Control of Air Pollution From Heavy-Duty Engines

SUMMARY: This advance notice of proposed rule (ANPRM) reviews the need

and potential for additional reductions in emissions of oxides of

nitrogen (NOX), hydrocarbons (HC), and particulate matter (PM)

from mobile source heavy-duty engines (HDEs), announces EPA's intent to

establish new emission controls for highway heavy-duty engines, and

also describes EPA's plans to work cooperatively with engine and

equipment manufacturers to consider additional reductions from nonroad

(off-highway) heavy-duty engines. Ozone pollution poses a serious

threat to the health and well-being of millions of Americans and a

large burden to the U.S. economy. Many ozone nonattainment areas face

great difficulties in reaching and maintaining attainment of the ozone

health-based air quality standards in the years ahead. Recognizing this

challenge, states, local governments and others have called on EPA to

promulgate additional national measures to reduce NOX and HC in

order to protect the public from the serious health effects of ozone

pollution. The control of PM emissions from HDEs is also a priority for

these stakeholders.

In response to the need for national pollution reduction measures,

EPA has initiated discussions with engine manufacturers regarding

future emission controls for HDEs. EPA, the California Air Resources

Board (CARB), and HDE manufacturers recently signed a Statement of

Principles (SOP) calling for significantly tighter NOX and non-

methane hydrocarbon (NMHC) standards for on-highway HDEs starting with

model year 2004. The SOP calls on manufacturers to achieve these ozone

precursor reductions without increasing PM emissions, even though

current diesel technology typically results in increased PM (and HC)

emissions when NOX emissions are reduced. The parties plan to

continue their discussions and to invite others to join them, with a

goal of reaching a similar SOP for nonroad HDEs.

DATES: EPA requests comment on this ANPRM no later than October 2,

1995. Should a commenter miss the requested deadline, EPA will try to

consider any comments that it receives prior to publication of the

expected NPRM regarding additional highway heavy-duty engine emission

controls. There will also be an opportunity to comment on any NPRM that

EPA publishes.

ADDRESSES: Materials relevant to this ANPRM are contained in Public

Docket A-95-27, located at room M-1500, Waterside Mall (ground floor),

U.S. Environmental Protection Agency, 401 M Street SW., Washington, DC

20460. The docket may be inspected from 8 a.m. until 5:30 p.m., Monday

through Friday. A reasonable fee may be charged by EPA for copying

docket materials.

Comments on this ANPRM should be sent to Public Docket A-95-27 at

the above address. EPA requests that a copy of comments also be sent to

Tad Wysor, U.S. EPA, Regulation Development and Support Division, 2565

Plymouth Road, Ann Arbor, MI 48105.

This ANPRM is available electronically on the Technology Transfer

Network (TTN), which is an electronic bulletin board system (BBS)

operated by EPA's Office of Air Quality Planning and Standards. The

service is free of charge, except for the cost of the phone call. Users

are able to access and download TTN files on their first call using a

personal computer and modem: TTN BBS, (919) 541-5742; Voice Helpline,

(919) 541-5384.

FOR FURTHER INFORMATION CONTACT: Tad Wysor, U.S. EPA, Regulation

Development and Support Division, 2565 Plymouth Road, Ann Arbor, MI

48105. Telephone: (313) 668-4332.

SUPPLEMENTARY INFORMATION: EPA is issuing this ANPRM to invite

comment from all interested parties on the need and potential for

additional reduction of NOX, HC and PM emissions from HDEs and

EPA's plans to achieve such reductions. After reviewing the

comments, EPA intends to issue a Notice of Proposed Rulemaking

(NPRM) proposing standards for Model Year 2004 and later heavy-duty

highway engines in accordance with the SOP. In addition, comments

received regarding reduction in emissions from nonroad HDEs will

inform any EPA discussions with manufacturers regarding additional

emission reductions.

I. Introduction

Poor air quality represents a serious threat to the health and

well-being of millions of Americans and a large burden to the U.S.

economy. This threat exists despite the fact that, over the past two

decades, great progress has been made at the local, state and national

levels in controlling emissions from many sources of air pollution. As

a result of this progress, many individual emission sources, both

stationary and mobile, pollute at only a fraction of their pre-control

rates. However, continued industrial growth and expansion of motor

vehicle usage threaten to reverse these past achievements. Today, more

than four years after the passage of major amendments to the Clean Air

Act (CAA or Act),1 many states are still finding it difficult to

meet the air quality standards by the CAA deadlines. Furthermore, other

states which are approaching or have reached attainment of National

Ambient Air Quality Standards (NAAQS) may see those gains lost if

current trends persist.

\1\ See 42 U.S.C. 7401 et seq.

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In recent years, efforts to improve air quality have focused

largely on ground-level ozone and its main precursors, nitrogen oxides

(NOX) and volatile organic compounds (VOCs, consisting mostly of

hydrocarbons, HC). In addition, airborne particulate matter (PM) has

been a major air quality concern in many regions. As discussed below,

NOX, ozone, and PM have all been linked to a range of serious

respiratory health problems and a variety of adverse environmental

effects.

At this time, ozone levels remain unacceptably high in many areas

across the country. For many years, control of VOCs was the main

strategy employed in efforts to reduce ground-level ozone. VOC

reductions were more cost effective (on a per-ton basis) and more

readily achievable than NOX reductions. In addition, it was

generally believed that greater ozone benefits could be achieved

through VOC reductions. More recently, it has become clear that

NOX controls are often the most effective strategy for reducing

ozone, especially where ozone is high over a large region (as in the

Midwest and Northeast). As a result, attention has turned to NOX

emissions as the key to improving air quality in many areas of the

country.

Current projections show a slight decrease in total NOX

emissions during the next few years as stationary and mobile source

control programs promulgated under the 1990 CAA are phased in. However,

downward trends in NOX pollution will begin to reverse and

NOX emission inventories begin to rise by the early 2000s, due to

growth in stationary and mobile source activity, and emissions from

heavy-duty highway and nonroad engines are projected to represent a

significant fraction of mobile

[[Page 45581]]

source NOX emissions by the middle of the next decade. In some

areas, the rise in NOX emissions can be expected to be accompanied

by a significant increase in ground-level ozone. Levels of PM are also

expected to rise, both because of the expected increase in numbers of

PM sources and because in the atmosphere, NOX is transformed into

fine acidic nitrate particles which account for a substantial fraction

of the airborne particulate in some areas of the country (``secondary

particulate formation'').

Given these expected trends, and in the absence of new emission

control initiatives, some of the nation's hard-won air quality

improvements will begin to be seriously threatened in the early 2000s.

In response to widespread urging by states, municipalities, health

officials, and concerned citizens in virtually every region of the

country,2 EPA has intensified its efforts to understand and

respond to today's stubborn air quality challenges. Over the past

decade, ambient air measurements and computer modeling studies have

repeatedly demonstrated that ozone and its precursors, NOX and

VOC, are transported across large distances. Thus, while there is a

role for all levels of government to address these issues, EPA's state

and local partners generally agree that only with new initiatives at

the regional and national level can long-term clean air goals be

achieved.

\2\ See Section VI for more detailed discussion of the comments

received by EPA to date.

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States are assigned the jurisdiction by the CAA for implementing

most stationary source emission controls. In most regions of the

country, states are implementing stationary source NOX control

options (as well as stationary source VOC controls) for the control of

acid rain, ozone, or both. However, in many areas these controls will

not be sufficient for reaching and/or maintaining the ozone standard

without significant additional NOX reductions from mobile sources.

California can establish emission control standards for new motor

vehicles, and other states may adopt California's programs.3

Traditionally, however, nationwide VOC and NOX control programs

for new motor vehicles are initiated at the federal level. Similarly,

mobile sources of PM emissions, especially the direct and indirect PM

from diesel engines, are a major consideration to local and state

officials in areas facing current and future air quality problems.

Thus, those charged with delivering cleaner air to the citizens of

their states are looking to the national mobile source emission control

program as a necessary complement to their efforts to reduce NOX,

PM, HC, and other emissions. Common emission standards for mobile

sources across the nation are also strongly supported by manufacturers,

which often face serious production inefficiencies when different

requirements apply to engines/vehicles sold in different states or

areas.

\3\ A similar relationship applies to new nonroad engines and

vehicles, although states may not set standards for certain classes

of these engines and vehicles. See Sections 209 and 213 of the Act.

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Motor vehicle emission control programs have a history of

technological success that, in the past, has largely offset the

pressure from constantly growing numbers of vehicles and miles traveled

in the U.S. The per-vehicle rate of emissions from new passenger cars

and light trucks has been reduced to very low levels. As a result,

increasing attention is now being focused on heavy-duty trucks (ranging

from large pickups to tractor-trailers), buses, and nonroad equipment.

For purposes of this ANPRM, the Agency is primarily interested in the

component of nonroad sources greater than 50 horsepower (37 kilowatts),

which is termed ``heavy-duty nonroad'' in this Notice. (Nonroad engines

greater than 50 hp represent the single largest contributor to total

nonroad NOX emissions.) EPA is addressing other off-highway

sources, such as small nonroad engines, locomotives, aircraft and

marine engines in separate actions.

Since the 1970s, manufacturers of heavy-duty engines for highway

use have developed new technological approaches in response to

increasingly stringent emission standards. However, the technological

characteristics of heavy-duty engines, particularly diesel engines,

have to date prevented the achievement of emission levels comparable to

today's light-duty gasoline vehicles. While diesel engines provide

advantages in terms of fuel efficiency, reliability, and durability,

control of NOX emissions is a much greater challenge for diesel

engines than for gasoline engines. Similarly, control of PM emissions,

which are at very low levels for gasoline engines, represents a

substantial challenge for diesel engines.

