years, 
and ends when either of the values (hours or years) is exceeded.

[[Page 68564]]

    (1) The minimum useful life in terms of hours is equal to 10,000 
hours for Category 1 and 20,000 hours for Category 2. The minimum 
useful life in terms of years is 10 years.
    (2) The manufacturer shall specify a longer useful life if the 
engine is designed to remain in service longer than the applicable 
minimum useful life. A manufacturer's recommended time to 
remanufacture/rebuild which is longer than the minimum useful life is 
one indicator of a longer design life.
    (b) Certification is the process by which manufacturers apply for 
and obtain certificates of conformity from EPA, which allows the 
manufacturer to introduce into commerce new marine engines for sale or 
use in the U.S.
    (1) Compliance with the applicable emission standards by an engine 
family shall be demonstrated by the certifying manufacturer before a 
certificate of conformity may be issued under Sec. 94.208. 
Manufacturers shall demonstrate compliance using emission data, 
measured using the procedures specified in subpart B of this part, from 
a low hour engine. A development engine that is equivalent in design to 
the marine engines being certified may be used for Category 2 
certification.
    (2) The emission values to compare with the standards shall be the 
emission values of a low hour engine, or a development engine, adjusted 
by the deterioration factors developed in accordance with the 
provisions of Sec. 94.219. Before any emission value is compared with 
the standard, it shall be rounded, in accordance with ASTM E 29-93a 
(incorporated by reference at Sec. 94.5), to the same number of 
significant figures as contained in the applicable standard.
    (c) Upon request by the manufacturer, the Administrator may limit 
the applicability of exhaust emission requirements of Sec. 94.8(e) as 
necessary for safety or to otherwise protect the engine.


Sec. 94.10  Warranty period.

    Warranties imposed by Sec. 94.1107 shall apply for a period of 
hours equal to 50 percent of the useful life in hours or a period of 
years equal to 50 percent of the useful life in years, whichever comes 
first.


Sec. 94.11  Requirements for rebuilding certified engines.

    (a) The provisions of this section apply with respect to engines 
subject to the standards prescribed in Sec. 94.8 and are applicable to 
the process of engine rebuilding (or rebuilding a portion of an engine 
or engine system). The process of engine rebuilding generally includes 
disassembly, replacement of multiple parts due to wear, and reassembly, 
and may also include the removal of the engine from the vessel and 
other acts associated with rebuilding an engine.
    (b) When rebuilding an engine, portions of an engine, or an engine 
system, there must be a reasonable technical basis for knowing that the 
resultant engine is equivalent, from an emissions standpoint, to a 
certified configuration (i.e., tolerances, calibrations, 
specifications), and the model year(s) of the resulting engine 
configuration must be identified. A reasonable basis would exist if:
    (1) Parts installed, whether the parts are new, used, or rebuilt, 
are such that a person familiar with the design and function of motor 
vehicle engines would reasonably believe that the parts perform the 
same function with respect to emission control as the original parts; 
and
    (2) Any parameter adjustment or design element change is made only:
    (i) In accordance with the original engine manufacturer's 
instructions; or
    (ii) Where data or other reasonable technical basis exists that 
such parameter adjustment or design element change, when performed on 
the engine or similar engines, is not expected to adversely affect in-
use emissions.
    (c) When an engine is being rebuilt and remains installed or is 
reinstalled in the same vessel, it must be rebuilt to a configuration 
of the same or later model year as the original engine. When an engine 
is being replaced, the replacement engine must be an engine of (or 
rebuilt to) a certified configuration that is equivalent, from an 
emissions standpoint, to the engine being replaced.
    (d) At time of rebuild, emission-related codes or signals from on-
board monitoring systems may not be erased or reset without diagnosing 
and responding appropriately to the diagnostic codes, regardless of 
whether the systems are installed to satisfy requirements in 
Sec. 94.211 or for other reasons and regardless of form or interface. 
Diagnostic systems must be free of all such codes when the rebuilt 
engine is returned to service. Such signals may not be rendered 
inoperative during the rebuilding process.
    (e) When conducting a rebuild without removing the engine from the 
vessel, or during the installation of a rebuilt engine, all critical 
emission-related components listed in Appendix I of this part not 
otherwise addressed by paragraphs (b) through (d) of this section must 
be checked and cleaned, adjusted, repaired, or replaced as necessary, 
following manufacturer recommended practices.
    (f) Records shall be kept by parties conducting activities included 
in paragraphs (b) through (e) of this section. The records shall 
include at minimum the hours of operation at the time of rebuild, a 
listing of work performed on the engine, and emission-related control 
components including a listing of parts and components used, engine 
parameter adjustments, emission-related codes or signals responded to 
and reset, and work performed under paragraph (e) of this section.
    (1) Parties may keep records in whatever format or system they 
choose as long as the records are understandable to an EPA enforcement 
officer or can be otherwise provided to an EPA enforcement officer in 
an understandable format when requested.
    (2) Parties are not required to keep records of information that is 
not reasonably available through normal business practices including 
information on activities not conducted by themselves or information 
that they cannot reasonably access.
    (3) Parties may keep records of their rebuilding practices for an 
engine family rather than on each individual engine rebuilt in cases 
where those rebuild practices are followed routinely.
    (4) Records must be kept for a minimum of two years after the 
engine is rebuilt.

Subpart B--Test Procedures


Sec. 94.101  Applicability.

    Provisions of this subpart apply for testing performed by the 
Administrator and for testing performed by manufacturers.


Sec. 94.102  General provisions.

    (a) The test procedures specified in this subpart for marine engine 
testing are intended to produce emission measurements that are 
equivalent to emission measurements that would result from emission 
tests performed during in-use operation using the same engine 
configuration installed in a vessel.
    (b) Test procedures otherwise allowed by the provisions of this 
subpart shall not be used where such procedures are not consistent with 
good engineering practice and the regulatory goal specified in 
paragraph (a) of this section.
    (c) Alternate test procedures may be used if shown to yield 
equivalent results, and if approved in advance by the Administrator.

[[Page 68565]]

Sec. 94.103  Test procedures for Category 1 marine engines.

    (a) Gaseous and particulate emissions shall be measured using the 
test procedures specified in 40 CFR part 89, except as otherwise 
specified in this subpart.
    (b) The Administrator may specify changes to the provisions of 
paragraph (a) of this section that are necessary to comply with the 
general provisions of Sec. 94.102.


Sec. 94.104  Test procedures for Category 2 marine engines.

    (a) Gaseous and particulate emissions shall be measured using the 
test procedures specified in 40 CFR part 92, except as otherwise 
specified in this subpart.
    (b)(1) The requirements of 40 CFR part 92 related to charge air 
temperatures, engine speed and load, and engine air inlet restriction 
pressures do not apply for marine engines.
    (2) For marine engine testing, charge air temperatures, engine 
speed and load, and engine air inlet restriction pressures shall be 
representative of typical in-use marine engine conditions.
    (c) The Administrator may specify changes to the provisions of 
paragraph (a) of this section that are necessary to comply with the 
general provisions of Sec. 94.102.


Sec. 94.105  Test cycles.

    (a) For the purpose of determining compliance with the emission 
standards of Sec. 94.8 (a), (c), (f), and (g), propulsion engines that 
are used with (or intended to be used with) fixed-pitch propellers 
shall be tested using the test cycle described in Table B-1, which 
follows:

  Table B-1.--Duty Cycle for Propulsion Engines: Fixed-Pitch Propeller
------------------------------------------------------------------------
                                Engine    Observed
                              speed (1)  power (2)   Minimum
          Mode No.             (percent   (percent   time in   Weighting
                               of rated   of max.      mode     factors
                                speed)   observed)  (minutes)
------------------------------------------------------------------------
1...........................        100        100        5.0       0.20
2...........................         91         75        5.0       0.50
3...........................         80         50        5.0       0.15
4...........................         63         25        5.0      0.15
------------------------------------------------------------------------
(1) Engine speed:  2 percent of point.
(2) Power: Observed power with maximum fueling rate for operation at 100
  percent point. Other points: 2 percent of engine maximum
  value.

    (b) For the purpose of determining compliance with the emission 
standards of Sec. 94.8 (a), (c), (f), and (g), constant-speed 
propulsion engines that are used with (or intended to be used with) 
variable-pitch propellers shall be tested using the test cycle 
described in Table B-2, which follows:

 Table B-2.--Duty Cycle for Propulsion Engines: Variable-Pitch Propeller
------------------------------------------------------------------------
                                Engine    Observed
                              speed (1)  power (2)   Minimum
          Mode No.             (percent   (percent   time in   Weighting
                               of rated   of max.      mode     factors
                                speed)   observed)  (minutes)
------------------------------------------------------------------------
1...........................        100        100        5.0       0.20
2...........................        100         75        5.0       0.50
3...........................        100         50        5.0       0.15
4...........................        100         25        5.0      0.15
------------------------------------------------------------------------
(1) Engine speed: 2 percent of point.
(2) Power: Observed power with maximum fueling rate for operation at 100
  percent point. Other points: 2 percent of engine maximum
  value.

    (c) For the purpose of determining compliance with the emission 
standards of Sec. 94.8 (a), (c), (f), and (g), auxiliary engines shall 
be tested using the applicable test cycle described in 40 CFR part 89.


Sec. 94.106  Supplemental test procedures.

    This section describes the test procedures for supplemental testing 
conducted to determine compliance with the exhaust emission 
requirements of Sec. 94.8(e). In general, the supplemental test 
procedures are the same as those otherwise specified by this subpart, 
except that they cover any speeds, loads, ambient conditions, and 
operating parameters that may be experienced in use. The test 
procedures specified by other sections in this subpart also apply to 
these tests, except as specified in this section.
    (a) Notwithstanding other provisions of this subpart, testing 
conducted to determine compliance with the exhaust emission 
requirements of Sec. 94.8(e) may be conducted:
    (1) At any speed and load (or combination of speeds and loads) 
within the applicable Not To Exceed Zone specified in paragraph (b) of 
this section;
    (2) Without correction, at any ambient:
    (i) Air temperature between 13 deg.C and 35 deg.C;
    (ii) Water temperature (or equivalent) between 5 deg.C and 
32 deg.C;
    (iii) Humidity between 7.1 and 10.7 grams of moisture per kilogram 
of dry air; and
    (3) With any continuous sampling period not less than 30 seconds in 
duration.
    (b) The Not to Exceed Zone for marine propulsion engines that are 
used with (or intended to be used with):
    (1) Fixed-pitch propellers as defined in Figure B-1;
    (2) Variable-pitch propellers defined as any load greater than or 
equal to 25 percent of rated power, and any speed at which the engine 
operates in use.
    (c)(1) Upon request by the manufacturer, the Administrator may 
specify a narrower Not to Exceed Zone for an engine family at the time 
of

[[Page 68566]]

certification, provided that the narrower Not to Exceed Zone includes 
all speeds and loads at which the engines are expected to normally 
operate in use.
    (2) The Administrator may specify, at the time of certification, a 
broader Not to Exceed Zone for an engine family containing engines used 
in planing vessels, provided that the broader Not to Exceed Zone 
includes only speeds and loads at which the engines are expected to 
normally operate in use.
    (3) The Administrator may specify, at the time of certification, a 
broader Not to Exceed Zone for an engine family containing engines used 
in vessels with variable-pitch propellers, provided that the broader 
Not to Exceed Zone includes only speeds and loads at which the engines 
are expected to normally operate in use.
    (d) Testing of engines over a transient test cycle shall be 
conducted using the dilute emission sampling and analytical procedures 
specified for diesel engines in 40 CFR Part 86, Subpart N.
    (e) Notwithstanding other provisions of this subpart, testing 
conducted to determine compliance with the exhaust emission 
requirements of Sec. 94.8(e) may be conducted at any ambient air 
temperature or humidity outside the ranges specified in 
Sec. 94.106(a)(2), provided that emission measurements are corrected to 
be equivalent to measurements within the ranges specified in 
Sec. 94.106(a)(2). Correction of emission measurements made in 
accordance with paragraph (a)(3) of this section shall be made in 
accordance with good engineering practice. The measurements shall be 
corrected to be within the range using the minimum possible correction.
    (f) Testing conducted under this section may include transient 
speed and load operation. Engine testing may not include transient 
operation that cannot be replicated by similar engines as installed on 
actual vessels in use.
    (g) Testing conducted under this section may not include engine 
starting.

BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TP11DE98.003


BILLING CODE 6560-50-C


Sec. 94.107  Determination of rated speed.

    This section specifies how to determine rated speed from a lug 
curve. This rated speed is the maximum test speed used in Secs. 94.105 
and 94.106.
    (a) Generation of lug curve. Prior to beginning emission testing, 
generate maximum measured brakepower versus engine speed data points 
using the applicable method specified in 40 CFR 86.1332. These data 
points form the lug curve.
    (b) Normalization of lug curve. (1) Identify the point (power and 
speed) on the lug curve at which maximum power occurs.
    (2) Normalize the power values of the lug curve by dividing them by 
the maximum power value identified in

[[Page 68567]]

paragraph (b)(1) of this section, and multiplying the resulting values 
by 100.
    (3) Normalize the engine speed values of the lug curve by dividing 
them by the speed at which maximum power occurs, which is identified in 
paragraph (b)(1) of this section, and multiplying the resulting values 
by 100.
    (4) Maximum engine power is located on the normalized lug curve at 
100 percent power and 100 percent speed.
    (c) Determination of rated speed. Calculate the rated speed from 
the speedfactor analysis described in this paragraph (c).
    (1) For a given combination of engine power and speed (i.e., a 
given power/speed point), the speedfactor is the normalized distance to 
the power/speed point from the zero power, zero speed point. The value 
of the speedfactor is defined as:
    (2) Calculate speedfactors for the power/speed data points on the 
lug curve, and determine the maximum value.
    (3) Rated speed is the speed at which the maximum value for the 
speedfactor occurs.


Sec. 94.108  Test fuels.

    (a) Petroleum diesel test fuel. (1) The diesel fuels for testing 
marine engines designed to operate on petroleum diesel fuel shall be 
clean and bright, with pour and cloud points adequate for operability. 
The diesel fuel may contain nonmetallic additives as follows: cetane 
improver, metal deactivator, antioxidant, dehazer, antirust, pour 
depressant, dye, dispersant, and biocide. The diesel fuel shall also 
meet the specifications (as determined using methods incorporated by 
reference at Sec. 94.5) in Table B-3 of this section, or substantially 
equivalent specifications approved by the Administrator, as follows:

                                  Table B-3.--Federal Test Fuel Specifications
----------------------------------------------------------------------------------------------------------------
                  Item                                Procedure (ASTM) \1\                  Value (type 2-D)
----------------------------------------------------------------------------------------------------------------
Cetane..................................  D613-95                                       40-48
Distillation Range:
    IBP,  deg.C.........................  D86-97                                        171-204
    10% point,  deg.C...................  D86-97                                        204-238
    50% point,  deg.C...................  D86-97                                        243-282
    90% point,  deg.C...................  D86-97                                        293-332
    EP,  deg.C..........................  D86-97                                        321-366
    Gravity, API........................  D287-92                                       32-37
    Total Sulfur, %mass.................  D129-95 or D2622-98                           0.03--0.80
Hydrocarbon composition:
    Aromatics, %vol.....................  D1319-98 or D5186-96                          10 (\2\)
    Paraffins, Naphthenes, Olefins......  D1319-98                                      (\3\)
    Flashpoint,  deg.C (minimum)........  D93-97                                        54
    Viscosity @ 38  deg.C, Centistokes..  D445-97                                       2.0-3.2
----------------------------------------------------------------------------------------------------------------
\1\ All ASTM procedures in this table have been incorporated by reference. See Sec.  94.6.
\2\ Minimum.
\3\ Remainder.

    (2) Other diesel fuels may be used for testing provided:
    (i) They are commercially available; and
    (ii) Information, acceptable to the Administrator, is provided to 
show that only the designated fuel would be used in service; and
    (iii) Use of a fuel listed under paragraph (a)(1) of this section 
would have a detrimental effect on emissions or durability; and
    (iv) Written approval from the Administrator of the fuel 
specifications is provided prior to the start of testing.
    (3) The specification of the fuel to be used under paragraphs 
(a)(1) and (a)(2) of this section shall be reported in the application 
for certification.
    (b) Other fuel types. (1) For engines which are designed to be 
capable of using a type of fuel (or mixed fuel) other than petroleum 
diesel fuel (e.g., natural gas or methanol), and which are expected to 
use that type of fuel (or mixed fuel) in service, a commercially 
available fuel of that type shall be used for exhaust emission testing. 
The Administrator shall determine the specifications of the fuel to be 
used for testing, based on the engine design, the specifications of 
commercially available fuels, and the recommendation of the 
manufacturer.
    (2) The specification of the fuel to be used under paragraph (b)(1) 
of this section shall be reported in the application for certification.
    (c)(1) Particulate emission measurements from engines without 
exhaust aftertreatment obtained using a diesel fuel containing more 
than 0.40 weight percent sulfur may be adjusted to a sulfur content of 
0.40 weight percent.
    (2) Adjustments to the particulate measurement shall be made using 
the following equation:

PMadj=PM-[BSFC *0.0917 *(FSF-0.0040)]

Where:

PMadj=adjusted measured PM level [g/Kw-hr]
PM=measured weighted PM level [g/Kw-hr]
BSFC=measured brake specific fuel consumption [G/Kw-hr]
FSF=fuel sulfur weight fraction

Subpart C--Certification Provisions


Sec. 94.201  Applicability.

    The requirements of this subpart are applicable to manufacturers of 
engines subject to the standards of subpart A of this part.


Sec. 94.202  Definitions.

    The definitions of subpart A of this part apply to this subpart.


Sec. 94.203  Application for certification.

    (a) For each engine family that complies with all applicable 
standards and requirements, the manufacturer shall submit to the 
Administrator a completed application for a certificate of conformity.
    (b) The application shall be approved and signed by the authorized 
representative of the manufacturer.
    (c) The application shall be updated and corrected by amendment, 
where necessary, as provided for in Sec. 94.210 to accurately reflect 
the manufacturer's production.
    (d) Each application shall include the following information:

[[Page 68568]]

    (1)(i) A description of the basic engine design, including but not 
limited to, the engine family specifications, the provisions of which 
are contained in Sec. 94.208;
    (ii) A list of distinguishable configurations to be included in the 
engine family;
    (2) An explanation of how the emission control system operates, 
including detailed descriptions of:
    (i) All emission control system components;
    (ii) The injection timing map or maps (i.e., degrees before or 
after top-dead-center), and any functional dependence of such timing on 
other operational parameters (e.g., engine coolant temperature or 
engine speed);
    (iii) Each auxiliary emission control device (AECD); and
    (iv) All fuel system components to be installed on any production 
or test engine(s);
    (3) A description of the test engine;
    (4) Special or alternate test procedures, if applicable;
    (5) A description of the operating cycle and the period of 
operation necessary to accumulate service hours on the test engine and 
stabilize emission levels;
    (6) A description of all adjustable operating parameters (e.g., 
injection timing and fuel rate), including the following:
    (i) The nominal or recommended setting and the associated 
production tolerances;
    (ii) The intended adjustable range and the physically adjustable 
range;
    (iii) The limits or stops used to limit adjustable ranges;
    (iv) Production tolerances of the limits or stops used to establish 
each physically adjustable range; and
    (v) Information relating to the reason that the physical limits or 
stops used to establish the physically adjustable range of each 
parameter, or any other means used to inhibit adjustment, are the most 
effective means possible of preventing adjustment of parameters to 
settings outside the manufacturer's specified adjustable ranges on in-
use engines;
    (7) For families participating in the averaging, banking, and 
trading program, the information specified in subpart D of this part;
    (8) Projected U.S. directed production volume information for each 
configuration;
    (9) A description of the test equipment and fuel proposed to be 
used;
    (10) All test data obtained by the manufacturer on each test 
engine;
    (11) The intended useful life period for the engine family, in 
accordance with Sec. 94.9(a);
    (12) The intended deterioration factors for the engine family, in 
accordance with Sec. 94.218; and
    (13) All information--including but not limited to message or 
parameter identification, scaling, limit, offset, and transfer 
function--required for EPA to interpret all messages and parameters 
broadcast on an engine's controller area network. (The manufacturer may 
reference publicly released controller area network standards where 
applicable. The format of this information shall be provided in a 
format similar to publicly released documents pertaining to controller 
area network standards.)
    (14) An unconditional statement certifying that all engines 
included in the engine family comply with all requirements of this part 
and the Clean Air Act.
    (15) A statement indicating whether the engine will be used in 
planing vessels or vessels with variable-pitch propellers.
    (e) At the Administrator's request, the manufacturer shall supply 
such additional information as may be required to evaluate the 
application.
    (f) (1) If the manufacturer submits some or all of the information 
specified in paragraph (d) of this section in advance of its full 
application for certification, the Administrator shall review the 
information and make the determinations required in Sec. 94.208 (d) 
within 90 days of the manufacturer's submittal.
    (2) The 90-day decision period is exclusive of any elapsed time 
during which EPA is waiting for additional information requested from a 
manufacturer regarding an adjustable parameter (the 90-day period 
resumes upon receipt of the manufacturer's response). For example, if 
EPA requests additional information 30 days after the manufacturer 
submits information under paragraph (f)(1) of this section, then the 
Administrator would make a determination within 60 days of the receipt 
of the requested information from the manufacturer.
    (g)(1) The Administrator may modify the information submission 
requirements of paragraph (d) of this section, provided that all of the 
information specified therein is maintained by the manufacturer as 
required by Sec. 94.215, and amended, updated, or corrected as 
necessary.
    (2) For the purposes of this paragraph (g), Sec. 94.215 includes 
all information specified in paragraph (d) of this section, whether or 
not such information is actually submitted to the Administrator for any 
particular model year.
    (3) The Administrator may review a manufacturer's records at any 
time. At the Administrator's discretion, this review may take place 
either at the manufacturer's facility or at another facility designated 
by the Administrator.


Sec. 94.204  Designation of engine families.

