[Federal Register Volume 85, Number 192 (Friday, October 2, 2020)]
[Rules and Regulations]
[Pages 62218-62233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18621]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 1042

[EPA-HQ-OAR-2018-0638; FRL-10013-36-OAR]
RIN 2060-AU30


Amendments Related to Marine Diesel Engine Emission Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is amending the 
national marine diesel engine program with relief provisions to address 
concerns associated with finding and installing certified Tier 4 marine 
diesel engines in certain high-speed commercial vessels. This relief is 
in the form of additional lead time for qualifying engines and vessels.

DATES: This final rule is effective on November 2, 2020.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2018-0638. All documents in the docket are 
listed on the www.regulations.gov website. Although listed in the 
index, some information is not publicly available, e.g., CBI or other 
information whose disclosure is restricted by statute. Certain other 
material, such as copyrighted material, is not placed on the internet 
and will be publicly available only in hard copy form. Publicly 
available docket materials are available either electronically in 
www.regulations.gov or in hard copy at Air and Radiation Docket and 
Information Center, EPA Docket Center, EPA/DC, EPA WJC West Building, 
1301 Constitution Ave. NW, Room 3334, Washington, DC. Note that the EPA 
Docket Center and Reading Room were closed to public visitors on March 
31, 2020, to reduce the risk of transmitting COVID-19. The Docket 
Center staff will continue to provide remote customer service via 
email, phone, and webform. The telephone number for the Public Reading 
Room is (202) 566-1744, and the telephone number for the Air Docket is 
(202) 566-1742. For further information on EPA Docket Center services 
and the current status, go to https://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: Alan Stout, Office of Transportation 
and Air Quality, Assessment and Standards Division (ASD), Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; 
telephone number: (734) 214-4805; email address: [email protected].

SUPPLEMENTARY INFORMATION:

Does this action apply to me?

    This action relates to marine diesel engines with rated power 
between 600 and 1,400 kW intended for installation on vessels flagged 
or registered in the United States, vessels that use those engines, and 
companies that manufacture, repair, or rebuild those engines and 
vessels.
    Categories and business entities that might be affected by this 
rule include the following:

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               Category                NAICS code \a\          Examples of potentially affected  entities
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Industry.............................          333618  Marine engine manufacturing.
Industry.............................          336611  Shipbuilding and repairing.
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\a\ North American Industry Classification System (NAICS).

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely covered by these rules. 
This table lists the types of entities that we are aware may be 
regulated by this action. Other types of entities not listed in the 
table could also be regulated. To determine whether your activities are 
regulated by this action, you should carefully examine the 
applicability criteria in the referenced regulations. You may direct 
questions regarding the applicability of this action to the persons 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.

I. Summary

    EPA's 2008 Final Rule for Control of Emissions of Air Pollution 
from Locomotive Engines and Marine Compression-Ignition Engines Less 
than 30 Liters per Cylinder adopted Tier 4 emission standards for 
commercial marine diesel engines at or above 600 kilowatts (kW) (73 FR 
37096, June 30, 2008). These standards, which were expected to require 
the use of exhaust aftertreatment technology, phased in from 2014 to 
2017, depending on engine power.\1\ After the Tier 4 standards were 
fully in effect for all engine sizes, some boat builders informed EPA 
that there were no certified Tier 4 engines available with suitable 
performance characteristics for the vessels they needed to build, 
specifically for high-speed commercial vessels that rely on engines 
with rated power between 600 and 1,400 kW that have high power density.
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    \1\ For engines up to 1,000 kW, compliance could be delayed for 
up to nine months, but no later than October 1, 2017.
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    To address these concerns, EPA proposed, and through this rule is 
adopting, provisions to provide additional lead time for implementing 
the Tier 4 standards for engines used in certain high-speed vessels (84 
FR 46909, September 6, 2019). We are also finalizing the proposed 
approaches for streamlining certification requirements to facilitate or 
accelerate certification of Tier 4 marine engines with high power 
density. These changes are reflected in amendments to 40 CFR. 1042.145, 
1042.505, and 1042.901 that we are making in this final rule. Each of 
these elements is discussed in more detail in this final rule.
    The September 2019 proposed rule also included provisions related 
to in-use fuel sulfur standards that apply for global marine fuel. We 
adopted those regulatory amendments to 40 CFR part 80 in a separate 
rule (84 FR 69335, December 18, 2019).
    The regulatory changes EPA is adopting in this final rule are 
largely the same as we proposed, with a few adjustments to address 
concerns raised by commenters. Several commenters also suggested that 
we broaden the scope of the rule to provide additional relief--either 
for a longer period or for a wider range of vessels. We are considering 
further rulemaking action to address these concerns, as described in 
Section VII.
    EPA adopted emission standards for marine diesel engines under 
Clean Air Act authority (42 U.S.C. 7401-7671q). The amendments in this 
rule are covered by that same authority.

[[Page 62219]]

II. Background

    In 2008, EPA adopted Tier 3 and Tier 4 emission standards for new 
marine diesel engines with per-cylinder displacement less than 30 
liters (73 FR 37096, June 30, 2008). The Tier 3 standards were based on 
engine manufacturers' capabilities to reduce particulate matter (PM) 
and oxides of nitrogen (NOX) emissions with recalibration 
and other engine-based technologies. The Tier 4 standards were based on 
achieving emission reductions through the application of catalytic 
aftertreatment technology, including selective catalytic reduction 
(SCR). These Tier 4 standards currently apply to commercial marine 
diesel engines with rated power at or above 600 kW. The Tier 3 
standards phased in for different engine sizes and power ratings from 
2009 to 2014. The Tier 4 phase-in schedule applied these more stringent 
standards starting in 2014 to engines at or above 2,000 kW, which are 
most prevalent on large workboats that are less sensitive to engine 
size and weight concerns. The Tier 4 standards started to apply at the 
start of model year 2017 for engines from 1,000 to 1,400 kW, and on 
October 1, 2017 for engines from 600 kW to 999 kW. The schedule for 
applying the Tier 4 standards was intended to give engine manufacturers 
time to redesign and certify compliant engines, and to give boat 
builders time to redesign their vessels to accommodate the Tier 4 
engines.
    The 600 kW threshold for applying the Tier 4 standards was intended 
to avoid aftertreatment-based standards for small vessels used for 
certain applications that were most likely to be designed for high-
speed operation with very compact engine installations. Most engines 
above 600 kW provide power for various types of workboats and larger 
passenger vessels. We were aware that there would be some high-speed 
vessels with engines above 600 kW, but expected that engine 
manufacturers would be able to certify 600-1,400 kW engines and vessel 
manufacturers would be able to make the necessary vessel design changes 
during the nine-year period between the final rule and the 
implementation of the Tier 4 standards.
    In response to the proposal preceding the 2008 final rule, some 
commenters recommended that the Tier 4 standards apply to engines as 
small as 37 kW, because small land-based nonroad diesel engines were 
subject to similar aftertreatment-based standards. Other commenters at 
that time advocated a vessel-based approach, for example exempting 
engines installed on patrol boats and ferries from the Tier 4 
standards. However, engine manufacturers commented that a vessel-based 
approach would be unworkable because they would then need to certify 
engines for a range of vessel types. Several commenters affirmed the 
600 kW threshold as appropriate, and no commenters suggested a higher 
threshold. As a result, EPA finalized the 600 kW threshold without 
further limiting the Tier 4 standards to particular types of commercial 
vessels.
    In the intervening years, only one engine manufacturer certified 
Tier 4 engines below 1,400 kW, and none of those had a power density 
greater than 35 kW per liter total engine displacement.\2\ Engine 
manufacturers pointed to the cost of product development and 
certification rather than technological feasibility as the reason for 
delaying certification of Tier 4 engines. We also heard from 
manufacturers of high-speed vessels that the lack of certified Tier 4 
engines with high power density was preventing them from building new 
vessels. Most of these concerns were related to lobster boats and pilot 
boats. Boat builders also told us that there would be greater 
challenges when installing SCR-equipped engines in these high-speed 
vessels.
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    \2\ Tier 4 engines in 2017 and 2018 were limited to 
Caterpillar's 32-liter and 57-liter engines.
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    When we adopted the Tier 4 standards in 2008, most if not all 
lobster boats used engines below 600 kW. Targeted lobster beds were 
typically located relatively close to shore. Lobster boats navigating 
in these areas have size and performance requirements that do not call 
for engines above 600 kW. Since 2008, however, it has become common to 
navigate to lobster beds 40 miles or farther from shore. The greater 
traveling distance necessitates more cargo space for a greater catch, 
and more speed to complete a day's work in a reasonable time. These 
factors caused a demand for larger vessels and more engine power, which 
led boat builders to install engines above 600 kW in lobster boats. 
Prior to the Tier 4 standards taking effect in 2017, engines for these 
lobster boats were subject to Tier 3 standards and thus required no 
aftertreatment technology. As a result, the lobster-boat engines needed 
for high speed and ocean navigation could fit into fiberglass hulls 
with minimal changes to fiberglass molds, or vessel design generally.
    A complicating factor for pilot boats is other federal, state, or 
local programs that impose speed restrictions on vessels for certain 
vessel lengths. Specifically, pilot boats that operate in certain 
coastal areas are subject to whale-strike avoidance rules that are 
designed to protect migrating and calving right whales. In designated 
areas off the coast of Georgia, for example, vessels 65 feet and longer 
may not exceed an operating speed of 10 knots from November 1 to April 
30 each year.\3\ The whale-strike avoidance rules increase the demand 
for pilot boats that are less than 65 feet long. This additional 
constraint further complicates the challenge to design vessels with 
Tier 4 engines as the SCR emission control system takes up a 
significant amount of already limited space. Here again, the use of 
Tier 4 engines will require significant boat changes and more time is 
needed to resolve these challenges.
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    \3\ The whale-strike avoidance rule was originally adopted by 
the National Marine Fisheries Service on October 10, 2008 (73 FR 
60173). See 50 CFR 224.105.
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    These concerns led us to propose provisions to allow additional 
lead time for implementing the Tier 4 standards for engines used in 
certain high-speed vessels, and to streamline Tier 4 certification 
requirements. The proposal identified several vessel and engine 
parameters that served as criteria to limit the additional lead time to 
qualifying vessels, rather than naming certain vessel types.
    EPA benefitted from extensive input from engine manufacturers, boat 
builders, and other stakeholders before publishing the proposed rule 
and in the comments submitted during the comment period. This 
information helped to clarify the constraints, capabilities, processes, 
and concerns for engine manufacturers, vessel manufacturers, and others 
affected by the Tier 4 standards.
    Since the middle of 2019, four additional engine manufacturers have 
certified Tier 4 engines with rated power between 600 and 1,400 kW. 
This expands the list of Tier 4 engine models that are available to 
provide power for a wider range of vessel types. However, these new 
engine certifications and the comments received do not change EPA's 
concerns as stated in the proposed rule that manufacturers of vessels 
for certain high-speed commercial applications continue to face 
important challenges associated with the availability of engines 
certified to the Tier 4 engine standards. These vessels have 
performance needs for achieving substantial propulsion power from a 
light-weight engine. In short, these vessel manufacturers have been 
unable to find certified Tier 4 engines meeting their requirements for 
maximum power, power density, and weight. See Section