Despite these technological challenges, there is emerging agreement

that heavy-duty highway engines offer the potential for substantial

additional emission reductions. In their successful efforts to reach

lower NOX and PM levels over the past 20 years, heavy-duty highway

diesel engine manufacturers have identified new technologies and

approaches that today offer promise for significant new reductions. New

technological options are available to manufacturers of heavy-duty

gasoline engines as well. The emerging technological potential for much

cleaner highway heavy-duty engines is discussed further in Section VIII

below.

In addition, many engines used in highway trucks have similar

counterparts that are used in certain nonroad equipment applications.

The first emission control regulations covering these heavy-duty

nonroad engines have been only recently established; these new

standards are less stringent than current standards for similar heavy-

duty engines intended for highway use. A strong potential exists for

current highway engine emission control technology to be applied in

many cases to heavy-duty nonroad engines (even though differences in

application and usage complicate direct translation of the technology),

representing a future avenue for additional mobile source emission

reductions.

Recognizing the need for additional NOX (and PM) control

measures at the national level to address air quality concerns in a

number of parts of the country and the growing contribution of the

heavy-duty engine sector to ozone (and PM) problems, EPA recently held

a series of discussions with the California Air Resources Board (CARB)

and representatives of the heavy-duty engine manufacturing industry.

The purpose of these discussions was to exchange views on the

appropriateness and feasibility of new emission standards for heavy-

duty engines. Based on these discussions, a Statement of Principles

(SOP) regarding highway heavy-duty engines has been signed by these

parties.

The SOP is described in more detail in Section VII of this notice

and is attached as an Appendix. It addresses NOX, PM, and NMHC

standards for highway heavy-duty engines starting in model year 2004,

the important role that fuel may play in achieving these standards, a

procedure to reevaluate the appropriateness of these standards in 1999,

the intent of the parties to undertake development of a joint industry/

government research program aimed at meeting and exceeding the NOX

and PM levels discussed in the SOP, and the intent of the parties to

continue discussions with others with the goal of signing a similar SOP

with respect to nonroad heavy-duty engines. Other important elements of

the SOP are also discussed in Section VII.

The main purposes of today's ANPRM are to provide an early focus

for an open and comprehensive discussion of the issues involved in

achieving additional emission reductions from heavy-duty engines and to

make the SOP available to the public for comment on specific

[[Page 45582]]

emission reductions from highway heavy-duty engines.4 The rest of

the ANPRM is organized as follows: Section II summarizes the public

health and welfare needs for this initiative and trends in overall

nationwide NOX, VOC, and PM emissions; Section III describes the

contribution of HDEs to overall emissions; Section IV summarizes the

need for control of heavy-duty engines; Section V provides the history

and status of highway heavy-duty engine emission standards; Section VI

summarizes a range of requests for action that EPA has received to

date; Section VII reviews the development and content of the Statement

of Principles; Section VIII discusses some approaches to highway HDE

emission control; and Section IX describes EPA's plans for involving

the public in the upcoming rulemaking process. The complete text of the

Statement of Principles is included as an Appendix to today's Notice.

\4\ Also, in a letter to certain organizations related to clean

air issues in California, EPA agreed that it would issue an ANPRM

regarding national standards for highway HDEs.

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II. Health Concerns and Air Quality Issues: NOX, VOC, Ozone,

and Particulate Matter

A. Health and Environmental Effects Related to NOX, VOC, and Ozone

5

\5\ Information cited in this section and other related

information on health effects of NOX, VOC and Ozone are

available from Docket A-95-27.

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Oxides of nitrogen comprise a family of highly reactive gaseous

compounds that contribute to air pollution in both urban and rural

environments. Because NOX emissions are produced during the

combustion of fuels at high temperatures, the primary sources of

atmospheric NOX include both stationary sources, such as power

plants and industrial boilers, and mobile sources, such as light- and

heavy-duty vehicles as well as construction, agricultural, and other

nonroad equipment. NOX is directly harmful to human health and the

environment, contributes to particulate pollution, and plays a critical

role in the formation of atmospheric ozone. The current primary

(health-based) and secondary (welfare-based) national ambient air

quality standards (NAAQS) for NO2 are both set at a concentration

of 0.053 parts per million (ppm), on an annual average.

Exposure to NO2 can reduce pulmonary function and increase

airway irritation in healthy subjects as well as people with pre-

existing pulmonary conditions. In children, exposure to NO2 at or

near the level of the ambient standard appears to increase the risk of

respiratory illness.6 NOX and its transformation products

(e.g., nitric acid, peroxyacetyl nitrate (PAN) and nitrate particles)

also contributes to a number of adverse environmental impacts such as

the overgrowth of algae and oxygen depletion (eutrophication).7

NOX and its products contribute to acid rain, which affects both

terrestrial and aquatic ecosystems, including acidification of surface

waters, reduction in fish populations, damage to forests and associated

wildlife, soil degradation, damage to materials, monuments, buildings,

etc., and reduced visibility.8

\6\ Air Quality Criteria Document for Oxides of Nitrogen, EPA-

600/8-91/049aF-cF, August 1993 (NTIS #: PB92-17-6361/REB,-6379/REB-

6387/REB).

\7\ Deposition of Air Pollutants Into the Great Waters: First

Report to Congress, EPA-453/r-93-055, May 1994.

\8\ ``Acid Deposition Standard Feasibility Study, A Report to

Congress,'' prepared for the U.S. Environmental Protection Agency by

the Cadmus Group, Inc., under Contract Number 68-D2-0168, February

1995.

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NOX is also a primary precursor to atmospheric ozone

(O3). (Volatile organic compounds (VOC), composed of a very large

number of different hydrocarbons (HC) and other organic compounds, are

also primary precursors to ozone. Their effects as a class of compounds

on health are generally considered in terms of ozone health effects;

health implications of individual toxic compounds are not separately

addressed in this Notice.) The rate of ozone creation depends on highly

complex interactions between VOCs and NOX in the presence of

sunlight. However, in areas with high VOC to NOX ratios, which

includes most of the area covering the eastern United States, ozone

formation is NOX limited, and NOX reductions will reduce

ozone levels. Areas with lower VOC to NOX ratios (particularly the

core of many large highly urbanized nonattainment areas) are VOC

limited and NOX emissions will interact with ozone to reduce ozone

levels. However, in NOX limited areas, downwind of these same

areas, NOX reductions will reduce ozone levels.

Ozone is a highly reactive chemical compound which can affect both

biological tissues and man-made materials. Ozone can affect human

pulmonary and respiratory health--symptoms include chest pain,

coughing, and shortness of breath.9 Studies, to date, indicate

that at the current standard these effects are reversible when exposure

stops.

\9\ Air Quality Criteria Document for Ozone and Related

Photochemical Oxidants (External Review Draft), EPA-600/AP-93/004a-

c, February, 1995 (NTIS #: PB94-17-3127, -3135, -3143).

The presence of elevated levels of ozone is of concern in rural

areas as well. Because of its high chemical reactivity, ozone causes

damage to vegetation. Estimates based on experimental studies of the

major commercial crops in the U.S. suggest that ozone may be

responsible for significant agricultural crop yield losses. In

addition, ozone causes noticeable leaf damage in many crops, which

reduces marketability and value. Finally, there is evidence that

exposures to ambient levels of ozone which exist in many parts of the

country are also responsible for forest and ecosystem damage. Such

damage may be exhibited as leaf damage, reduced growth rate, and

increased susceptibility to insects, disease, and other environmental

stresses and has been reported to occur in areas that attain the

current standard. There are complexities associated with evaluating

such effects due to the wide range of species and biological systems

introduce significant uncertainties.

B. Health and Other Effects Related to Particulate Matter 10

Air pollutants collectively called particulate matter (PM) include

dust, dirt, soot, smoke and liquid droplets directly emitted into the

air by sources such as factories, power plants, cars, trucks,

woodstoves/fireplaces, construction activity, forest fires,

agricultural activities such as tillage, and natural windblown dust.

Particles formed secondarily in the atmosphere by condensation or the

transformation of emitted gases such as SO2, NOX, and VOCs

are also considered particulate matter.

\10\ Information cited in this section and other related

information on the health effects of particulate matter are

available for the public from Docket A-95-27.

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Based on studies of human populations exposed to high

concentrations of particles (sometimes in the presence of SO2),

and laboratory studies of animals and humans, there are major human

health concerns associated with PM. These include deleterious effects

on breathing and respiratory systems, aggravation of existing

respiratory and cardiovascular disease, alterations in the body's

defense systems against foreign materials, damage to lung tissue,

carcinogenesis, and premature death. The major subgroups of the

population that appear to be most sensitive to the effects of

particulate matter include individuals with chronic obstructive

pulmonary or cardiovascular disease,

[[Page 45583]]

those with influenza, asthmatics, the elderly, and children.

Particulate matter also soils and damages materials, and fine particles

are a major cause of visibility impairment in the United States.11

\11\ Air Quality Criteria for Particulate Matter (External

Review Draft), EPA-600/AP-95/001a-c, April 1995 (NTIS #PB95-22-1727,

-1735, -1743).

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C. Need for NOX and VOC Control; Ozone and Other Air Quality

Management Issues

States are obligated under the Clean Air Act to submit State

Implementation Plans (SIPs) demonstrating how each nonattainment area

will reach attainment of the ozone NAAQS. For nonattainment areas

designated as serious or worse, this obligation involves the use of

photochemical grid modeling (e.g., Urban Airshed Modeling, or UAM) for

each nonattainment area. Although these attainment demonstrations were

due November 15, 1994, the magnitude of this modeling task, especially

for areas which are significantly affected by transport of ozone and

precursors generated outside of the nonattainment area, has delayed

many states in submitting complete modeling results.

Recognizing these challenges, EPA recently issued guidance on ozone

demonstrations,12 based on a two-phase approach for the submittal

of ozone SIP attainment demonstrations. Under the first phase, the

state is required to submit a plan implementing a set of specific

control measures to obtain major reductions in ozone precursors along

with limited UAM modeling. The second phase includes a two-year process

during which EPA, the states, regional associations, and other

interested parties can improve emission inventories and modeling and

better assess regional and local impacts and control strategies on

ozone attainment. These analyses are then to be used by states as their

basis for demonstrating ozone attainment plans in their phase II SIPs.