    This section specifies the procedure and requirements for grouping 
of engines into engine families.
    (a) Manufacturers shall divide their engines into groupings of 
engines which are expected to have similar emission characteristics 
throughout their useful life. Each group shall be defined as a separate 
engine family.
    (b) For Category 1 marine engines, the following characteristics 
distinguish engine families:
    (1) Fuel;
    (2) Cooling method (including cooling medium);
    (3) Method of air aspiration;
    (4) Method of exhaust aftertreatment (for example, catalytic 
converter or particulate trap);
    (5) Combustion chamber design;
    (6) Bore;
    (7) Stroke;
    (8) Number of cylinders, (engines with aftertreatment devices 
only);
    (9) Cylinder arrangement (engines with aftertreatment devices 
only); and
    (10) Fuel system configuration
    (c) For Category 2 marine engines, the following characteristics 
distinguish engine families:
    (1) The combustion cycle (e.g., diesel cycle);
    (2) The type of engine cooling employed (air-cooled or water-
cooled), and procedure(s) employed to maintain engine temperature 
within desired limits (thermostat, on-off radiator fan(s), radiator 
shutters, etc.);
    (3) The bore and stroke dimensions;
    (4) The approximate intake and exhaust event timing and duration 
(valve or port);
    (5) The location of the intake and exhaust valves (or ports);
    (6) The size of the intake and exhaust valves (or ports);
    (7) The overall injection, or as appropriate ignition, timing 
characteristics (i.e., the deviation of the timing curves from the 
optimal fuel economy timing curve must be similar in degree);
    (8) The combustion chamber configuration and the surface-to-volume 
ratio of the combustion chamber when the piston is at top dead center 
position, using nominal combustion chamber dimensions;
    (9) The location of the piston rings on the piston;

[[Page 68569]]

    (10) The method of air aspiration (turbocharged, supercharged, 
naturally aspirated, Roots blown);
    (11) The turbocharger or supercharger general performance 
characteristics (e.g., approximate boost pressure, approximate response 
time, approximate size relative to engine displacement);
    (12) The type of air inlet cooler (air-to-air, air-to-liquid, 
approximate degree to which inlet air is cooled);
    (13) The intake manifold induction port size and configuration;
    (14) The type of fuel and fuel system configuration;
    (15) The configuration of the fuel injectors and approximate 
injection pressure;
    (16) The type of fuel injection system controls (i.e., mechanical 
or electronic);
    (17) The type of smoke control system;
    (18) The exhaust manifold port size and configuration; and
    (19) The type of exhaust aftertreatment system (oxidation catalyst, 
particulate trap), and characteristics of the aftertreatment system 
(catalyst loading, converter size vs engine size).
    (d) Upon request by the manufacturer, engines that are eligible to 
be included in the same engine family based on the criteria in 
paragraph (b) or (c) of this section may be divided into different 
engine families. This request must be accompanied by information the 
manufacturer believes supports the use of these different engine 
families.
    (e) Upon request by the manufacturer, the Administrator may allow 
engines that would be required to be grouped into separate engine 
families based on the criteria in paragraph (b) or (c) of this section 
to be grouped into a single engine family if the manufacturer 
demonstrates that the engines will have similar emission 
characteristics. This request must be accompanied by emission 
information supporting the appropriateness of such combined engine 
families.


Sec. 94.205  Prohibited controls, adjustable parameters.

    (a) Any system installed on, or incorporated in, a new engine to 
enable such engine to conform to the standards contained in this part:
    (1) Shall not in its operation or function cause significant (as 
determined by the Administrator) emission into the ambient air of any 
noxious or toxic substance that would not be emitted in the operation 
of such engine without such system, except as specifically permitted by 
regulation;
    (2) Shall not in its operation, function or malfunction result in 
any unsafe condition endangering the engine, the ship, its operators, 
riders or property on a ship, or persons or property in close proximity 
to the engine; and
    (3) Shall function during all in-use operation, except as otherwise 
allowed by this part.
    (b) In specifying the adjustable range of each adjustable parameter 
on a new engine, the manufacturer, shall:
    (1) Ensure that safe engine operating characteristics are available 
within that range, as required by section 202(a)(4) of the Clean Air 
Act, taking into consideration the production tolerances; and
    (2) To the maximum extent practicable, limit the physical range of 
adjustability to that which is necessary for proper operation of the 
engine.


Sec. 94.206  Required information.

    (a) The manufacturer shall perform the tests required by the 
applicable test procedures, and submit to the Administrator the 
information required by this section: Provided, that if requested by 
the manufacturer, the Administrator may waive any requirement of this 
section for testing of engines for which the required emission data are 
otherwise available.
    (b) The manufacturer shall submit exhaust emission deterioration 
factors, with supporting data. The determination of the deterioration 
factors shall be conducted in accordance with good engineering practice 
to ensure that the engines covered by a certificate issued under 
Sec. 94.208 will meet all of the emission standards in Sec. 94.8 in use 
for the useful life of the engine.
    (c) The manufacturer shall submit emission data on such engines 
tested in accordance with the applicable test procedures of subpart B 
of this part. These data shall include zero hour data, if generated. In 
lieu of providing the emission data required by paragraph (a) of this 
section, the Administrator may, upon request of the manufacturer, allow 
the manufacturer to demonstrate (on the basis of previous emission 
tests, development tests, or other testing information) that the engine 
will conform with the applicable emission standards of Sec. 94.8.
    (d) The manufacturer shall submit a statement that the engines for 
which certification is requested conform to the requirements in 
Sec. 94.7 and that the descriptions of tests performed to ascertain 
compliance with the general standards in Sec. 94.7, and the data 
derived from such tests, are available to the Administrator upon 
request.
    (e) The manufacturer shall submit a statement that the emission 
data engine used to demonstrate compliance with the applicable 
standards of this part is in all material respects as described in the 
manufacturer's application for certification; that it has been tested 
in accordance with the applicable test procedures utilizing the fuels 
and equipment described in the application for certification; and that 
on the basis of such tests, the engine family conforms to the 
requirements of this part. If, on the basis of the data supplied and 
any additional data as required by the Administrator, the Administrator 
determines that the test engine was not as described in the application 
for certification or was not tested in accordance with the applicable 
test procedures utilizing the fuels and equipment as described in the 
application for certification, the Administrator may make the 
determination that the engine does not meet the applicable standards. 
If the Administrator makes such a determination, he/she may withhold, 
suspend, or revoke the certificate of conformity under Sec. 94.208 
(c)(3)(i).


Sec. 94.207  Special test procedures.

    (a) Establishment of special test procedures by EPA. The 
Administrator may, on the basis of written application by a 
manufacturer, establish special test procedures other than those set 
forth in this part, for any engine that the Administrator determines is 
not susceptible to satisfactory testing under the specified test 
procedures set forth in subpart B of this part.
    (b) Use of alternate test procedures by a manufacturer. (1) A 
manufacturer may elect to use an alternate test procedure, provided 
that it is equivalent to the specified procedures with respect to the 
demonstration of compliance, its use is approved in advance by the 
Administrator, and the basis for the equivalence with the specified 
test procedures is fully described in the manufacturer's application.
    (2) The Administrator may reject data generated under alternate 
test procedures if the data do not correlate with data generated under 
the specified procedures.


Sec. 94.208  Certification.

    (a) If, after a review of the application for certification, test 
reports and data acquired from an engine or from a development data 
engine, and any other information required or obtained by EPA, the 
Administrator determines that the application is complete and that the 
engine family meets the requirements of the Act and this part, he/she 
will issue a certificate of conformity with respect to such engine 
family, except as

[[Page 68570]]

provided by paragraph (c)(3) of this section. The certificate of 
conformity is valid for each engine family from the date of issuance by 
EPA until 31 December of the model year or calendar year for which it 
is issued and upon such terms and conditions as the Administrator deems 
necessary or appropriate to ensure that the production engines covered 
by the certificate will meet the requirements of the Act and of this 
part.
    (b) [Reserved]
    (c) (1) The manufacturer shall bear the burden of establishing to 
the satisfaction of the Administrator that the conditions upon which 
the certificates were issued were satisfied or excused.
    (2) The Administrator will determine whether the test data included 
in the application represents all engines of the engine family.
    (3) Notwithstanding the fact that any engine(s) may comply with 
other provisions of this subpart, the Administrator may withhold or 
deny the issuance of any certificate of conformity, or suspend or 
revoke any such certificate(s) which has (have) been issued with 
respect to any such engine(s) if:
    (i) The manufacturer submits false or incomplete information in its 
application for certification thereof;
    (ii) The manufacturer renders inaccurate any test data which it 
submits pertaining thereto or otherwise circumvents the intent of the 
Act, or of this part with respect to such engine;
    (iii) Any EPA Enforcement Officer is denied access on the terms 
specified in Sec. 94.215 to any facility or portion thereof which 
contains any of the following:
    (A) An engine which is scheduled to undergo emissions testing, or 
which is undergoing emissions testing, or which has undergone emissions 
testing; or
    (B) Any components used or considered for use in the construction, 
modification or buildup of any engine which is scheduled to undergo 
emissions testing, or which is undergoing emissions testing, or which 
has undergone emissions testing for purposes of emissions 
certification; or
    (C) Any production engine which is or will be claimed by the 
manufacturer to be covered by the certificate; or
    (D) Any step in the construction of the engine; or
    (E) Any records, documents, reports or histories required by this 
part to be kept concerning any of the items listed in paragraphs 
(c)(3)(iii)(A) through (D) of this section; or
    (iv) Any EPA Enforcement Officer is denied ``reasonable 
assistance'' (as defined in Sec. 94.215).
    (4) In any case in which a manufacturer knowingly submits false or 
inaccurate information or knowingly renders inaccurate or invalid any 
test data or commits any other fraudulent acts and such acts contribute 
substantially to the Administrator's decision to issue a certificate of 
conformity, the Administrator may deem such certificate void ab initio.
    (5) In any case in which certification of an engine is to be 
withheld, denied, revoked or suspended under paragraph (c)(3) of this 
section, and in which the Administrator has presented to the 
manufacturer involved reasonable evidence that a violation of 
Sec. 94.215 in fact occurred, the manufacturer, if it wishes to contend 
that, even though the violation occurred, the engine in question was 
not involved in the violation to a degree that would warrant 
withholding, denial, revocation or suspension of certification under 
paragraph (c)(3) of this section, shall have the burden of establishing 
that contention to the satisfaction of the Administrator.
    (6) Any revocation, suspension, or voiding of certification under 
paragraph (c)(3) of this section shall:
    (i) Be made only after the manufacturer concerned has been offered 
an opportunity for a hearing conducted in accordance with Sec. 94.216; 
and
    (ii) Extend no further than to forbid the introduction into 
commerce of engines previously covered by the certification which are 
still in the hands of the manufacturer, except in cases of such fraud 
or other misconduct that makes the certification invalid ab initio.
    (7) The manufacturer may request, within 30 days of receiving 
notification, that any determination made by the Administrator under 
paragraph (c)(3) of this section to withhold or deny certification be 
reviewed in a hearing conducted in accordance with Sec. 94.216. The 
request shall be in writing, signed by an authorized representative of 
the manufacturer and shall include a statement specifying the 
manufacturer's objections to the Administrator's determinations, and 
data in support of such objections. If the Administrator finds, after a 
review of the request and supporting data, that the request raises a 
substantial factual issue, he/she will grant the request with respect 
to such issue.
    (d) In approving an application for certification, the 
Administrator may specify:
    (1) A broader range of adjustability than recommended by the 
manufacturer for those engine parameters which are subject to 
adjustment, if the Administrator determines that it will not be 
practical to keep the parameter adjusted within the recommended range 
in use;
    (2) A longer useful life period, if the Administrator determines 
that the useful life of the engines in the engine family, as defined in 
Sec. 94.2, is longer than the period specified by the manufacturer; 
and/or
    (3) Larger deterioration factors, if the Administrator determines 
that the deterioration factors specified by the manufacturer do not 
meet the requirements of Sec. 94.218.
    (e) Within 30 days following receipt of notification of the 
Administrator's determinations made under paragraph (d) of this 
section, the manufacturer may request a hearing on the Administrator's 
determinations. The request shall be in writing, signed by an 
authorized representative of the manufacturer and shall include a 
statement specifying the manufacturer's objections to the 
Administrator's determinations and data in support of such objections. 
If, after review of the request and supporting data, the Administrator 
finds that the request raises a substantial factual issue, the 
manufacturer shall be provided with a hearing in accordance with 
Sec. 94.216 with respect to such issue.


Sec. 94.209  Special provisions for post-manufacturer marinizers.

    (a) Eligibility requirements. To be eligible to use the provisions 
of paragraph (b) of this section, the manufacturer shall demonstrate 
that it has met all the following requirements:
    (1) The manufacturer must be a post-manufacturer marinizer as 
defined in Sec. 94.2;
    (2) The base engine used for modification shall have a Certificate 
of Conformity issued under 40 CFR part 89 or 40 CFR part 92 or the 
heavy-duty engine provisions of 40 CFR part 86; and (3) The certified 
emission levels (after application of deterioration factors) of the 
base engine shall be below the numerical levels of the otherwise 
applicable standards of this part for all pollutants.
    (b) Broader engine families. (1) In lieu of the requirements of 
Sec. 94.204, the manufacturer may group its engines into engine 
families that consist of engines that are within a single category of 
engines and have similar emission deterioration characteristics.
    (2) All other provisions of this subpart shall apply to these 
engines using the engine family defined in (b)(1) of this section.
    (c) Hardship relief. Post-manufacture marinizers may take any of 
the otherwise prohibited actions identified

[[Page 68571]]

in Sec. 94.1103(a)(1) if approved in advance by the Administrator, and 
subject to the following requirements:
    (1) Application for relief must be submitted to the Engine Programs 
and Compliance Division of the EPA in writing prior to the earliest 
date in which the applying manufacturer would be in violation of 
Sec. 94.1103. The manufacturer must submit evidence showing that the 
requirements for approval have been met.
    (2) [Reserved]
    (3) The conditions causing the impending violation must not be 
substantially the fault of the applying manufacturer.
    (4) The conditions causing the impending violation must be such 
that the applying manufacturer will experience serious economic 
hardship if relief is not granted.
    (5) The applying manufacturer must demonstrate that no other 
allowances under this part will be available to avoid the impending 
violation.
    (6) Any relief granted must begin within one year after the 
implementation date of the standard applying to the engines for which 
relief is requested, and may not exceed one year in duration.
    (7) The Administrator may impose other conditions on the granting 
of relief including provisions to recover the lost environmental 
benefit.
    (d) Compliance date of standards. Post-manufacture marinizers may 
elect to delay the compliance date of the standards in Sec. 94.8 by one 
year, instead of using the provisions of paragraph (c) of this section. 
Post-manufacture marinizers wishing to take advantage of this provision 
must inform the Director of the Engine Programs and Compliance Division 
of their intent to do so in writing before the date that compliance 
with the standards would otherwise be mandatory.


Sec. 94.210  Amending the application and certificate of conformity.

    (a) The manufacturer shall notify the Administrator when changes to 
information required to be described in the application for 
certification are to be made to a product line covered by a certificate 
of conformity. This notification shall include a request to amend the 
application or the existing certificate of conformity. Except as 
provided in paragraph (e) of this section, no manufacturer shall make 
said changes or produce said engines prior to receiving approval from 
EPA.
    (b) A manufacturer's request to amend the application or the 
existing certificate of conformity shall include the following 
information:
    (1) A full description of the change to be made in production, or 
of the engines to be added;
    (2) Engineering evaluations or data showing that the engines as 
modified or added will comply with all applicable emission standards; 
and
    (3) A determination whether the manufacturer's original test fleet 
selection is still appropriate, and if the original test fleet 
selection is determined not to be appropriate, test fleet selection(s) 
representing the engines changed or added which would have been 
required if the engines had been included in the original application 
for certification.
    (c) The Administrator may require the manufacturer to perform tests 
on the engine representing the engine to be added or changed.
    (d)(1) Based on the description of the amendment and data derived 
from such testing as the Administrator may require or conduct, the 
Administrator will determine whether the change or addition would still 
be covered by the certificate of conformity then in effect.
    (2) If the Administrator determines that the change or new 
engine(s) meets the requirements of this part and the Act, the 
appropriate certificate of conformity shall be amended.
    (3) If the Administrator determines that the changed engine(s) does 
not meet the requirements of this part and the Act, the certificate of 
conformity will not be amended. The Administrator shall provide a 
written explanation to the manufacturer of the decision not to amend 
the certificate. The manufacturer may request a hearing on a denial.
    (e) A manufacturer may make changes in or additions to production 
engines concurrently with the notification to the Administrator, as 
required by paragraph (a) of this section, if the manufacturer complies 
with the following requirements:
    (1) In addition to the information required in paragraph (b) of 
this section, the manufacturer shall supply supporting documentation, 
test data, and engineering evaluations as appropriate to demonstrate 
that all affected engines will still meet applicable emission 
standards.
    (2) If, after a review, the Administrator determines additional 
testing is required, the manufacturer shall provide the required test 
data within 30 days or cease production of the affected engines.
    (3) If the Administrator determines that the affected engines do 
not meet applicable requirements, the Administrator will notify the 
manufacturer to cease production of the affected engines and to recall 
and correct at no expense to the owner all affected engines previously 
produced.
    (4) Election to produce engines under this paragraph will be deemed 
to be a consent to recall all engines that the Administrator determines 
do not meet applicable standards and to cause such nonconformity to be 
remedied at no expense to the owner.


Sec. 94.211  Emission-related maintenance instructions for purchasers.

    (a) The manufacturer shall furnish or cause to be furnished to the 
ultimate purchaser of each new engine, subject to the standards 
prescribed in Sec. 94.8, written instructions for the proper 
maintenance and use of the engine as are reasonable and necessary to 
assure the proper functioning of the emissions control system, 
consistent with the applicable provisions of paragraph (b) of this 
section.
    (1) The maintenance and use instructions required by this section 
shall be clear and easily understandable.
    (2) The maintenance instructions required by this section shall 
contain a general description of the documentation that would 
demonstrate that the ultimate purchaser or any subsequent owner had 
complied with the instructions.
    (b)(1) The manufacturer must provide in boldface type on the first 
page of the written maintenance instructions notice that maintenance, 
replacement, or repair of the emission control devices and systems may 
be performed by any engine repair establishment or individual.
    (2) The instructions under paragraph (b)(1) of this section will 
not include any condition on the ultimate purchaser's or owner's using, 
in connection with such engine, any component or service (other than a 
component or service provided without charge under the terms of the 
purchase agreement) which is identified by brand, trade, or corporate 
name. Such instructions also will not directly or indirectly 
distinguish between service performed by any other service 
establishments with which such manufacturer has a commercial 
relationship and service performed by independent vessel or engine 
repair facilities with which such manufacturer has no commercial 
relationship.
    (3) The prohibition of paragraph (b)(2) of this section may be 
waived by the Administrator if:
    (i) The manufacturer satisfies the Administrator that the engine 
will function properly only if the component or service so identified 
is used in connection with such engine, and

[[Page 68572]]