[[Page 62220]]

V for a more detailed discussion of the newly certified engines and the 
relationship to designing vessels with those Tier 4 engines.
    In response to these concerns, and consistent with the proposed 
rule, EPA is adopting amendments to our marine diesel engine program to 
provide additional lead time to address these concerns for certain 
high-speed vessels. The new provisions allow engines installed on 
qualifying high-speed vessels to continue to meet Tier 3 standards 
during a relief period, which in turn will allow time for engine 
manufacturers to certify additional engine models, and for vessel 
manufacturers to implement design changes to their vessels to 
accommodate new Tier 4 engines as they become available.
    The Tier 4 relief in this final rule addresses the concerns that 
led to the proposed rule. In particular, absent relief, boat builders 
would be unable to build the types of high-speed vessels identified in 
the proposed rule in the near term. This could result in boat 
purchasers sourcing new boats that are underpowered or prolonging the 
service life of older boats, perhaps including replacement of original 
engines with Tier 3 or dirtier engines. As more Tier 4 engines become 
available, boat builders will be able to design and build high-speed 
vessels that comply with Tier 4 requirements, consistent with the 
schedule we are specifying in this final rule. Section IV evaluates the 
cost and environmental impact of the relief provisions in this final 
rule.
    Note that the new provisions allowing additional lead time for 
EPA's Tier 4 marine diesel engine standards are distinct from the 
international engine emission standards that apply under Annex VI to 
the International Convention for the Prevention of Pollution from Ships 
(MARPOL Annex VI). Because the domestic and international emission 
standards are adopted under different legal authorities, this rule has 
no bearing on the international standards. It is also the case that 
U.S. vessels operating only domestically are not subject to the 
standards adopted under MARPOL Annex VI (see 40 CFR 1043.10(a)(2)). As 
a result, the high-speed commercial vessels that are the subject of 
this rule will not be subject to emission standards under MARPOL Annex 
VI as long as they do not operate internationally.

III. Regulatory Changes in This Final Rule

    In this rule, EPA is adopting revisions to the marine diesel engine 
emission control program for certain high-speed vessels and the 
associated engines with rated power between 600 and 1,400 kW. These 
changes provide more time for engine manufacturers to certify 
additional engine models and for vessel manufacturers to design and 
build boats with Tier 4 engines. We are also making changes to our 
certification requirements to facilitate certification, especially 
related to demonstrating the durability of emission controls.
    The regulatory changes in this final rule are largely the same as 
we proposed, with a few adjustments in response to concerns raised by 
commenters. Several commenters also suggested that we broaden the scope 
of the rule to provide additional relief--either for a longer period or 
for a wider range of vessels. We are considering further rulemaking 
action to address these concerns, as noted in Section VII.

A. Adjusted Implementation Dates

    EPA is revising the Tier 4 implementation dates for certain types 
of marine diesel engines for installation in qualifying high-speed 
vessels. The additional time will allow vessel manufacturers to 
redesign their vessels to accommodate engines with the Tier 4 
technology. Engine manufacturers have also indicated that the 
additional time will allow them to certify more engine models with high 
power density to the Tier 4 standards.
    The new lead time provisions have two phases. The first phase sets 
model year 2022 as the Tier 4 implementation deadline for engines 
installed in high-speed vessels meeting a specific set of criteria. The 
second phase sets model year 2024 as the Tier 4 implementation deadline 
for engines installed in a narrower set of high-speed vessels that are 
facing a different set of compliance challenges.
    We are applying the model year 2022 implementation date for Phase 1 
relief, as proposed. This will allow boat builders time to redesign 
qualifying vessels to install certified Tier 4 engines. Available 
engines include currently certified models with total displacements of 
24 and 32 liters. Engine manufacturers are also continuing to develop 
additional Tier 4 engine models.
    The second phase addresses the different needs of manufacturers of 
fiberglass and other nonmetal vessels up to 50 feet long that need 
additional time to redesign their boats to use 600-1,000 kW engines 
certified to Tier 4 standards.
    Boat builders and boat owners expressed a concern that the proposed 
additional lead time for both Phase 1 and Phase 2 was not adequate. For 
Phase 1, commenters requested some additional years to redesign 
vessels, and to find customers needing vessels during the relief 
period. Our intent in the proposed rule was to allow boat builders to 
address the dilemma of not being able to fill orders for building new 
boats because Tier 4 engines were not available. We did not intend, and 
do not support, a longer time frame that would allow boat builders to 
seek out expanded opportunities based on marketing the cost-saving 
advantages of Tier 3 compliant vessels for additional customers. The 
additional lead time associated with this proposed rule will allow 
vessel manufacturers to reconfigure vessels, create new tooling, and 
start producing compliant vessels.
    Commenters representing the lobstering industry described their 
concerns that Tier 4 standards would be more challenging and may never 
be appropriate for vessels meeting the Phase 2 criteria. The types of 
lobster boats that need engines with more than 600 kW have size and 
performance characteristics that are best met with 15-18 liter engines. 
Larger engines, especially with SCR aftertreatment, are too large and 
heavy to provide a suitable alternative power source for these lobster 
boats. We are therefore adopting the Phase 2 relief, as proposed, to 
allow two additional years of lead time beyond the Phase 1 criteria, 
and a waiver process to address the possibility that Tier 4 engines 
will continue to be unavailable.
    Vigor, Gladding-Hearn, and Ray Hunt Design requested that EPA 
clarify whether they would need to take certain steps before the end of 
the relief period for their vessels to qualify for the additional lead 
time. Implementation of new emission standards is based on a 
combination of build dates for the engines and the vessels. For 
example, Phase 1 relief expires in 2021, which means that engines 
qualifying for relief must have a date of manufacture in model year 
2021 or earlier; i.e., crankshafts must be installed in those engine 
blocks on or before December 31, 2021.\4\ Similarly, vessels qualify 
for relief only if their keels are laid on or before December 31, 
2021.\5\
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    \4\ See the prohibition in 40 CFR 1068.101(a)(1) and the 
definitions of ``Date of manufacture'' and ``Model year'' in 40 CFR 
1068.30.
    \5\ See the prohibition in 40 CFR 1068.101(a)(1) and paragraph 
(8) of the definition of ``Model year'' in 40 CFR 1042.901.
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    At the same time, however, we are concerned that boat builders may 
lay keels and order engines speculatively to allow them to sell Tier 3 
vessels for several years beyond the relief period. This practice would 
be contrary to the

[[Page 62221]]

intent of the proposed relief. The program is intended to allow boat 
builders to meet existing demand for certain high-speed vessels where 
they are currently unable to supply those vessels. To prevent building 
up inventories of vessels during the relief period to circumvent the 
Tier 4 standards, we are adopting a requirement to limit the relief to 
vessels for which the boat builder has a written contract from a buyer 
to purchase a vessel. The contract must be signed before the end of the 
relief period.

B. Relief Criteria

    Vessels qualify for relief if they meet certain criteria, as 
specified in the proposal and updated for this final rule.
    Both phases of relief will be available only to engines installed 
on high-speed vessels. High-speed vessels may generally be 
characterized as planing vessels based on a hull design that causes the 
vessel to rise up out of the water and experience lower hydrodynamic 
drag (with a corresponding decrease in required propulsion power) when 
operating at high speed. This contrasts with displacement hulls, for 
which propulsion power continuously increases with increasing vessel 
speed. Vessels with displacement hulls do not experience the same 
design and installation challenges compared to planing hulls. While 
this distinction is straightforward, there is no generally accepted way 
to draw a clear line between the two types of vessels. This is 
illustrated by ``semi-planing'' vessels, which have operating 
characteristics that fall between planing and displacement vessels. We 
are adopting a vessel speed criterion, as proposed, that is consistent 
with industry practice. We are limiting relief to high-speed vessels 
that have a maximum operating speed (in knots) at or above 3.0 [middot] 
L\1/2\, where L is the vessel's waterline length, in feet. 
This includes an upward adjustment of about 40 percent compared to 
published definitions to draw a clearer line to identify high-speed 
vessels. As an example, 45-foot vessels would need to have a maximum 
speed of at least 23 knots to qualify for relief using the specified 
threshold. Vessels not meeting the speed criterion either (1) are large 
enough to not have the same sensitivity to engine size and weight that 
should qualify them for relief from using Tier 4 engines or (2) do not 
need engines with more than 600 kW. In particular, vessels with 
displacement hulls that are less than 65' long generally do not have 
engines with rated power above 600 kW. The vessel speed criterion 
applies equally to both phases of adjusted implementation dates for the 
Tier 4 standards.
    Both phases of relief will be available to both inspected and 
uninspected commercial vessels. This is different from our proposal, 
which would have limited both phases of relief provisions to vessels 
classified as uninspected vessels by the U.S. Coast Guard.\6\ Coast 
Guard designates all commercial vessels as either inspected or 
uninspected. Inspected vessels carry freight-for-hire or any hazardous 
or dangerous cargo. Towing and most passenger vessels are also 
inspected. In contrast, uninspected vessels include recreational 
vessels not engaged in trade, non-industrial fishing vessels, very 
small cargo vessels (less than 15 gross tons), and miscellaneous 
vessels such as pilot boats, patrol and other law-enforcement vessels, 
fire boats, and research vessels, among others. The Passenger Vessel 
Association, All American Marine, Gladding-Hearn, and Savannah Bar 
Pilots indicated that there are examples of inspected vessels that face 
the same issues related to engine availability and design constraints 
that apply for uninspected vessels. For example, pilot boats may be 
inspected or uninspected, depending on the owner's interest in 
expanding the use of a pilot boat to carrying some paying passengers. 
We agree that limiting relief to uninspected vessels may unnecessarily 
exclude some vessels for which relief was intended. We have therefore 
revised the final rule to remove this as a qualifying criterion. This 
change is necessary to accomplish the goal of the intended relief. We 
do not think this change will significantly expand the range or number 
of vessels that will qualify for relief, because other engine and 
vessel qualifying criteria will continue to limit the number of 
qualifying vessels.
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    \6\ See Title 46, Chapter I, of the Code of Federal Regulations.
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    Vessels qualify for additional lead time based on engine 
characteristics in addition to the vessel characteristics described 
above. Qualifying engines would need to be certified to EPA's Tier 3 
standards and have certain characteristics related to power density and 
maximum power output. Specifically, the first phase of relief is 
limited to propulsion engines with maximum power output up to 1,400 kW, 
and power density of at least 27.0 kW per liter displacement, rather 
than the proposed 35.0 kW per liter displacement. In addition, we are 
limiting relief to engines that will be installed on vessels with a 
waterline length up to 65 feet with total nameplate propulsion power at 
or below 2,800 kW (to accommodate vessels with multiple propulsion 
engines). The combination of the limit on maximum power for each engine 
with the limit on the total nameplate propulsion power has the 
practical effect of limiting relief to vessels with one or two 
propulsion engines. These criteria are intended to target relief from 
the Tier 4 standards for the engines and vessels identified in the 
proposed rule as needing additional lead time.
    The second phase of relief is limited to engines that will be 
installed on vessels with a single propulsion engine with maximum power 
output up to 1,000 kW and power density of at least 35.0 kW per liter 
displacement, where the vessel is made with a nonmetal hull and has a 
maximum waterline length of 50 feet. As noted in the proposed rule, we 
limited Phase 2 relief to fiberglass and other nonmetal hulls because 
of the cost of creating new hull forms, and because there is no option 
for a twin-engine installation for lobster boats or similar vessels 
less than 50'.
    Gladding-Hearn and Ray Hunt Design requested that the regulation 
clearly state how to determine vessel length, and suggested referencing 
the U.S. Coast Guard regulations at 46 CFR 175.400. We agree with these 
comments and are adding a regulatory definition of ``waterline length'' 
in 40 CFR 1042.901 that references the Coast Guard regulation. This 
includes language defining a worst-case condition representing maximum 
vessel loading and minimum water density. This is intended to prevent a 
situation in which a vessel could exceed specified length limits as a 
result of changing conditions.
    We proposed power density criteria of 35.0 and 40.0 kW per liter 
displacement for Phase 1 and Phase 2, respectively. The proposed 
criteria were intended to focus the relief on lightweight engines 
needed for the affected high-speed vessels. However, boat builders 
expressed a concern that the proposed value might reduce the number of 
available Tier 3 engines to the point that the relief provisions would 
not allow them to build the vessels as contemplated in the proposed 
rule. Vigor and Savannah Bar Pilots identified 27 kW/liter as an 
alternative qualifying threshold to allow a wider range of engines that 
could be used with vessels qualifying for relief. Similarly, Gladding-
Hearn and Ray Hunt Design identified 24 kW/liter as an alternative 
qualifying threshold. The 24 kW/liter value was based on an engine 
model with 57 liters total displacement, and the 27 kW/liter value was 
based on an engine model with 38 liters total displacement. We agree 
that a wider