\12\ Memorandum from Mary D. Nichols, Assistant Administrator

for Air and Radiation, to EPA Regional Administrators, re Ozone

Attainment Demonstrations, March 2, 1995.

Modeling results already available and the need for two-phased

ozone attainment plans highlight the fact that ozone pollution is a

regional problem, not simply a local or state problem. Ozone itself and

its precursors are transported long distances by winds and

meteorological events. Thus, achieving ozone attainment for an area and

thereby protecting its citizens from ozone-related health effects often

depends on the ozone and/or precursor emission levels of upwind areas.

Local stationary source NOX and VOC controls will assist

nonattainment areas toward their ozone reduction goals, but for many

areas with persistent ozone problems, attainment of the ozone NAAQS

will require broader control strategies for both NOX and VOC. As a

result, effective national ozone control requires an integrated

strategy which combines cost-effective approaches in both the mobile

and stationary source arenas at both the local and national levels.

The rate of ozone creation depends on highly complex interactions

between VOCs and NOX in the presence of sunlight. While regional

concentrations and transport of precursor pollutants have a significant

role in determining the rate of ozone production in many areas, local

conditions are also important and may be predominant factors in some

cases. Generally, the formation of ozone in locations with low VOC to

NOX ratios tends to be VOC limited. Low VOC to NOX ratios are

characteristic of the central core of many highly urbanized

nonattainment areas, which may thus be dependent on VOC control for

effective ozone reduction. On the other hand, in areas with higher VOC

to NOX ratios, ozone formation is NOX limited, and NOX

reduction strategies are required for effective ozone control. Such

conditions occur over broad regions of the U.S., including many areas

downwind of large urban centers. As concluded in a recent report by the

National Research Council (NRC), ``the optimal set of controls relying

on VOCs, NOX, or, most likely, reductions of both, will vary from

one place to the next.'' 13

\13\ National Research Council. Rethinking the Ozone Problem in

Urban and Regional Air Pollution. National Academy Press,

Washington, D.C., 1991.

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While both NOX and VOC emissions are subject to various

stationary and mobile source regulations, VOCs have often been the

primary focus of past ozone abatement strategies, and specific air

quality issues regarding NOX emissions have received somewhat less

attention. Accordingly, the next sections describe some of the key

regional ozone and other air quality problems around the country for

which additional NOX controls will be beneficial.

1. Eastern United States

There is a growing body of evidence that reduction of regional

ozone levels holds the key to the ability of a number of the most

seriously polluted areas in the Eastern United States, in both the

Southeast and the Northeast, to meet the ozone NAAQS. Regional Oxidant

Modeling (ROM) studies conducted by EPA (called the ROMNET and Matrix

studies 14) strongly suggest that reducing NOX emissions is

the most effective approach for reducing ozone over large geographical

areas. (In contrast, as described below, local NOX controls may or

may not be helpful in individual nonattainment areas.) At the same

time, these studies, as well as ongoing UAM modeling by states, suggest

that reduction in VOC emissions may be key to reducing locally

generated peak ozone concentrations. Additional NOX control will

also contribute to addressing the problems of year-round NOX

deposition in the Chesapeake Bay and other nitrogen-limited estuaries

15 and acid rain in the eastern part of the country.

\14\ See Regional Ozone Modeling for Northeast Transport

(ROMNET), EPA Doc. EPA-450/4-91-002a (June 1991), and Chu, S.H.,

E.L. Meyer, W.M. Cox, R.D. Scheffe, ``The Response of Regional Ozone

to VOC and NOX Emissions Reductions: An Analysis for the

Eastern United States Based on Regional Oxidant Modeling,''

Proceedings of U.S. EPA/AWMA International Specialty Conference on

Tropospheric Ozone: Nonattainment and Design Value Issues, AWMA TR-

23, 1993.

\15\ Deposition of Air Pollutants Into the Great Waters: First

Report to Congress, EPA-453/r-93-055, May 1994.

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In its analysis supporting the approval of a Low Emission Vehicle

program in the eastern and northeast states comprising the Ozone

Transport Region (OTR),16 EPA reviewed existing work and performed

new analysis to evaluate in detail the degree NOX controls are

needed.17 These studies showed that 50-75 percent reductions in

NOX from 1990 levels would be needed throughout the OTR. These

studies also showed that 50-75 percent reductions in VOC would be

needed in and near the portion of the OTR comprising the Northeast

urban corridor. The studies also concluded that transport of ozone and

precursors from upwind areas is a significant contributor to ozone

exceedances downwind in essentially all nonattainment areas in the OTR.

\16\ Maine, New Hampshire, Vermont, Massachusetts, Rhode Island,

Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland,

District of Columbia, and northern Virginia.

\17\ Environmental Protection Agency, Low Emission Vehicle

Program for Northeast Ozone Transport Region; Final Rule, 60 FR

48673, January 24, 1995.

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More recently, three new studies have become available which

confirm the conclusions of the earlier studies. In one of these, the

Agency performed new ROM analyses evaluating the eastern third of the

U.S. and southern Canada.18

[[Page 45584]]

Taken together, these studies strongly support the view that NOX

emission reductions in the range of 50-75 percent will be needed in

each state in the OTR and VOC reductions in the range of 50-75 percent

will be needed in and near the Northeast urban corridor to reach and

maintain attainment.

\18\ Environmental Protection Agency, ``Summary of EPA Regional

Oxidant Model Analyses of Various Regional Ozone Control

Strategies,'' November 28, 1994; Kuruville, John et al., ``Modeling

Analyses of Ozone Problem in the Northeast,'' prepared for EPA, EPA

Document No. EPA-230-R-94-108, 1994; Cox, William M. and Chu, Shao-

Hung, ``Meteorologically Adjusted Ozone Trends in Urban Areas: A

Probabilistic Approach,'' Atmospheric Environment, Vol. 27B, No. 4,

pp 425-434, 1993.

2. Other Regions

A recent Southern Oxidant Study (SOS) report 19 describes the

results of research showing that, in the south, relatively high

concentrations of ozone accumulate in both rural and urban areas.

Although the rural ozone levels tend to be lower than in urban areas,

and are generally in compliance with the current ozone NAAQS, the rural

ozone concentrations are still high enough to inhibit photosynthesis,

thus reducing agricultural yields and causing damage to forests and

ornamental plants.

\19\ The State of the Southern Oxidant Study (SOS): Policy-

Relevant Findings in Ozone Pollution Research, 1988-1994. North

Carolina State University, April 1995.

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These rural concentrations of ozone and its precursors create a

relatively high ozone background on which the ozone plumes from

stationary and area sources in urban areas are superimposed. As a

result, modeling in the Atlanta metropolitan area, designated as a

serious ozone nonattainment area, suggests that a 90 percent decrease

in NOX emissions will be required to achieve the current NAAQS in

Atlanta.

Modeling studies performed to date for the states surrounding Lake

Michigan (Wisconsin, Illinois, Indiana, and Michigan) indicate that

reducing ozone transported into this region has a significant effect on

the number and stringency of local control measures likely to be needed

to meet the ozone NAAQS. Without such reductions, these studies suggest

that the necessary degree of local control will be very difficult to

achieve. The EPA Matrix study referenced above also indicates that

NOX control will be effective in reducing regional ozone in the

Midwest. This suggests that new reductions in NOX emission will be

helpful in meeting the NAAQS in the Lake Michigan area, even though

NOX control in the immediate vicinity of and within major

nonattainment areas near Lake Michigan do not appear to contribute to

attainment in these areas.

The ozone SIP that the State of California has submitted to EPA for

approval relies on NOX and VOC reductions for most California

nonattainment areas to demonstrate compliance with the NAAQS.

Specifically, the revised SIP projects that the following NOX

reductions will be required: South Coast, 59 percent; Sacramento, 40

percent; Ventura, 51 percent; San Diego, 26 percent; and San Joaquin

Valley, 40 percent. For VOC, the required reductions will be the

following: South Coast, 79 percent; Sacramento, 38 percent; Ventura, 48

percent; San Diego, 26 percent; and San Joaquin Valley, 40 percent.

Transported ozone and precursor emissions are also an important factor

in California's need for additional NOX controls.20

\20\ In addition, the revised SIP concludes that secondary

formation of nitrate particulate from NOX (primarily ammonium

nitrate) contributes to the particulate problem in the South Coast

Air Basin and the San Joaquin Valley. Reduction of this fraction of

the total PM will require additional NOX emission reductions.

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The Agency requests comment on these studies and the application of

their findings to the planned actions in this Notice as well as any

additional data or analysis that would inform any future actions.

4. Waivers of Local Stationary Source NOX Control Requirements

In some cases, states with nonattainment areas subject to NOX

Reasonably Available Control Technology (RACT) requirements for

stationary sources have petitioned EPA for a waiver from these

requirements. EPA guidance on such waivers provides that waivers may be

granted if states show that reducing NOX in a nonattainment area

would not contribute to attainment of the ozone NAAQS within the same

nonattainment area.21 EPA's policy is to limit the assessment of

the petitions to the effect that NOX reductions within a

nonattainment area have on that specific area's ability to meet the

NAAQS (i.e., an assessment of pollutant transport outside the area is

not made). EPA has separate authority under the CAA to require a state

to reduce emissions from sources where there is evidence showing that

such emissions would contribute significantly to nonattainment or

interfere with maintenance of attainment in other states.

\21\ ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--

Revised Process and Criteria,'' EPA Memo from John S. Seitz,

Director, OAQPS, to Regional Air Directors, February 8, 1995.