    (ii) The Administrator finds that such a waiver is in the public 
interest.
    (c) The manufacturer shall provide to the Administrator, no later 
than the time of the submission required by Sec. 94.203, a copy of the 
emission-related maintenance instructions that the manufacturer 
proposes to supply to the ultimate purchaser or owner in accordance 
with this section. The Administrator will review such instructions to 
determine whether they are reasonable and necessary to ensure the 
proper functioning of the engine's emission control systems. If the 
Administrator determines that such instructions are not reasonable and 
necessary to ensure the proper functioning of the emission control 
systems, he/she may disapprove the application for certification or may 
require that the manufacturer modify the instructions.
    (d) Any revision to the maintenance instructions which will affect 
emissions shall be supplied to the Administrator at least 30 days 
before being supplied to the ultimate purchaser or owner unless the 
Administrator consents to a lesser period of time, and is subject to 
the provisions of Sec. 94.210.
    (e) This paragraph (e) specifies emission-related scheduled 
maintenance for purposes of obtaining durability data for marine 
engines. The maintenance intervals specified in this paragraph are 
minimum intervals.
    (1) All emission-related scheduled maintenance for purposes of 
obtaining durability data must occur at the same or longer hours of use 
intervals as those specified in the manufacturer's maintenance 
instructions furnished to the ultimate purchaser of the engine under 
paragraph (a) of this section. This maintenance schedule may be updated 
as necessary throughout the testing of the engine, provided that no 
maintenance operation is deleted from the maintenance schedule after 
the operation has been performed on the test equipment or engine.
    (2) Any emission-related maintenance which is performed on 
equipment, engines, subsystems, or components must be technologically 
necessary to ensure in-use compliance with the emission standards. The 
manufacturer must submit data which demonstrate to the Administrator 
that all of the emission-related scheduled maintenance which is to be 
performed is technologically necessary. Scheduled maintenance must be 
approved by the Administrator prior to being performed or being 
included in the maintenance instructions provided to the purchasers 
under paragraph (a) of this section.
    (i) The Administrator may require longer maintenance intervals than 
those listed in paragraphs (e)(3) and (e)(4) of this section where the 
listed intervals are not technologically necessary.
    (ii) The Administrator may allow manufacturers to specify shorter 
maintenance intervals than those listed in paragraphs (e)(3) and (e)(4) 
of this section where technologically necessary for Category 2 engines.
    (3) The adjustment, cleaning, repair, or replacement of items 
listed in paragraphs (e)(3)(i) through (e)(3)(iii) of this section 
shall occur at 1,500 hours of use and at 1,500-hour intervals 
thereafter.
    (i) Exhaust gas recirculation system-related filters and coolers.
    (ii) Positive crankcase ventilation valve.
    (iii) Fuel injector tips (cleaning only).
    (4) The adjustment, cleaning and repair of items in paragraphs 
(e)(4)(i) through (e)(4)(vii) of this section shall occur at 3,000 
hours of use and at 3,000-hour intervals thereafter for engines rated 
under 130 kW, or at 4,500-hour intervals thereafter for nonroad 
compression-ignition engines rated at or above 130 kW.
    (i) Fuel injectors.
    (ii) Turbocharger.
    (iii) Electronic engine control unit and its associated sensors and 
actuators.
    (iv) Particulate trap or trap-oxidizer system (including related 
components).
    (v) Exhaust gas recirculation system (including all related control 
valves and tubing), except as otherwise provided in paragraph (e)(3)(i) 
of this section.
    (vi) Catalytic convertor.
    (vii) Any other add-on emission-related component (i.e., a 
component whose sole or primary purpose is to reduce emissions or whose 
failure will significantly degrade emission control and whose function 
is not integral to the design and performance of the engine).
    (f) Scheduled maintenance not related to emissions which is 
reasonable and technologically necessary (e.g., oil change, oil filter 
change, fuel filter change, air filter change, cooling system 
maintenance, adjustment of idle speed, governor, engine bolt torque, 
valve lash, injector lash, timing, lubrication of the exhaust manifold 
heat control valve, etc.) may be performed on durability vehicles at 
the least frequent intervals recommended by the manufacturer to the 
ultimate purchaser, (e.g., not the intervals recommended for severe 
service).
    (g) Adjustment of engine idle speed on emission data engines may be 
performed once before the low-hour emission test point. Any other 
engine, emission control system, or fuel system adjustment, repair, 
removal, disassembly, cleaning, or replacement on emission data 
vehicles shall be performed only with advance approval of the 
Administrator.
    (h) Equipment, instruments, or tools may not be used to identify 
malfunctioning, maladjusted, or defective engine components unless the 
same or equivalent equipment, instruments, or tools will be available 
to dealerships and other service outlets and are:
    (1) Used in conjunction with scheduled maintenance on such 
components; or
    (2) Used subsequent to the identification of a vehicle or engine 
malfunction, as provided in paragraph (e) of this section for emission 
data engines; or
    (3) Specifically authorized by the Administrator.
    (i) All test data, maintenance reports, and required engineering 
reports shall be compiled and provided to the Administrator in 
accordance with Sec. 94.215.
    (j)(1) The components listed in paragraphs (j)(1)(i) through 
(j)(1)(vi) of this section are defined as critical emission-related 
components.
    (i) Catalytic convertor.
    (ii) Electronic engine control unit and its associated sensors and 
actuators.
    (iii) Exhaust gas recirculation system (including all related 
filters, coolers, control valves, and tubing).
    (iv) Positive crankcase ventilation valve.
    (v) Particulate trap or trap-oxidizer system.
    (vi) Any other add-on emission-related component (i.e., a component 
whose sole or primary purpose is to reduce emissions or whose failure 
will significantly degrade emission control and whose function is not 
integral to the design and performance of the engine).
    (2) All critical emission-related scheduled maintenance must have a 
reasonable likelihood of being performed in use. The manufacturer must 
show the reasonable likelihood of such maintenance being performed in-
use. Critical emission-related scheduled maintenance items which 
satisfy one of the conditions defined in paragraphs (j)(2)(i) through 
(j)(2)(vi) of this section will be accepted as having a reasonable 
likelihood of being performed in use.
    (i) Data are presented which establish for the Administrator a 
connection between emissions and vehicle performance such that as 
emissions increase due to lack of maintenance, vehicle performance will 
simultaneously deteriorate to a point unacceptable for typical 
operation.

[[Page 68573]]

    (ii) Survey data are submitted which adequately demonstrate to the 
Administrator with an 80 percent confidence level that 80 percent of 
such engines already have this critical maintenance item performed in-
use at the recommended interval(s).
    (iii) A clearly displayed visible signal system approved by the 
Administrator is installed to alert the equipment operator that 
maintenance is due. A signal bearing the message ``maintenance needed'' 
or ``check engine,'' or a similar message approved by the 
Administrator, shall be actuated at the appropriate usage point or by 
component failure. This signal must be continuous while the engine is 
in operation and not be easily eliminated without performance of the 
required maintenance. Resetting the signal shall be a required step in 
the maintenance operation. The method for resetting the signal system 
shall be approved by the Administrator. The system must not be designed 
to deactivate upon the end of the useful life of the engine or 
thereafter.
    (iv) A manufacturer may desire to demonstrate through a survey that 
a critical maintenance item is likely to be performed without a visible 
signal on a maintenance item for which there is no prior in-use 
experience without the signal. To that end, the manufacturer may in a 
given model year market up to 200 randomly selected vehicles per 
critical emission-related maintenance item without such visible 
signals, and monitor the performance of the critical maintenance item 
by the owners to show compliance with paragraph (j)(2)(ii) of this 
section. This option is restricted to two consecutive model years and 
may not be repeated until any previous survey has been completed. If 
the critical maintenance involves more than one engine family, the 
sample will be sales weighted to ensure that it is representative of 
all the families in question.
    (v) The manufacturer provides the maintenance free of charge, and 
clearly informs the customer that the maintenance is free in the 
instructions provided under paragraph (a) of this section.
    (vi) The manufacturer uses any other method which the Administrator 
approves as establishing a reasonable likelihood that the critical 
maintenance will be performed in-use.
    (3) Visible signal systems used under paragraph (j)(2)(iii) of this 
section are considered an element of design of the emission control 
system. Therefore, disabling, resetting, or otherwise rendering such 
signals inoperative without also performing the indicated maintenance 
procedure is a prohibited act.


Sec. 94.212  Labeling.

    (a) General requirements. (1) Each new engine covered by a 
certificate of conformity under Sec. 94.208 shall be labeled by the 
manufacturer in the manner described in this paragraph (b) of this 
section at the time of manufacture.
    (2) Each new marine engine modified from a base engine by post-
manufacturer marinizers in accordance with the provisions of 
Sec. 94.209 (b) and covered by a certificate of conformity under 
Sec. 94.208 shall be labeled by the PMM in the manner described in 
paragraph (b) of this section.
    (b) Engine labels. (1) Engine labels meeting the specifications of 
paragraph (b)(2) of this section shall be applied by every manufacturer 
at the point of original manufacture.
    (2)(i) Engine labels shall be permanent and legible and shall be 
affixed to the engine in a position in which it will be readily visible 
after installation of the engine in the vessel.
    (ii) The label shall be attached to an engine part necessary for 
normal operation and not normally requiring replacement during the 
useful life of the engine.
    (iii) The label shall be affixed by the manufacturer in such manner 
that it cannot be removed without destroying or defacing the label. The 
label shall not be affixed to any equipment which is easily detached 
from such engine.
    (iv) The label may be made up of more than one piece, provided that 
all pieces are permanently attached to the same engine part.
    (v) The label shall contain the following information lettered in 
the English language in block letters and numerals, which shall be of a 
color that contrasts with the background of the label:
    (A) The label heading: Marine Engine Emission Control Information.
    (B) Full corporate name and trademark of the manufacturer.
    (C) The model year.
    (D) The category and subcategory of marine engine.
    (E) Engine family and configuration identification.
    (F) A prominent unconditional statement of compliance with U.S. 
Environmental Protection Agency regulations which apply to marine 
engines designated by the parameters of paragraph (b)(2)(v) (A) through 
(E) of this section
    (G) The useful life of the engine.
    (H) The standards and/or FELs to which the engine was certified.
    (I) Engine tune-up specifications and adjustments, as recommended 
by the manufacturer in accordance with the applicable emission 
standards, including but not limited to idle speeds(s), injection 
timing, valve lash (as applicable), as well as other parameters deemed 
necessary by the manufacturer.
    (c) The provisions of this section shall not prevent a manufacturer 
from also providing on the label any other information that such 
manufacturer deems necessary for, or useful to, the proper operation 
and satisfactory maintenance of the vessel or engine.


Sec. 94.213  Submission of engine identification numbers.

    (a) Upon request of the Administrator, the manufacturer of any 
engine covered by a certificate of conformity shall, within 30 days of 
receipt of such request, identify by engine identification number, the 
engines covered by the certificate of conformity.
    (b) The manufacturer of any engines covered by a certificate of 
conformity shall provide to the Administrator, within 60 days of the 
issuance of a certificate of conformity, an explanation of the elements 
in any engine identification coding system in sufficient detail to 
enable the Administrator to identify those engines which are covered by 
a certificate of conformity.


Sec. 94.214  Production engines.

    Any manufacturer obtaining certification under this part shall 
supply to the Administrator, upon his/her request, a reasonable number 
of production engines, as specified by the Administrator. The engines 
shall be representative of the engines, emission control systems, and 
fuel systems offered and typical of production engines available for 
sale or use under the certificate. These engines shall be supplied for 
testing at such time and place and for such reasonable periods as the 
Administrator may require.


Sec. 94.215  Maintenance of records; submittal of information; right of 
entry.

    (a) Any manufacturer subject to any of the standards or procedures 
prescribed in this subpart shall establish, maintain and retain the 
following adequately organized and indexed records:
    (1) General records. The records required to be maintained by this 
paragraph (a) shall consist of:
    (i) Identification and description of all certification engines for 
which testing is required under this subpart.
    (ii) A description of all emission control systems which are 
installed on

[[Page 68574]]

or incorporated in each certification engine.
    (iii) A description of all procedures used to test each such 
certification engine.
    (iv) A copy of all applications for certification, filed with the 
Administrator.
    (2) Individual records. (i) A brief history of each engine used for 
certification under this subpart including:
    (A) In the case where a current production engine is modified for 
use as a certification engine, a description of the process by which 
the engine was selected and of the modifications made. In the case 
where the certification engine is not derived from a current production 
engine, a general description of the buildup of the engine (e.g., 
whether experimental heads were cast and machined according to supplied 
drawings). In the cases in the previous two sentences, a description of 
the origin and selection process for fuel system components, ignition 
system components (as applicable), intake air pressurization and 
cooling system components, cylinders, pistons and piston rings, exhaust 
smoke control system components, and exhaust aftertreatment devices as 
applicable, shall be included. The required descriptions shall specify 
the steps taken to assure that the certification engine, with respect 
to its engine, drivetrain, fuel system, emission control system 
components, exhaust aftertreatment devices, or any other devices or 
components as applicable, that can reasonably be expected to influence 
exhaust emissions will be representative of production engines and that 
either: all components and/or engine, construction processes, component 
inspection and selection techniques, and assembly techniques employed 
in constructing such engines are reasonably likely to be implemented 
for production engines; or that they are as close as practicable to 
planned construction and assembly process.
    (B) A complete record of all emission tests performed (except tests 
performed by EPA directly), including test results, the date and 
purpose of each test, and the number of hours accumulated on the 
engine.
    (C) A record and description of all maintenance and other servicing 
performed, giving the date of the maintenance or service and the reason 
for it.
    (D) A record and description of each test performed to diagnose 
engine or emission control system performance, giving the date and time 
of the test and the reason for it.
    (E) A brief description of any significant events affecting the 
engine during the period covered by the history and not described by an 
entry under one of the previous headings, including such extraordinary 
events as accidents involving the engine or dynamometer runaway.
    (ii) Each such history shall be started on the date that the first 
of any of the selection or buildup activities in paragraph (a)(2)(i)(A) 
of this section occurred with respect to the certification engine and 
shall be kept in a designated location.
    (3) All records, other than routine emission test records, required 
to be maintained under this subpart shall be retained by the 
manufacturer for a period of 8 years after issuance of all certificates 
of conformity to which they relate. Routine emission test records shall 
be retained by the manufacturer for a period of one (1) year after 
issuance of all certificates of conformity to which they relate. 
Records may be retained as hard copy or reduced to computer disks, 
etc., depending on the record retention procedures of the manufacturer: 
Provided, that in every case all the information contained in the hard 
copy shall be retained.
    (4) Nothing in this section limits the Administrator's discretion 
in requiring the manufacturer to retain additional records or submit 
information not specifically required by this section.
    (5) Pursuant to a request made by the Administrator, the 
manufacturer shall submit to him/her the information that is required 
to be retained.
    (6) EPA may void a certificate of conformity ab initio for an 
engine family for which the manufacturer fails to retain the records 
required in this section or to provide such information to the 
Administrator upon request.
    (b) The manufacturer of engines subject to any of the standards 
prescribed in this part shall submit to the Administrator, at the time 
of issuance by the manufacturer, copies of all instructions or 
explanations regarding the use, repair, adjustment, maintenance, or 
testing of such engine, relevant to the control of crankcase, or 
exhaust emissions issued by the manufacturer, for use by other 
manufacturers, assembly plants, distributors, dealers, owners and 
operators. Any material not translated into the English language need 
not be submitted unless specifically requested by the Administrator.
    (c) Any manufacturer participating in averaging, banking and 
trading program of subpart D of this part 94 must comply with the 
maintenance of records requirements of Sec. 94.308.
    (d)(1) Any manufacturer who has applied for certification of a new 
engine subject to certification testing under this subpart shall admit 
or cause to be admitted any EPA Enforcement Officer during operating 
hours on presentation of credentials to any of the following:
    (i) Any facility where any such tests or any procedures or 
activities connected with such test are or were performed;
    (ii) Any facility where any engine which is being tested (or was 
tested, or is to be tested) is present;
    (iii) Any facility where any construction process or assembly 
process used in the modification or buildup of such an engine into a 
certification engine is taking place or has taken place; or
    (iv) Any facility where any record or other document relating to 
any of the activities listed in this paragraph (d)(1) is located.
    (2) Upon admission to any facility referred to in paragraph (d)(1) 
of this section, any EPA Enforcement Officer shall be allowed:
    (i) To inspect and monitor any part or aspect of such procedures, 
activities and testing facilities including, but not limited to, 
monitoring engine preconditioning, emissions tests, service 
accumulation, maintenance, and engine storage procedures, and to verify 
correlation or calibration of test equipment;
    (ii) To inspect and make copies of any such records, designs, or 
other documents, including those records specified in subpart D of this 
part; and
    (iii) To inspect and/or photograph any part or aspect of any such 
certification engine and any components to be used in the construction 
thereof.
    (3) In order to allow the Administrator to determine whether or not 
production engines, conform to the conditions upon which a certificate 
of conformity has been issued, or conform in all material respects to 
the design specifications applicable to those engines, as described in 
the application for certification for which a certificate of conformity 
has been issued, any manufacturer shall admit any EPA Enforcement 
Officer on presentation of credentials to:
    (i) Any facility where any document, design or procedure relating 
to the translation of the design and construction of engines and 
emission related components described in the application for 
certification or used for certification testing into production engines 
is located or carried on;
    (ii) Any facility where any engines to be introduced into commerce 
are manufactured; and

[[Page 68575]]

    (iii) Any facility where records specified this section are 
located.
    (4) On admission to any such facility referred to in paragraph 
(d)(3) of this section, any EPA Enforcement Officer shall be allowed:
    (i) To inspect and monitor any aspects of such manufacture and 
other procedures;
    (ii) To inspect and make copies of any such records, documents or 
designs;
    (iii) To inspect and photograph any part or aspect of any such 
engine(s) and any component used in the assembly thereof that are 
reasonably related to the purpose of his/her entry; and
    (iv) To inspect and make copies of any records and documents 
specified in this section.
    (5) Any EPA Enforcement Officer shall be furnished by those in 
charge of a facility being inspected with such reasonable assistance as 
he/she may request to help him/her discharge any function listed in 
this part. Each applicant for or recipient of certification is required 
to cause those in charge of a facility operated for its benefit to 
furnish such reasonable assistance without charge to EPA whether or not 
the applicant controls the facility.
    (6) The duty to admit or cause to be admitted any EPA Enforcement 
Officer applies to any facility involved in the manufacturing or 
assembling of engines, whether or not the manufacturer owns or controls 
the facility in question and applies both to domestic and to foreign 
manufacturers and facilities. EPA will not attempt to make any 
inspections which it has been informed that local law forbids. However, 
if local law makes it impossible to do what is necessary to insure the 
accuracy of data generated at a facility, no informed judgment that an 
engine is certifiable or is covered by a certificate can properly be 
based on those data. It is the responsibility of the manufacturer to 
locate its testing and manufacturing facilities in jurisdictions where 
this situation will not arise.
    (7) For purposes of this section:
    (i) ``Presentation of credentials'' shall mean display of the 
document designating a person as an EPA Enforcement Officer.
    (ii) Where component or engine storage areas or facilities are 
concerned, ``operating hours'' shall mean all times during which 
personnel other than custodial personnel are at work in the vicinity of 
the area or facility and have access to it.
    (iii) Where facilities or areas other than those covered by 
paragraph (d)(7)(ii) of this section are concerned, ``operating hours'' 
shall mean all times during which an assembly line is in operation or 
all times during which testing, maintenance, service accumulation, 
production or compilation of records, or any other procedure or 
activity related to certification testing, to translation of designs 
from the test stage to the production stage, or to engine manufacture, 
or assembly is being carried out in a facility.
    (iv) ``Reasonable assistance'' includes, but is not limited to, 
clerical, copying, interpretation and translation services, the making 
available on request of personnel of the facility being inspected 
during their working hours to inform the EPA Enforcement Officer of how 
the facility operates and to answer his questions, and the performance 
on request of emissions tests on any engine which is being, has been, 
or will be used for certification testing. Such tests shall be 
nondestructive, but may require appropriate service accumulation. A 
manufacturer may be compelled to cause the personal appearance of any 
employee at such a facility before an EPA Enforcement Officer by 
written request for his appearance, signed by the Assistant 
Administrator for Air and Radiation or the Assistant Administrator for 
Enforcement and Compliance Assurance, served on the manufacturer. Any 
such employee who has been instructed by the manufacturer to appear 
will be entitled to be accompanied, represented and advised by counsel.
    (v) Any entry without 24 hour prior written or oral notification to 
the affected manufacturer shall be authorized in writing by the 
Assistant Administrator for Air and Radiation or the Assistant 
Administrator for Enforcement and Compliance Assurance.
    (8) EPA may void a certificate of conformity ab initio for engines 
introduced into commerce if the manufacturer (or contractor for the 
manufacturer, if applicable) fails to comply with any provision of this 
section.


Sec. 94.216  Hearing procedures.

    (a)(1) After granting a request for a hearing under Sec. 94.210 or 
Sec. 94.208, the Administrator shall designate a Presiding Officer for 
the hearing.
    (2) The hearing shall be held as soon as practicable at a time and 
place fixed by the Administrator or by the Presiding Officer.
    (3) In the case of any hearing requested pursuant to Sec. 94.208, 
the Administrator may in his/her discretion direct that all argument 
and presentation of evidence be concluded within such fixed period not 
less than 30 days as he/she may establish from the date that the first 
written offer of a hearing is made to the manufacturer. To expedite 
proceedings, the Administrator may direct that the decision of the 
Presiding Officer (who may, but need not be the Administrator) shall be 
the final EPA decision.
    (b)(1) Upon his/her appointment pursuant to paragraph (a) of this 
section, the Presiding Officer will establish a hearing file. The file 
shall consist of the notice issued by the Administrator under 
Sec. 94.210 or Sec. 94.208 together with any accompanying material, the 
request for a hearing and the supporting data submitted therewith, and 
all documents relating to the request for certification and all 
documents submitted therewith, and correspondence and other data 
material to the hearing.
    (2) The hearing file will be available for inspection by the 
applicant at the office of the Presiding Officer.
    (c) An applicant may appear in person, or may be represented by 
counsel or by any other duly authorized representative.
    (d)(1) The Presiding Officer, upon the request of any party, or in 
his/her discretion, may arrange for a prehearing conference at a time 
and place specified by him/her to consider the following:
    (i) Simplification of the issues;
    (ii) Stipulations, admissions of fact, and the introduction of 
documents;
    (iii) Limitation of the number of expert witnesses;
    (iv) Possibility of agreement disposing of all or any of the issues 
in dispute;
    (v) Such other matters as may aid in the disposition of the 
hearing, including such additional tests as may be agreed upon by the 
parties.
    (2) The results of the conference shall be reduced to writing by 
the Presiding Officer and made part of the record.
    (e)(1) Hearings shall be conducted by the Presiding Officer in an 
informal but orderly and expeditious manner. The parties may offer oral 
or written evidence, subject to the exclusion by the Presiding Officer 
of irrelevant, immaterial and repetitious evidence.
    (2) Witnesses will not be required to testify under oath. However, 
the Presiding Officer shall call to the attention of witnesses that 
their statements may be subject to the provisions of 18 U.S.C. 1001 
which imposes penalties for knowingly making false statements or 
representations, or using false documents in any matter within the 
jurisdiction of any department or agency of the United States.
    (3) Any witness may be examined or cross-examined by the Presiding 
Officer, the parties, or their representatives.

[[Page 68576]]

    (4) Hearings shall be reported verbatim. Copies of transcripts of 
proceedings may be purchased by the applicant from the reporter.
    (5) All written statements, charts, tabulations, and similar data 
offered in evidence at the hearings shall, upon a showing satisfactory 
to the Presiding Officer of their authenticity, relevancy, and 
materiality, be received in evidence and shall constitute a part of the 
record.
    (6) Oral argument may be permitted in the discretion of the 
Presiding Officer and shall be reported as part of the record unless 
otherwise ordered by him/her.
    (f)(1) The Presiding Officer shall make an initial decision which 
shall include written findings and conclusions and the reasons or basis 
therefor on all the material issues of fact, law, or discretion 
presented on the record. The findings, conclusions, and written 
decision shall be provided to the parties and made a part of the 
record. The initial decision shall become the decision of the 
Administrator without further proceedings unless there is an appeal to 
the Administrator or motion for review by the Administrator within 30 
days of the date the initial decision was filed.
    (2) On appeal from or review of the initial decision, the 
Administrator shall have all the powers which he/she would have in 
making the initial decision including the discretion to require or 
allow briefs, oral argument, the taking of additional evidence or the 
remanding to the Presiding Officer for additional proceedings. The 
decision by the Administrator shall include written findings and 
conclusions and the reasons or basis therefor on all the material 
issues of fact, law, or discretion presented on the appeal or 
considered in the review.


Sec. 94.217  Emission data engine selection.