[[Page 62222]]

range of power density values is appropriate to accomplish the rule's 
objectives and are therefore adjusting the power density thresholds for 
the final rule. We selected the 27 kW/liter threshold because the 38-
liter engine is a viable option for vessels qualifying for Phase 1 
relief, while the 57-liter engine is much too large to be a viable 
option for these vessels. If we consider relief for additional types of 
vessels in a future rulemaking, as described in Section VII, we may 
reconsider the appropriate qualifying criteria for engines installed on 
those vessels.
    These commenters suggesting lower power density thresholds made 
clear that weight considerations are a secondary engine parameter in 
designing high-speed vessels. For example, a 38-liter engine at 27 kW/
liter provides about 1,100 kW of propulsion power. An engine could 
achieve the same power output with only 29 liters total displacement if 
the engine had power density at 35 kW/liter. The incremental engine 
weight of adding SCR to a 29-liter engine is probably less than the 
added weight of the larger engine without SCR. We therefore conclude 
that space and packaging rather than engine weight are the limiting 
factor in designing compliant high-speed vessels. This helps us to 
understand the range of engine characteristics that will be suitable 
for these vessels when the Tier 4 standards apply.
    Table 1 summarizes the provisions we are adopting for additional 
lead time in this rule. This takes the form of a revised Tier 4 
implementation schedule for propulsion engines with high power density.

       Table 1--Summary of Qualifying Criteria for Adjusted Tier 4
                          Implementation Dates
------------------------------------------------------------------------
          Criteria \1\                  Phase 1             Phase 2
------------------------------------------------------------------------
Vessel speed (knots)............  >3.0 [middot]       >3.0 [middot]
                                   (feet)\1/2\.        (feet)\1/2\.
Engine power density............  >27.0 kW/liter....  >35.0 kW/liter.
Engine power rating.............  <=1,400 kW........  <=1,000 kW.
Total vessel propulsion power...  <=2,800 kW........  <=1,000 kW.
Vessel's waterline length.......  <=65 feet.........  <=50 feet.
Vessel hull construction........  Any...............  nonmetal.
Model years for continued use of  through 2021......  through 2023.
 Tier 3 Engines.
------------------------------------------------------------------------
\1\ The specified engine criteria apply for the Tier 3 engines installed
  in vessels that qualify for relief.

    Only those engines and vessels that meet the criteria we are 
finalizing in this rule qualify for the revised Tier 4 implementation 
dates. An engine installed in a nonqualifying vessel, or a 
nonqualifying engine installed on any vessel, is subject to the 
prohibitions set out in 40 CFR 1068.101(a)(1) for new engines and 
vessels introduced into U.S. commerce, and would therefore be in 
violation.
    In addition to the above provisions, several commenters suggested 
other adjustments to the proposed criteria to broaden the scope of 
relief. Section V includes our response to those comments.

C. Availability of Tier 3 Engines During Relief Period

    Engine manufacturers will need to certify engines above 600 kW to 
the Tier 3 commercial standards for installation in newly constructed 
vessels that meet the qualifying criteria before vessel manufacturers 
can utilize the additional lead time provided in this final rule. Boat 
builders may need these Tier 3 engines very soon after we finalize this 
rule. To do this, engine manufacturers would generally need to restart 
production of engine configurations that were already certified to the 
Tier 3 commercial standards. Engine manufacturers may still be 
producing these or substantially equivalent engine configurations as 
certified Tier 3 recreational engines, as exempt replacement engines, 
or as engines for export. In most cases, engine manufacturers can 
resubmit information from their earlier Tier 3 application for 
certification to cover the new production.
    Vigor, Gladding-Hearn, Ray Hunt Design, Savannah Bar Pilots, and 
Columbia River Pilots asked EPA to allow installation of recreational 
Tier 3 engines in commercial vessels during the relief period. We are 
not adjusting our program to allow this. Since the beginning of our 
emission control program for marine diesel engines, we have prohibited 
installation of recreational engines in commercial vessels. 
Recreational engines have a much shorter useful life and therefore 
cannot provide reliable emission control in a commercial application. 
However, engine manufacturers can consider qualifying their 
recreational marine engines as light-commercial marine engines meeting 
a reduced useful life of 5,000 hours, as described in Section III.E.2. 
Except for that accommodation, we still find it important to disallow 
installation of recreational engines in commercial vessels. For 
manufacturers using the new provision for a reduced useful life, we 
will be ready to work with engine manufacturers to apply the provisions 
of 40 CFR 1042.245(b) to determine appropriate deterioration factors 
(see Section III.E.1).
    Based on input received from engine manufacturers after the comment 
period, we expect boat builders to have several available Tier 3 engine 
models. Several manufacturers indicated publicly that they intend to 
pursue certification for Tier 3 commercial engines above 600 kW during 
the relief period, including Caterpillar (18-liter and 32-liter), MTU 
(22-liter and 27-liter) and Scania (16-liter). We are aware of 
additional engine manufacturers that may also pursue Tier 3 
certification for engines above 600 kW.

D. Relief Through Waivers for Qualifying Engines and Vessels

    EPA is adopting waiver provisions that start to apply in 2024 for 
vessels meeting the Phase 2 specifications described in Table 1. These 
waiver provisions are intended to allow boat builders to continue 
building boats with Tier 3 engines if engine manufacturers have not yet 
certified suitable engines for those vessels.
    Starting in 2024, manufacturers of vessels meeting the Phase 2 
qualifications described in Table 1 have the option to request that EPA 
approve an exemption from the Tier 4 standards. EPA will evaluate these 
requests based on the availability of suitable certified Tier 4 engines 
at the time of the request for the intended vessel design. EPA may 
approve requests covering multiple vessels, but any approval will apply 
only for the number of vessels approved for relief. The waiver 
authority does not expire, so EPA would be able to

[[Page 62223]]

continue approving manufacturers' requests to install Tier 3 engines in 
qualifying vessels until suitable certified Tier 4 engine models become 
available.
    The Passenger Vessel Association, Vigor, Savannah Bar Pilots, and 
Columbia River Pilots suggested that the waiver process should also 
apply for all vessels meeting the Phase 1 qualifying criteria. As noted 
above, the waiver provisions are intended to allow for continued boat 
building in case there continue to be no suitable Tier 4 engines for 
the targeted vessels. In 2022 and later, we expect boat builders to be 
able to choose from several Tier 4 engine models between 20 and 40 
liters total displacement. It will take time to modify vessel designs 
to accommodate Tier 4 engine technologies, but it is reasonable to 
expect the available Tier 4 engines to be suitable for the Phase 1 
vessels. As mentioned above and described in Section VII, we are 
considering a separate rulemaking proposal to address remaining 
questions about the availability of Tier 4 engines for other types of 
high-speed vessels where there may not yet be suitable Tier 4 engines.
    EMA stated that they do not support extending Tier 4 relief for a 
longer period than we proposed. They specifically objected to 
specifying 2028 as the year for applying the Tier 4 standards for Phase 
2 relief based on engine manufacturers' need to start selling Tier 4 
engines to recover their development costs. They also expressed a 
concern that waiver provisions could be disruptive for product planning 
if the waiver approval would not be well defined or if it extended more 
than one year beyond the adjusted starting date of the Tier 4 
standards. We agree that adding several years of lead time would not be 
an effective way to support the engine manufacturers' development and 
certification programs for Tier 4 engines. The waiver process is 
preferable because it allows us to limit relief in 2024 and later to 
cases in which there are no suitable engines certified to the Tier 4 
standards. For example, engine manufacturers have not committed to 
certifying Tier 4 engines below 20 liters, and if that is still the 
case and raised in a request for a waiver, it may be appropriate not to 
limit a waiver to a single year beyond the adjusted start date for the 
Tier 4 standards. Conversely, if an engine manufacturer certifies an 
engine model that is suitable for powering vessels that would otherwise 
meet the specified Phase 2 criteria, it would be appropriate to deny 
the waiver request. The waiver provisions spell out the approval 
criteria needed for EPA to evaluate any future requests for relief; the 
approval process with the approval criteria adequately define the terms 
of the waiver to avoid arbitrary decision-making that would be 
disruptive for engine manufacturers and their product planning.