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EPA's approval of a NOX exemption is granted on a contingent

basis.22 That is, a monitoring-based exemption lasts for only as

long as the area's monitoring data continue to demonstrate attainment

and a modeling-based exemption lasts for only as long as the area's

modeling continue to demonstrate attainment without NOX reductions

from major stationary sources.23

\22\ ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--

Revised Process and Criteria,'' EPA Memo from John S. Seitz,

Director, OAQPS, to Regional Air Directors, May 27, 1994.

\23\ NOX Supplement to the General Preamble, 57 FR 55628

(Nov. 25, 1992).

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Given these circumstances, EPA's approval of NOX waivers for

certain areas should not be viewed as contradictory to the

consideration of regional and national measures to reduce NOX

emissions. As discussed above, new regional and/or national NOX

controls are needed to obtain the NAAQS designed to protect the public

health.

5. National NOX and VOC Emissions Trends 24

\24\ For today's notice, EPA has assembled data available to

date projecting emissions from various sources into the future. The

data comes from the EPA ``Trends Document'' (National Air Pollutant

Emission Trends, 1900-1993, EPA-454/R-94-027, October 1994), MOBILE5

emissions modeling, and work performed under EPA's contract with

E.H. Pechan and Associates. EPA expects to continue to revise and

improve its projections of emissions and will discuss and rely on

such updated information in future rulemakings.

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Figure 1 displays projected total NOX emissions over the time

period 1990 to 2020 as well as stationary and mobile source components

over the same period. Figure 2 presents similar data for VOC emissions

for the period 1990 to 2010 (later-year projections for VOC are under

development).25 As the figures show, a similar pattern is

projected for both of these ozone precursor emissions. Initially, the

projections indicate that the national inventories will decrease over

the next few years as a result of continued implementation of existing

CAA stationary and mobile-source NOX control programs. After the

year 2000, however, as the implementation of new CAA programs is

completed and the

[[Page 45585]]

pressure of growth continues, these downward trends are expected to

reverse, and national VOC and NOX emissions are both expected to

rise again.

\25\ The data in these and the succeeding figures in this ANPRM

take into account the expected effects of various CAA control

programs which have been promulgated to date, including Tier I

tailpipe standards, new evaporative emission test procedures,

enhanced inspection and maintenance requirements, reformulated

gasoline, oxygenated fuels, and California LEV (Low Emission

Vehicle) requirements. Nonroad NOX emission projections also

reflect the future effects of existing nonroad emission regulations.

The potential effects of contemplated National LEV requirements are

not reflected in the data. In these figures, nonroad emission data

includes emissions from a broad range of off-highway sources

including, locomotives, aircraft and marine vessels.

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Figures 1 and 2 present emissions data for the entire country. In

nonattainment areas, the fraction of NOX and VOC total emissions

contributed by mobile sources on average is greater than in the

nationwide assessment and is in excess of the stationary source

contribution.

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D. Need for PM Control; PM Air Quality Issues and Emission Trends

The overwhelming proportion of PM-10 emissions is created by wind

erosion, accidental fires, fugitive dust emissions (from road surfaces,

agricultural tilling, construction sites, etc.), and other

miscellaneous sources. As much as 85 percent of PM-10 in nonattainment

areas can be composed of these ``crustal'' and miscellaneous materials.

Since these sources are not readily amenable to regulatory standards

and controls, when considering the need for PM controls it is

appropriate to focus on the ``controllable'' portion of the particulate

pollution problem. The result is shown in Figure 3, which displays

national trends in PM-10 levels from stationary and mobile sources,

projected for the twenty year period 1990 to 2010. Similar to the

pattern discussed above for VOC and NOX emissions, the figure

shows that total PM from these sources will decline slightly as the

beneficial effects of the 1990 CAA Amendments continue to be felt.

However, in the absence of additional controls, mobile source and

industrial source emissions of PM-10 levels are expected to rise after

2000.

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Currently, there are 44 PM-10 nonattainment areas in 18 states.

More generally, diesel emissions contribute significantly to higher

than average PM levels that tend to occur in high-population, high-

traffic urban settings. These areas frequently have elevated ambient

levels of other air pollutants as well. To the extent that higher PM

exposures result from these factors, control of PM emissions from

diesel engines could be expected to provide public health and welfare

benefits for a relatively large number of individuals.

III. Contribution of Heavy-Duty Engines to National NOX, VOC,

and PM Emissions

Heavy-duty highway and nonroad engines contribute significantly to

levels of NOX and are also an important source of VOC (as a result

of HC emissions) and PM in most parts of the country. This section

describes the current and expected future role of HDEs in contributing

to the nation's major air pollution problems.

A. HDE Contribution to National NOX Emissions

Figure 4 shows the total mobile source NOX inventory by

emission source (light-duty highway vehicles, heavy-duty highway

vehicles, and nonroad engines), projected over the next 25 years.

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B. HDE Contribution to National VOC Emissions

Figure 5 shows the total mobile source VOC inventory by emission

source. The figure shows that light-duty vehicle emissions can be

expected to decline for some years but then begin rising in the 2005

time frame. VOC emissions from highway heavy-duty engine and nonroad

sources are projected to rise slightly throughout this period.

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C. HDE Contribution to National PM Emissions

Projected mobile source trends for PM-10 are shown in Figure

6.26 The figure shows that, over the next 15 years, the

contribution of highway sources including HDEs to PM-10 emissions are

expected to decrease and then remain relatively constant well into the

next decade, while PM emissions from nonroad sources are expected to

increase.

\26\ Environmental Protection Agency, ``National Air Pollutant

Emission Trends, 1900-1993,'' EPA-454/4-94-027, October 1994.

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IV. The Need for New Heavy-Duty Engine Emission Control

The Agency believes several factors combine to support rulemaking

to reduce NOX, HC, and PM emissions from highway and nonroad

heavy-duty engines in the next decade. First, HDE emission controls

offer a means to address at the national level the need for new

approaches to NOX, HC, and PM reductions that is described in

Section II. As explained more fully above, local measures alone to

control NOX, HC and PM will prove insufficient if all areas of the

country are to achieve and maintain attainment of the ozone and PM

NAAQS in the years ahead. Heavy-duty engines, like other mobile

sources, represent an emissions source that crosses attainment areas

and state boundaries; trucks and buses often travel long distances

while nonroad heavy-duty engines power a variety of equipment used in

both urban and rural areas, and are often relocated to different

regions of the country as needed.

Second, the projections in Section III above show that heavy-duty

engines contribute in varying degrees to the national inventory of

NOX, HC, and PM emissions.27 Third, an effort now to

implement national HDE controls may prevent a patchwork of regulation

where some states require HDE controls while other states do not.

Indeed, engine manufacturers felt it was very important that the new

program which EPA expects to propose regarding highway HDEs (see

Section VII below) provide for the harmonization of requirements

between EPA and CARB, resulting in a single set of heavy-duty standards

applicable in all 50 states. A national program thus appears to offer

the most efficient way for states, engine manufacturers, and EPA to

implement additional HDE controls. Fourth, since states must soon

finalize SIPs demonstrating attainment in the years ahead, action on

additional HDE controls will allow states to incorporate the expected

reductions from HDE controls in their SIPs.

\27\ For PM emissions, the projections show that the mobile

source contribution is growing; available data shows that heavy-duty

highway and nonroad engines represent significant fractions of

mobile source emissions.

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Fifth, with respect to highway HDEs, cost effective technology

options now appear to be within reach which can achieve very large

NOX emission reductions from new highway HDEs manufactured in

model year 2004 and subsequent years (see Section VIII below for a more

detailed discussion of this issue). The Agency is optimistic that, with

continued investment in research and development by the highway HDE

manufacturers, and with cooperation between EPA, CARB, the

manufacturers, and the oil refining industry, technological barriers

which have prevented NOX emissions from diesel HDEs from reaching

levels characteristic of gasoline engines will be overcome. For the

benefits of these NOX reductions to be realized to a significant

degree in the next decade, the Agency believes that this work must

begin soon.

Finally, with respect to nonroad heavy-duty engines, EPA believes

that there is the potential to apply current highway HDE emission

control technology to many nonroad HDEs, providing an avenue for

significant additional mobile source emission reductions. Only recently

have the first emission controls been applied to heavy-duty nonroad

engines, and standards are currently set at levels significantly higher

than current highway heavy-duty engine standards. While control of some

or all nonroad heavy-duty engines raises special issues such as the

lack of a vehicle registration system and the potential difficulty of

``packaging'' engines on a variety of equipment types, many engines

used in highway trucks have similar counterparts that are used in

nonroad equipment applications. It therefore makes sense to explore

ways to apply highway HDE emission control technology to nonroad HDEs.

The Agency is interested in comment on the role of NOX

emissions in contributing to high ozone levels over broad areas and the

need for national HDE controls to address NOX and ozone levels. In

addition the Agency solicits comment on other approaches such as local

and regional controls.

V. Background on Highway Heavy-Duty Engine Standards

Under EPA's classification system, vehicles with a gross vehicle

weight rating (GVWR) over 8,500 pounds are considered heavy-duty

vehicles. (The State of California classifies the lighter end of EPA's

heavy-duty class as ``medium-duty vehicles.'') Heavy-duty engines are

used in a wide range of heavy-duty vehicle categories, from small

utility vans to large trucks. Because one type of heavy-duty engine may

be used in many different applications, EPA emission standards for

heavy-duty vehicles are based on the emissions performance of the

engine (and any associated aftertreatment devices) separate from the

vehicle chassis. Testing of a heavy-duty engine consists of exercising

the engine over a prescribed duty cycle of engine speeds and loads

using an engine dynamometer.

Emissions from heavy-duty engines are measured in grams of

pollutant per brake horsepower-hour (g/bhp-hr) or, in more recent

regulations, in grams per kilowatt hour (g/kw-hr). These units for

emission rates recognize that the primary purpose of heavy-duty engines

is to perform work and that there is a large variation in work output

among the engines used in heavy-duty applications. Under this system,

standards per unit of work are the same for all heavy-duty engines.