    (a) The manufacturer must select for testing, from each engine 
family, the engine configuration which is expected to be worst-case for 
exhaust emission compliance on in-use engines, considering all exhaust 
emission constituents and the range of installation options available 
to vessel builders.
    (b) Each engine in the test fleet must be constructed to be 
representative of production engines.
    (c) After review of the manufacturer's test fleet, the 
Administrator may select from the available fleet one additional test 
engine from each engine family.
    (d) Each engine selected shall be tested according to the 
provisions of subpart B of this part.
    (e) In lieu of testing an emission data engine selected under 
paragraph (a) of this section and submitting the resulting data, a 
manufacturer may, with Administrator approval, use emission data on a 
similar engine for which certification has previously been obtained or 
for which all applicable data required under this subpart have 
previously been submitted. These data must be submitted in the 
application for certification.


Sec. 94.218  Deterioration factor determination.

    Manufacturers shall determine exhaust emission deterioration 
factors using good engineering judgement according to the provisions of 
this section. Every deterioration factor must be, in the 
Administrator's judgment, consistent with emissions increases observed 
in-use based on emission testing of similar engines. Deterioration 
factors that predict emission increases over the useful life of an 
engine that are significantly less than the emission increases over the 
useful life observed from in-use testing of similar engines shall not 
be used.
    (a) A separate exhaust emission deterioration factor shall be 
established for each engine family and for each emission constituent 
applicable to that family.
    (b) Calculation procedures. (1) For engines not utilizing 
aftertreatment technology (e.g., catalyst). For each applicable 
emission constituent, an additive deterioration factors shall be used; 
that is, a deterioration factor that when added to the low mileage 
emission rate equals the emission rate at the end of useful life. 
However, if the deterioration factor supplied by the manufacturer is 
less than zero, it shall be zero for the purposes of this section.
    (2) For engines utilizing aftertreatment technology (e.g., 
catalyst). For each applicable emission constituent, a multiplicative 
deterioration factors shall be used; that is deterioration factors that 
when multiplied by the low mileage emission rate equal the emission 
rate at the end of useful life. However, if the deterioration factor 
supplied by the manufacturer is less than one, it shall be one for the 
purposes of this section.
    (c) Rounding. (1) In the case of a multiplicative exhaust emission 
deterioration factor, the factor shall be rounded to three places to 
the right of the decimal point in accordance with ASTM E 29-93a 
(incorporated by reference at Sec. 94.5).
    (2) In the case of an additive exhaust emission deterioration 
factor, the factor shall be established to a minimum of two places to 
the right of the decimal in accordance with ASTM E 29-93a (incorporated 
by reference at Sec. 94.5).
    (d)(1) Except as allowed by paragraph (d)(2) of this section, the 
manufacturer shall determine the deterioration factors based on service 
accumulation and related testing, according to the manufacturer's 
procedures, and the provisions of Secs. 94.219 and 94.220. The 
manufacturer shall determine the form and extent of this service 
accumulation, consistent with good engineering practice, and shall 
describe this process in the application for certification.
    (2) Alternatives to service accumulation and testing for the 
determination of a deterioration factor. A written explanation of the 
appropriateness of using an alternative must be included in the 
application for certification.
    (i) Carryover and carryacross of durability emission data. In lieu 
of testing an emission data or durability data engine selected under 
Sec. 94.217 or Sec. 94.219, and submitting the resulting data, a 
manufacturer may, with Administrator approval, use exhaust emission 
deterioration data on a similar engine for which certification to the 
same standard has previously been obtained or for which all applicable 
data required under this subpart have previously been submitted. These 
data must be submitted in the application for certification.
    (ii) Use of non-marine deterioration data. In the case where a 
manufacturer produces a certified motor vehicle engine, locomotive 
engine, or other nonroad engine that is similar to the marine engine to 
be certified, deterioration data from the non-marine engine may be 
applied to the marine engine. This application of deterioration data 
from such an engine to a marine engine is subject to Administrator 
approval, and the determination of whether the engines are similar 
shall be based on good engineering judgment.
    (iii) Engineering analysis for established technologies. In the 
case where an engine family uses technology which is well established, 
an analysis based on good engineering practices may be used in lieu of 
testing to determine a deterioration factor for that engine family. 
Engines using exhaust gas recirculation or aftertreatment are excluded 
from this provision. The manufacturer shall provide a written statement 
to the Administrator that all data, analyses, test procedures, 
evaluations, and other documents, on which the deterioration factor is 
based, are available to the Administrator upon request.

[[Page 68577]]

Sec. 94.219  Durability data engine selection.

    (a) The manufacturer shall select for durability testing, from each 
engine family, the engine configuration which is expected to generate 
the highest level of exhaust emission deterioration on engines in use, 
considering all exhaust emission constituents and the range of 
installation options available to vessel builders. The manufacturer 
shall use good engineering judgment in making this selection.
    (b) In lieu of testing the engine selected in paragraph (a) of this 
section, the manufacturer may select, using good engineering judgement, 
an equivalent or worse-case engine configuration. Carryover data 
satisfying the provisions of Sec. 94.220 may also be used in lieu of 
testing the configuration selected in paragraph (a) of this section.
    (c) Durability data engines shall be built from subsystems and 
components that are representative of actual production engines.


Sec. 94.220  Service accumulation.

    (a) Stabilized emission service accumulation for emission data 
engines.
    (1) Each test emission data engine in the test fleet must be 
operated with all emission control systems operating properly for a 
period sufficient to stabilize emissions.
    (2) A manufacturer may elect to consider as stabilized emission 
levels from emission data engines with 125 or fewer hours of service.
    (b) Durability data engines shall accummulate service in a manner 
which will represent the emission levels from in-use engines over their 
full useful life, consistent with good engineering judgement.
    (1) Components may be removed from the engine and aged separately.
    (2) End of useful life emission levels and deterioration factors 
may be projected from durability data engines which have completed less 
than full useful life service accumulation, provided that the amount of 
service accumulation completed and projection procedures are determined 
using good engineering judgement.
    (c) No maintenance, other than recommended lubrication and filter 
changes or maintenance otherwise allowed by this part, may be performed 
during service accumulation without the Administrator's approval.
    (d) Service accumulation should be performed in a manner using good 
engineering judgment to ensure that emissions are representative of in-
use engines.
    (e) The manufacturer must maintain, and provide to the 
Administrator if requested, records stating the rationale for selecting 
the service accumulation period and records describing the method used 
to accumulate service hours on the test engine(s).


Sec. 94.221  Application of good engineering judgment.

    (a) The manufacturer shall exercise good engineering judgment in 
making all decisions called for under this subpart, including but not 
limited to selections, categorizations, determinations, and 
applications of the requirements of the subpart.
    (b) Upon written request by the Administrator, the manufacturer 
shall provide within 15 working days (or such longer period as may be 
allowed by the Administrator) a written description of the engineering 
judgment in question.
    (c) The Administrator may reject any such decision by a 
manufacturer if it is not based on good engineering judgment or is 
otherwise inconsistent with the requirements of this subpart.
    (d) If the Administrator rejects a decision by a manufacturer with 
respect to the exercise of good engineering judgment, the following 
provisions shall apply:
    (1) If the Administrator determines that incorrect information was 
deliberately used in the decision process, that important information 
was deliberately overlooked, that the decision was not made in good 
faith, or that the decision was not made with a rational basis, the 
Administrator may suspend or void ab initio a certificate of 
conformity.
    (2) If the Administrator determines that the manufacturer's 
decision is not covered by the provisions of paragraph (d)(1) of this 
section, but that a different decision would reflect a better exercise 
of good engineering judgment, then the Administrator will notify the 
manufacturer of this concern and the basis of the concern.
    (i) The manufacturer shall have at least 30 days to respond to this 
notice. The Administrator may extend this response period upon request 
from the manufacturer if it is necessary to generate additional data 
for the manufacturer's response.
    (ii) The Administrator shall make the final ruling after 
considering the information provided by the manufacturer during the 
response period. If the Administrator determines that the 
manufacturer's decision was not made using good engineering judgment, 
he/she may reject that decision and apply the new ruling to future 
corresponding decisions as soon as practicable.
    (e) The Administrator shall notify the manufacturer in writing 
regarding any decision reached under paragraph (d)(1) or (2) of this 
section. The Administrator shall include in this notification the basis 
for reaching the determination.
    (f) Within 30 working days following receipt of notification of the 
Administrator's determinations made under paragraph (d) of this 
section, the manufacturer may request a hearing on those 
determinations. The request shall be in writing, signed by an 
authorized representative of the manufacturer, and shall include a 
statement specifying the manufacturer's objections to the 
Administrator's determinations, and data or other analysis in support 
of such objections. If, after review of the request and supporting data 
or analysis, the Administrator finds that the request raises a 
substantial factual issue, he/she shall provide the manufacturer a 
hearing in accordance with Sec. 94.216 of this subpart with respect to 
such issue.

Subpart D--Certification Averaging, Banking, and Trading Provisions


Sec. 94.301  Applicability.

    Marine engine families subject to the standards of subpart A of 
this part are eligible to participate in the certification averaging, 
banking, and trading program described in this subpart. The provisions 
of this subpart apply to manufacturers of new engines that are subject 
to the emission standards of Sec. 94.8.


Sec. 94.302  Definitions.

    The definitions of subpart A of this part apply to this subpart. 
The following definitions also apply.
    Applicable standard means a standard that would have otherwise been 
applicable had the engine not been certified under this subpart to an 
FEL different than that standard.
    Broker means any entity that facilitates a trade between a buyer 
and seller.
    Buyer means the entity that receives credits as a result of trade 
or transfer.
    Reserved credits means credits that have been generated but have 
not yet been reviewed by EPA or used to demonstrate compliance under 
the averaging provisions of this subpart.
    Seller means the entity that provides credits during a trade.


Sec. 94.303  General provisions.

    (a) Participation in the averaging, banking, and trading program is 
voluntary. A manufacturer may choose to involve some or all of its 
engine families in any or all aspects of the program.

[[Page 68578]]

    (b) An engine family is eligible to participate in the 
certification averaging, banking, and trading program for 
THC+NOX and PM emissions if it is subject to regulation 
under this part with certain exceptions specified in paragraph (c) of 
this section. No averaging, banking, and trading program is available 
for meeting the CO standards of this part.
    (c) Engines may not participate in the certification averaging, 
banking, and trading program if they are exported. Only engines 
certified under this part are eligible for inclusion in this 
certification averaging, banking, and trading program.
    (d) Averaging involves the generation of credits by a manufacturer 
for use by that same manufacturer in the same calendar year. A 
manufacturer may use averaging during certification to offset an 
emission exceedance of an engine family caused by an FEL above the 
applicable emission standard, subject to the provisions of this 
subpart.
    (e) Banking involves the generation of credits by a manufacturer in 
a given calendar year for use in a subsequent model year. A 
manufacturer may bank actual credits only after the end of the calendar 
year and after EPA has reviewed the manufacturer's end-of-year reports. 
During the calendar year and before submittal of the end-of-year 
report, credits originally designated in the certification process for 
banking will be considered reserved and may be redesignated for trading 
or averaging in the end-of-year report. Credits declared for banking 
from the previous calendar year that have not been reviewed by EPA may 
be used in averaging or trading transactions. However, such credits may 
be revoked at a later time following EPA review of the end-of-year 
report or any subsequent audit actions.
    (f) Trading involves the sale of banked credits for use in 
certification of new engines under this part. Only banked credits may 
be traded; reserved credits may not be traded.


Sec. 94.304  Compliance requirements.

    (a) Manufacturers wishing to participate in certification 
averaging, banking and trading programs shall select a FEL for each 
engine family they wish to include. The level of the FEL shall be 
selected by the manufacturer, subject to the upper limits described in 
paragraph (m) of this section. An engine family certified to an FEL is 
subject to all provisions specified in this part, except that the 
applicable FEL replaces the applicable THC+NOX and PM 
emission standard for the family participating in the averaging, 
banking, and trading program.
    (b) A manufacturer may certify one or more engine families at FELs 
above or below the applicable emission standard, provided the summation 
of the manufacturer's projected balance of all credit transactions in a 
given calendar year is greater than or equal to zero, as calculated for 
each family under Sec. 94.305 and reported under Sec. 94.309.
    (c) Manufacturers certifying engine families with FELs exceeding 
the applicable emission standard shall obtain emission credits in 
amounts sufficient to address the shortfall. Credits may be obtained 
from averaging, banking, or trading, subject to the restrictions 
described in this subpart.
    (d) Manufacturers certifying engine families with FELs below the 
applicable emission standard may generate emission credits to average, 
bank, or trade, or a combination thereof.
    (e) Engine families may not generate credits for one pollutant 
while also using credits for another pollutant in the same model year.
    (f) Credits may only be used for certification; they may not be 
used to remedy a violation of the FEL determined by production line or 
in-use testing. Credits may be used to allow subsequent production of 
engines for an engine family failing production line testing if the 
manufacturer elects to recertify to a higher FEL.
    (g) [Reserved].
    (h) If an FEL is changed after initial certification in any given 
model year, the manufacturer must conduct production line testing to 
verify that the emission levels are achieved.
    (i) Manufacturers participating in the averaging, banking and 
trading program must demonstrate compliance with the applicable 
emission standards at the end of the model year. Manufacturers that 
have certified engine families to FELs above the applicable emission 
standards and do not have sufficient emission credits to offset the 
difference between the emission standard and the FEL for such engine 
family (ies) will be in violation of the conditions of the certificate 
of conformity for such engine family (ies). The certificates of 
conformity may be voided ab initio for those engine families.
    (j) In the event of a negative credit balance resulting from a 
credit trade, both the buyer(s) and the seller(s) are liable, except in 
cases involving fraud. Certificates of all engine families 
participating in a negative trade may be voided ab initio.
    (1) Where a buyer of credits is not responsible for causing the 
negative credit balance, it is only liable to supply additional credits 
equivalent to any amount of invalid credits that it used.
    (2) Credit holders responsible for the credit shortfall may be 
subject to the requirements of Sec. 94.309(g)(3).
    (k) Averaging sets. Credits generated by engine families in one 
averaging set may not be used for compliance by engine families in any 
other averaging set. The averaging sets are defined as:
    (1) Category 1 engines certified to the Tier 2 standards.
    (2) Category 2 engines certified to the Tier 2 standards.
    (3) Category 1 engines certified to the Tier 3 standards.
    (4) Category 2 engines certified to the Tier 3 standards.
    (l) Credit life shall be unlimited.
    (m) Upper limits. The FELs for THC+NOX and PM for new 
engines certified for participation in this averaging, banking and 
trading program may not exceed the following values:
    (1) For Category 1 engines, the FEL may not exceed the levels 
contained in Table D-1.

                         Table D-1.--Category 1 Upper Limits for Family Emission Limits
----------------------------------------------------------------------------------------------------------------
                                                                                  THC+NOX FEL g/   PM FEL  g/kW-
    Subcategory liters/cylinder                  Tier               Model year*        kW-hr            hr
----------------------------------------------------------------------------------------------------------------
Power  37 kW disp. < 0.9  Tier 2.....................            2004            11.5            1.2
                                     Tier 3.....................            2008             7.5            1.2
0.9  disp. < 1.2........  Tier 2.....................            2004            11.5            1.2
                                     Tier 3.....................            2008             7.5            1.2
1.2  disp. < 1.5........  Tier 2.....................            2004            10.5            0.54
                                     Tier 3.....................            2008             7.5            0.54
1.5  disp. < 2.0........  Tier 2.....................            2004            10.5            0.54
                                     Tier 3.....................            2008             7.5            0.54

[[Page 68579]]

 
2.0  disp. < 2.5........  Tier 2.....................            2006            10.5            0.54
                                     Tier 3.....................            2008             7.5            0.54
2.5  disp. < 5.0........  Tier 2.....................            2008            10.5            0.54
                                     Tier 3.....................            2010             7.5            0.54
----------------------------------------------------------------------------------------------------------------
* The model years listed indicate the model years for which the specified tier of limits take effect.

    (2) For Category 2 engines, the FEL may not exceed the levels 
contained in Table D-2.

     Table D-2.--Category 2 Upper Limits for Family Emission Limits
------------------------------------------------------------------------
                                                     THC+NOX
                  Tier                     Model    FEL g/kW-  PM FEL g/
                                           year*        hr       kW-hr
------------------------------------------------------------------------
Tier 2.................................       2008       10.7       0.60
Tier 3.................................       2010        7.5       0.60
------------------------------------------------------------------------
*The model years listed indicate the model years for which the specified
  tier of limits take effect.

Sec. 94.305  Credit generation and use calculation.

    (a) For each participating engine family, THC+NOX and PM 
emission credits (positive or negative) are to be calculated according 
to the equation in paragraph (b) of this section and rounded in 
accordance with ASTM E29-93a, to the nearest one-hundredth of a 
megagram (Mg). Consistent units are to be used throughout the 
calculation.
    (b) Credits for each engine family are calculated as:

Emission credits = (Std--FEL) X (UL) X (Production) X (AvgPR) X (LF) X 
(10-\6\)

    Where:

    (i) Std=the applicable cycle-weighted marine engine 
THC+NOX and/or PM emission standard in grams per kilowatt-
hour.
(ii) FEL = the family emission limit for the engine family in grams per 
kilowatt-hour. (The FEL may not exceed the limit established in 
Sec. 94.304(m) for each pollutant.)
(iii) UL = the useful life in hours.
(iv) Production = the number of engines participating in the averaging, 
banking, and trading program within the given engine family during the 
calendar year (or the number of engines in the subset of the engine 
family for which credits are being calculated). Quarterly production 
projections are used for initial certification. Actual applicable 
production/sales volumes are used for end-of-year compliance 
determination.
(v) AvgPR = average power rating of all of the configurations within an 
engine family, calculated on a sales-weighted basis, in kilowatts.
(vi) LF = the load factor, dependent on whether the engine is intended 
for propulsion or auxiliary applications, as follows:

(A) 0.69 for propulsion engines,
(B) 0.51 for auxiliary engines.


Sec. 94.306  Certification.

    (a) In the application for certification a manufacturer must:
    (1) Declare its intent to include specific engine families in the 
averaging, banking, and/or trading programs. Separate declarations are 
required for each pollutant (THC+NOX and PM).
    (2) Declare FELs for each engine family participating in 
certification averaging, banking, and/or trading.
    (i) The FELs must be to the same number of significant digits as 
the emission standard.
    (ii) In no case may the FEL exceed the upper limit prescribed in 
Sec. 94.304(m).
    (3) Conduct and submit detailed calculations of projected emission 
credits (positive or negative) based on quarterly production 
projections for each participating family and for each pollutant, using 
the applicable equation in Sec. 94.305 and the applicable values of the 
terms in the equation for the specific family.
    (i) If the engine family is projected to have negative emission 
credits, state specifically the source (manufacturer/engine family) of 
the credits necessary to offset the credit deficit according to 
quarterly projected production.
    (ii) If the engine family is projected to generate credits, state 
specifically where the quarterly projected credits will be applied 
(manufacturer/engine family or reserved).
    (4) Submit a statement that the engines for which certification is 
requested will not, to the best of the manufacturer's belief, cause the 
manufacturer to have a negative credit balance when all credits are 
calculated for all the manufacturer's engine families participating in 
the averaging, banking, and trading program.
    (b) Based on this information, each manufacturer's certification 
application must demonstrate:
    (1) That at the end of model year production, each engine family 
has a net emissions credit balance equal to or greater than zero for 
any pollutant and program for which participation in certification 
under averaging, banking, and/or trading is being sought. The equation 
in section Sec. 94.305 shall be used in this calculation for each 
engine family.
    (2) That the manufacturer will obtain sufficient credits to be used 
to comply with the emission standard for any engine family with an FEL 
that exceeds the applicable emission standard, or where credits will be 
applied if the FEL is less than the emission standard. In cases where 
credits are being obtained, for each engine family involved the 
manufacturer must identify specifically the source of the credits being 
used (manufacturer/engine family). All such reports shall include all 
credits involved in certification averaging, banking, or trading.
    (3) That in cases where credits are being generated/supplied, the 
use of such credits is specifically designated (manufacturer/engine 
family or reserved). All such reports shall include all credits 
involved in certification averaging, banking, or trading.
    (c) Manufacturers must monitor projected versus actual production 
throughout the model year to ensure that compliance with emission 
standards is achieved at the end of the model year
    (d) At the end of the model year, the manufacturer must provide the 
end-of-year reports required under Sec. 94.309.
    (1) Projected credits based on the information supplied in the 
certification application may be used to obtain a certificate of 
conformity. However, any such projected credits must be validated based 
on review of the end of model year reports and may be revoked at a 
later time based on follow-up audits or any other verification measure 
deemed appropriate by the Administrator.
    (2) Compliance for engine families using averaging, banking, or 
trading will be determined at the end of the model

[[Page 68580]]

year. Manufacturers that have certified engine families with credit 
balances for THC+NOX and/or PM that do not equal or exceed 
zero shall be in violation of the conditions of the certificate of 
conformity for such engine families. The certificate of conformity may 
be voided ab initio for those engine families.
    (e) Other conditions of certification. (1) All certificates issued 
are conditional upon compliance by the manufacturer with the provisions 
of this subpart both during and after the calendar year of production.
    (2) Failure to comply with all provisions of this subpart will be 
considered to be a failure to satisfy the conditions upon which the 
certificate was issued, and the certificate may be deemed void ab 
initio.
    (3) The manufacturer bears the burden of establishing to the 
satisfaction of the Administrator that the conditions upon which the 
certificate was issued were satisfied or waived.


Sec. 94.307  Labeling.

    For all engines included in the certification averaging, banking, 
and trading program, the FEL to which the engine is certified must be 
included on the label required in Sec. 94.212.


Sec. 94.308  Maintenance of records.