E. Revised Certification Requirements

    Engine manufacturers told us that one of the biggest factors 
delaying their plans to certify Tier 4 engines in the 600 to 1,400 kW 
power range is the expected low sales volumes that make it harder to 
recover the investment needed to develop marine-specific calibrations 
and perform the testing needed to certify engines under 40 CFR part 
1042. We understand engine manufacturers' concerns to recover their 
investment in designing and certifying compliant engines. The market 
for compliant engines is expected to grow as more engines are needed 
internationally to comply with the stringent emission standards adopted 
for NOX Emission Control Areas under MARPOL Annex VI. 
Manufacturers are also expected to redesign their engines to comply 
with the stringent marine diesel engine emission requirements for 
vessels operating on inland waterways in Europe. The stringency of the 
European standards is similar to EPA's Tier 4 standards for 
NOX emissions and is more stringent for PM emissions. These 
standards will therefore contribute to further development and 
installation of advanced emission controls.
    To facilitate certification of engines meeting the EPA Tier 4 
standards, we are adopting revised engine certification requirements 
aimed at reducing engine manufacturer compliance and certification 
costs for the affected engines. These provisions are intended to help 
accelerate the market entry of additional Tier 4 marine engines, and 
additional power ratings for engines already certified to Tier 4 
standards.
1. Deterioration Factors
    We are adopting a temporary provision allowing engine manufacturers 
to certify specific engines to Tier 4 standards based on assigned 
deterioration factors. Engine manufacturers rely on deterioration 
factors so they can test a new engine and adjust the test results 
mathematically to represent emission levels at full useful life. Before 
this rule, the regulations for certifying marine diesel engines have 
allowed assigned deterioration factors only for small-volume engine 
manufacturers and post-manufacture marinizers. Assigned deterioration 
factors reduce the cost and time to certify to Tier 4 standards, which 
could accelerate the schedule for certifying, and may lead 
manufacturers to decide to pursue Tier 4 certification in light of the 
expected low sales volumes for recovering the associated development 
costs.
    To encourage development of additional engine options for high-
speed vessels, we will allow assigned deterioration factors for engines 
with power density above 30.0 kW/liter displacement. This applies 
through 2024 for 1,000-1,400 kW engines, and through model year 2026 
for 600-1,000 kW engines. These dates are set to apply for the first 
three years after the Tier 4 standards start to apply on the adjusted 
schedule, with the expectation that engine manufacturers could 
accumulate information on the durability characteristics of engines 
during those three model years before needing to develop family-
specific deterioration factors.
    The proposal specified that assigned deterioration factors would be 
available for two years for engines with power density above 35.0 kW/
liter. Engine manufacturers' comments requested that we allow assigned 
deterioration factors down to 30.0 kW/liter, and for a year longer than 
we proposed. They suggested the changes to ensure that the amended 
provisions would together create the appropriate reduction in 
development costs needed to achieve the objective of getting additional 
engines certified to the Tier 4 standards. We had selected the proposed 
thresholds for power density mostly to prevent adverse competitive 
effects for manufacturers that had already certified to Tier 4 
standards. We realize, however, that even those manufacturers with 
certified engines can benefit from the new flexibility for certifying 
additional engine families.
    We have reviewed available data to support default values for 
assigned deterioration factors. The deterioration factors are 
multiplicative values of 1.1 for NOX and 1.4 for HC and CO, 
and an additive value of 0.003 g/kW-hr for PM.\7\ These are the same 
values specified for the proposed rule. Where an individual engine 
manufacturer has existing data available, such as from certified land-
based versions of its marine engines, EPA would consider that 
information, consistent with 40 CFR 1042.245(b), and may adjust the 
value of one or more default assigned deterioration factors 
accordingly.
---------------------------------------------------------------------------

    \7\ ``Technical Analysis for Amendments Related to Marine Diesel 
Engine Emission Standards,'' EPA memorandum from Cheryl Caffrey to 
Docket EPA-HQ-OAR-2018-0638, August 1, 2019.

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

[[Page 62224]]

    Engine manufacturers would need to certify using family-specific 
deterioration factors in the first model year after the assigned 
deterioration factors are no longer available. Manufacturers could 
determine new deterioration factors from a conventional durability 
demonstration based on emission measurements before and after an 
extended period of service accumulation in the laboratory.
    The proposal included a request for comment to allow at-sea 
emission measurement in addition to lab-based measurement to establish 
deterioration factors. We contemplated this change in the context of 
engine manufacturers' interest in an alternative to the conventional 
durability demonstration. In their comments, engine manufacturers did 
not support changing the program to require deterioration factors based 
on emission measurement for engines installed in vessels. We will not 
adopt this as a requirement. With respect to alternative durability 
demonstration, we note that 40 CFR 1042.245(b) allows manufacturers to 
determine deterioration factors using an engineering analysis based on 
emission measurements from highway or nonroad engines that are similar 
to the marine engine being certified.
2. Reduced Regulatory Useful Life for Light Commercial Engines
    We proposed to reduce the useful life from 10,000 hours to 5,000 
hours for commercial marine engines that have power density above 50.0 
kW/liter displacement. There are currently no engines certified to Tier 
4 standards with power density above 44 kW per liter. We acknowledge 
that increasing an engine's power rating comes from higher intake air 
pressures and greater fuel flow into the engine, which can cause some 
engine and aftertreatment components to wear out sooner. Engines with 
lower power density are designed for continuous operation for very long 
periods with minimal downtime. Engines with high power density are 
inherently lighter weight for a given power rating and have a shorter 
time before scheduled rebuilding. Under our current regulations, the 
same regulatory useful life applies for commercial engines without 
regard to power density. However, the performance demands associated 
with high power density make it more difficult to demonstrate that 
engines with aftertreatment technology will meet Tier 4 standards over 
the full regulatory useful life.
    Vigor and Savannah Bar Pilots supported the proposal to adopt a 
shorter useful life for engines with high power density as a way to 
increase the number of certified engines, but stated that 40 kW/liter 
would be the appropriate qualifying threshold. The Truck and Engine 
Manufacturers Association also supported adopting a shorter useful 
life, but stopped short of making a recommendation on the threshold 
that should apply.
    We are adopting a shorter regulatory useful life for commercial 
engines above 600 kW with very high power density as proposed, except 
that the qualifying threshold is 45.0 kW/liter (see Sec.  1042.145). If 
manufacturers opt for the shorter useful life for qualifying engines, 
we consider those to be ``light-commercial marine engines'' (see Sec.  
1042.901). The newly certified 24-liter engine from MAN meets the Tier 
4 standards for a useful life of 10,000 hours at a top rating of about 
44 kW/liter. This engine serves as an important benchmark for decision-
making about the limits of a 10,000 hour useful life in an engine with 
very high power density. First, the engine demonstrates the feasibility 
of meeting the Tier 4 standards for 10,000 hours. Second, it 
demonstrates the feasibility limits of meeting Tier 4 standards over a 
useful life of 10,000 hours. MAN makes this same engine with higher 
power ratings for recreational applications. We therefore understand 44 
kW/liter to be the upper bound for meeting the Tier 4 standards without 
a reduced useful life. Setting the threshold at 45.0 kW/liter creates 
an incentive for other manufacturers to pursue engine certification for 
higher-output light-commercial ratings to create additional power 
alternatives for boat builders that need to meet the most demanding 
performance specifications.
    The reduced useful life for light-commercial engines also applies 
for Tier 3 engines with maximum power above 600 kW, consistent with the 
proposed rule. This may increase the number of engine models available 
during the relief period to the extent that engine manufacturers 
certify recreational engine models for light-commercial applications. 
The Truck and Engine Manufacturers Association commented asking that we 
specify the shorter useful life also for Tier 3 engines below 600 kW. 
However, there are several such engine models currently certified to 
the Tier 3 standards over a useful life of 10,000 hours with power 
density between 45 and 55 kW/liter. As a result, allowing engines less 
than 600 kW to qualify for a shorter useful life would relax the 
stringency of standards that manufacturers are already meeting. We are 
therefore not reducing the useful life for engines below 600 kW.
    Manufacturers certifying engines to Tier 4 standards using a 
reduced useful life can use assigned deterioration factors as described 
in Section III.E.1. In the proposal, we considered adjusting the values 
of the assigned deterioration factors to account for the shorter useful 
life. However, this final rule applies the same assigned deterioration 
factors for the shorter useful life, because we expect those engines to 
experience the same amount of wear and degradation in 5,000 hours that 
other engines would experience in 10,000 hours.
3. Engine Duty Cycle for Certification Testing
    Engine manufacturers certify their engines to the relevant emission 
standards by measuring emissions at test points on the applicable duty 
cycle specified in 40 CFR 1042.505 and contained in Appendix II of 40 
CFR part 1042, and summing the weight-adjusted emission results. As 
described in 40 CFR 1042.505(b)(1) and (2), commercial propulsion 
engines with fixed-pitch propellers are tested on the 4-mode E3 duty 
cycle, and recreational engines are tested on the 5-mode E5 duty cycle. 
While engine speed and power at the test modes are substantially the 
same for both duty cycles, the E5 duty cycle has an extra test point at 
idle and also includes different weighting to calculate overall 
emissions. These duty cycles are intended to represent in-use operation 
for the different applications: Commercial engines are expected to 
operate more time at 75% load and above while doing work (engaged in 
commercial activity) while recreational engines are expected to operate 
at high load only occasionally. Recreational engines have much less 
operation overall, and they spend more time at idle and low engine 
loads.
    Table 2 reproduces the speed and power settings for the E3 and E5 
duty cycles.

[[Page 62225]]



                       Table 2--Speed and Power Settings for the ISO E3 and E5 Duty Cycles
----------------------------------------------------------------------------------------------------------------
                                                                    Percent of
                                                                   maximum test    E3 weighting    E5 weighting
               Mode No.                       Engine speed             power          factors         factors
                                                                     (percent)
----------------------------------------------------------------------------------------------------------------
1.....................................  Maximum test speed......             100            0.20            0.08
2.....................................  91%.....................              75            0.50            0.13
3.....................................  80%.....................              50            0.15            0.17
4.....................................  63%.....................              25            0.15            0.32
5.....................................  Warm idle...............               0  ..............            0.30
----------------------------------------------------------------------------------------------------------------

    In response to EPA's request for comment on duty cycles, engine 
manufacturers asked that EPA allow the option of using the E5 duty 
cycle to certify commercial marine diesel engines with power density 
above 30.0 kW/liter. Engines above 30 kW/liter may be used in 
applications that are more like high-speed recreational boats (e.g., 
planing boats) than low-speed commercial boats (e.g., river boats). We 
agree with engine manufacturers that this change is appropriate. We are 
therefore amending 40 CFR 1042.505 to allow manufacturers to certify 
engines above 30.0 kW/liter using the E5 duty cycle. The reasons for 
this change are the same as the reasons supporting the reduced useful 
life revision described above. These engines are likely to be operated 
in a way more reflective of the E5 duty cycle, particularly those 
installed on planing or semi-planing vessels like lobster boats or 
pilot boats. The option to certify engines above 30.0 kW/liter applies 
equally to Tier 3 and Tier 4 engines.
    As noted above, engines with power density above 45.0 kW/liter may 
certify with a reduced useful life of 5,000 hours. These engines are 
inherently limited to installation in vessels whose operation is 
shifted toward light-load operation. We are therefore requiring engines 
to be certified using the E5 duty cycle if they have the shorter useful 
life. This may require development of engine calibrations and control 
strategies optimized to maintain low NOX emissions at idle 
and low-load operation to ensure that in-use engines will control 
emissions as effectively as the prototype engine tested for 
certification.
    We will not require testing with both E3 and E5 duty cycles for any 
engine families certified to EPA standards under 40 CFR part 1042. 
However, to simplify dual certification to both our Clean Air Act 
marine diesel engine standards and MARPOL Annex VI Regulation 13 
NOX limits, manufacturers may submit test data from both 
duty cycles. The reported data would need to show that engines meet 
emission standards over each duty cycle.
    These changes to the program will not require new testing for 
engines that are already certified to our Tier 3 or Tier 4 standards, 
and certification based on the E3 duty cycle will continue to be valid 
for demonstrating compliance with standards for any engines certified 
to a useful life of 10,000 hours.