Emission standards have been in place for highway diesel and

gasoline heavy-duty engines since the early 1970s. The first

regulations focused on control of emissions of smoke. Subsequent

regulations broadened emission control requirements to include gaseous

and particulate emissions. The 1990 amendments to the Clean Air Act

required EPA to set more stringent standards for NOX emissions

from all heavy-duty highway engines and for PM from buses. 42 U.S.C.

7521(a)(3), 7521(f), 7554(b).

The current exhaust emission standards for highway heavy-duty

diesel and gasoline engines are presented in Table 1. Standards for

``urban buses'' (large transit buses), which specify more stringent PM

levels than those applying to other heavy-duty engines, are displayed

separately in the table.

[[Page 45597]]

Table 1.--Highway Heavy-Duty Emission Standards

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

Oxides of Diesel

Year Hydrocarbons (g/ Carbon Monoxide nitrogen (g/bhp- particulate (g/

bhp-hr) (g/bhp-hr) hr) bhp-hr)

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

Diesel:

1991-93......................... 1.3 15.5 5.0 0.25

1994-97......................... 1.3 15.5 5.0 0.10

1998............................ 1.3 15.5 4.0 0.10

Urban buses:

1991-92......................... 1.3 15.5 5.0 0.25

1993............................ 1.3 15.5 5.0 0.10

1994-95......................... 1.3 15.5 5.0 0.07

1996-97......................... 1.3 15.5 5.0 *0.05

1998............................ 1.3 15.5 4.0 *0.05

Gasoline:

1991-97:

(A)............................. 1.1 14.4 5.0 4.0

(B)............................. 1.9 37.1 5.0 4.0

1998:

(A)............................. 1.1 14.4 4.0 3.0

(B)............................. 1.9 37.1 4.0 4.0

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

Note: ``(A)'' denotes the standard for engines in trucks 14,000 lbs. GVWR.

``(B)'' denotes the standard for engines in trucks 14,000 lbs. GVWR.

*.07 g/bhp-hr in-use.

Under Section 202(a)(3), emission standards for heavy-duty highway

engines are set at the ``greatest degree of emission reduction

achievable through the application of technology which the

Administrator determines will be available for the model year to which

such standards apply, giving appropriate consideration to cost, energy,

and safety factors associated with the application of such technology''

(42 U.S.C. 7521(a)(3)(A)). In addition, Section 202(a)(3) provides that

highway heavy-duty engine manufacturers will have four model years of

lead time before any new emission standards may be implemented (42

U.S.C. 7521(a)(3)(C)). The Act also provides that standards for heavy-

duty engines apply for at least three model years to provide stability

to any heavy-duty standards. Id. Finally, the Act precludes new

NOX emission standards for heavy-duty highway engines before the

model year 2004. 42 U.S.C. 7521(b)(1)(C).

VI. Summary of Public Support for EPA To Take Action

Several states, public interest groups and environmental

organizations, trucking associations, and others have strongly

encouraged EPA to pursue additional NOX, HC, and PM emissions

reductions from HDEs through national programs. The Agency has received

numerous letters encouraging EPA to move forward with a national

program to reduce heavy-duty engine emissions. In December of 1994,

several organizations including the American Lung Association and the

Natural Resources Defense Council sent a letter to the EPA Assistant

Administrator for Air and Radiation requesting that EPA tighten the

heavy-duty engine standards to 0.05 g/bhp-hr for particulates and 2.0

g/bhp-hr for NOX.28 Jim Edgar, Governor of Illinois, sent a

letter to U. S. Senator Paul Simon in March of 1995, urging him to

request that EPA implement national rules to reduce ozone precursor

emissions from, among other sources, heavy-duty engines. The California

Air Resources Board signed a Memorandum of Understanding with EPA in

April, 1995 to undertake joint efforts in support of EPA's development

of a national program for the control of NOX, PM, and HC emissions

from heavy-duty engines. In addition, the ozone SIP submitted by the

State of California relies on EPA to set national standards for highway

heavy-duty engines at the level of 2.0 g/bhp-hr and requests such

action. During May and June of 1995 the Administrator received letters

from the State and Territorial Air Pollution Program Administrators/

Association of Local Air Pollution Control Officials (STAPPA/ALAPCO),

the Northeast States for Coordinated Air Use Management (NESCAUM), and

the Mid-Atlantic Regional Air Management Association (MARAMA) on behalf

of their member states, requesting that EPA implement new national

controls for heavy-duty engine emissions. The Northeast Ozone Transport

Commission adopted a resolution on June 13, 1995 supporting EPA's

efforts to control diesel engine emissions. EPA also received support

for reducing the heavy-duty engine NOX standard from the

Manufacturers of Emission Controls Association (MECA). On June 22,

1995, the Appalachian Mountain Club, a conservation and recreation

group with 65,000 members in eleven regional areas, sent a letter to

the Administrator that supports EPA's initiative as critical for

controlling ozone, PM, acid deposition, and regional haze in the

Northeast. In addition to written requests, EPA has received numerous

positive comments from concerned individuals, municipalities, and other

organizations endorsing a new national control program to reduce

emissions from heavy-duty engines.

\28\ Copies of all letters cited and received to date can be

obtained from Docket A-95-27, as described at the beginning of this

Notice.

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VII. Summary of Government/Industry Statement of Principles

EPA initiated discussions with engine manufacturers, California's

Air Resources Board (CARB), and others to begin to explore what

additional controls could be implemented to further reduce emissions

from heavy-duty engines. As a result of these discussions, EPA,

individual members of the highway heavy-duty engine industry, and CARB

have signed a Statement of Principles (SOP) regarding future highway

HDE emission reductions. The manufacturer signatories 29 represent

more than 95 percent of sales by the highway heavy-duty engine

industry. With this SOP, presented in its entirety as an Appendix to

this notice, the heavy-duty engine

[[Page 45598]]

industry has stepped forward to become a leader in environmental

protection, and industry and government will work as partners to bring

about cleaner air. The following presents a summary of the key elements

of this Statement of Principles.

\29\ Caterpillar, Inc., Cummins Engine Company, Inc., Detroit

Diesel Corporation, Ford Motor Company, General Motors Corporation,

Hino Motors, Ltd., Isuzu Motors America, Inc., Mack Trucks, Inc.,

Mitsubishi Motors America, Inc., Navistar International, and Volvo

Truck Corporation.

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The goal of all Signatories to the SOP is to reduce NOX

emissions from highway HDEs to levels approximating 2.0 g/bhp-hr

beginning in model year (MY) 2004, while also achieving reductions in

HC. Accordingly, the Signatories concur that EPA would issue a notice

of proposed rulemaking (NPRM) proposing to implement (1) a combined

NOX plus non-methane hydrocarbon (NMHC) standard of 2.4 g/bhp-hr

and (2) a combined NOX plus NMHC standard of 2.5 g/bhp-hr together

with a NMHC cap of 0.5 g/bhp-hr, with flexibility for an engine family

to comply with either of these standards as the manufacturer

determines. The Signatories expect that these standards will result in

emissions comparable to a NOX standard of 2.0 g/bhp-hr as well as

reduced NMHC emissions. In order to facilitate the rulemaking process

and solicit additional views, the SOP Signatories concur with EPA's

desire to precede the issuance of the NPRM with this ANPRM.

The Signatories acknowledge that fuel composition 30 has a

significant effect on emissions, and commit to making improvements in

HDE fuel as appropriate under the CAA to meet the MY2004 emission

standards, taking into consideration costs and other relevant factors.

The Signatories also recognize that any changes to both certification

and commercial fuel specifications would have to become effective no

later than October 2003 to ensure fuel availability at the time the

MY2004 engine standards would go into effect.

\30\ Representatives of the fuel industry are not parties to

this agreement as noted above. EPA will continue to engage the fuel

industry in discussions as we proceed to implement the SOP,

including identifying formal ways to cooperate with all parties

affected by potential heavy-duty engine changes.

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In accordance with the SOP, EPA would in 1999 review any rulemaking

adopting the MY2004 standards by issuing a notice providing the

opportunity for public comment on whether or not the MY2004 standards

are technologically feasible and otherwise appropriate under the CAA.

EPA would review the need, feasibility, and cost of the standards under

the criteria imposed by the CAA, and would assess whether any fuel

improvements that are needed to assist heavy-duty engines in complying

with the MY2004 standards would be available nationwide by the

appropriate date. After receiving public comment, EPA would take final

Agency action. Depending on the results of EPA's review, the MY2004

standards would remain at the levels described above or EPA would

propose to adjust them. The Signatories expect any adjustment of the

standards would not exceed (1) 2.9 g/bhp-hr NOX plus NMHC and (2)

3.0 g/bhp-hr NOX plus NMHC with a proportional increase in the

NMHC cap (to 0.6 g/bhp-hr), unless improvements to fuel quality are

needed but not made.

Both EPA and California recognize in the SOP the benefits of

harmonizing state and federal regulations regarding highway HDEs.

California confirms its intent to hold a public hearing regarding

harmonization of its regulations for dynamometer-certified engines

greater than 8500 lbs. GVWR with the federal regulations adopted under

the SOP, provided such action would not compromise California's

obligations to comply with state and federal law.

Neither PM nor CO emission standards change under the SOP. Also,

the SOP is premised on the assumption that EPA will not alter federal

test procedures for heavy-duty highway engines. With respect to

durability, the Signatories commit to work to develop appropriate

measures which ensure that emission gains are maintained in-use.

As part of the SOP, EPA and CARB commit to work cooperatively with

industry to develop improved averaging, banking, and trading programs

that will create more incentive for early introduction of cleaner

engines. At a minimum EPA would, in the NPRM on the MY2004 standards,

propose to eliminate any limitations on credit life, propose to

eliminate all credit discounts, and solicit comment on the merits of

allowing cross-fuel, cross-subclass, and cross-category credit

exchanges, to the extent permitted under the CAA.