    (a) The manufacturer of any engine that is certified under the 
averaging, banking, and trading program must establish, maintain, and 
retain the following adequately organized and indexed records for each 
such engine produced:
    (1) EPA engine family and configuration;
    (2) Engine identification number;
    (3) Engine calendar year and build date;
    (4) Rated power;
    (5) Purchaser and destination or owner; and
    (6) Assembly plant.
    (b) The manufacturer of any engine family that is certified under 
the averaging, banking, and trading program must establish, maintain, 
and retain the following adequately organized and indexed records for 
each such family:
    (1) Model year and EPA engine family;
    (2) Family Emission Limit(s) (FEL);
    (3) Rated power for each configuration;
    (4) Projected applicable production/sales volume for the calendar 
year;
    (5) Actual applicable production/sales volume for the calendar 
year; and
    (6) Useful life.
    (c) Any manufacturer producing an engine family participating in 
trading of credits must maintain the following records on a quarterly 
basis for each engine family in the trading program:
    (1) The model year and engine family;
    (2) The actual quarterly and cumulative applicable production/sales 
volume;
    (3) The values required to calculate credits as given in 
Sec. 94.305;
    (4) The resulting type and number of credits generated/required;
    (5) How and where credit surpluses are dispersed; and
    (6) How and through what means credit deficits are met.
    (d) The manufacturer must retain all records required to be 
maintained under this section for a period of 8 years from the due date 
for the end-of-calendar year report. Records may be retained as hard 
copy or reduced to microfilm, ADP diskettes, and so forth, depending on 
the manufacturer's record retention procedure; provided, that in every 
case all information contained in the hard copy is retained.
    (e) Nothing in this section limits the Administrator's discretion 
in requiring the manufacturer to retain additional records or submit 
information not specifically required by this section.
    (f) Pursuant to a request made by the Administrator, the 
manufacturer must submit to the Administrator the information that the 
manufacturer is required to retain.
    (g) EPA may void ab initio a certificate of conformity for an 
engine family for which the manufacturer fails to retain the records 
required in this section or to provide such information to the 
Administrator upon request.


Sec. 94.309  Reports.

    (a) Manufacturers must submit the certification information as 
required under Sec. 94.306, and end-of-year reports each year as part 
of their participation in certification averaging, banking, and trading 
programs.
    (b) Quarterly reports. All entities involved in credit trades must 
submit quarterly reports. The reports shall include the source or 
recipient of the credits, the amount of credits involved plus remaining 
balances, details regarding the pollutant, and model year as well as 
the information prescribed in Sec. 94.308(c). Copies of contracts 
related to credit trading must be included or supplied by the buyer, 
seller, and broker, as applicable.
    (c) End-of-year reports must include the information prescribed in 
Sec. 94.308(b). The report shall include a calculation of credit 
balances for each family to show that the summation of the 
manufacturer's use of credits results in a credit balance equal to or 
greater than zero. The report shall be consistent in detail with the 
information submitted under Sec. 94.306 and show how credit surpluses 
were dispersed and how credit shortfalls were met on a family specific 
basis. The end-of-year report shall incorporate any information 
reflected in previous quarterly reports.
    (d) The applicable production/sales volume for quarterly and end-
of-year reports must be based on the location of either the point of 
first retail sale by the manufacturer or the point at which the engine 
is placed into service, whichever occurs first. This is called the 
final product purchase location.
    (e) Each quarterly and end-of-year report submitted shall include a 
statement certifying to the accuracy and authenticity of the material 
reported therein.
    (f) Requirements for submission. (1) Quarterly reports must be 
submitted within 90 days of the end of the calendar quarter to: Group 
Manager, Engine Compliance Programs Group, Engine Programs and 
Compliance Division U.S. Environmental Protection Agency, 6403-J, 401 M 
St., SW, Washington, D.C. 20460.
    (2) End-of-year reports must be submitted within 120 days of the 
end of the calendar year to: Group Manager, Engine Compliance Programs 
Group, Engine Programs and Compliance Division U.S. Environmental 
Protection Agency, 6403-J, 401 M St., SW, Washington, D.C. 20460.
    (3) Failure by a manufacturer participating in the averaging, 
banking, or trading program to submit any quarterly or end-of-year 
reports in the specified time for all engines is a violation of 
sections 203(a)(1) and 213 of the Clean Air Act for each engine.
    (4) A manufacturer generating credits for banking only who fails to 
submit end-of-year reports in the applicable specified time period (120 
days after the end of the calendar year) may not use or trade the 
credits until such reports are received and reviewed by EPA. Use of 
projected credits pending EPA review is not permitted in these 
circumstances.
    (g) Reporting errors. (1) Errors discovered by EPA or the 
manufacturer in the end-of-year report, including errors in credit 
calculation, may be corrected 180-days subsequent to submission of the 
end-of-year report. Errors discovered by EPA after 180-days shall be 
correctable if, as a result of the correction, the manufacturer's 's 
credits are reduced. Errors in the manufacturer's favor are not 
corrected if discovered after the 180-day correction period allowed.
    (2) If EPA or the manufacturer determines that a reporting error 
occurred on an end-of-year report

[[Page 68581]]

previously submitted to EPA under this section, the manufacturer's 
credits and credit calculations will be recalculated. Erroneous 
positive credits will be void. Erroneous negative credit balances may 
be corrected by EPA.
    (3) If EPA review of a manufacturer's end-of-year report indicates 
a credit shortfall, the manufacturer will be permitted to purchase the 
necessary credits to bring the credit balance to zero. These credits 
must be supplied at the ratio of 1.1 credits for each 1.0 credit 
needed. If sufficient credits are not available to bring the credit 
balance to zero for the family(ies) involved, EPA may void the 
certificate(s) for that family(ies) ab initio. In addition, all engines 
within an engine family for which there are insufficient credits will 
be considered to have violated the conditions of the certificate of 
conformity and therefore are not covered by that certificate.
    (4) If within 180 days of receipt of the manufacturer's end-of-year 
report, EPA review determines a reporting error in the manufacturer's 
favor (that is, resulting in an increased credit balance) or if the 
manufacturer discovers such an error within 180 days of EPA receipt of 
the end-of-year report, the credits are restored for use by the 
manufacturer.


Sec. 94.310  Notice of opportunity for hearing.

    Any voiding of the certificate under this subpart will be made only 
after the manufacturer concerned has been offered an opportunity for a 
hearing conducted in accordance with Sec. 94.216 and, if a manufacturer 
requests such a hearing, will be made only after an initial decision by 
the Presiding Officer.

Subpart E--Emission-related Defect Reporting Requirements, 
Voluntary Emission Recall Program


Sec. 94.401  Applicability.

    The requirements of this subpart of this part are applicable to 
manufacturers of engines subject to the provisions of subpart A of this 
part. The requirement to report emission-related defects affecting a 
given class or category of engines applies for eight years from the end 
of the year in which such engines were manufactured.


Sec. 94.402  Definitions.

    The definitions of Subpart A of this part apply to this subpart.


Sec. 94.403  Emission defect information report.

    (a) A manufacturer must file a defect information report whenever 
it determines, in accordance with procedures it established to identify 
either safety-related or performance defects, (or based on other 
information) that a specific emission-related defect exists in 25 or 
more Category 1 marine engines, or 10 or more Category 2 marine 
engines. No report must be filed under this paragraph for any emission-
related defect corrected prior to the sale of the affected engines to 
an ultimate purchaser.
    (b) Defect information reports required under paragraph (a) of this 
section must be submitted not more than 15 working days after the same 
emission-related defect is found to effect 25 or more Category 1 marine 
engines, or 10 or more Category 2 marine engines. Information required 
by paragraph (c) of this section that is either not available within 15 
working days or is significantly revised must be submitted as it 
becomes available.
    (c) Except as provided in paragraph (b) of this section, each 
defect report must contain the following information in substantially 
the format outlined:
    (1) The manufacturer's corporate name.
    (2) A description of the defect.
    (3) A description of each class or category of engines potentially 
affected by the defect including make, model, calendar year produced, 
purchaser and any other information as may be required to identify the 
engines affected.
    (4) For each class or category of engines described in response to 
paragraph (c)(3) of this section, the following shall also be provided:
    (i) The number of engines known or estimated to have the defect and 
an explanation of the means by which this number was determined.
    (ii) The address of the plant(s) at which the potentially defective 
engines were produced.
    (5) An evaluation of the emissions impact of the defect and a 
description of any operational or performance problems which a 
defective engine might exhibit.
    (6) Available emissions data which relate to the defect.
    (7) An indication of any anticipated follow-up by the manufacturer.


Sec. 94.404  Voluntary emissions recall reporting.

    (a) When any manufacturer initiates a voluntary emissions recall 
campaign involving an engine, the manufacturer shall submit to EPA a 
report describing the manufacturer's voluntary emissions recall plan as 
prescribed by this section within 15 working days of the date owner 
notification was begun. The report shall contain the following:
    (1) A description of each class or category of engines recalled 
including the number of engines to be recalled, the calendar year if 
applicable, the make, the model, and such other information as may be 
required to identify the engines recalled.
    (2) A description of the specific modifications, alterations, 
repairs, corrections, adjustments, or other changes to be made to 
correct the engines affected by the emission-related defect.
    (3) A description of the method by which the manufacturer will 
notify engine owners.
    (4) A description of the proper maintenance or use, if any, upon 
which the manufacturer conditions eligibility for repair under the 
remedial plan, an explanation of the manufacturer's reasons for 
imposing any such condition, and a description of the proof to be 
required of an engine owner to demonstrate compliance with any such 
condition.
    (5) A description of the procedure to be followed by engine owners 
to obtain correction of the nonconformity. This shall include 
designation of the date on or after which the owner can have the 
nonconformity remedied, the time reasonably necessary to perform the 
labor to remedy the defect, and the designation of facilities at which 
the defect can be remedied.
    (6) If some or all the nonconforming engines are to be remedied by 
persons other than authorized warranty agents of the manufacturer, a 
description of the class of persons other than authorized warranty 
agents of the manufacturer who will remedy the defect.
    (7) A copy of any written notification sent to engine owners.
    (8) A description of the system by which the manufacturer will 
assure that an adequate supply of parts will be available to perform 
the repair under the remedial plan including the date by which an 
adequate supply of parts will be available to initiate the repair 
campaign, the percentage of the total parts requirement of each person 
who is to perform the repair under the remedial plan to be shipped to 
initiate the campaign, and the method to be used to assure the supply 
remains both adequate and responsive to owner demand.
    (9) Three copies of all necessary instructions to be sent to those 
persons who are to perform the repair under the remedial plan.
    (10) A description of the impact of the changes on fuel 
consumption, operation or performance, and safety of each class or 
category of engines to be recalled.
    (11) A sample of any label to be applied to engines which 
participate in the voluntary recall campaign.

[[Page 68582]]

    (b) Unless otherwise specified by the Administrator, the 
manufacturer shall report on the progress of the recall campaign by 
submitting subsequent reports for six consecutive quarters, or until 
proven that remedial action has been adequately taken on all affected 
engines, whichever occurs first, commencing with the quarter after the 
voluntary emissions recall campaign actually begins. Such reports shall 
be submitted no later than 25 working days after the close of each 
calendar quarter. For each class or group of engine subject to the 
voluntary emissions recall campaign, the quarterly report shall contain 
the:
    (1) Emission recall campaign number, if any, designated by the 
manufacturer.
    (2) Date owner notification was begun, and date completed.
    (3) Number of engines involved in the voluntary emissions recall 
campaign.
    (4) Number of engines known or estimated to be affected by the 
emission-related defect and an explanation of the means by which this 
number was determined.
    (5) Number of engines inspected pursuant to voluntary emission 
recall plan.
    (6) Number of inspected engines found to be affected by the 
emissions-related defect.
    (7) Number of engines actually receiving repair under the remedial 
plan.
    (8) Number of engines determined to be unavailable for inspection 
or repair under the remedial plan due to exportation, scrappage, or for 
other reasons (specify).
    (9) Number of engines determined to be ineligible for remedial 
action due to a failure to properly maintain or use such engines.
    (10) Three copies of any service bulletins which relate to the 
defect to be corrected and which have not previously been reported.
    (11) Three copies of all communications transmitted to engine 
owners which relate to the defect to be corrected and which have not 
previously been submitted.
    (c) If the manufacturer determines that any of the information 
requested in paragraph (b) of this section has changed or was 
incorrect, revised information and an explanatory note shall be 
submitted. Answers to paragraphs (b)(5), (6), (7), (8), and (9) of this 
section shall be cumulative totals.
    (d) The manufacturer shall maintain in a form suitable for 
inspection, such as computer information storage devices or card files, 
the names and addresses of engine owners:
    (1) To whom notification was given;
    (2) Who received remedial repair or inspection under the remedial 
plan; and (3) Who were determined not to qualify for such remedial 
action when eligibility is conditioned on proper maintenance or use.
    (e) The records described in paragraph (d) of this section shall be 
made available to the Administrator upon request.


Sec. 94.405  Alternative report formats.

    (a) Any manufacturer may submit a plan for making either of the 
reports required by Secs. 94.403 and 94.404 on computer diskettes, 
magnetic tape or other machine readable format. The plan shall be 
accompanied by sufficient technical detail to allow a determination 
that data requirements of these sections will be met and that the data 
in such format will be usable by EPA.
    (b) Upon approval by the Administrator of the reporting system, the 
manufacturer may use such system until otherwise notified by the 
Administrator.


Sec. 94.406  Reports filing: record retention.

    (a) The reports required by Secs. 94.403 and 94.404 shall be sent 
to: Group Manager, Engine Compliance Programs Group, Engine Programs 
and Compliance Division, U.S. Environmental Protection Agency, 6403-J, 
401 M St., S.W., Washington, D.C. 20460.
    (b) The information gathered by the manufacturer to compile the 
reports required by Secs. 94.403 and 94.404 shall be retained for not 
less than 8 years from the date of the manufacture of the engines and 
shall be made available to duly authorized officials of the EPA upon 
request.


Sec. 94.407  Responsibility under other legal provisions preserved.

    The filing of any report under the provisions of this subpart shall 
not affect a manufacturer's responsibility to file reports or 
applications, obtain approval, or give notice under any provision of 
law.


Sec. 94.408  Disclaimer of production warranty applicability.

    (a) The act of filing an Emission Defect Information Report 
pursuant to Sec. 94.403 is inconclusive as to the existence of a defect 
subject to the warranty provided by section 207(a) of the Act.
    (b) A manufacturer may include on each page of its Emission Defect 
Information Report a disclaimer stating that the filing of a Defect 
Information Report pursuant to these regulations is not conclusive as 
to the applicability of the Production Warranty provided by section 
207(a) of the Act.

Subpart F--Manufacturer Production Line Testing Programs


Sec. 94.501  Applicability.

    The requirements of this subpart of this part are applicable to 
manufacturers of engines subject to the provisions of Subpart A of this 
part.


Sec. 94.502  Definitions.

    The definitions in Subpart A of this part apply to this subpart.


Sec. 94.503  General requirements.

    (a) Manufacturers shall test production line engines in accordance 
with sampling procedures specified in Sec. 94.505 and the test 
procedures specified in Sec. 94.506.
    (b) The Administrator may waive some or all of the requirements of 
this subpart.
    (c) The requirements of this subpart apply with respect to all 
applicable standards and FELs of subpart A of this part, including the 
supplemental standards of Sec. 94.8(e).


Sec. 94.504  Right of entry and access.

    (a) To allow the Administrator to determine whether a manufacturer 
is complying with the provisions of this part, one or more EPA 
enforcement officers may enter during operating hours and upon 
presentation of credentials any of the following places:
    (1) Any facility, including ports of entry, where any engine is to 
be introduced into commerce or any emission-related component is 
manufactured, assembled, or stored;
    (2) Any facility where any test conducted pursuant to a 
manufacturer's production line testing program or any procedure or 
activity connected with such test is or was performed;
    (3) Any facility where any test engine is present; and
    (4) Any facility where any record required under Sec. 94.509 or 
other document relating to this subpart is located.
    (b) Upon admission to any facility referred to in paragraph (a) of 
this section, EPA enforcement officers are authorized to perform the 
following inspection-related activities:
    (1) To inspect and monitor any aspect of engine manufacture, 
assembly, storage, testing and other procedures, and to inspect and 
monitor the facilities in which these procedures are conducted;
    (2) To inspect and monitor any aspect of engine test procedures or 
activities, including test engine selection, preparation and service 
accumulation,

[[Page 68583]]

emission test cycles, and maintenance and verification of test 
equipment calibration;
    (3) To inspect and make copies of any records or documents related 
to the assembly, storage, selection, and testing of an engine; and
    (4) To inspect and photograph any part or aspect of any engine and 
any component used in the assembly thereof that is reasonably related 
to the purpose of the entry.
    (c) EPA enforcement officers are authorized to obtain reasonable 
assistance without cost from those in charge of a facility to help the 
officers perform any function listed in this subpart and they are 
authorized to request the manufacturer to make arrangements with those 
in charge of a facility operated for the manufacturer benefit to 
furnish reasonable assistance without cost to EPA.
    (1) Reasonable assistance includes, but is not limited to, 
clerical, copying, interpretation and translation services; the making 
available on an EPA enforcement officer's request of personnel of the 
facility being inspected during their working hours to inform the EPA 
enforcement officer of how the facility operates and to answer the 
officer's questions; and the performance on request of emission tests 
on any engine which is being, has been, or will be used for production 
line testing.
    (2) By written request, signed by the Assistant Administrator for 
Air and Radiation or the Assistant Administrator for Enforcement and 
Compliance Assurance, and served on the manufacturer, a manufacturer 
may be compelled to cause the personal appearance of any employee at 
such a facility before an EPA enforcement officer. Any such employee 
who has been instructed by the manufacturer to appear will be entitled 
to be accompanied, represented, and advised by counsel.
    (d) EPA enforcement officers are authorized to seek a warrant or 
court order authorizing the EPA enforcement officers to conduct the 
activities authorized in this section, as appropriate, to execute the 
functions specified in this section. EPA enforcement officers may 
proceed ex parte to obtain a warrant or court order whether or not the 
EPA enforcement officers first attempted to seek permission from the 
manufacturer or the party in charge of the facility(ies) in question to 
conduct the activities authorized in this section.
    (e) A manufacturer is responsible for locating its foreign testing 
and manufacturing facilities in jurisdictions where local law does not 
prohibit an EPA enforcement officer(s) from conducting the activities 
specified in this section. EPA will not attempt to make any inspections 
which it has been informed local foreign law prohibits.


Sec. 94.505  Sample selection for testing.

    (a) At the start of each model year, the manufacturer will begin to 
select engines from each engine family for production line testing. 
Each engine will be selected from the end of the production line. 
Testing shall be performed throughout the entire model year to the 
extent possible. Engines selected shall cover the broadest range of 
production possible.
    (1)(i) The required sample size for a Category 1 engine family is 
one percent of projected annual production for all engine families, 
provided that no engine tested fails to meet applicable emission 
standards. The required sample size is zero if a manufacturer's 
projected annual production for all engine families is less than 100.
    (ii) The required sample size for a Category 2 engine family is one 
percent of projected annual production for all engine families, with a 
minimum sample size of one test per model year provided that no engine 
tested fails to meet applicable emission standards.
    (2) Manufacturers may elect to test additional engines. All 
additional engines must be tested in accordance with the applicable 
test procedures of this part.
    (3) The Administrator may reject any engines selected by the 
manufacturer if he or she determines that such engines are not 
representitive of actual production.
    (b) The manufacturer must assemble the test engines using the same 
mass production process that will be used for engines to be introduced 
into commerce.
    (c) No quality control, testing, or assembly procedures will be 
used on any test engine or any portion thereof, including parts and 
subassemblies, that have not been or will not be used during the 
production and assembly of all other engines of that family, except 
with the approval of the Administrator.


Sec. 94.506  Test procedures.

    (a)(1) For engines subject to the provisions of this subpart, the 
prescribed test procedures are those procedures described in subpart B 
of this part, except as provided in this section.
    (2) The Administrator may, on the basis of a written application by 
a manufacturer, prescribe test procedures other than those specified in 
paragraph (a)(1) of this section for any engine he/she determines is 
not susceptible to satisfactory testing using procedures specified in 
paragraph (a)(1) of this section.
    (3) If test procedures other than those in subpart B were used in 
certification of the engine family being tested under this subpart 
(other than alternate test procedures necessary for testing of a 
development engine instead of a low hour engine under Sec. 94.9), the 
manufacturer shall use the test procedures used in certification for 
production line testing.
    (b)(1) The manufacturer may not adjust, repair, prepare, modify, or 
perform any emission test on any test engine unless this adjustment, 
repair, preparation, modification and/or test is documented in the 
manufacturer's engine assembly and inspection procedures and is 
actually performed by the manufacturer or unless this adjustment, 
repair, preparation, modification and/or test is required or permitted 
under this subpart or is approved in advance by the Administrator.
    (2) Any adjustable engine parameter must be set to values or 
positions that are within the range specified in the approved 
application for certification .
    (3) The Administrator may adjust or require to be adjusted any 
engine parameter which the Administrator has determined to be subject 
to adjustment for certification and production line testing, to any 
setting within the specified adjustable range of that parameter, as 
determined by the Administrator, prior to the performance of any test.
    (c) Service Accumulation/Green Engine Factor. The manufacturer 
shall accumulate up to 300 hours of service on the engines to be 
tested. In lieu of conducting such service accumulation, the 
manufacturer may establish a Green Engine Factor for each regulated 
pollutant for each engine family to be used in calculating emissions 
test results. The manufacturer shall obtain the approval of the 
Administrator prior to using a Green Engine Factor.
    (d) The manufacturer may not perform any maintenance on test 
engines after selection for testing.
    (e) If an engine is shipped to a facility other than the production 
facility for production line testing, and an adjustment or repair is 
necessary because of such shipment, the engine manufacturer must 
perform the necessary adjustment or repair only after the initial test 
of the engine, except where the Administrator has determined that the 
test would be impossible to perform or would permanently damage the 
engine.