IV. Economic and Environmental Impacts

    The economic impact, emission inventory, and human health and 
welfare assessments performed for this final rule use the same 
methodologies as were used for the proposal. The inventory and costs 
assessments rely on the data and methodologies developed to support our 
2008 Final Rule. The benefits assessment uses a simplified health 
benefits estimation method. The results of these analyses are set out 
in a technical memorandum prepared for this rule,\8\ are summarized 
below, and are contained in Table 3 below. The Technical memorandum 
also contains the Executive Order 13771, Reducing Regulation and 
Controlling Regulatory Costs analysis prepared for this rule.
---------------------------------------------------------------------------

    \8\ See ``Final Assessment Analysis: Amendments Related to 
Marine Diesel Engine Emission Standards,'' EPA memorandum from Jean 
Marie Revelt, EPA, Kenneth Davidson, PS, and Margaret Zawacki, EE, 
to Docket EPA-HQ-OAR-2018-0638, August 12, 2020.
---------------------------------------------------------------------------

    Consistent with the economic impact analysis prepared for EPA's 
2008 rulemaking, the costs for this final rule were estimated using 
both a behavioral approach (in the intermediate-run after the adoption 
of new standards, producers pass only some compliance through to 
consumers), and a full-cost pass-through approach (in the long-run 
after the adoption of new standards, producers pass all compliance 
costs through to consumers). This rule imposes no additional economic 
costs above those included in our 2008 rulemaking. Instead, the 
additional lead time is expected to result in cost savings. We estimate 
cost reductions of about $3.9 million, using a behavioral modeling 
approach, or $4.2 million, using a full-cost pass-through approach 
(2015$). These are the estimated cost reductions from installing less 
expensive Tier 3 engines in new vessels during the relief period (2020 
through 2023) and the associated operating cost reductions during the 
13-year lifetime of those engines (2020 through 2035).
    With respect to emission inventory impacts, this rule changes the 
implementation date of the Tier 4 standards for qualifying engines and 
vessels, which will delay the emission and air quality benefits of 
those standards. The estimated annual increase in NOX and 
PM10 \9\ emissions associated with the relief is about 108 
and 2.3 short tons, respectively, in 2020 and 2021, when both sets of 
engines are affected, decreasing to 37 and 1 ton, respectively, in 2022 
and 2023, when only those engine up to 1,000 kW engines are affected. 
The lifetime inventory increase is estimated to be about 3,764 tons of 
NOX and 79 tons of PM10, assuming a 13-year 
lifetime. This represents less than one-tenth of one percent of the 
national annual emissions for these pollutants from commercial Category 
1 marine diesel engines (i.e., engines below 7.0 liters per cylinder 
displacement).
---------------------------------------------------------------------------

    \9\ Consistent with the 2008 Rule, this inventory analysis is 
for PM10. In the 2008 rule, PM2.5 was 
estimated at 97% of PM10.
---------------------------------------------------------------------------

    The estimated impacts on emissions and costs presented in Table 3 
do not include the use of waivers. If engine manufacturers apply for 
and receive waivers post-2023, the estimated cost reductions and 
emission inventory impacts would increase and would extend for a longer 
period of time (the useful life of the engines produced subject to the 
waiver).

[[Page 62226]]



                                Table 3--Estimated Impacts on Emissions and Costs
----------------------------------------------------------------------------------------------------------------
                                                 NOX increase    PM10 increase
                                   Affected        per year        per year      Compliance cost  Operating cost
             Year                 engines per    (short tons)    (short tons)       reduction        reduction
                                     year                                           (2005$) *         (2005$)
----------------------------------------------------------------------------------------------------------------
2020..........................              25           108.1             2.3  $455,667 to              $36,000
                                                                                 $531,177.
2021..........................              25           216.3             4.6  $455,913 to               72,000
                                                                                 $531,689.
2022..........................              21           252.9             5.3  $301,749 to              102,240
                                                                                 $359,562.
2023..........................              21           289.5             6.1  $301,686 to              132,480
                                                                                 $359,499.
2024..........................               0           289.5             6.1  0...............         132,480
                                                                               ---------------------------------
    Lifetime Impacts (sum of                92           3,764            79.2    $3.2 to $3.5 million (2005$)
     2020-2035).
                                                                                  ($3.9 to $4.2 million 2015$)
----------------------------------------------------------------------------------------------------------------
* Costs were modeled in 2005$; lifetime impacts were converted in the final step of the analysis. Lower value of
  costs impacts estimated with a behavioral modeling approach, upper value estimated with a full-cost pass-
  through modeling approach. See ``Assessment Analysis: Final Marine CI Tier 4 Rule,'' EPA memorandum from Jean
  Marie Revelt, to Docket EPA-HQ-OAR-2018-0638 for details.

    These forgone emission reductions are associated with forgone 
improvements in human health. Using reduced form health benefit per-ton 
values,\10\ we estimate that the annual PM2.5-related 
forgone benefits do not exceed a high-end estimate of $3.0 million in 
any given year (2015$, 3% discount rate, mortality effect estimate 
derived from Lepeule et al., 2012). The total present value of the 
stream of forgone benefits ranges from $9.8 million to $31 million.
---------------------------------------------------------------------------

    \10\ PM2.5-related health benefits are estimated by 
applying sector-specific (C1/C2 marine vessel engine) benefit per 
ton values for NOX and directly-emitted PM2.5 
using a source apportionment approach that is similar to what has 
been used in past EPA analyses. See: Wolfe, P., Davidson, K. 
Fulcher, C., Fann, N., Zawacki, M., Baker, K.R. (2018). Monetized 
health benefits attributable to mobile source emission reductions 
across the United States in 2025. STOTEN, 650 (2019) 2490-2498, 
September.
---------------------------------------------------------------------------

    Reduced form tools, by their nature, are subject to 
uncertainty.\11\ In addition to the uncertainties present across the 
entire emissions-to-impact modeling pathway, it is important to note 
that the monetized benefit per ton estimates used here reflect the 
geographic patterns of the underlying emissions and air quality 
modeling assumptions used to create the reduced form health benefit per 
ton values. Those assumptions do not necessarily reflect the conditions 
of the policy scenario in which they are applied, which can lead to an 
over- or underestimate of benefits. In this rule, for example, the 
forgone benefits may be overstated in a location like Maine, because 
there will be some transport of emissions offshore or to areas external 
to the United States with different population and geographic 
characteristics. See the Final Assessment Analysis prepared for this 
rule for additional discussion regarding reduced form benefit per ton 
values.\12\
---------------------------------------------------------------------------

    \11\ See EPA (2018). Technical Support Document: Estimating the 
Benefit per Ton of Reducing PM2.5 Precursors from 17 
Sectors. Office of Air and Radiation, Office of Air Quality Planning 
and Standards, Research Triangle Park, February.
    \12\ See ``Final Assessment Analysis: Amendments Related to 
Marine Diesel Engine Emission Standards,'' EPA memorandum from Jean 
Marie Revelt, EPS, Kenneth Davidson, PS, and Margaret Zawacki, EE, 
to Docket EPA-HQ-OAR-2018-0638, August 12, 2020.
---------------------------------------------------------------------------

V. Response to Comments

    As described in Section II, the proposed rule focused on providing 
relief for specific applications where limited engine availability may 
be preventing boat builders from making certain types of high-speed 
vessels. The proposed rule accordingly described regulatory amendments 
to allow additional lead time only for certain types of vessels, based 
on several engine-related and vessel-related qualifying criteria.
    Section III describes the regulatory amendments for this final rule 
and addresses comments that relate directly to those provisions. This 
Section V addresses comments that apply more generally, or that are 
outside the scope of the proposed rule.

A. Commenters Generally Supporting the Rule

    The Truck and Engine Manufacturers Association (EMA) and multiple 
state organizations commented in support of the proposed rule to 
provide Tier 4 relief for certain high-speed vessels. Maritime Partners 
stated that they did not oppose the proposed rule. Each of these 
comments also noted that EPA should not expand the relief beyond what 
was proposed.
    In line with these comments, we are taking the approach of 
finalizing the narrowly crafted relief from the proposed rule. Section 
III describes how we made several minor adjustments following the 
proposal. For example, the final rule--
     Includes vessels that are subject to Coast Guard 
inspections as qualifying for relief.
     Allows boat builders to build vessels qualifying for 
relief based on a less challenging requirement for minimum power 
density.
     Specifies a lower power density to qualify for a reduced 
useful life for certifying Tier 4 ``light-commercial'' engines.
     Adds an option to certify certain commercial engines with 
the E5 duty cycle that previously was used only for certifying 
recreational engines.

Each of these minor modifications from the proposal is intended to 
ensure that the relief provisions will accomplish the intended 
objective.

B. Commenters Wanting To Expand the Scope of Relief for High-Speed 
Vessels

    Several boat builders and boat operators suggested that we broaden 
the scope of the rule to provide additional relief for a wider range of 
high-speed vessels for which certified Tier 4 engines were not 
available. This included general recommendations to allow relief for 
all high-speed vessels longer than 65' and for all emergency-response 
vessels (or all publicly owned vessels). Some commenters also described 
the need for relief for very specific applications, such as hovercraft 
and catamarans with certain characteristics. Commenters also advocated 
for allowing Phase 2 relief for vessels with metal hulls.
    To prepare the proposed rule, we did an in-depth investigation of 
information, perspectives, constraints, and prospects for developments 
related to the vessels and engines that we identified in the proposed 
rule. That led us to carefully construct the qualifying criteria to 
allow relief where the need was evident, and to disallow relief where 
we expected vessel manufacturers to have access to Tier 4 engines that 
were suitable for those applications. We also used available 
information to determine the appropriate duration of the relief period

[[Page 62227]]

and to quantify the economic and environmental impacts of providing 
relief for qualifying vessels and engines. The result was the proposed 
arrangement of Phase 1 and Phase 2 qualifying criteria and the 
corresponding schedule for delaying implementation of the Tier 4 
standards.
    It is appropriate to focus this final rule on solving the problems 
that were the basis of the proposed rule. This will allow us to quickly 
finalize the relief for the vessels targeted in the proposed rule. 
Repeating the process of defining qualifying criteria and setting an 
appropriately revised implementation schedule for additional vessel 
types would require additional information gathering and stakeholder 
outreach.
    Commenters raised several concerns about boat builders' ability to 
find and install Tier 4 engines in certain types of vessels. As 
described in Section VII, we are not adopting relief in this rule to 
address these concerns, but we are rather intending to further 
investigate the need additional relief. If we pursue additional relief 
for certain types of vessels, this would be in the form of a new 
proposal that would consider the comments we received in the context of 
this rule.
    A similar assessment applies for the comments describing a need for 
lobster boats to be permanently excluded from Tier 4 requirements. We 
are adopting the Phase 2 relief consistent with the proposed rule to 
address what we know about concerns for building boats with Tier 4 
engines. In any subsequent proposal, we would also consider revisiting 
the decision in this rule to require installation of Tier 4 engines in 
lobster boats and other vessels meeting the Phase 2 criteria starting 
in 2024.