A key purpose of the SOP is to provide the HDE industry with

increased certainty and stability for their business planning. Without

such certainty and stability, industry would not commit to the enormous

investment that the SOP standards will require. EPA and CARB in turn

acknowledge that industry will be making a commitment and investment

that will require more than the minimum period of stability of three

years set forth in the CAA.

The SOP also outlines a plan to undertake a joint industry/

government research program with the goal of developing engine and fuel

technologies which can meet and exceed the MY2004 standards. Pursuant

to a separate research agreement, the SOP Signatories and possibly

others will try to reduce NOX emissions to 1.0 g/bhp-hr and PM

emissions to 0.05 g/bhp-hr while maintaining current highway diesel

engine attributes such as performance, reliability, durability, safety,

and efficiency.

Finally, while the SOP focuses on highway HDEs, the SOP Signatories

commit to participate in discussions with nonroad HDE and equipment

manufacturers to develop a separate SOP by October 1995 addressing

emission standards for nonroad HDEs.

The SOP plan offers a flexible means of achieving a 50 percent

reduction in NOX emissions from the 4.0 g/bhp-hr NOX standard

that goes into effect beginning in model year 1998. Figure 7 shows the

estimated national NOX inventory for highway heavy-duty engines

with and without the potential control measures articulated in the SOP.

These projections are based on preliminary analysis of available

information and subject to revision as EPA continues to analyze such

factors as the future growth and turnover of the heavy-duty fleet, in-

use emission performance, expedited or delayed introduction of new

emission reduction technology and other factors.

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For hydrocarbons, EPA expects the NMHC plus NOX standards in

the SOP to be equivalent to about half or less of the current HC

standards (1.3 g/bhp-hr for diesel engines and 1.1-1.9 g/bhp-hr for

gasoline engines). Further, the standards ensure continued control of

PM emissions from highway HDEs at current levels (0.1 g/bhp-hr),

despite a tendency for PM emissions from diesel HDEs to increase when

NOX emissions decrease. Ambient PM reductions may also result from

the NOX emission reductions, since NOX contributes to

secondary particulate.

EPA will actively seek to work with both the Signatories to the SOP

and the oil refining industry to evaluate the role of fuel improvements

in achieving the MY2004 standards. EPA believes the joint industry/

government research program with the goal of achieving highway HDE

emissions of just 1.0 g/bhp-hr NOX and 0.05 g/bhp-hr PM offers an

unusual opportunity to work collaboratively for the benefit of the

environment. EPA will also continue discussions with the Signatories

and others with the aim of achieving an SOP on nonroad heavy-duty

engines comparable to this SOP regarding highway heavy-duty engines.

VIII. Approaches to Highway Heavy-Duty Engine Emission Control

Highway heavy-duty engine manufacturers are engaged in ongoing

efforts to design and produce the cleaner engines envisioned in the

SOP. As with any motor vehicle engine technology, control of emissions

from heavy-duty highway engines can come from changes in the design of

engines and related hardware, changes to fuels, or some combination of

the two. While EPA and the engine manufacturing industry are not yet

certain which types of technologies in which combinations might be

necessary for manufacturers to reach the standards under consideration,

several promising approaches have been identified to date. EPA has

prepared a document that describes the causes of highway HDE emissions

and several engine-based approaches and exhaust aftertreatment devices

to control emissions. This document is available in Docket A-95-27.

Changes in engine technology or aftertreatment which can reduce HC,

NOX and PM emissions must be evaluated with respect to, and bear a

close relationship to, the fuel composition the engines will be using.

The petroleum industry has changed fuels a number of times in the past

either to reduce the emissions from existing vehicles (e.g., gasoline

volatility, reformulated gasoline) or to make it possible for engine

manufacturers to employ new engine designs or emission control

technologies that are sensitive to fuel characteristics (e.g., unleaded

gasoline to facilitate the use of catalytic converters, low-sulfur

diesel). EPA intends to work jointly with the petroleum industry and

the highway HDE manufacturers to develop emission and cost data to help

EPA assess the potential role of fuel changes in achieving the

standards set forth in the SOP (Section VII above). EPA request comment

on the planned approach for assessing the potential role of fuels. In

addition, engines designed to use non-petroleum alternative fuels may

provide another avenue for manufacturers to comply with more stringent

standards.

EPA is interested in exploring programs and approaches which have

the potential to help achieve the goals of the planned regulatory

program in the most effective ways, including cost considerations. The

Agency expects to continue a broad and open discussion of such

potential approaches. The sections below briefly discusses an initial

set of ideas which may improve this program; EPA solicits comments on

these ideas and encourages suggestions for others.

A. In-Use Emissions Control Elements

Historically, EPA has viewed in-use emissions deterioration as a

problem associated more with gasoline engines than diesel engines. EPA

believes that deterioration of emissions for diesel engines, especially

NOX, has tended to be less than that of gasoline engines because

diesel engines currently use fewer aftertreatment or other devices

susceptible to in-use degradation. Diesel engine emissions standards

have historically been met mainly through overall improvements to the

engine and fuel system. These improvements have provided performance,

fuel economy, and durability benefits as well.

As standards are reduced and diesel HDE manufacturers introduce new

technologies such as catalysts and exhaust gas recirculation (EGR)

solely for emissions control purposes, long-term emissions performance

becomes a greater concern. The controls may not function as long as the

engines and there may be little incentive for vehicle owners to conduct

the repairs on these items needed to ensure emissions control during

the very long life of the engines. The HDE engine market has demanded

longer-lasting engines, and manufacturers have been successful in

increasing engine life. It has been brought to EPA's attention that

some current engines accumulate in excess of 600,000 miles before the

first rebuild and are often rebuilt many times; the current regulatory

``useful life'' is 290,000 miles. Failure of emissions controls early

in the engine's life would offset much of the benefit associated with

the expected more stringent standards.

Programs which encourage manufacturers to design and build engines

with very durable emission controls and programs to encourage the

proper maintenance and repair of engines and emissions controls are

important in achieving the full benefit of emissions standards. The

goal is for engines to maintain ``new'' engine performance throughout

their in-use operation. EPA is considering changes to current

manufacturer emissions durability-related programs to further encourage

the design and production of durable emission control systems. Possible

changes include extending the period over which manufacturers are

responsible for meeting emissions standards (the ``useful life'') and

adjusting the regulations relating to the emission-related maintenance

that is required of owners by manufacturers to maintain the engine's

emissions warranty. EPA is also interested in exploring a program where

manufacturers would perform in-use compliance testing and could take

advantage of an averaging, banking, and trading program to help achieve

in-use compliance. Under such a program, manufacturers would test a set

percentage of their in-use engine families each year and could

potentially generate emission credits (or take on liabilities)

depending on the results of in-use tests relative to the Family

Emission Limits established for the engine families involved. EPA

believes such a program could offer a cost-effective means of achieving

better assurance that standards are being met in-use.

Proper maintenance and repairs are likely to be important for

durable emissions controls, especially for engines designed for a

million or more miles. Therefore, EPA is also interested in approaches

that involve increased responsibility of the vehicle owner. One

approach EPA is considering and on which it invites comment is whether

the incorporation of onboard diagnostic systems for emissions

monitoring into heavy-duty engine designs would be appropriate. With

the increasing availability of sophisticated computer controls, there

is a potential to monitor emission control performance and components.

EPA is also considering establishing requirements relating to the

rebuilding of HDEs as a way of ensuring

[[Page 45601]]

that engines and emission controls remain in their proper working

condition throughout their full operating life. See 42 U.S.C.

7521(a)(3)(D).

B. Elements to Add Compliance Flexibility

EPA desires to implement any new regulatory programs in ways that

minimize the complexity and cost of compliance and maximize flexibility

for the regulated industry in complying with the requirements. EPA's

chief goal with such approaches would be to encourage the early

introduction of cleaner engines whenever possible. EPA may explore a

number of options for increasing flexibility to comply with more

stringent emissions standards for highway HDEs. The following presents

some of the ideas that EPA may consider.

Averaging, Banking and Trading Program. Currently, an averaging,

banking, and trading (ABT) program is in place for heavy-duty highway

engines which allows heavy-duty highway engine manufacturers to average

the emissions of their various engine families and to generate credits

when they introduce cleaner engine families than are required by law.

Under this program, a manufacturer may choose to certify an engine

family slightly higher or lower than the standard so long as the

average emission level for all engine families produced by the

manufacturer is at or below the standard. Credit for selling engines

that are cleaner than is required can be used immediately, ``banked''

for later use, or traded to another manufacturer.

Along with the standards discussed above, EPA expects to propose an

expanded ABT program that would apply for these new standards. Because

exceeding the requirements of the standards under consideration will be

very challenging, EPA will propose revisions to the current program

which are expected to encourage aggressive emission control development

efforts on the part of manufacturers and the early implementation of

new technology. EPA will propose changes to the ABT program which would

eliminate the discounting of credits over time and would extend the

life of the credits indefinitely. EPA will also seek comment on other

changes to the ABT programs such as trading between highway and nonroad

engines, among the four heavy-duty diesel subclasses, and between

heavy-duty diesel and gasoline engines, to the extent permitted under

the Act. Such approaches could be difficult to develop in an equitable

way given the very different emissions characteristics of these engine

types and the fact that the manufacturers' product lines vary.

Non-Conformance Penalties. In addition to the ABT program described

above, another existing program which serves to increase the

flexibility for manufacturers of heavy-duty highway engines facing new

emission standards is non-conformance penalties (NCPs). The Clean Air

Act (Section 206(g)) requires EPA to allow a heavy-duty engine

manufacturer to receive a certificate of compliance for an engine which

exceeds the standard (but does not exceed an upper limit) if the

manufacturer pays an NCP established by EPA through rulemaking. NCPs

increase periodically to discourage long-term nonconformance. EPA

expects to consider establishing NCPs related to the new heavy-duty

emission standards that EPA plans to propose.