[[Page 68584]]

    (f) If an engine cannot complete the service accumulation ( if 
applicable) or an emission test, because of a malfunction, the 
manufacturer may request that the Administrator authorize either the 
repair of that engine or its deletion from the test sequence.
    (g) Retesting. If an engine manufacturer determines that any 
production line emission test of an engine is invalid, the engine must 
be retested in accordance with the requirements of this subpart. 
Emission results from all tests must be reported to EPA, including test 
results the manufacturer determines are invalid. The engine 
manufacturer must also include a detailed explanation of the reasons 
for invalidating any test in the quarterly report required in 
Sec. 94.508(e). In the event a retest is performed, a request may be 
made to the Administrator, within ten days of the end of the production 
quarter, for permission to substitute the after-repair test results for 
the original test results. The Administrator will either affirm or deny 
the request by the engine manufacturer within ten working days from 
receipt of the request.


Sec. 94.507  Sequence of testing.

    (a) If one or more engines fail a production line test, then the 
manufacturer must test two additional engines for each engine that 
fails.
    (b) The two additional engines tested under paragraph (a) of this 
section shall be selected from either the next fifteen produced in that 
engine family, or from those engines produced in that engine family 
within 48 hours of the completion of the failed test.


Sec. 94.508  Calculation and reporting of test results.

    (a) Manufacturers shall calculate initial test results using the 
applicable test procedure specified in Sec. 94.506(a). These results 
must also include the Green Engine Factor, if applicable. The 
manufacturer shall round these results, in accordance with ASTM E29-93a 
(incorporated by reference at Sec. 94.5), to the number of decimal 
places contained in the applicable emission standard expressed to one 
additional significant figure.
    (b) Final test results shall be calculated by summing the initial 
test results derived in paragraph (a) of this section for each test 
engine, dividing by the number of tests conducted on the engine, and 
rounding in accordance with ASTM E29-93a (incorporated by reference at 
Sec. 94.5) to the same number of decimal places contained in the 
applicable standard expressed to one additional significant figure.
    (c) Manufacturers shall calculate the final test results for each 
test engine by applying the appropriate deterioration factors, derived 
in the certification process for the engine family, to the final test 
results, and rounding in accordance with ASTM E 29-93a (incorporated by 
reference at Sec. 94.5) to the same number of decimal places contained 
in the applicable standard expressed to one additional significant 
figure.
    (d) If, subsequent to an initial failure of a production line test, 
the average of the test results for the failed engine and the two 
additional engines tested, is greater than any applicable emission 
standard or FEL, the engine family is deemed to be in non-compliance 
with applicable emission standards, and the manufacturer must notify 
the Administrator within 2 working days of such noncompliance.
    (e) Within 30 calendar days of the end of each quarter, each 
manufacturer must submit to the Administrator a report which includes 
the following information:
    (1) The location and description of the manufacturer's emission 
test facilities which were utilized to conduct testing reported 
pursuant to this section;
    (2) Total production and sample size for each engine family;
    (3) The applicable standards and/or FELs against which each engine 
family was tested;
    (4) A description of the test engines;
    (5) For each test conducted:
    (i) A description of the test engine, including:
    (A) Configuration and engine family identification;
    (B) Year, make, and build date;
    (C) Engine identification number;
    (D) Number of hours of service accumulated on engine prior to 
testing; and
    (E) Description of Green Engine Factor; how it is determined and 
how it is applied;
    (ii) Location(s) where service accumulation was conducted and 
description of accumulation procedure and schedule, if applicable;
    (iii) Test number, date, test procedure used, initial test results 
before and after rounding, and final test results for all production 
line emission tests conducted, whether valid or invalid, and the reason 
for invalidation of any test results, if applicable;
    (iv) A complete description of any adjustment, modification, 
repair, preparation, maintenance, and testing which was performed on 
the test engine, has not been reported pursuant to any other paragraph 
of this subpart, and will not be performed on other production engines;
    (v) Any other information the Administrator may request relevant to 
the determination whether the new engines being manufactured by the 
manufacturer do in fact conform with the regulations with respect to 
which the certificate of conformity was issued;
    (6) For each failed engine as defined in Sec. 94.510(a), a 
description of the remedy and test results for all retests as required 
by Sec. 94.512(g);
    (7) The date of the end of the engine manufacturer's model year 
production for each engine family tested; and
    (8) The following signed statement and endorsement by an authorized 
representative of the manufacturer:
    This report is submitted pursuant to Sections 213 and 208 of the 
Clean Air Act. This production line testing program was conducted in 
complete conformance with all applicable regulations under 40 CFR part 
94. No emission-related changes to production processes or quality 
control procedures for the engine family tested have been made during 
this production line testing program that affect engines from the 
production line. All data and information reported herein is, to the 
best of (Company Name) knowledge, true and accurate. I am aware of the 
penalties associated with violations of the Clean Air Act and the 
regulations thereunder. (Authorized Company Representative.)


Sec. 94.509  Maintenance of records; submittal of information.

    (a) The manufacturer for any new engine subject to any of the 
provisions of this subpart must establish, maintain, and retain the 
following adequately organized and indexed records:
    (1) General records. A description of all equipment used to test 
engines in accordance with Sec. 94.503. The equipment requirements in 
subpart B of this part apply to tests performed under this subpart.
    (2) Individual records. These records pertain to each production 
line test conducted pursuant to this subpart and include:
    (i) The date, time, and location of each test;
    (ii) The method by which the Green Engine Factor was calculated or 
the number of hours of service accumulated on the test engine when the 
test began and ended;
    (iii) The names of all supervisory personnel involved in the 
conduct of the production line test;
    (iv) A record and description of any adjustment, repair, 
preparation or modification performed on test engines, giving the date, 
associated time, justification, name(s) of the authorizing

[[Page 68585]]

personnel, and names of all supervisory personnel responsible for the 
conduct of the action;
    (v) If applicable, the date the engine was shipped from the 
assembly plant, associated storage facility or port facility, and the 
date the engine was received at the testing facility;
    (vi) A complete record of all emission tests performed pursuant to 
this subpart (except tests performed directly by EPA), including all 
individual worksheets and/or other documentation relating to each test, 
or exact copies thereof, in accordance with the record requirements 
specified in subpart B of this part;
    (vii) A brief description of any significant events during testing 
not otherwise described under this paragraph (a)(2) of this section, 
commencing with the test engine selection process and including such 
extraordinary events as engine damage during shipment.
    (3) The manufacturer must establish, maintain and retain general 
records, pursuant to paragraph (a)(1) of this section, for each test 
cell that can be used to perform emission testing under this subpart.
    (b) The manufacturer must retain all records required to be 
maintained under this subpart for a period of eight (8) years after 
completion of all testing. Records may be retained as hard copy (i.e., 
on paper) or reduced to microfilm, floppy disk, or some other method of 
data storage, depending upon the manufacturer's record retention 
procedure; provided, that in every case, all the information contained 
in the hard copy is retained.
    (c) The manufacturer must, upon request by the Administrator, 
submit the following information with regard to engine production:
    (1) Projected production for each configuration within each engine 
family for which certification has been requested and/or approved.
    (2) Number of engines, by configuration and assembly plant, 
scheduled for production.
    (d) Nothing in this section limits the Administrator's discretion 
to require a manufacturer to establish, maintain, retain or submit to 
EPA information not specified by this section.
    (e) All reports, submissions, notifications, and requests for 
approval made under this subpart must be addressed to: Group Manager, 
Engine Compliance Programs Group, Engine Programs and Compliance 
Division 6403-J, U.S. Environmental Protection Agency, 401 M Street SW, 
Washington, DC 20460.
    (f) The manufacturer must electronically submit the results of its 
production line testing using an EPA information format.


Sec. 94.510  Compliance with criteria for production line testing.

    (a) A failed engine is one whose final test results pursuant to 
Sec. 94.508(c), for one or more of the applicable pollutants, exceed an 
applicable emission standard or FEL.
    (b) An engine family is deemed to be in noncompliance, for purposes 
of this subpart, if at any time throughout the model year, the average 
of an initial failed engine and the two additional engines tested, is 
greater than any applicable emission standard or FEL.


Sec. 94.511  [Reserved]


Sec. 94.512  Suspension and revocation of certificates of conformity.

    (a) The certificate of conformity is suspended with respect to any 
engine that fails a production line test pursuant to Sec. 94.510(a), 
effective from the time the testing of that engine is completed.
    (b) The Administrator may suspend the certificate of conformity for 
an engine family which is in noncompliance pursuant to Sec. 94.510(b), 
thirty days after the engine family is deemed to be in noncompliance.
    (c) If the results of testing pursuant to the regulations in this 
subpart indicate that engines of a particular family produced at one 
plant of a manufacturer do not conform to the regulations with respect 
to which the certificate of conformity was issued, the Administrator 
may suspend the certificate of conformity with respect to that family 
for engines manufactured by the manufacturer at all other plants.
    (d) The Administrator may suspend a certificate of conformity for 
any engine family in whole or in part if:
    (1) The manufacturer fails to comply with any of the requirements 
of this subpart.
    (2) The manufacturer submits false or incomplete information in any 
report or information provided to the Administrator under this subpart.
    (3) The manufacturer renders inaccurate any test data submitted 
under this subpart.
    (4) An EPA enforcement officer is denied the opportunity to conduct 
activities authorized in this subpart.
    (5) An EPA enforcement officer is unable to conduct activities 
authorized in Sec. 94.504 for any reason.
    (e) The Administrator shall notify the manufacturer in writing of 
any suspension or revocation of a certificate of conformity in whole or 
in part; a suspension or revocation is effective upon receipt of such 
notification or thirty days from the time an engine family is deemed to 
be in noncompliance under Secs. 94.508(d), 94.510(a), or 94.510(b), 
whichever is earlier, except that the certificate is immediately 
suspended with respect to any failed engines as provided for in 
paragraph (a) of this section.
    (f) The Administrator may revoke a certificate of conformity for an 
engine family when the certificate has been suspended pursuant to 
paragraph (b) or (c) of this section if the remedy is one requiring a 
design change or changes to the engine and/or emission control system 
as described in the application for certification of the affected 
engine family.
    (g) Once a certificate has been suspended for a failed engine, as 
provided for in paragraph (a) of this section, the manufacturer must 
take the following actions before the certificate is reinstated for 
that failed engine:
    (1) Remedy the nonconformity;
    (2) Demonstrate that the engine conforms to applicable standards or 
family emission limits by retesting if applicable, the engine in 
accordance with this part; and
    (3) Submit a written report to the Administrator, after successful 
completion of testing on the failed engine, which contains a 
description of the remedy and test results for each engine in addition 
to other information that may be required by this part.
    (h) Once a certificate for a failed engine family has been 
suspended pursuant to paragraph (b) or (c) of this section, the 
manufacturer must take the following actions before the Administrator 
will consider reinstating the certificate:
    (1) Submit a written report to the Administrator which identifies 
the reason for the noncompliance of the engines, describes the remedy, 
including a description of any quality control and/or quality assurance 
measures to be taken by the manufacturer to prevent future occurrences 
of the problem, and states the date on which the remedies will be 
implemented.
    (2) Demonstrate that the engine family for which the certificate of 
conformity has been suspended does in fact comply with the regulations 
of this part by testing engines selected from normal production runs of 
that engine family. Such testing must comply with the provisions of 
this subpart. If the manufacturer elects to continue testing individual 
engines after suspension of a certificate, the certificate is 
reinstated for any engine actually determined to be in conformance with 
the applicable

[[Page 68586]]

standards or family emission limits through testing in accordance with 
the applicable test procedures, provided that the Administrator has not 
revoked the certificate pursuant to paragraph (f) of this section.
    (i) Once the certificate has been revoked for an engine family, if 
the manufacturer desires to continue introduction into commerce of a 
modified version of that family, the following actions must be taken 
before the Administrator may issue a certificate for that modified 
family:
    (1) If the Administrator determines that the change(s) in engine 
design may have an effect on emission performance deterioration, the 
Administrator shall notify the manufacturer, within five working days 
after receipt of the report in paragraph (h)(1) of this section, 
whether subsequent testing under this subpart will be sufficient to 
evaluate the change or changes or whether additional testing will be 
required; and
    (2) After implementing the change or changes intended to remedy the 
nonconformity, the manufacturer must demonstrate that the modified 
engine family does in fact conform with the regulations of this part by 
testing engines selected from normal production runs of that engine 
family. When both of these requirements are met, the Administrator 
shall reissue the certificate or issue a new certificate, as the case 
may be, to include that family. If this subsequent testing reveals 
failing data the revocation remains in effect.
    (j) At any time subsequent to an initial suspension of a 
certificate of conformity for a test engine pursuant to paragraph (a) 
of this section, but not later than 30 days (or such other period as 
may be allowed by the Administrator) after notification of the 
Administrator's decision to suspend or revoke a certificate of 
conformity in whole or in part pursuant to paragraphs (b), (c), or (f) 
of this section, a manufacturer may request a hearing as to whether the 
tests have been properly conducted or any sampling methods have been 
properly applied.
    (k) Any suspension of a certificate of conformity under paragraphs 
(a), (b), (c) and (d) of this section:
    (1) Shall be made only after the manufacturer concerned has been 
offered an opportunity for a hearing conducted in accordance with 
Secs. 94.513, 94.514, and 94.515 and
    (2) Need not apply to engines no longer in the possession of the 
manufacturer.
    (l) After the Administrator suspends or revokes a certificate of 
conformity pursuant to this section or voids a certificate of 
conformity under paragraph Sec. 94.215, and prior to the commencement 
of a hearing under Sec. 94.513, if the manufacturer demonstrates to the 
Administrator's satisfaction that the decision to suspend, revoke, or 
void the certificate was based on erroneous information, the 
Administrator shall reinstate the certificate.
    (m) To permit a manufacturer to avoid storing non-test engines 
while conducting subsequent testing of the noncomplying family, a 
manufacturer may request that the Administrator conditionally reinstate 
the certificate for that family. The Administrator may reinstate the 
certificate subject to the following condition: the manufacturer must 
commit to recall all engines of that family produced from the time the 
certificate is conditionally reinstated if the family fails subsequent 
testing and must commit to remedy any nonconformity at no expense to 
the owner.


Sec. 94.513  Request for public hearing.

    (a) If the manufacturer disagrees with the Administrator's decision 
to suspend or revoke a certificate or disputes the basis for an 
automatic suspension pursuant to Sec. 94.512(a), the manufacturer may 
request a public hearing.
    (b) The manufacturer's request shall be filed with the 
Administrator not later than 30 days after the Administrator's 
notification of his or her decision to suspend or revoke, unless 
otherwise specified by the Administrator. The manufacturer shall 
simultaneously serve two copies of this request upon the Director of 
the Engine Programs and Compliance Division, Office of Mobile Sources 
and file two copies with the Hearing Clerk of the Agency. Failure of 
the manufacturer to request a hearing within the time provided 
constitutes a waiver of the right to a hearing. Subsequent to the 
expiration of the period for requesting a hearing as of right, the 
Administrator may, in his or her discretion and for good cause shown, 
grant the manufacturer a hearing to contest the suspension or 
revocation.
    (c) A manufacturer shall include in the request for a public 
hearing:
    (1) A statement as to which configuration(s) within a family is to 
be the subject of the hearing;
    (2) A concise statement of the issues to be raised by the 
manufacturer at the hearing, except that in the case of the hearing 
requested under Sec. 94.512(j), the hearing is restricted to the 
following issues:
    (i) Whether tests have been properly conducted (specifically, 
whether the tests were conducted in accordance with applicable 
regulations under this part and whether test equipment was properly 
calibrated and functioning);
    (ii) Whether there exists a basis for distinguishing engines 
produced at plants other than the one from which engines were selected 
for testing which would invalidate the Administrator's decision under 
Sec. 94.512(c));
    (3) A statement specifying reasons why the manufacturer believes it 
will prevail on the merits of each of the issues raised; and
    (4) A summary of the evidence which supports the manufacturer's 
position on each of the issues raised.
    (d) A copy of all requests for public hearings will be kept on file 
in the Office of the Hearing Clerk and will be made available to the 
public during Agency business hours.


Sec. 94.514  Administrative procedures for public hearing.

    (a) The Presiding Officer shall be an Administrative Law Judge 
appointed pursuant to 5 U.S.C. 3105 (see also 5 CFR part 930).
    (b) The Judicial Officer shall be an officer or employee of the 
Agency appointed as a Judicial Officer by the Administrator, pursuant 
to this section, who shall meet the qualifications and perform 
functions as follows:
    (1) Qualifications. A Judicial Officer may be a permanent or 
temporary employee of the Agency who performs other duties for the 
Agency. The Judicial Officer shall not be employed by the Office of 
Enforcement or have any connection with the preparation or presentation 
of evidence for a hearing held pursuant to this subpart. The Judicial 
Officer shall be a graduate of an accredited law school and a member in 
good standing of a recognized Bar Association of any state or the 
District of Columbia.
    (2) Functions. The Administrator may consult with the Judicial 
Officer or delegate all or part of the Administrator's authority to act 
in a given case under this section to a Judicial Officer, provided that 
this delegation does not preclude the Judicial Officer from referring 
any motion or case to the Administrator when the Judicial Officer 
determines such referral to be appropriate.
    (c) For the purposes of this section, one or more Judicial Officers 
may be designated by the Administrator. As work requires, a Judicial 
Officer may be designated to act for the purposes of a particular case.
    (d)(1) In the case of a hearing requested under Sec. 94.512(j), 
when it clearly appears from the data and other information contained 
in the request for

[[Page 68587]]

a hearing that no genuine and substantial question of fact or law 
exists with respect to the issues specified in Sec. 94.513(c)(2), the 
Administrator may enter an order denying the request for a hearing and 
reaffirming the original decision to suspend or revoke a certificate of 
conformity.
    (2) In the case of a hearing requested under Sec. 94.513 to 
challenge a suspension of a certificate of conformity for the reason(s) 
specified in Sec. 94.512(d), when it clearly appears from the data and 
other information contained in the request for the hearing that no 
genuine and substantial question of fact or law exists with respect to 
the issue of whether the refusal to comply with this subpart was caused 
by conditions and circumstances outside the control of the 
manufacturer, the Administrator may enter an order denying the request 
for a hearing and suspending the certificate of conformity.
    (3) Any order issued under paragraph (d)(1) or (d)(2) of this 
section has the force and effect of a final decision of the 
Administrator, as issued pursuant to Sec. 94.516.
    (4) If the Administrator determines that a genuine and substantial 
question of fact or law does exist with respect to any of the issues 
referred to in paragraphs (d)(1) and (d)(2) of this section, the 
Administrator shall grant the request for a hearing and publish a 
notice of public hearing in the Federal Register or by such other means 
as the Administrator finds appropriate to provide notice to the public.
    (e) Filing and service. (1) An original and two copies of all 
documents or papers required or permitted to be filed pursuant to this 
section and Sec. 94.513(c) must be filed with the Hearing Clerk of the 
Agency. Filing is considered timely if mailed, as determined by the 
postmark, to the Hearing Clerk within the time allowed by this section 
and Sec. 94.513(b). If filing is to be accomplished by mailing, the 
documents must be sent to the address set forth in the notice of public 
hearing referred to in paragraph (d)(4) of this section.
    (2) To the maximum extent possible, testimony will be presented in 
written form. Copies of written testimony will be served upon all 
parties as soon as practicable prior to the start of the hearing. A 
certificate of service will be provided on or accompany each document 
or paper filed with the Hearing Clerk. Documents to be served upon the 
Director of the Engine Programs and Compliance Division must be sent by 
registered mail to: Director, Engine Programs and Compliance Division 
6403-J, U.S. Environmental Protection Agency, 401 M Street S.W., 
Washington, D.C. 20460. Service by registered mail is complete upon 
mailing.
    (f) Computation of time. (1) In computing any period of time 
prescribed or allowed by this section, except as otherwise provided, 
the day of the act or event from which the designated period of time 
begins to run is not included. Saturdays, Sundays, and federal legal 
holidays are included in computing the period allowed for the filing of 
any document or paper, except that when the period expires on a 
Saturday, Sunday, or federal legal holiday, the period is extended to 
include the next following business day.
    (2) A prescribed period of time within which a party is required or 
permitted to do an act is computed from the time of service, except 
that when service is accomplished by mail, three days will be added to 
the prescribed period.
    (g) Consolidation. The Administrator or the Presiding Officer in 
his or her discretion may consolidate two or more proceedings to be 
held under this section for the purpose of resolving one or more issues 
whenever it appears that consolidation will expedite or simplify 
consideration of these issues. Consolidation does not affect the right 
of any party to raise issues that could have been raised if 
consolidation had not occurred.
    (h) Hearing date. To the extent possible hearings under Sec. 94.513 
will be scheduled to commence within 14 days of receipt of the request 
for a hearing.


Sec. 94.515  Hearing procedures.

    The procedures provided in Sec. 86.1014-84 (i) through (s) of this 
chapter apply for hearings requested pursuant to Sec. 94.513 regarding 
suspension, revocation, or voiding of a certificate of conformity.


Sec. 94.516  Appeal of hearing decision.

    The procedures provided in Sec. 86.1014-84 (t) through (aa) of this 
chapter apply for appeals filed with respect to hearings held pursuant 
to Sec. 94.515.


Sec. 94.517  Treatment of confidential information.

    Except for information required by Sec. 94.508(e)(2) and quarterly 
emission test results described in Sec. 94.508(e), information 
submitted pursuant to this subpart shall be made available to the 
public by EPA notwithstanding any claim of confidentiality made by the 
submitter. The provisions for treatment of confidential information 
described in Sec. 94.4 apply to the information required by 
Sec. 94.508(e)(2) and quarterly emission test results described in 
Sec. 94.508(e).

Subpart G [Reserved]

Subpart H--Recall Regulations


Sec. 94.701  Applicability.

    The requirements of this subpart are applicable to all nonroad 
engines subject to the provisions of this part.


Sec. 94.702  Definitions.

    The definitions in Subpart A of this part apply to this subpart.


Sec. 94.703  Applicability of 40 CFR part 85, subpart S.