C. Commenters Opposed to the Rule

    Some commenters objected to providing any relief from the Tier 4 
standards. We address each of these comments in the following sections 
based on the main arguments presented.
1. General Issues
    The American Lung Association (ALA) and an anonymous commenter 
stated that EPA should keep the Tier 4 standards as adopted to realize 
the important environmental gains from improved emission control. They 
argued that manufacturers have had enough time to produce compliant 
engines and vessels, and that EPA should not revise the rules to reduce 
costs to industry. MAN objected to EPA providing relief based on the 
increased cost of Tier 4 engines in light of their understanding that 
certifying engines to Tier 4 standards did not involve unreasonable 
costs.
    Regarding ALA's comments on the forgone environmental benefits, we 
quantified the estimated environmental impacts of this rule using the 
methods and data we used in our 2008 final rule; see Section IV. 
Allowing boat builders to use Tier 4 engines for a longer phase-in 
period is expected to increase annual in NOx and PM10 \13\ 
emissions by about 108 and 2.3 short tons, respectively, in 2020 and 
2021, when both sets of engines are affected, decreasing to 37 and 1 
ton, respectively, in 2022 and 2023, when only engines 600-1,000 kW are 
affected. EPA talked with several boat builders who indicated that they 
simply cannot build boats at this time because certified Tier 4 engines 
in the necessary power range are unavailable. This means that at least 
some part of the fleet of commercial boats with high power density 
engines is prevented from turning over to cleaner Tier 4 engines, and 
that in at least some of these cases unregulated engines or Tier 1 or 
Tier 2 engines with higher emission levels will continue to operate in 
the fleet. While it is not possible to know how many of these previous-
tier vessels are not being replaced, it is reasonable to observe that 
replacing these boats with new boats powered by Tier 3 engines is 
preferable to having the older vessels continue in the fleet. This is 
because the older vessels that need to be replaced are likely to have 
engines that pre-date the Tier 3 standards: Tier 2 or, even more 
likely, pre-control engines. As such, these vessels are likely to have 
much higher emissions than vessels powered by Tier 3 engines. Replacing 
these vessels with vessels powered by Tier 3 engines would reduce air 
emissions from the sector.
---------------------------------------------------------------------------

    \13\ Consistent with the 2008 Rule, this inventory analysis is 
for PM10. In the 2008 rule, PM2.5 was 
estimated at 97% of PM10.
---------------------------------------------------------------------------

    Regarding MAN's comment on costs, the basis for the proposed 
changes to the program was to respond to the concerns of boat builders 
that they could not build new boats due to the non-availability of 
compliant engines. EPA was aware of the challenges of certifying 600-
1400 kW engines when we adopted the 2008 rule, which was the basis for 
allowing the greatest lead time for these engines. It is 
straightforward to conclude that boat builders have not been able to 
build the identified types of vessels because engine manufacturers had 
not produced many of the same engine models in a Tier 4 configuration 
that they had previously produced in a Tier 3 configuration for use in 
these vessel types.
    EPA notes that MAN has recently certified a 24-liter engine with 
high power density for use in commercial boat applications, and that 
some additional lead time will be necessary for vessel builders to 
incorporate this engine into their designs. We anticipate that further 
developments in certifying additional engine models to Tier 4 standards 
will make it possible to eventually realize most or all of the 
anticipated emission reductions anticipated in the 2008 rule.
2. Availability of Suitable Tier 4 Engines
    MAN objected to EPA acknowledging widespread use of SCR in marine 
applications, and then providing relief based on SCR not being 
available for marine engines. More specifically, MAN argued that they 
and other manufacturers have certified a range of Tier 4 engines that 
provide suitable power options for the vessels EPA identified as 
needing relief. MAN emphasized that EPA's relief provisions would 
prevent them from being able to sell their Tier 4 engines after 
investing substantially to certify their engines.
    EPA was not suggesting that SCR is not an appropriate technology 
for marine engines. However, boat builders need engine manufacturers to 
develop properly sized compliant engines and certify them to Tier 4 
standards before they do the necessary design work to install those 
engines into their vessels. In this rule, EPA is responding to the 
engine manufacturers' delayed schedule for certifying Tier 4 engines. 
Specifically, before the Tier 4 standards went into effect in 2017, 
engine manufacturers offered several marine diesel engine models for 
use in a wide variety of commercial boats. However, when the Tier 4 
standards went into effect, the market was characterized by the absence 
of certified engines. For whatever reason, engine manufacturers chose 
not to carry out the development programs necessary to apply SCR or 
other Tier 4 technology to these smaller engines and to certify those 
engines in large enough quantities to maintain this section of the 
marine diesel market. Our decision to propose relief was accordingly 
based on the availability of certified engines, not on a judgment as to 
whether SCR is an inappropriate technology for marine installations.
    Engine manufacturers have now certified 20-liter, 24-liter and 32-
liter engines to the Tier 4 standards (Table 4 identifies the Tier 4 
engines that are available). Currently certified Tier 4 engines larger 
than 32-liter reach high power density only for ratings well above 
1,400 kW. We anticipate that engine manufacturers will certify

[[Page 62228]]

additional engine models with different displacements and power ratings 
in the years ahead. The 65' pilot boat that Savannah Bar Pilots want to 
build illustrates the need for relief. Vigor, the boat builder for 
Savannah Bar Pilots, commented that this boat would not meet 
performance specifications related to speed and annual operating hours 
with 24-liter engines. Previous designs for this type of vessel 
included a pair of 32-liter engines, which may give an appropriate 
balance of power, weight, and durability, but 32-liter engines with 
after treatment and associated hardware would require the boat builder 
to substantially redesign the vessel. Boat builders need time to make 
those changes to be able to build a boat that meets performance 
specifications with the Tier 4 engine configuration. In recognition 
that additional certified Tier 4 engines are now becoming available for 
consideration by boat builders, EPA is providing only temporary, 
limited relief from the Tier 4 standards.

                            Table 4--Currently Certified Tier 4 Engines Below 1400 kW
----------------------------------------------------------------------------------------------------------------
                                                                   Displacement    Maximum power   Power density
                          Manufacturer                               (liters)          (kW)         (kW/liter)
----------------------------------------------------------------------------------------------------------------
Yanmar..........................................................            20.4         670-749           33-37
MAN.............................................................           24.2L       746-1,066           31-44
Baudouin........................................................           32.1L       900-1,215           28-38
Caterpillar.....................................................             32L       746-1,082           23-35
Mitsubishi......................................................             49L             940              19
Caterpillar.....................................................           57.6L     1,000-1,772           17-31
----------------------------------------------------------------------------------------------------------------

3. Vessel Redesign for Lobster Boats
    MAN described their 24-liter engine as being a suitable option for 
lobster boats if boat builders make a reasonable effort to redesign 
vessels to account for the additional size and heat rejection 
associated with exhaust after treatment.
    We have learned that a full-size lobster boat is normally 45-50' 
long with a single 16-18 liter engine that has a power rating of 700-
750 kW. These Tier 4 engines with exhaust aftertreatment will require 
boat builders to substantially redesign their vessels just to make room 
for a larger engine package. That would be a considerable challenge 
with 16-18 liter engines. Boat builders would not be able to install 
the larger 24-liter engine with exhaust aftertreatment in these vessels 
without extensive structural changes. The vessel redesign would also 
need to address concerns about higher engine room temperatures, water 
reversion that could damage SCR catalysts, and storing Diesel Exhaust 
Fluid (DEF), among other things. Boat builders may be able to redesign 
their vessels to address all these concerns, but they need to have 
clear specifications from the engine manufacturers before they 
undertake such redesign and, in any event, are not likely to be able to 
successfully accomplish this for building boats in 2023 or earlier. 
They may even need more lead time than we are adopting in this rule. 
This is the basis to allow for the possibility that boat builders will 
not be able to install Tier 4 engines in 2024 and later model years by 
providing the waiver provisions discussed in Section III.D.
    It should be noted that some lobster boat builders (and boat 
purchasers), faced with a requirement to install Tier 4 engines, may 
choose instead to build a boat with a smaller engine certified to Tier 
3 standards. Other boat owners may choose to keep their older boats 
running instead of buying new boats with Tier 4 engines, and possibly 
repowering with previous tier engines when needed.\14\ The purpose of 
the relief provisions we are adopting in this rule is to avoid these 
unintended consequences by giving engine manufacturers more time to 
address the power needs for high-speed vessels while allowing boat 
builders to continue to build boats with Tier 3 engines in the interim. 
To the extent these unintended consequences would play out in the 
marketplace in the absence of this rulemaking, there could be 
associated cost and emission impacts in the absence of this rulemaking. 
However, these costs are unclear and EPA's impacts assessment described 
in Section IV only models costs and disbenefits directly related to 
this rule.
---------------------------------------------------------------------------

    \14\ See EPA-HQ-OAR-2018-0638-0054 and EPA-HQ-OAR-2018-0638-
0055.
---------------------------------------------------------------------------

4. DEF Availability
    MAN commented that DEF is widely available and EPA should therefore 
not extend compliance deadlines based on limited access to DEF.
    As described above, the proposed relief is based on the limited 
availability of certified Tier 4 engines suitable for use in certain 
high-speed vessels. Some commenters advocated for relief from Tier 4 
emission standards based on limited access to DEF, but DEF supply and 
infrastructure were not considered in the proposed rule. These issues 
are therefore outside the scope of this rule.

D. River Towing

    The American Waterways Operators and some of its members commented 
on the proposed rule to suggest that river pushboats also needed 
additional time to comply with Tier 4 standards. Commenters mainly 
cited reliability concerns for Tier 4 engines operating in a river 
environment (i.e., operating at high load when pushing against the 
river current, low load when operating with the river current), the 
challenge of redesigning this type of vessel to use Tier 4 engines, the 
additional complexity of operating and maintaining Tier 4 engines with 
advanced electronic controls and aftertreatment, the limited available 
Tier 4 engine models, and access to diesel exhaust fluid on inland 
rivers. They also expressed concerns about the aggregate costs of 
purchasing, installing, and using Tier 4 engines.
    These comments contrasted with those from Maritime Partners, who 
said that engine manufacturers and multiple boat builders are actively 
engaged with substantial investments to design and build river 
pushboats with Tier 4 engines.
    We did not propose to make any changes to the Tier 4 standards or 
implementation schedule for river pushboats and are therefore not in a 
position to adopt relief provisions for those vessels in this rule. We 
may take further action to address these concerns in any follow-on 
action we consider as described in Section VII.