Incentive-Based Approaches. EPA is aware of several program

initiatives that could potentially supplement the emission reductions

from improved design of new heavy-duty engines. Some of these are

described briefly in the following paragraphs. EPA encourages these

activities, and in some cases will be supporting their development. Any

actions to develop these initiatives, however, will progress in

parallel with the planned rulemaking to revise highway heavy-duty

engine emission standards, rather than being incorporated into that

rule directly.

Incentive-based approaches to emission control generally seek to

provide some credit or reward to encourage businesses to make voluntary

changes in operations or procedures to reduce air emissions. In the

case of heavy-duty engines, EPA desires incentives that would encourage

early introduction of cleaner engines. The ongoing effort to establish

these policies must focus on designing a program to ensure that a

business's emission reductions are voluntary, quantifiable, and

enforceable. Open market trading, which is currently under development

by EPA, could be designed to include the credits generated under these

programs.

One potential incentive program would encourage fleets to buy

cleaner truck engines earlier than required or buy cleaner engines than

otherwise required and make these credits available as Mobile Emissions

Reduction Credits. Another idea is to design a program to encourage

truck fleet owners to accelerate the turnover of their fleets to newer

engines. Typically, this would involve an encouragement to scrap old

engines and purchase new lower-emitting engines. Another possibility is

to rebuild heavy-duty engines with upgraded components so the ``new''

engine has the emission control capability of a more recent model year.

Other Approaches. Changes to vehicle operation may also reduce

emissions. For example, trucks are frequently allowed to idle for

several hours to power accessories such as air conditioners during

extended stops. The potential for electrical hookup at truck stops,

rest areas, etc., in combination with changes to engine and vehicle

designs, could reduce the contribution of extended idling to engine

emissions without inconveniencing drivers. Similarly, a program to

limit the operating speeds of heavy-duty vehicles, through engine

design or other changes, would reduce the excess NOx emissions caused

by vehicle operation at high speeds. The reduced fuel consumption

associated with these measures would represent a secondary benefit to

fleet owners.

Finally, EPA is working with the freight transportation industry to

identify potential infrastructure or regulatory changes that could

increase system efficiencies. Any move to improve the efficiency of

freight transportation, while reducing costs to industry, would reduce

emissions by decreasing the total mileage driven by heavy-duty trucks.

IX. Public Participation

EPA intends for this Notice to provide the basis for the beginning

of a broad-based public discussion of the issues surrounding more

stringent standards for heavy-duty highway engines presented in the

Statement of Principles signed by EPA, CARB, and heavy-duty engine

manufacturers. Specifically, the Agency requests comment on the need

for heavy-duty engine controls, the proposed timing for Agency action,

and on whether the standards and other regulatory provisions planned in

the SOP are reasonable and appropriate. EPA also requests comment on

the planned approach for dealing with fuels. The Agency requests

comment on the plan and need to pursue nonroad heavy-duty engine

standards through cooperative discussions with engine and equipment

manufacturers and CARB. The Agency also requests any emissions data,

technical information, or analyses of technical feasibility which can

be used to inform the planned actions. Finally, the Agency requests

comment and information on the economic feasibility, including cost

considerations for the planned actions.

EPA expects to issue a Notice of Proposed Rulemaking in the near

future

[[Page 45602]]

proposing new emission standards for highway heavy-duty engines in

accordance with the SOP. The Agency is committed to a full and open

regulatory process and looks forward to input from a wide range of

interested parties as the rulemaking process develops. These

opportunities will likely include meetings and workshops in addition to

the minimum required process involving a formal public comment period

and a public hearing. EPA encourages all interested parties to become

involved in this process as it develops.

X. Statutory Authority

Section 202(a)(3) authorizes EPA to establish emissions standards

for new heavy-duty motor vehicle engines. See 42 U.S.C. 7521(a)(3).

These standards are to reflect the greatest reduction achievable

through the application of technology which the Administrator

determines will be available, giving appropriate consideration to cost,

energy, and safety factors associated with the application of such

technology. This provision also establishes the lead time and stability

requirements for these standards, and in addition authorizes EPA to

establish requirements to control rebuilding practices for heavy-duty

engines. Pursuant to Sections 202(a)(1) and 202(d), these emissions

standards apply for the useful life period established by the Agency.

See 42 U.S.C. 7521(a)(1), 7521(d).

Section 213 authorizes EPA to establish emissions standards for new

heavy-duty nonroad engines where EPA determines that they cause or

contribute to ozone or carbon monoxide air pollution in more than one

area that is in nonattainment for ozone or carbon monoxide, or where

EPA determines that emissions of other pollutants significantly

contribute to air pollution which may reasonably be anticipated to

endanger public health or welfare. As with heavy-duty motor vehicle

engines, the emissions standards apply for the useful life established

by the Agency. See 42 U.S.C. 7547.

Section 211(c) authorizes EPA to establish controls or prohibitions

on fuels and fuel additives for use in highway and nonroad vehicles and

engines. EPA may issue such regulations if it determines that (1) any

emission product of the fuel or fuel additive causes or contributes to

air pollution which may reasonably be anticipated to endanger the

public health or welfare, or (2) emissions products of a fuel or fuel

additive will impair to a significant degree the performance of any

emissions control device or system which is in general use or which the

Administrator finds has been developed to a point where in a reasonable

time it would be in general use were such regulation promulgated. See

42 U.S.C. 7545(c).

EPA's authority to issue a certificate of conformity upon payment

of a non-compliance penalty established by regulations is found in

Section 206(g) of the Act. See 42.U.S.C. 7525(g). Other provisions of

Title II of the Act, along with Section 301, are additional authority

for the measures discussed in this ANPRM.

XI. Unfunded Mandates Reform Act

Under Section 202 of the Unfunded Mandates Reform Act of 1995

(``UMRA''), P.L. 104-4, EPA must prepare a budgetary impact statement

to accompany any general notice of proposed rulemaking or final rule

that includes a Federal mandate which may result in estimated costs to

State, local, or tribal governments in the aggregate, or to the private

sector, of $100 million or more. Under Section 205, for any rule

subject to Section 202 EPA generally must select the least costly, most

cost-effective, or least burdensome alternative that achieves the

objectives of the rule and is consistent with statutory requirements.

Under Section 203, before establishing any regulatory requirements that

may significantly or uniquely affect small governments, EPA must take

steps to inform and advise small governments of the requirements and

enable them to provide input.

EPA has determined that the requirements of UMRA do not extend to

advance notices of proposed rulemaking such as this notice regarding

potential controls for heavy-duty engines.

XII. Administrative Designation and Regulatory Analysis

Under Executive Order 12866 (58 FR 51735 (Oct. 4, 1993)), the

Agency must determine whether this regulatory action is ``significant''

and therefore subject to OMB review and the requirements of the

Executive Order. The order defines ``significant regulatory action'' as

any regulatory action (including an advanced notice of proposed

rulemaking) that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more

or adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities;

(2) Create a serious inconsistency or otherwise interfere with

an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements,

grants, user fees, or loan programs or the rights and obligations of

recipients thereof; or,

(4) Raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

This Advance Notice was submitted to the Office of Management and

Budget (OMB) for review as required by Executive Order 12866. Any

written comments from OMB and any EPA response to OMB comments are in

the public docket for this Notice.

List of Subjects in 40 CFR Parts 80, 86, and 90

Environmental protection, Administrative practice and procedure,

Air pollution control, Diesel fuel, Motor vehicles, Motor vehicles

pollution, Reporting and recordkeeping requirements, Research.

Dated: August 24, 1995.

Carol M. Browner,

Administrator.

Appendix: Statement of Principles

Statement of Principles

Members of the heavy-duty engine industry, the U.S.

Environmental Protection Agency (``EPA''), and the California Air

Resources Board (``CARB'') (collectively, the ``Signatories'')

recognize the importance of preserving the environment while

maintaining a strong industry. This Statement of Principles

(``SOP'') increases certainty and stability for the heavy-duty

engine industry which is vital for their business planning. It also

ensures cleaner air in a manner which is both realistic for industry

and responds to environmental needs. With this SOP, the heavy-duty

engine industry has stepped forward to become a leader in

environmental protection, and industry and government will work as

partners to bring about cleaner air.

This SOP outlines the joint understanding of all Signatories,

including issuance by EPA of a Notice of Proposed Rulemaking

(``NPRM'') which would be consistent with the points outlined in

this document. EPA intends to issue the NPRM in 1995 and plans to

promulgate a final rule by the end of 1996. However, this SOP does

not change the importance of EPA demonstrating the need for the

standards described below and EPA's obligation to meet the criteria

of the Clean Air Act (the ``Act'' or ``CAA'') in finalizing any

rule, including complying with all applicable rulemaking procedures.

In order to facilitate the rulemaking process and to solicit

additional views, EPA will precede the issuance of the NPRM with an

Advanced Notice of Proposed Rulemaking (``ANPRM'') announcing this

SOP.

1. National Standards for On-Highway Heavy-Duty Engines: For

more than two decades, as public concerns about air pollution and

smog caused by emissions from heavy-duty trucks and buses have

increased, both the industry and the government have responded to

protect public health and the environment. Standards have

[[Page 45603]]

dropped from levels of 16.0 grams per brake-horsepower/hour (``g/bhp-

hr'') for Hydrocarbons (``HC'')+Oxides of Nitrogen (``NOX'') in

1974 to just 5.0 g/bhp-hr NOX and 1.3 g/bhp-hr HC for heavy-

duty diesel engines today. The NOX standard will fall again to

4.0 g/bhp-hr in 1998. California also has NOX standards of 5.0

g/bhp-hr for these engines today and plans to adopt the federal 4.0

g/bhp-hr standard for 1998 models.