    (a) Engines subject to provisions of this part are subject to 
recall regulations specified in part 85, subpart S of this chapter, 
except for the items set forth in this section.
    (b) In Sec. 85.1801, section 216 of the Clean Air Act applies, 
rather than section 214 of the Act.
    (c) In Sec. 85.1802(a), section 213 of the Act applies, rather than 
section 202 of the Act.
    (d) In Sec. 85.1803(a) and Sec. 85.1805(a)(1) ``family emission 
limits as defined in part 94 promulgated under section 213 of the Act'' 
applies, rather than the reference to ``family particulate emission 
limits as defined in part 86 promulgated under section 202 of the 
Act''.
    (e) Throughout the subpart references to ``engines'' apply rather 
than references to ``vehicles or engines''.

Subpart I--Importation of Nonconforming Engines


Sec. 94.801  Applicability.

    (a) Except where otherwise indicated, this subpart is applicable to 
importers of engines (and vessels containing engines) for which the 
Administrator has promulgated regulations under this part prescribing 
emission standards, that are offered for importation or imported into 
the United States, but which engines, at the time of importation or 
being offered for importation, are not covered by certificates of 
conformity issued under section 213 and section 206(a) of the Clean Air 
Act (that is, which are nonconforming engines as defined in Sec. 94.2), 
and this part. Compliance with regulations under this subpart does not 
relieve any person or entity from compliance with other applicable 
provisions of the Clean Air Act.
    (b) Regulations prescribing further procedures for the importation 
of engines into the Customs territory of the United States, as defined 
in 19 U.S.C. 1202, are set forth in U.S. Customs Service regulations 
(19 CFR Chapter I).

[[Page 68588]]

Sec. 94.802  Definitions.

    The definitions of Subpart A of this part apply to this subpart.


Sec. 94.803  Admission.

    A nonconforming engine offered for importation may be admitted into 
the United States pursuant to the provisions of this subpart. In order 
to obtain admission the importer must submit to the Administrator a 
written request for approval containing the following:
    (a) Identification of the importer of the engine and the importer's 
address, telephone number, and taxpayer identification number;
    (b) Identification of the engine's owner, the owner's address, 
telephone number, and taxpayer identification number;
    (c) Identification of the engine including make, model, 
identification number, and original production year;
    (d) Information indicating the provision in this subpart under 
which the engine is to be imported;
    (e) Identification of the place(s) where the engine is to be stored 
until EPA approval of the importer's application to the Administrator 
for final admission;
    (f) Authorization for EPA enforcement officers to conduct 
inspections or testing otherwise permitted by the Act or regulations 
thereunder; and
    (g) Such other information as is deemed necessary by the 
Administrator.


Sec. 94.804  Exemptions.

    (a) Unless otherwise specified, any person may apply for the 
exemptions allowed by this section.
    (b) Notwithstanding other requirements of this subpart, a 
nonconforming engine that qualifies for a temporary exemption under 
this paragraph may be conditionally admitted into the United States if 
prior written approval for the conditional admission is obtained from 
the Administrator. Conditional admission is to be under bond. The 
Administrator may request that the U.S. Customs Service require a 
specific bond amount to ensure compliance with the requirements of the 
Act and this subpart. A written request for a temporary exemption from 
the Administrator shall contain the identification required in 
Sec. 94.803 and information that demonstrates that the engines qualify 
for an exemption. Noncompliance with provisions of this section may 
result in the forfeiture of the total amount of the bond and/or 
exportation of the engine. The following temporary exemptions are 
permitted by this paragraph (b):
    (1) Exemption for repairs or alterations. Upon written approval by 
EPA, a person may conditionally import under bond a nonconforming 
engine solely for purpose of repair(s) or alteration(s). The engine may 
not be operated in the United States other than for the sole purpose of 
repair or alteration or shipment to the point of repair or alteration 
and to the port of export. It may not be sold or leased in the United 
States and is to be exported upon completion of the repair(s) or 
alteration(s).
    (2) Testing exemption. A nonconforming test engine may be 
conditionally imported by a person subject to the requirements of 
Sec. 94.905. A test engine may be operated in the United States 
provided that the operation is an integral part of the test. This 
exemption is limited to a period not exceeding one year from the date 
of importation unless a request is made by the appropriate importer, 
and subsequently granted by EPA, concerning the engine in accordance 
with Sec. 94.905 for a subsequent one-year period.
    (3) Display exemptions. (i) A nonconforming engine intended solely 
for display may be conditionally imported under bond subject to the 
requirements of Sec. 94.906(b).
    (ii) A display engine may be imported by any person for purposes 
related to a business or the public interest. Such purposes do not 
include collections normally inaccessible or unavailable to the public 
on a daily basis, display of an engine at a dealership, private use, or 
other purpose that the Administrator determines is not appropriate for 
display exemptions. A display engine may not be sold or leased in the 
United States and may not be operated in the United States except for 
the operation incident and necessary to the display purpose.
    (iii) A display exemption is granted for 12 months or for the 
duration of the display purpose, whichever is shorter. Extensions of up 
to 12 months each are available upon approval by the Administrator. In 
no circumstances, however, may the total period of exemption exceed 36 
months.
    (c) National security exemption. Notwithstanding any other 
requirement of this subpart, an engine may be permanently imported into 
the United States under the national security exemption found at 
Sec. 94.908, if prior written approval for such permanent importation 
is obtained from the Administrator. A request for approval is to 
contain the identification information required in Sec. 94.803 and 
information that demonstrates that the importer is entitled to the 
exemption.
    (d) An application for exemption provided for in paragraphs (b) and 
(c) of this section shall be mailed to: Group Manager, Engine 
Compliance Programs Group, Engine Programs and Compliance Division, 
U.S. Environmental Protection Agency, 6403-J, 401 M St., SW., 
Washington, DC 20460, Attention: Imports.


Sec. 94.805  Prohibited acts; penalties.

    (a) The importation of an engine (including an engine incorporated 
in an imported marine vessel) which is not covered by a certificate of 
conformity other than in accordance with this subpart and the entry 
regulations of the U.S. Customs Service is prohibited. Failure to 
comply with this section is a violation of section 213(d) and section 
203 of the Act.
    (b) Unless otherwise permitted by this subpart, during a period of 
conditional admission, the importer of an engine may not:
    (1) Operate the engine in the United States; or
    (2) Sell or lease or offer the engine for sale or lease.
    (c) An engine conditionally admitted pursuant to Sec. 94.804 and 
not otherwise permanently exempted or excluded by the end of the period 
of conditional admission, or within such additional time as the 
Administrator and the U.S. Customs Service may allow, is deemed to be 
unlawfully imported into the United States in violation of section 
213(d) and section 203 of the Act, unless the engine has been delivered 
to the U.S. Customs Service for export or other disposition under 
applicable Customs laws and regulations by the end of the period of 
conditional admission. An engine not so delivered is subject to seizure 
by the U.S. Customs Service.
    (d) An importer who violates section 213(d) and section 203 of the 
Act is subject to a civil penalty under section 205 of the Act and 
Sec. 94.1106. In addition to the penalty provided in the Act and 
Sec. 94.1106, where applicable, a person or entity who imports an 
engine under the exemption provisions of Sec. 94.804 and, who fails to 
deliver the engine to the U.S. Customs Service by the end of the period 
of conditional admission is liable for liquidated damages in the amount 
of the bond required by applicable Customs laws and regulations.

Subpart J--Exclusion and Exemption Provisions


Sec. 94.901  Purpose and applicability.

    The provisions of this subpart of this part identify excluded 
engines (i.e.,

[[Page 68589]]

engines not covered by the Act) and allow for the exemption of engines 
from certain provisions of this part. The applicability of the 
exclusions is described in Sec. 94.903, and the applicability of the 
exemption allowances is described in Secs. 94.904 through 94.909.


Sec. 94.902  Definitions.

    The definitions of Subpart A of this part apply to this subpart.


Sec. 94.903  Exclusions.

    (a) Upon written request with supporting documentation, EPA will 
make written determinations as to whether certain engines are excluded 
from applicability of this part. Any engines that are determined to be 
excluded are not subject to the regulations under this part. Requests 
to determine whether certain engines are excluded should be sent to: 
Group Manager, Engine Compliance Programs Group, Engine Programs and 
Compliance Division, U.S. Environmental Protection Agency, 6403-J, 401 
M St., SW., Washington, DC 20460.
    (b) EPA will maintain a list of models of engines that have been 
determined to be excluded from coverage under this part. This list will 
be available to the public and may be obtained by writing to the 
address in paragraph (a) of this section.
    (c) In addition to the engines excluded in paragraph (a) of this 
section, certain engines are not subject to the requirements and 
prohibitions of this part because they are excluded from the 
definitions of ``marine engine'' in Sec. 94.2.


Sec. 94.904  Exemptions.

    (a) Except as specified otherwise in this subpart, the provisions 
of Secs. 94.904 through 94.911 exempt certain new engines from the 
standards, other requirements, and prohibitions of this part, except 
for the requirements of this subpart and the requirements of 
Sec. 94.1104.
    (b)(1) Any person may request a testing exemption subject to the 
provisions of Sec. 94.905.
    (2) Any engine manufacturer may request a national security 
exemption subject to the provisions of Sec. 94.908.
    (3) Engines manufactured for export purposes are exempt without 
application, subject to the provisions of Sec. 94.909, except as 
otherwise specified by Sec. 94.909.
    (4) Manufacturer-owned engines are exempt without application, 
subject to the provisions of Sec. 94.906 (a).
    (5) Display engines are exempt without application, subject to the 
provisions of Sec. 94.906 (b).
    (6) Engines used solely for the purpose of competition are exempt, 
subject to the provisions of Sec. 94.906 (c).
    (7) Auxiliary engines used on foreign trade vessels are exempt, 
subject to the provisions of Sec. 94.906 (d).
    (8) Engines that are identical to engines that are covered by a 
certificate of conformity issued under 40 CFR part 89 or 40 CFR part 92 
are exempt, subject to the provisions of Sec. 94.907.


Sec. 94.905  Testing exemption.

    (a)(1) The Administrator may exempt from the standards and/or other 
requirements and prohibitions of this part new engines that are being 
used solely for the purpose of conducting a test program. Any person 
requesting an exemption for the purpose of conducting a test program 
must demonstrate the following:
    (i) That the proposed test program has a purpose which constitutes 
an appropriate basis for an exemption in accordance this section;
    (ii) That the proposed test program necessitates the granting of an 
exemption;
    (iii) That the proposed test program exhibits reasonableness in 
scope; and
    (iv) That the proposed test program exhibits a degree of oversight 
and control consonant with the purpose of the test program and EPA's 
monitoring requirements.
    (2) Paragraphs (b), (c), (d), and (e) of this section describe what 
constitutes a sufficient demonstration for each of the four elements 
identified in paragraphs (a)(1)(i) through (iv) of this section.
    (b) With respect to the purpose of the proposed test program, an 
appropriate purpose would be research, investigations, studies, 
demonstrations, technology development, or training, but not national 
security. A concise statement of purpose is a required item of 
information.
    (c) With respect to the necessity that an exemption be granted, 
necessity arises from an inability to achieve the stated purpose in a 
practicable manner without performing or causing to be performed one or 
more of the prohibited acts under Sec. 94.1103. In appropriate 
circumstances, time constraints may be a sufficient basis for 
necessity, but the cost of certification alone, in the absence of 
extraordinary circumstances, is not a basis for necessity.
    (d) With respect to reasonableness, a test program must exhibit a 
duration of reasonable length and affect a reasonable number of 
engines. In this regard, required items of information include:
    (1) An estimate of the program's duration; and
    (2) The maximum number of engines involved.
    (e) With respect to control, the test program must incorporate 
procedures consistent with the purpose of the test and be capable of 
affording EPA monitoring capability. As a minimum, required items of 
information include:
    (1) The technical nature of the testing;
    (2) The location(s) of the testing;
    (3) The time, work, or mileage duration of the testing;
    (4) The ownership arrangement with regard to the engines involved 
in the testing;
    (5) The intended final disposition of the engines;
    (6) The manner in which the engine identification numbers will be 
identified, recorded, and made available; and (7) The means or 
procedure whereby test results will be recorded.
    (f) A manufacturer of new engines may request a testing exemption 
to cover engines intended for use in test programs planned or 
anticipated over the course of a subsequent two-year period. Unless 
otherwise required by the Director, Engine Programs and Compliance 
Division, a manufacturer requesting such an exemption need only furnish 
the information required by paragraphs (a)(1) and (d)(2) of this 
section along with a description of the recordkeeping and control 
procedures that will be employed to assure that the engines are used 
for purposes consistent with paragraph (a) of this section.
    (g) For engines being used for the purpose of developing a 
fundamentally new emission control technology related either to an 
alternative fuel or an aftertreatment device, the Administrator may 
exempt the engine from some or all of the applicable standards of this 
part for the full useful life of the engine, subject to the provisions 
of paragraphs (a) through (f) of this section.


Sec. 94.906  Manufacturer-owned exemption, display exemption, 
competition exemption, and foreign trade vessel exemption.

    (a) Any manufacturer-owned-owned engine, as defined by Sec. 94.2, 
is exempt from Sec. 94.1103, without application, if the manufacturer 
complies with the following terms and conditions:
    (1) The manufacturer must establish, maintain, and retain the 
following adequately organized and indexed information on each exempted 
engine:
    (i) Engine identification number;
    (ii) Use of the engine on exempt status; and

[[Page 68590]]

    (iii) Final disposition of any engine removed from exempt status.
    (2) The manufacturer must provide right of entry and access to 
these records to EPA Enforcement Officers as outlined in Sec. 94.208.
    (3) The manufacturer must permanently affix a label to each engine 
on exempt status, unless the requirement is waived or an alternate 
procedure is approved by the Director, Engine Programs and Compliance 
Division. This label should:
    (i) Be affixed in a readily visible portion of the engine;
    (ii) Be attached in such a manner that cannot be removed without 
destruction or defacement;
    (iii) State in the English language and in block letters and 
numerals of a color that contrasts with the background of the label, 
the following information:
    (A) The label heading ``Emission Control Information'';
    (B) Full corporate name and trademark of manufacturer;
    (C) Engine displacement, engine family identification, and model 
year of engine; or person of office to be contacted for further 
information about the engine;
    (D) The statement ``This engine is exempt from the prohibitions of 
40 CFR 94.1103.''
    (4) No provision of paragraph (a)(3) of this section prevents a 
manufacturer from including any other information it desires on the 
label.
    (5) The engine is not used in revenue-generating service, or sold.
    (b) Display exemption. An uncertified engine that is to be used 
solely for display purposes, and that will only be operated incident 
and necessary to the display purpose, and will not be sold unless an 
applicable certificate of conformity has been obtained for the engine, 
is exempt without request from the standards of this part.
    (c) Competition exemption. The Administrator may exempt, upon 
request, engines that are used solely for the purpose of competition.
    (d) Foreign trade exemption. (1) The Administrator may exempt, upon 
request of the vessel owner, auxiliary engines used on foreign trade 
vessels.
    (2) Vessel owners requesting an exemption under this paragraph (d) 
must demonstrate to the Administrator that the vessel will spend less 
than 25 percent of its operating time within 320 nautical kilometers of 
U.S. territory.
    ( 3) For the purpose of this paragraph (d), the term ``vessel 
owner'' includes any entities that have contracted to purchase a new 
marine vessel.


Sec. 94.907  Non-marine-specific engine exemption.

    (a)(1) For manufacturers selling non-marine-specific engines to be 
used as propulsion engines in marine vessels, such engines are exempt, 
provided:
    (i) The engines are covered by a certificate of conformity issued 
under 40 CFR part 89 or 40 CFR part 92;
    (ii) The certified emission levels (after application of 
deterioration factors) are below the numerical levels of the otherwise 
applicable standards of this part for all pollutants;
    (iii) More engines are reasonably projected to be sold and used 
under the certificate for non-marine use than for use in marine 
vessels;
    (iv) The engine is sold to an engine dresser for marization prior 
to being placed in a vessel;
    (v) The Administrator has approved the exemption as specified in 
paragraph (d) of this section.
    (2) For the purposes of this section ``covered by a certificate of 
conformity issued under 40 CFR part 89 or 40 CFR part 92'' means that:
    (i) The engine complies with all applicable requirements of either 
40 CFR part 89 or 40 CFR part 92;
    (ii) The fuel system of the engine has not been modified after the 
original manufacture of the engine is complete;
    (iii) The engine cooling system of an installed engine meets the 
original manufacturer's specifications for certified engines;
    (iv) No other changes are made to the engine that could reasonably 
be expected to adversely effect the emissions performance of the 
engine; and
    (v) The original emissions label remains clearly visible on the 
engine after installation in the vessel.
    (b) For manufacturers selling non-marine-specific engines to be 
used as auxiliary engines in marine vessels, such engines are exempt 
from the certification requirements of subpart C of this part and the 
production line testing requirements of subpart F of this part, 
provided that they comply with all of the requirements of paragraph (a) 
of this section other than the requirement of paragraph (a)(1)(iv) of 
this section. These engines are not exempt from the standards of 
subpart A of this part.
    (c) Manufacturers of engines exempted under this section shall:
    (1) Report annually to EPA the number of engines exempted under 
paragraph (a) of this section;
    (2) Upon the Administrator's request, provide test data showing the 
emissions of the engine when it is operated over a typical marine 
engine cycle; and
    (3) Notify purchasers that the engine a dressed non-marine specific 
engine (e.g., is a dressed locomotive engine) that is exempt from the 
requirements of this part 94.
    (d)(1) Manufacturers seeking an exemption under this section shall 
notify the Administrator of such intent in their applications for 
certification under 40 CFR part 89 or 40 CFR part 92.
    (2) The Administrator shall deny a non-marine-specific exemption in 
any case where he/she has evidence that approving such an exemption 
would be inappropriate because of adverse environmental or economic 
impacts.


Sec. 94.908  National security exemption.

    (a)(1) Any marine engine, otherwise subject to this part, which is 
used in a vessel that exhibits substantial features ordinarily 
associated with military combat such as armor and/or permanently 
affixed weaponry and which will be owned and/or used by an agency of 
the federal government with responsibility for national defense, will 
be exempt from the regulations in this subpart for purposes of national 
security. No request for exemption is necessary.
    (2) Manufacturers may request a national security exemption for any 
marine engine, otherwise subject to this part, which does not meet the 
conditions described in paragraph (a)(1) of this section. A 
manufacturer requesting a national security exemption must state the 
purpose for which the exemption is required and the request must be 
endorsed by an agency of the federal government charged with 
responsibility for national defense.
    (b) EPA will maintain a list of models of marine engines (and the 
vessels which use them) that have been granted a national security 
exemption under paragraph (a)(2) of this section. This list will be 
available to the public and may be obtained by writing to the following 
address: Group Manager, Engine Compliance Programs Group, Engine 
Programs and Compliance Division, (6403-J) Environmental Protection 
Agency, 401 M Street SW, Washington, DC 20460.


Sec. 94.909  Export exemptions.

    (a) A new engine intended solely for export, and so labeled or 
tagged on the outside of any container and on the engine, is subject to 
the provisions of Sec. 94.1103, unless the importing country has new 
marine engine emission standards which differ from EPA standards.
    (b) For the purpose of paragraph (a) of this section, a country 
having no standards whatsoever is deemed to be a

[[Page 68591]]

country having emission standards which differ from EPA standards.
    (c) It is a condition of any exemption for the purpose of export 
under paragraph (a) of this section, that such exemption is void ab 
initio with respect to a new engine intended solely for export, where 
such engine is sold, or offered for sale, to an ultimate purchaser or 
otherwise distributed or introduced into commerce in the United States 
for purposes other than export.


Sec. 94.910  Granting of exemptions.

    (a) If upon completion of the review of an exemption request made 
pursuant to Sec. 94.905 or Sec. 94.908, EPA determines it is 
appropriate to grant such an exemption, a memorandum of exemption is to 
be prepared and submitted to the person requesting the exemption. The 
memorandum is to set forth the basis for the exemption, its scope, and 
such terms and conditions as are deemed necessary. Such terms and 
conditions generally include, but are not limited to, agreements by the 
applicant to conduct the exempt activity in the manner described to 
EPA, create and maintain adequate records accessible to EPA at 
reasonable times, employ labels for the exempt engines setting forth 
the nature of the exemption, take appropriate measures to assure that 
the terms of the exemption are met, and advise EPA of the termination 
of the activity and the ultimate disposition of the engines.
    (b) Any exemption granted pursuant to paragraph (a) of this section 
is deemed to cover any subject engine only to the extent that the 
specified terms and conditions are complied with. A breach of any term 
or condition causes the exemption to be void ab initio with respect to 
any engine. Consequently, the causing or the performing of an act 
prohibited under Sec. 94.1103(a)(1) or (a)(3), other than in strict 
conformity with all terms and conditions of this exemption, renders the 
person to whom the exemption is granted, and any other person to whom 
the provisions of Sec. 94.1103(a) are applicable, liable to suit under 
sections 204 and 205 of the Act.


Sec. 94.911  Submission of exemption requests.

    Requests for exemption or further information concerning exemptions 
and/or the exemption request review procedure should be addressed to: 
Group Manager, Engine Compliance Programs Group, Engine Programs and 
Compliance Division, U.S. Environmental Protection Agency, 6403-J, 401 
M St., S.W., Washington, D.C. 20460.

Subpart L--General Enforcement Provisions and Prohibited Acts


Sec. 94.1101  Applicability.

    The requirements of this subpart are applicable to all persons with 
respect to engines subject to the provisions of subpart A of this part.


Sec. 94.1102  Definitions.

    The definitions of subpart A of this part apply to this subpart.


Sec. 94.1103  Prohibited acts.