E. Replacement Engines

    Gladding-Hearn Shipbuilding and the Passenger Vessel Association 
requested that we revise the regulation to allow vessel owners to 
replace old engines

[[Page 62229]]

under the replacement engine exemption under 40 CFR 1068.240, but keep 
the old engine as a spare to minimize downtime in anticipation of an 
emergency engine failure. The commenters stated that such an engine 
failure without a spare engine could be economically devastating.
    These commenters are describing ``swing'' engines. EPA clarified 
our approach to swing engines in our 2008 rulemaking in response to the 
concerns of commenters on that rule (73 FR 37158, June 30, 2008). Some 
ship owners said that they currently use swing engines in their regular 
operations and that the application of our replacement engine 
provisions would prevent them from continuing this practice. In our 
2008 rule, we clarified that we allow swing engines as a maintenance 
practice when the swing engines are additional engines purchased at the 
time the vessel is constructed and are clearly intended to be part of 
an engine maintenance strategy for that vessel. In a qualifying swing 
engine fleet, when one of the vessel's engines is due for rebuild, it 
is removed from the vessel and replaced with an engine from the swing 
engine group. The removed engine is rebuilt and then becomes the next 
swing engine. The swing engine must be the same emission tier as the 
original engine on the vessel, and it is subject to EPA's marine diesel 
engine remanufacturing requirements when it is rebuilt. Note that if a 
swing engine is replaced with a new engine, both engines are subject to 
the engine replacement provisions in 40 CFR 1042.615 and 1068.240.
    The commenters are requesting that they be allowed to designate an 
engine as a swing engine at the time the engine is replaced, by 
retaining the rebuilt original engine, thus exempting the engine from 
the provisions for new replacement engines. We disagree with this 
request, as it undermines the purpose of the replacement engine 
provisions in our marine diesel engine program. Currently, if an owner 
installs a new replacement engine, the new engine must meet the most 
stringent tier of standards feasible for installation on a boat.\15\ 
Thus, a new replacement engine for a vessel built in 1995 would need to 
meet at least Tier 3, unless it can be established that a Tier 3 engine 
cannot be used in the vessel because of the physical or performance 
needs of the vessel, at which point a Tier 2 engine must be considered, 
and then a Tier 1 engine. Because new replacement engines prolong the 
life of older vessels and delay the turnover of the fleet to cleaner 
engines, this requirement is an important means of making incremental 
improvements in emission controls from the marine fleet.
---------------------------------------------------------------------------

    \15\ As stated in 40 CFR 1042.615, EPA has determined that 
engines certified to Tier 4 standards do not have the appropriate 
physical or performance characteristics to replace uncertified 
engines or engines certified to emission standards that are less 
stringent than the Tier 4 standards.
---------------------------------------------------------------------------

    In the context of swing engines, if an engine in the fleet 
experiences engine failure, the owner would remove the failed engine, 
install the swing engine, and use the exemption for new replacement 
engines to become the next swing engine. This would require returning 
the failed engine to the engine manufacturer as a core exchange. The 
engine manufacturer may restore the failed engine to a working 
condition and resell it, subject to the conditions that apply under 40 
CFR 1068.240. The regulation does not allow the owner to retain 
ownership of the original engine after it has been replaced with an 
exempted engine under 40 CFR 1068.240, even if it could otherwise be 
rebuilt for use as a swing engine.
    Note that if the owner is replacing the old engine with a used 
engine, rather than a new engine, the only regulatory constraint is 
that the replacement engine may not be certified to a lesser tier of 
standards than the engine it is replacing (see 40 CFR 1068.120). 
However, that used engine may be subject to EPA's marine diesel engine 
remanufacture program when it is rebuilt (see 40 CFR part 1042, subpart 
I).
    These comments on replacement engines are outside the scope of the 
proposed rule. However, we want to take the opportunity to emphasize 
that EPA's swing engine program is well established and that the Agency 
has no plans to revise those regulatory provisions.

F. Other Comments

    State groups submitted comments stating that EPA would need to 
adopt alternative control measures to make up for forgone emission 
reductions that are already in state plans for meeting air quality 
standards. We originally adopted emission standards for marine diesel 
engines to comply with our Clean Air Act authority to set emission 
standards requiring the greatest achievable degree of emission control. 
The relief provisions we are adopting are based on this same assessment 
of what is feasible. We will consider every opportunity to require 
emission reductions from marine diesel engines and other sectors, but 
emissions accounting does not change our assessment of what boat 
builders can do to comply with the Tier 4 standards.
    The National Association of Clean Air Agencies (NACAA) encouraged 
us to prioritize and take action to establish more stringent marine 
emission standards for engines below 600 kW, and to consider adopting 
emission standards that harmonize with more stringent standards that 
apply outside the United States where possible. Our 2008 final rule 
described the challenges associated with applying Tier 4 standards to 
commercial marine engines below 600 kW and the boats that use them and, 
to our knowledge, these challenges have not been resolved. EPA does not 
have plans to revisit those emission standards at this time; however, 
we will continue to evaluate whether or when it is appropriate to apply 
more stringent emission standards for engines below 600 kW. Similarly, 
we will continue to evaluate whether or when it is appropriate to adopt 
more stringent emission standards that would allow engine manufacturers 
to make a single low-emission engine that simultaneously complies with 
emission standards adopted by multiple regulating agencies.
    EMA commented that dedicated direct-drive fire pumps should be 
permanently exempted from Tier 4 standards because their use is limited 
to emergency operations (plus limited maintenance and testing). EMA 
provided no detailed justification for not meeting Tier 4 standards and 
provided no information that would help us assess the economic or 
environmental impacts of such a change to the regulation. This comment 
is outside the scope of this rulemaking. We are not taking action in 
this final rule to address the request.
    NACAA recommended that we provide a more geographically resolved 
estimation of the lost emission reductions, at least on the regional 
level. We have concluded that it is not possible to provide a more 
geographically resolved estimation of the forgone emission reductions 
without knowing the precise location of the boats that take advantage 
of the additional lead time. As explained in the economic and 
environmental impacts analysis prepared for this rule, we estimate that 
if all the annual emissions for the 600-1,000 kW engines are attributed 
to Maine, the forgone emissions from Tier 4 relief would amount to 
about 0.4 percent and 0.1 percent of those state-wide NOX 
and PM10 emissions, respectively. Similarly, if all the 
annual emissions for 600-1,000 kW engines are attributed to Georgia, 
the forgone emissions from Tier 4 relief would amount to about 0.13 
percent and

[[Page 62230]]

0.03 percent of those state-wide NOX and PM10 
emissions, respectively.\16\
---------------------------------------------------------------------------

    \16\ See ``Final Assessment Analysis: Amendments Related to 
Marine Diesel Engine Emission Standards,'' EPA memorandum from Jean 
Marie Revelt, EPA, Kenneth Davidson, PS, and Margaret Zawacki, EE, 
to Docket EPA-HQ-OAR-2018-0638, August 12, 2020.
---------------------------------------------------------------------------

VI. Regulatory Alternatives

    The proposed rule described the basis for pursuing additional lead 
time for meeting Tier 4 requirements for certain engines and vessels 
where it was apparent that there was no feasible path for compliance. 
The relief provisions in this rule are narrowly crafted to address the 
concerns communicated by boat builders leading up to the proposed rule. 
These provisions include a waiver process for vessels meeting the Phase 
2 criteria as described in Section III.B for 2024 and beyond. In the 
proposal, we also requested comment on an alternative approach of 
adopting a new Tier 4 start date of 2028 for vessels meeting the Phase 
2 criteria.
    As described in Section V, adding several years of lead time would 
not be an effective way to support the engine manufacturers' 
development and certification programs for Tier 4 engines. The waiver 
process is preferable because it allows us to limit relief in 2024 and 
later to cases in which there are no suitable engines certified to the 
Tier 4 standards. If an engine manufacturer certifies an engine model 
that is suitable for powering vessels that would otherwise meet the 
specified Phase 2 criteria, it would be appropriate to deny the waiver 
request.
    We have calculated the emission impacts associated with an 
alternative 2028 Tier 4 start date for vessels meeting the Phase 2 
criteria.\17\ Adopting this regulatory alternative would have increased 
the estimated total forgone inventory benefits of the proposal by about 
1,760 additional short tons of NOX and 37 additional short 
tons of PM10 above the estimated inventory increases 
associated with the final program adopted in this final rule. Using 
reduced form health benefit per ton values, we estimate that the annual 
PM2.5-related forgone benefits for this regulatory 
alternative could be up to a high-end estimate of $4.4 million in any 
given year (2015$, 3% discount rate, mortality effect estimate derived 
from Lepeule et al., 2012). The total present value of the stream of 
forgone benefits ranges from $13.5 million to $44.6 million. The 
estimated cost savings would increase by $3.3 million, using a 
behavioral modeling approach, or $3.6 million, using a full-cost, pass-
through approach (2015$), over the estimated cost savings associated 
with the final adopted program.
---------------------------------------------------------------------------

    \17\ See ``Final Assessment Analysis: Amendments Related to 
Marine Diesel Engine Emission Standards,'' EPA memorandum from Jean 
Marie Revelt, EPA, Kenneth Davidson, PS, and Margaret Zawacki, EE, 
to Docket EPA-HQ-OAR-2018-0638, August 12, 2020.
---------------------------------------------------------------------------

VII. Plans for Further Action

    In response to our proposal, we received several comments from 
industry stakeholders who indicated that relief is also needed for 
other vessel types. These include catamarans, hovercraft, some types of 
emergency response boats, and push boats. Specifically, hovercraft have 
design specifications for lifting the vessel up out of the water that 
require engines to fall into a narrow range of power, size, and weight. 
Similarly, catamarans with hydrofoils need to use light-weight 
components and materials to achieve the lift necessary to operate 
properly. Also, fire boats and other emergency response vessels 
sometimes need to achieve very high speeds, which in turn requires very 
compact and light-weight engines with very high power output. For these 
and similar applications, boat builders indicated that they may not be 
able to move ahead with new construction with available Tier 4 engines.
    The issues raised by these commenters are complex. It will take 
some time to carefully consider an appropriate policy direction and, if 
necessary, prepare a new proposal with specific additional relief 
provisions. Rather than delay the relief as described in the proposed 
rule, we will consider the issues raised by these stakeholders 
separately. As a result, we will continue to consider whether and how 
to formulate Tier 4 relief provisions for these vessels. We will be 
reaching out to stakeholders to better understand their concerns and 
determine whether we can develop a set of narrow qualifying criteria to 
allow relief where it is needed while continuing to require 
installation of Tier 4 engines where relief is not needed. The 
appropriate measure for evaluating the need for relief is whether 
certified Tier 4 engines will be available with the appropriate power 
characteristics to meet performance specifications, after accounting 
for reasonable measures to redesign vessels to account for engines with 
exhaust aftertreatment.
    In this future assessment, we will need to take into consideration 
currently certified engines and the efforts that engine manufacturers 
intend to make to certify relevant engines in the foreseeable future. 
We will need to carefully assess the expected range of available 
engines, both to determine which vessels warrant relief and to 
determine how long the relief period should be.
    Finally, we will also consider whether further changes to 
certification requirements are necessary to encourage greater 
availability of relevant engines. This is of particular concern for 
engines with total displacement below 20 liters, where the absence of 
Tier 4 certified engines is most pronounced. In our assessment, we will 
also consider the progress that engine manufacturers have made toward 
certifying marine diesel engines to the IMO Tier III or EU Stage V 
standards. Our assessment may also include consideration of adjusting 
NOX, HC, CO, or PM standards, revising the durability 
testing provisions for certification, and expanding the scope of Tier 4 
to apply to engines below 600 kW.
    In any future action, we would also consider whether to make 
further regulatory changes to address the request for a long-term and 
sustainable set of requirements for lobster boats and similarly 
affected vessels.
    As described in Section V, some operators of river boats continue 
to be concerned about complying with Tier 4 requirements. These 
concerns are very different than those that apply to installing Tier 4 
engines in high-speed vessels. Rather, boat builders and operators will 
need time to work out design, installation, and operational issues with 
newly configured engines in a river environment. We will continue to 
monitor progress toward compliance for river pushboats that are subject 
to Tier 4 requirements. We will also learn, along with the industry, 
how Tier 4 compliance requirements are affecting the ability of 
operators to safely and effectively deliver products on the inland 
waterway system.