Much of the recent focus on improving emissions from diesel

engines has centered around reducing smoke and soot from the

exhaust. Particulate matter (``PM'') standards for heavy-duty diesel

engines have dropped from 0.6 g/bhp-hr in 1988 to just 0.1 g/bhp-hr

today. The current PM standards represent a 90% reduction from

unregulated levels. The 0.1 g/bhp-hr standard applies both in the

California and federal programs. Urban buses have even tighter

standards.

Heavy-duty engine manufacturers have certified vehicles to

operate on clean alternative fuels such as natural gas and methanol

and continue to research the emissions benefits of alternative and

renewable fuels. Clearly, the industry has worked hard to improve

technology and provide cleaner vehicles and engines.

However, in recent years, concern over the role of NOX and

HC emissions in causing ozone formation has grown considerably, and

reducing both has become an important goal. The opportunity to

reduce overall emissions of these pollutants by producing cleaner

heavy-duty engines is significant.

The goal of all Signatories to this SOP is to reduce NOX

emissions from on-highway heavy-duty engines to levels approximating

2.0 g/bhp-hr beginning in 2004. The Signatories also recognize the

need to reduce HC emissions. Because of the air quality importance

of reducing hydrocarbon emissions to the maximum extent feasible and

in order to maximize industry's ability to achieve low NOX

levels, EPA will propose for all heavy-duty engines as part of the

NPRM: (1) a combined Non-methane Hydrocarbon (``NMHC'')+NOX

standard of 2.4 g/bhp-hr and (2) a combined NMHC+NOX standard

of 2.5 g/bhp-hr together with a NMHC cap of 0.5 g/bhp-hr

(collectively, the ``Standards''), with flexibility for an engine

family to comply with either one of these Standards as the

manufacturer determines. It is expected that the Standards would

result in emissions comparable to a NOX standard of 2.0 g/bhp-

hr (i.e., half of the 1998 NOX standard), and also significant

reductions in HC emissions.

While this SOP focuses on NOX and NMHC emissions, the

Signatories recognize it does not affect other existing emission or

safety standards which pertain to heavy-duty engines. Specifically,

all Signatories concur that the feasibility of the Standards would

be affected by any changes in PM standards. Thus, this SOP is

premised on EPA not changing the 0.1 g/bhp-hr diesel particulate

standard currently in effect (or the lower PM standards for urban

buses). Further, all Signatories concur that any changes in Carbon

Monoxide (``CO'') standards could affect compliance for spark-

ignited engines. Thus, this SOP is premised on EPA not changing the

CO standards currently in effect for heavy-duty engines.

2. Fuel Improvements: All Signatories acknowledge that fuel

composition has a significant effect on emissions and that changes

in the composition and improvements in the quality of fuel may be

needed to make the Standards technologically feasible and otherwise

appropriate under the Act. As part of the focus on reducing

NOX, and in cooperation with the fuels industry, the

Signatories are committed to making improvements in diesel fuel (and

other fuels used in heavy-duty engines) as appropriate under the Act

to meet the 2004 Standards, taking into consideration costs and

other relevant factors. Such efforts may include evaluation of the

contribution of fuel parameters to heavy-duty engine emissions,

including a higher cetane number and lower levels of aromatics and

sulfur. The Signatories recognize fuel improvements are important

and may be essential in reaching low NOX levels in the most

efficient manner, considering costs and other factors. The

Signatories also recognize that any changes to both the

certification and commercial fuel specification would have to become

effective no later than October 2003 to ensure fuel availability at

the time the Standards take effect.

3. Feasibility: To assess the progress of industry efforts to

meet the Standards set forth in this SOP and to assure the lowest

appropriate standards in 2004, in 1999 EPA shall review any

rulemaking adopting the Standards discussed herein by issuing a

notice providing the opportunity for public comment on whether or

not the Standards are technologically feasible and otherwise

appropriate under the CAA. After receiving public comment, EPA shall

take final Agency action on the review under Sec. 307 of the CAA,

and shall revise the rule if the Agency determines that the

Standards are not technologically feasible or are otherwise not

appropriate under the CAA. The evaluation will consider the status

of heavy-duty engine technology in that year and its projection to

2004. In addition, the evaluation will include an assessment of

whether any fuel improvements (see item #2) that are needed to

assist heavy-duty engines in complying with the Standards will be

available nationwide.

In reviewing the rulemaking as set forth above, EPA shall review

the need, feasibility and cost of the Standards under the criteria

imposed on EPA by the Act, including, without limitation, the need

to provide engine manufacturers no less than four full model years

of lead-time. If EPA determines compliance with the Standards in

2004 is not technologically feasible or is otherwise not in

accordance with the Act, then the Administrator will adjust the

standard. If an adjustment is deemed necessary, the Standards for

2004 are not expected to be raised beyond a cap of: (1) 2.9 g/bhp-hr

NMHC+NOX and (2) 3.0 g/bhp-hr NMHC+NOX with a proportional

increase in the NMHC cap. However, if improvements to fuel quality

are needed but not made, the Standards are not expected to be raised

beyond a cap of: (1) 3.4 g/bhp-hr NMHC+NOX and (2) 3.5 g/bhp-hr

NMHC+NOX with a proportional increase in the NMHC cap.

The Signatories shall meet periodically to provide updates on

their efforts and progress in complying with the SOP.

4. California Standards: The California State Implementation

Plan (``SIP'') includes a proposed control measure to establish a

2.0 g/bhp-hr NOX emission standard for new engines used in on-

highway trucks sold in California in 2002 and thereafter. Both EPA

and California recognize the benefits of harmonizing state and

federal regulations. California confirms its intent to notice a

public hearing to consider action to harmonize its regulations for

dynamometer-certified engines greater than 8,500 lbs. GVWR with the

federal regulations adopted under this SOP, provided such action

would not compromise California's obligations to comply with state

and federal law including the SIP. The Signatories recognize that

California regulations establishing separate emission standards and

test procedures for gasoline chassis-certified vehicles are not

affected by this SOP.

5. Test Procedures: While there has been some discussion of

current test procedures for heavy-duty engines, the SOP and the

subsequent NPRM are premised on EPA not altering federal test

procedures. It is possible that the Agency may evaluate changes for

testing heavy-duty engines in the future, but it is recognized that

the SOP is made in the context of current test procedures. Further,

all Signatories recognize that any test cycle changes or additions

would likely complicate and delay industry's ability to research,

design, test, and produce engines that comply with the Standards by

2004. Any changes to test procedures used to determine compliance

with the Standards for purposes of EPA certification or enforcement

programs could also affect industry's ability to meet the Standards.

6. Durability: All Signatories recognize that it is important

that emissions from cleaner heavy-duty engines be maintained

throughout the life of the engine. To meet this goal, the

Signatories will work to develop appropriate measures which ensure

that emission gains are maintained in-use.

7. Averaging, Banking, and Trading Incentives: As part of this

SOP, EPA and CARB will work cooperatively with industry to develop

improved national averaging, banking, and trading (``AB&T'')

programs that will create more incentive for the early introduction

of cleaner engines. At a minimum, EPA will propose to modify the

existing AB&T program to eliminate any limitations on credit life

and to eliminate all credit discounts. The Signatories acknowledge

that an improved AB&T program may be critical in making the

Standards feasible in 2004, and would provide an incentive for early

introduction of cleaner technology.

In addition, EPA shall solicit comments in the NPRM on the

merits of allowing cross-fuel, cross-subclass, and cross-category

(e.g. on-highway and nonroad) credit exchanges, to the extent

permitted under the Act.

8. Scope: These standards will apply to all on-highway heavy-

duty engines, including those operating on diesel, gasoline, or

alternative fuels or fuel blends. It is recognized that EPA and

California place a

[[Page 45604]]

high priority on the need for additional nonroad heavy-duty engine

standards, and that additional nonroad heavy-duty engine standards

may be required. The Signatories intend to participate in

discussions with nonroad heavy-duty engine and equipment

manufacturers to develop a separate SOP by approximately October

1995 addressing emissions standards for heavy-duty nonroad engines.

9. Stability: One of the key principles of the SOP is to provide

industry with increased certainty and stability for their business

planning. Without such certainty and stability, industry would not

commit to the enormous investment that the Standards will require.

And, without such certainty and stability, those investments might

never be recouped. EPA and California recognize the huge investment

that will be required of industry. Under the Act, the minimum period

of stability that EPA must provide for new on-highway heavy-duty

engine emissions standards is three years. However, EPA and

California acknowledge that under this SOP industry will be making a

commitment and investment that will require more than the minimum

period of stability.

10. Research Agreement: The Signatories recognize the benefits

of a joint industry/government research program with the goal of

developing engine and fuel technologies which can meet and exceed

the standards for heavy-duty on-highway engines outlined in this

SOP. The Signatories will undertake development of a separate

research agreement with goals of reducing NOX emissions to 1.0

g/bhp-hr and PM emissions to 0.05 g/bhp-hr while maintaining

attributes of current on-highway diesel engines such as performance,

reliability, durability, safety, and efficiency. These

characteristics have allowed current diesel engines to serve as the

pillar of the international trucking industry. This research

agreement would include certain of the industry signatories below,

EPA, CARB, and other organizations, such as the U.S. Department of

Energy, as are approved by the participants.

Signed July 11, 1995, Chicago, Illinois.

Mary D. Nichols,

U.S. Environmental Protection Agency.

John D. Dunlap,

California Air Resources Board.

Members of the Engine Manufacturer Association

Caterpillar, Inc.

Cummins Engine Company

Detroit Diesel Corporation

Ford Motor Company

General Motors Corporation

Hino Motors, Ltd.

Mack Trucks, Inc.

Mitsubishi Motors America, Inc.

Navistar International

Volvo Truck Corporation

Environmental Protection Agency (Mary D. Nichols)

California Air Resources Board (John Dunlap)

[FR Doc. 95-21525 Filed 8-30-95; 8:45 am]

BILLING CODE 6560-50-P