    (a) The following acts and the causing thereof are prohibited:
    (1)(i)(A) In the case of a manufacturer of new engines, the sale, 
the offering for sale, the introduction into commerce, the delivery for 
introduction into commerce, or the distribution in commerce of any new 
engine manufactured after December 31, 2003 (the effective date of 
applicable emission standards under this part), unless such engine is 
covered by a certificate of conformity issued (and in effect) under 
regulations found in this part.
    (B) The manufacture of an engine for the purpose of an act listed 
in paragraph (a)(1)(i)(A) of this section unless such engine is covered 
by a certificate of conformity issued (and in effect) under regulations 
found in this part prior to its introduction into commerce.
    (ii) In the case of any person, except as provided in Subpart I of 
this part, the importation into the United States of any engine 
manufactured on or after the implementation date of the applicable 
emission limits for the relevant engine, unless such engine is covered 
by a certificate of conformity issued (and in effect) under regulations 
found in this part. (2)(i) For a person to fail or refuse to permit 
access to or copying of records or to fail to make reports or provide 
information required under this part.
    (ii) For a person to fail or refuse to permit entry, testing, or 
inspection authorized under this part.
    (iii) For a person to fail or refuse to perform tests, or to have 
tests performed as required by this part.
    (iv) For a person to fail to establish or maintain records as 
required under this part. (3)(i) For a person to remove or render 
inoperative a device or element of design installed on or in a engine 
in compliance with regulations under this part, or to set any 
adjustable parameter to a setting outside of the range specified by the 
manufacturer, as approved in the application for certification by the 
Administrator.
    (ii) For a person to manufacture, sell or offer to sell, or 
install, a part or component intended for use with, or as part of, a 
engine, where a principal effect of the part or component is to bypass, 
defeat, or render inoperative a device or element of design installed 
on or in a engine in compliance with regulations issued under this 
part, and where the person knows or should know that the part or 
component is being offered for sale or installed for this use or put to 
such use.
    (iii) For a person to deviate from the provisions of Sec. 94.11 
when rebuilding an engine (or rebuilding a portion of an engine or 
engine system).
    (4) For a manufacturer of a new engine subject to standards 
prescribed under this part:
    (i) To sell, offer for sale, or introduce or deliver for 
introduction into commerce, a new engine unless the manufacturer has 
complied with the requirements of Sec. 94.1107.
    (ii) To sell, offer for sale, or introduce or deliver for 
introduction into commerce, a new engine unless all required labels and 
tags are affixed to the engine in accordance with Sec. 94.212.
    (iii) To fail or refuse to comply with the requirements of 
Sec. 94.1108.
    (iv) Except as provided in Sec. 94.211, to provide directly or 
indirectly in any communication to the ultimate purchaser or a 
subsequent purchaser that the coverage of a warranty under the Act is 
conditioned upon use of a part, component, or system manufactured by 
the manufacturer or a person acting for the manufacturer or under its 
control, or conditioned upon service performed by such persons.
    (v) To fail or refuse to comply with the terms and conditions of 
the warranty under Sec. 94.1107.
    (5) For a manufacturer of marine vessels to distribute in commerce, 
sell, offer for sale, or deliver for introduction into commerce a new 
vessel containing an engine not covered by a certificate of conformity.
    (6) For any person to install a recreational marine engine in a 
vessel that is manufactured on or after the implementation date of the 
applicable standards and that is not a recreational vessel.
    (b) For the purposes of enforcement of this part, the following 
apply:
    (1) Nothing in paragraph (a)(3) of this section is to be construed 
to require the use of any manufacturer's parts in maintaining or 
repairing a engine.
    (2) Actions for the purpose of repair or replacement of a device or 
element of design or any other item are not considered prohibited acts 
under paragraph (a)(3)(i) of this section if the action is a necessary 
and temporary procedure, the device or element is replaced upon 
completion of the

[[Page 68592]]

procedure, and the action results in the proper functioning of the 
device or element of design.
    (3) Where the Administrator determines that no engine produced by 
any manufacturer and is certified to the requirements of this part is 
available with the appropriate physical or performance characteristics 
to repower a vessel, the Administrator may allow a replacement engine 
to be produced without complying with all of the otherwise applicable 
requirements of this part. Such engine shall not be subject to the 
prohibitions of paragraph (a)(1) of this section, provided that:
    (i) The engine requiring replacement is not certified or is 
certified to emission standards that are less stringent than those in 
effect when the replacement engine is built; and
    (ii) The engine manufacturer or its agent takes ownership and 
possession of the engine being replaced in partial exchange for the 
replacement engine; and
    (iii) The replacement engine is clearly labeled with the following 
language, or similar alternate language approved by the Administrator:

    THIS ENGINE DOES NOT COMPLY WITH FEDERAL MARINE ENGINE EMISSION 
REQUIREMENTS. SALE OR INSTALLATION OF THIS ENGINE FOR ANY PURPOSE 
OTHER THAN AS A REPLACEMENT ENGINE FOR AN ENGINE MANUFACTURED PRIOR 
TO JANUARY 1 [INSERT APPROPRIATE YEAR] IS A VIOLATION OF FEDERAL LAW 
SUBJECT TO CIVIL PENALTY; and

    (iv) In cases where an engine is to be imported for replacement 
purposes under the provisions of this paragraph (b)(3), the term 
``engine manufacturer'' shall not apply to an individual or other 
entity that does not possess a current Certificate of Conformity issued 
by EPA under this part; and
    (v) Where the replacement engine is intended to replace an engine 
that is certified to emission standards that are less stringent than 
those in effect when the replacement engine is built, the replacement 
engine shall be identical in all material respects to a certified 
configuration of the same or later model year as the engine being 
replaced; and
    (vi) Engines sold pursuant to the provisions of this paragraph will 
neither generate nor use emission credits and will not be part of any 
accounting under the averaging, banking and trading program.


Sec. 94.1104  General enforcement provisions.

    (a) Information collection provisions. (1)(i) Every manufacturer of 
new engines and other persons subject to the requirements of this part 
must establish and maintain records, perform tests, make reports and 
provide information the Administrator may reasonably require to 
determine whether the manufacturer or other person has acted or is 
acting in compliance with this part or to otherwise carry out the 
provisions of this part, and must, upon request of an officer or 
employee duly designated by the Administrator, permit the officer or 
employee at reasonable times to have access to and copy such records. 
The manufacturer shall comply in all respects with the requirements of 
subpart E of this part.
    (ii) Every manufacturer or owner of engines exempted from the 
standards or requirements of this part must establish and maintain 
records, perform tests, make reports and provide information the 
Administrator may reasonably require regarding the emissions of such 
engines.
    (2) For purposes of enforcement of this part, an officer or 
employee duly designated by the Administrator, upon presenting 
appropriate credentials, is authorized:
    (i) To enter, at reasonable times, any establishment of the 
manufacturer, or of any person whom the manufacturer engaged to perform 
any activity required under paragraph (a)(1) of this section, for the 
purposes of inspecting or observing any activity conducted pursuant to 
paragraph (a)(1) of this section, and
    (ii) To inspect records, files, papers, processes, controls, and 
facilities used in performing an activity required by paragraph (a)(1) 
of this section, by the manufacturer or by a person whom the 
manufacturer engaged to perform the activity.
    (b) Exemption provision. The Administrator may exempt a new engine 
from Sec. 94.1103 upon such terms and conditions as the Administrator 
may find necessary for the purpose of export, research, investigations, 
studies, demonstrations, or training, or for reasons of national 
security, or for other purposes allowed by subpart J of this part.
    (c) Importation provision. (1) A new engine, offered for 
importation or imported by a person in violation of Sec. 94.1103 is to 
be refused admission into the United States, but the Secretary of the 
Treasury and the Administrator may, by joint regulation, provide for 
deferring a final determination as to admission and authorizing the 
delivery of such a engine offered for import to the owner or consignee 
thereof upon such terms and conditions (including the furnishing of a 
bond) as may appear to them appropriate to insure that the engine will 
be brought into conformity with the standards, requirements, and 
limitations applicable to it under this part.
    (2) If a engine is finally refused admission under this paragraph 
(c), the Secretary of the Treasury shall cause disposition thereof in 
accordance with the customs laws unless it is exported, under 
regulations prescribed by the Secretary, within 90 days of the date of 
notice of the refusal or additional time as may be permitted pursuant 
to the regulations.
    (3) Disposition in accordance with the customs laws may not be made 
in such manner as may result, directly or indirectly, in the sale, to 
the ultimate consumer, of a new engine that fails to comply with 
applicable standards of the Administrator under this part.
    (d) Export provision. A new engine intended solely for export, and 
so labeled or tagged on the outside of the container if used and on the 
engine, shall be subject to the provisions of Sec. 94.1103, except that 
if the country that is to receive the engine has emission standards 
that differ from the standards prescribed under subpart A of this part, 
then the engine must comply with the standards of the country that is 
to receive the engine.
    (e) Recordkeeping. Except where specified otherwise, records 
required by this part must be kept for eight (8) years.


Sec. 94.1105  Injunction proceedings for prohibited acts.

    (a) The district courts of the United States have jurisdiction to 
restrain violations of Sec. 94.1103(a).
    (b) Actions to restrain violations of Sec. 94.1103(a) must be 
brought by and in the name of the United States. In an action, 
subpoenas for witnesses who are required to attend a district court in 
any district may run into any other district.


Sec. 94.1106  Penalties.

    (a) Violations. A violation of the requirements of this subpart is 
a violation of the applicable provisions of the Act, including sections 
213(d) and 203, and is subject to the penalty provisions thereunder.
    (1) A person who violates Sec. 94.1103(a)(1), (a)(4), (a)(5), or 
(a)(6), or a manufacturer or dealer who violates Sec. 94.1103(a)(3) (i) 
or (iii) is subject to a civil penalty of not more than $25,000 for 
each violation unless modified by the Debt Collection Improvement Act 
and/or regulations issued there under.
    (2) A person other than a manufacturer or dealer who violates 
Sec. 94.1103(a)(3) (i) or (iii) or any person who violates 
Sec. 94.1103(a)(3)(ii) is subject to a civil penalty of not more

[[Page 68593]]

than $2,500 for each violation unless modified by the Debt Collection 
Improvement Act and/or regulations issued thereunder.
    (3) A violation with respect to Sec. 94.1103(a)(1), (a)(3)(i), 
(a)(4), or (a)(5) constitutes a separate offense with respect to each 
engine.
    (4) A violation with respect to Sec. 94.1103(a)(3)(ii) constitutes 
a separate offense with respect to each part or component. Each day of 
a violation with respect to Sec. 94.1103(a)(5) constitutes a separate 
offense.
    (5) A person who violates Sec. 94.1103(a)(2) or (a)(5) is subject 
to a civil penalty of not more than $25,000 per day of violation unless 
modified by the Debt Collection Improvement Act and/or regulations 
issued there under.
    (b) Civil actions. The Administrator may commence a civil action to 
assess and recover any civil penalty under paragraph (a) of this 
section.
    (1) An action under this paragraph (b) may be brought in the 
district court of the United States for the district in which the 
defendant resides or has the Administrator's principal place of 
business, and the court has jurisdiction to assess a civil penalty.
    (2) In determining the amount of a civil penalty to be assessed 
under this paragraph (b), the court is to take into account the gravity 
of the violation, the economic benefit or savings (if any) resulting 
from the violation, the size of the violator's business, the violator's 
history of compliance with Title II of the Act, action taken to remedy 
the violation, the effect of the penalty on the violator's ability to 
continue in business, and such other matters as justice may require.
    (3) In any such action, subpoenas for witnesses who are required to 
attend a district court in any district may run into any other 
district.
    (c) Administrative assessment of certain penalties. (1) 
Administrative penalty authority. In lieu of commencing a civil action 
under paragraph (b) of this section, the Administrator may assess any 
civil penalty prescribed in paragraph (a) of this section, except that 
the maximum amount of penalty sought against each violator in a penalty 
assessment proceeding shall not exceed $200,000, unless the 
Administrator and the Attorney General jointly determine that a matter 
involving a larger penalty amount is appropriate for administrative 
penalty assessment. Any such determination by the Administrator and the 
Attorney General is not subject to judicial review. Assessment of a 
civil penalty shall be by an order made on the record after opportunity 
for a hearing held in accordance with the procedures found at part 22 
of this chapter. The Administrator may compromise, or remit, with or 
without conditions, any administrative penalty which may be imposed 
under this section.
    (2) Determining amount. In determining the amount of any civil 
penalty assessed under this paragraph (c), the Administrator shall take 
into account the gravity of the violation, the economic benefit or 
savings (if any) resulting from the violation, the size of the 
violator's business, the violator's history of compliance with Title II 
of the Act, action taken to remedy the violation, the effect of the 
penalty on the violator's ability to continue in business, and such 
other matters as justice may require.
    (3) Effect of administrator's action. (i) Action by the 
Administrator under this paragraph (c) does not affect or limit the 
Administrator's authority to enforce any provisions of the Act; except 
that any violation with respect to which the Administrator has 
commenced and is diligently prosecuting an action under this paragraph 
(c), or for which the Administrator has issued a final order not 
subject to further judicial review and for which the violator has paid 
a penalty assessment under this paragraph shall not be the subject of a 
civil penalty action under paragraph (b) of this section.
    (ii) No action by the Administrator under this paragraph (c) shall 
affect a person's obligation to comply with a section of this part.
    (4) Finality of order. An order issued under this paragraph (c) is 
to become final 30 days after its issuance unless a petition for 
judicial review is filed under paragraph (c)(5) of this section.
    (5) Judicial review. A person against whom a civil penalty is 
assessed in accordance with this paragraph (c) may seek review of the 
assessment in the United States District Court for the District of 
Columbia or for the district in which the violation is alleged to have 
occurred, in which such person resides, or where the person's principal 
place of business is located, within the 30-day period beginning on the 
date a civil penalty order is issued. The person shall simultaneously 
send a copy of the filing by certified mail to the Administrator and 
the Attorney General. The Administrator shall file in the court within 
30 days a certified copy, or certified index, as appropriate, of the 
record on which the order was issued. The court is not to set aside or 
remand any order issued in accordance with the requirements of this 
paragraph (c) unless substantial evidence does not exist in the record, 
taken as a whole, to support the finding of a violation or unless the 
Administrator's assessment of the penalty constitutes an abuse of 
discretion, and the court is not to impose additional civil penalties 
unless the Administrator's assessment of the penalty constitutes an 
abuse of discretion. In any proceedings, the United States may seek to 
recover civil penalties assessed under this section.
    (6) Collection. (i) If any person fails to pay an assessment of a 
civil penalty imposed by the Administrator as provided in this part 
after the order making the assessment has become final or after a court 
in an action brought under paragraph (c)(5) of this section has entered 
a final judgment in favor of the Administrator, the Administrator shall 
request that the Attorney General bring a civil action in an 
appropriate district court to recover the amount assessed (plus 
interest at rates established pursuant to section 6621(a)(2) of the 
Internal Revenue Code of 1986 (26 U.S.C. 6621(a)(2)) from the date of 
the final order or the date of final judgment, as the case may be). In 
such an action, the validity, amount, and appropriateness of the 
penalty is not subject to review.
    (ii) A person who fails to pay on a timely basis the amount of an 
assessment of a civil penalty as described in paragraph (c)(6)(i) of 
this section shall be required to pay, in addition to that amount and 
interest, the United States' enforcement expenses, including attorney's 
fees and costs for collection proceedings, and a quarterly nonpayment 
penalty for each quarter during which the failure to pay persists. The 
nonpayment penalty is an amount equal to ten percent of the aggregate 
amount of that person's penalties and nonpayment penalties which are 
unpaid as of the beginning of such quarter.


Sec. 94.1107  Warranty provisions.

    (a) The manufacturer of each engine must warrant to the ultimate 
purchaser and each subsequent purchaser or owner that the engine is 
designed, built, and equipped so as to conform at the time of sale with 
applicable regulations under section 213 of the Act, and is free from 
defects in materials and workmanship which cause such engine to fail to 
conform with applicable regulations for its warranty period (as 
determined under Sec. 94.10).
    (b) For the purposes of this section, the owner of any engine 
warranted under this part is responsible for the proper maintenance of 
the engine. Proper maintenance includes replacement and/or service, as 
needed, at the owner's expense at a service

[[Page 68594]]

establishment or facility of the owner's choosing, of all parts, items, 
or devices which were in general use with engines prior to 1999. For 
diesel engines, this would generally include replacement or cleaning of 
the fuel delivery and injection system.


Sec. 94.1108  In-use compliance provisions.

    (a) Effective with respect to engines subject to the requirements 
of this part:
    (1) If the Administrator determines that a substantial number of 
any class or category of engines, although properly maintained and 
used, do not conform to the regulations prescribed under section 213 of 
the Act when in actual use throughout their useful life period (as 
defined under Sec. 94.2), the Administrator shall immediately notify 
the manufacturer of such nonconformity and require the manufacturer to 
submit a plan for remedying the nonconformity of the engines with 
respect to which such notification is given.
    (i) The manufacturer's plan shall provide that the nonconformity of 
any such engines which are properly used and maintained will be 
remedied at the expense of the manufacturer.
    (ii) If the manufacturer disagrees with such determination of 
nonconformity and so advises the Administrator, the Administrator shall 
afford the manufacturer and other interested persons an opportunity to 
present their views and evidence in support thereof at a public 
hearing. Unless, as a result of such hearing, the Administrator 
withdraws such determination of nonconformity, the Administrator shall, 
within 60 days after the completion of such hearing, order the 
manufacturer to provide prompt notification of such nonconformity in 
accordance with paragraph (a)(2) of this section.
    (2) Any notification required to be given by the manufacturer under 
paragraph (a)(1) of this section with respect to any class or category 
of engines shall be given to ultimate purchasers, subsequent purchasers 
(if known), and dealers (as applicable) in such manner and containing 
such information as required in subparts E and H of this part.
    (3)(i) The certifying manufacturer shall furnish with each new 
engine written instructions for the proper maintenance and use of the 
engine by the ultimate purchaser as required under Sec. 94.211.
    (ii) The instruction under paragraph (a)(3)(i) of this section must 
not include any condition on the ultimate purchaser's using, in 
connection with such engine, any component or service (other than a 
component or service provided without charge under the terms of the 
purchase agreement) which is identified by brand, trade, or corporate 
name. Such instructions also must not directly or indirectly 
distinguish between service performed by the franchised dealers of such 
manufacturer, or any other service establishments with which such 
manufacturer has a commercial relationship, and service performed by 
independent engine repair facilities with which such manufacturer has 
no commercial relationship.
    (iii) The prohibition of paragraph (a)(3)(ii) of this section may 
be waived by the Administrator if:
    (A) The manufacturer satisfies the Administrator that the engine 
will function properly only if the component or service so identified 
is used in connection with such engine; and
    (B) The Administrator finds that such a waiver is in the public 
interest.
    (iv) In addition, the manufacturer shall indicate by means of a 
label or tag permanently affixed to the engine that the engine is 
covered by a certificate of conformity issued for the purpose of 
assuring achievement of emission standards prescribed under section 213 
of the Act. This label or tag shall also contain information relating 
to control of emissions as prescribed under Sec. 94.212.
    (b) The manufacturer bears all cost obligation any dealer incurs as 
a result of a requirement imposed by paragraph (a) of this section. The 
transfer of any such cost obligation from a manufacturer to a dealer 
through franchise or other agreement is prohibited.
    (c) If a manufacturer includes in an advertisement a statement 
respecting the cost or value of emission control devices or systems, 
the manufacturer shall set forth in the statement the cost or value 
attributed to these devices or systems by the Secretary of Labor 
(through the Bureau of Labor Statistics). The Secretary of Labor, and 
his or her representatives, has the same access for this purpose to the 
books, documents, papers, and records of a manufacturer as the 
Comptroller General has to those of a recipient of assistance for 
purposes of section 311 of the Act.

Appendix I to Part 94--Emission Related Engine Parameters and 
Specifications

I. Basic Engine Parameters--Reciprocating Engines.
    1. Compression ratio.
    2. Type of air aspiration (natural, Roots blown, supercharged, 
turbocharged).
    3. Valves (intake and exhaust).
    a. Head diameter dimension.
    b. Valve lifter or actuator type and valve lash dimension.
    4. Camshaft timing.
    a. Valve opening--intake exhaust (degrees from TDC or BDC).
    b. Valve closing--intake exhaust (degrees from TDC or BDC).
    c. Valve overlap (degrees).
    5. Ports--two stroke engines (intake and/or exhaust).
    a. Flow area.
    b. Opening timing (degrees from TDC or BDC).
    c. Closing timing (degrees from TDC or BDC).
II. Intake Air System.
    1. Roots blower/supercharger/turbocharger calibration.
    2. Charge air cooling.
    a. Type (air-to-air; air-to-liquid).
    b. Type of liquid cooling (engine coolant, dedicated cooling 
system).
    c. Performance (charge air delivery temperature ( deg.F) at 
rated power and one other power level under ambient conditions of 
80 deg.F and 110 deg.F, and 3 minutes and 15 minutes after selecting 
rated power, and 3 minutes and 5 minutes after selecting other power 
level).
    3. Temperature control system calibration.
    4. Maximum allowable inlet air restriction.
III. Fuel System.
    1. General.
    a. Engine idle speed.
    2. Fuel injection--compression ignition engines.
    a. Control parameters and calibrations.
    b. Transient enrichment system calibration.
    c. Air-fuel flow calibration.
    d. Altitude compensation system calibration.
    e. Operating pressure(s).
    f. Injector timing calibration.
IV. Engine Cooling System.
    1. Thermostat calibration.
V. Exhaust System.
    1. Maximum allowable back pressure.
VI. Exhaust Emission Control System.
    1. Air injection system.
    a. Control parameters and calibrations.
    b. Pump flow rate.
    2. EGR system.
    a. Control parameters and calibrations.
    b. EGR valve flow calibration.
    3. Catalytic converter system.
    a. Active surface area.
    b. Volume of catalyst.
    c. Conversion efficiency.
    4. Backpressure.
VII. Crankcase Emission Control System.
    1. Control parameters and calibrations.
    2. Valve calibrations.
VIII. Auxiliary Emission Control Devices (AECD).
    1. Control parameters and calibrations.
    2. Component calibration(s).

[FR Doc. 98-32304 Filed 12-10-98; 8:45 am]
BILLING CODE 6560-50-P