VIII. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This is a significant regulatory action that was submitted to the 
Office of Management and Budget (OMB) for review. Any changes made in 
response to OMB recommendations have been documented in the docket.

[[Page 62231]]

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This action is considered an Executive Order 13771 deregulatory 
action. Details on the estimated cost savings of this final rule can be 
found in EPA's analysis of the projected costs and benefits associated 
with this action.

C. Paperwork Reduction Act (PRA)

    The information collection activities in this rule have been 
submitted for approval to the Office of Management and Budget (OMB) 
under the PRA. The Information Collection Request (ICR) document that 
the EPA prepared has been assigned EPA ICR number 2602.02. You can find 
a copy of the ICR in the docket for this rule, and it is briefly 
summarized here. The information collection requirements are not 
enforceable until OMB approves them. OMB has previously approved the 
information collection activities related to marine diesel engine 
emission standards in 40 CFR part 1042 under OMB control number 2060-
0287.
    Information collection is limited to manufacturers of qualifying 
high-speed vessels requesting a waiver from the Tier 4 standards after 
the standards restart in model year 2024. We are adopting this as a 
precaution, in case engine certification and further technology 
development for installing Tier 4 engines does not allow for complying 
with standards in 2024. We will protect confidential business 
information as described in 40 CFR part 2.
    Respondents/affected entities: Manufacturers of high-speed vessels.
    Respondent's obligation to respond: Response is required to get 
EPA's approval for a waiver from Tier 4 standards.
    Estimated number of respondents: 0.
    Frequency of response: There are no recurring responses.
    Total estimated burden: 0 hours (per year). Burden is defined at 5 
CFR 1320.3(b).
    Total estimated cost: $0 per year, including $0 per year in 
annualized capital or operation & maintenance costs.
    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 the 
EPA's regulations in 40 CFR are listed in 40 CFR part 9.

D. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the impact of concern is any significant 
adverse economic impact on small entities. An agency may certify that a 
rule will not have a significant economic impact on a substantial 
number of small entities if the rule relieves regulatory burden, has no 
net burden, or otherwise has a positive economic effect on the small 
entities subject to the rule. This rule is expected to provide 
regulatory flexibility to small owners and operators of U.S. vessels. 
We have therefore concluded that this action will have no net 
regulatory burden for any directly regulated small entities.

E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. The action imposes no enforceable duty on any state, 
local, or tribal governments or the private sector.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

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

    This action does not have tribal implications as specified in 
Executive Order 13175. This rule will be implemented at the Federal 
level and affects owners and operators of U.S. vessels. Thus, Executive 
Order 13175 does not apply to this action.

H. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is not subject to Executive Order 13045 because it is 
not economically significant as defined in Executive Order 12866, and 
because the EPA does not believe the environmental health or safety 
risks addressed by this action present a disproportionate risk to 
children. This action's health and risk assessments are described in 
Section IV.

I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. This action provides relief from 
current emission standards for a small number of vessels and 
streamlines the process for certifying engines. None of these changes 
are expected to significantly affect energy supply, distribution, or 
use. Section IV describes how we expect this rule to have a small 
overall environmental impact.

J. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

K. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations, and Low-Income Populations

    This action does not have disproportionately high and adverse human 
health or environmental effects on minority populations, low-income 
populations or indigenous peoples, as specified in Executive Order 
12898 (59 FR 7629, February 16, 1994). Section IV describes how this 
action will have a very small impact on all populations.

L. Congressional Review Act (CRA)

    This action is subject to the CRA, and EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. This action is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

List of Subjects in 40 CFR Part 1042

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Labeling, Penalties, Reporting and recordkeeping requirements, Vessels, 
Warranties.

Andrew Wheeler,
Administrator.
    For the reasons set forth above, EPA amends 40 CFR part 1042 as 
follows:

PART 1042--CONTROL OF EMISSIONS FROM NEW AND IN-USE MARINE 
COMPRESSION-IGNITION ENGINES AND VESSELS

0
1. The authority citation for part 1042 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.


0
2. Section 1042.145 is amended by adding paragraphs (k) through (o) to 
read as follows:


Sec.  1042.145   Interim provisions.

* * * * *
    (k) Adjusted implementation dates for Tier 4 standards. Engines and 
vessels may qualify for delaying the Tier 4

[[Page 62232]]

standards specified in Sec.  1042.101 as follows:
    (1) The delay is limited to model year 2021 and earlier engines and 
vessels that meet all the following characteristics:
    (i) Category 1 propulsion engines with specific power density above 
27.0 kW/liter, up to maximum engine power of 1,400 kW.
    (ii) Vessels have total propulsion power at or below 2,800 kW.
    (iii) Vessel waterline length is at or below 65 feet.
    (iv) Vessels have a maximum speed (in knots) at or above 3.0 
[middot] L1/2, where L is the vessel's waterline length, in feet.
    (2) The delay also applies through model year 2023 for engines and 
vessels that meet all the following characteristics:
    (i) Category 1 propulsion engines with specific power density above 
35.0 kW/liter, up to maximum engine power of 1,000 kW.
    (ii) Vessels have total propulsion power at or below 1,000 kW.
    (iii) Vessel waterline length is at or below 50 feet.
    (iv) Vessels have a maximum speed (in knots) at or above 3.0 
[middot] L1/2, where L is the vessel's waterline length, in feet.
    (v) Vessels have fiberglass or other nonmetal hulls.
    (3) Vessel manufacturers must have a contract or purchase agreement 
signed before the end of the relief period for each vessel produced 
under this paragraph (k).
    (4) Affected engines must instead be certified to the appropriate 
Tier 3 emission standards specified in Sec.  1042.101. Engine 
manufacturers may include engine configurations with maximum engine 
power below 600 kW in the same engine family even if the power density 
is below the value specified in paragraph (k)(1) or (2) of this 
section.
    (5) If you introduce an engine into U.S. commerce under this 
section, you must meet the labeling requirements in Sec.  1042.135, but 
add the following statement instead of the compliance statement in 
Sec.  1042.135(c)(10):
    THIS MARINE ENGINE COMPLIES WITH U.S. EPA TIER 3 EMISSION STANDARDS 
UNDER 40 CFR 1042.145(k). ANY OTHER INSTALLATION OR USE OF THIS ENGINE 
MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (l) [Reserved]
    (m) Tier 4 waiver. Starting with model year 2024, vessel 
manufacturers may request an exemption from the Tier 4 standards as 
follows:
    (1) The subject vessels and engines must meet the qualifications of 
paragraph (k)(2) of this section.
    (2) Vessel manufacturers must send a written request for the 
exemption to the Designated Compliance Officer. The request must 
describe efforts taken to identify available engines certified to the 
Tier 4 standards, describe design efforts for installing engines in the 
subject vessels, identify the number of vessels needing exempt engines, 
demonstrate that the vessel cannot meet essential performance 
specifications using available Tier 4 engines, and state that engine 
and vessel manufacturers will meet all the terms and conditions that 
apply. We may approve an exemption from the Tier 4 standards based on 
the submitted information.
    (3) Engine manufacturers may ship exempt engines under this 
paragraph (m) only after receiving a written request from a vessel 
manufacturer who has received our written approval to build a specific 
number of vessels. The prohibitions in 40 CFR 1068.101(a)(1) do not 
apply to a new engine that is subject to Tier 4 standards, subject to 
the following conditions:
    (i) The engine meets the appropriate Tier 3 emission standards in 
Sec.  1042.101 consistent with the provisions specified in 40 CFR 
1068.265.
    (ii) The engine is installed on a vessel consistent with the 
conditions of this paragraph (m).
    (iii) The engine meets the labeling requirements in Sec.  1042.135, 
with the following statement instead of the compliance statement in 
Sec.  1042.135(c)(10):
    THIS MARINE ENGINE DOES NOT COMPLY WITH CURRENT U.S. EPA EMISSION 
STANDARDS UNDER 40 CFR 1042.145(m). ANY OTHER INSTALLATION OR USE OF 
THIS ENGINE MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (n) Assigned deterioration factors. Engine manufacturers may use 
assigned deterioration factors for certifying Tier 4 engines with 
maximum power up to 1,400 kW, as follows:
    (1) For engine families that have at least one configuration with 
maximum engine power at or below 1,400 kW and power density above 30.0 
kW/liter, you may use assigned deterioration factors through model year 
2024.
    (2) For engine families that have at least one configuration with 
maximum engine power at or below 1,000 kW and power density above 30.0 
kW/liter, you may use assigned deterioration factors through model year 
2026.
    (3) The assigned deterioration factors are multiplicative values of 
1.1 for NOX and 1.4 for HC and CO, and an additive value of 
0.003 g/kW-hr for PM, unless we approve your request to use different 
values. We will approve your proposed values if we determine based on 
data from similar engines and supporting rationale you submit with your 
request that they better represent your engines.
    (o) Useful life for light-commercial engines. You may certify 
commercial Category 1 engines at or above 600 kW with power density 
above 45.00 kW/liter to the exhaust emission standards of this part 
over a full useful life of 10 years or 5,000 hours of operation instead 
of the useful-life values specified in Sec.  1042.101(e). Engines 
certified to this shorter useful life must be in their own engine 
family.

0
3. Section 1042.505 is amended by revising paragraphs (b) introductory 
text and (b)(2) to read as follows:


Sec.  1042.505   Testing engines using discrete-mode or ramped-modal 
duty cycles.

* * * * *
    (b) Measure emissions by testing the engine on a dynamometer with 
the following duty cycles (as specified) to determine whether it meets 
the emission standards in Sec.  1042.101 or Sec.  1042.104:
* * * * *
    (2) Duty cycle for engines with high power density. Except as 
specified in paragraph (b)(3) of this section, use the 5-mode duty 
cycle or the corresponding ramped-modal cycle described in paragraph 
(b) of Appendix II of this part for light-commercial engines and 
recreational marine engines with maximum engine power at or above 37 
kW. You may also use this duty cycle for other commercial engines 
instead of the duty cycle specified in paragraph (b)(1) of this section 
if the power density for every configuration in an engine family is 
above 30.0 kW/liter.
* * * * *

0
4. Section 1042.901 is amended by adding definitions in alphabetical 
order for ``Light-commercial marine engine'' and ``Waterline length'' 
to read as follows:


Sec.  1042.901   Definitions.

* * * * *
    Light-commercial marine engine means a Category 1 propulsion marine 
engine at or above 600 kW with power density above 45.0 kW/liter that 
is certified with a shorter useful life based on its high power 
density.
* * * * *
    Waterline length means the horizontal distance measured between 
perpendiculars taken at the forwardmost and aftermost points on the 
waterline

[[Page 62233]]

corresponding to the deepest operating draft (see ``Length between 
perpendiculars'' at 46 CFR 175.400). This applies for a worst-case 
combination of a fully loaded vessel in freshwater in summer.
* * * * *
[FR Doc. 2020-18621 Filed 10-1-20; 8:45 am]
BILLING CODE 6560-50-P