Control of Emissions of Air Pollution from Highway Heavy-Duty Engines

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 86

[AMS-FRL-5526-9]

Control of Emissions of Air Pollution from Highway Heavy-Duty

Engines

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this action, EPA proposes new emission standards and

related provisions for heavy-duty engines intended for highway

operation, beginning in the 2004 model year. The proposed provisions

represent a large reduction (approximately 50 percent) in emission of

oxides of nitrogen (NOX), as well as reductions in hydrocarbons

(HC) and nitrate particulate matter (PM) from trucks and buses. If the

proposed standards are implemented, the resulting emission reductions

would translate into significant, long-term improvements in air quality

in many areas of the U.S. This would provide much-needed assistance to

a range of states and regions facing ozone and particulate air quality

problems that are causing a range of adverse health effects for their

citizens, especially in terms of respiratory impairment and related

illnesses.

EPA is also proposing several provisions to increase the durability

of emission controls and to provide flexibility for manufacturers in

complying with the stringent new standards. The Agency previously

published an Advance Notice of Proposed Rulemaking relating to this

action and addresses here a number of the comments received on the

Advance Notice. EPA believes the proposed program would result in

significant progress throughout the country in protecting public health

and the environment.

DATES: EPA requests comment on the proposal rulemaking no later than

August 26, 1996.

EPA will hold a public hearing on this proposal on July 25, 1996.

EPA will also hold a public meeting on July 19, 1996, to discuss

the proposed HDE regulations and receive informal public input on them,

and to discuss other potential mobile source controls identified in the

California Ozone State Implementation Plan for the South Coast (the

greater Los Angeles area).

More information about commenting on this action and on the public

hearing and meeting may be found under Public Participation, in Section

II of SUPPLEMENARY INFORMATION.

ADDRESSES: Materials relevant to this proposal including the draft

regulatory text and Regulatory Impact Analysis (RIA) 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, S.W.,

Washington, DC 20460. The docket may be inspected from 8:00 a.m. until

5:30 p.m., Monday through Friday. A reasonable fee may be charged by

EPA for copying docket materials.

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

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

to Chris Lieske, U.S. EPA, Engine Programs and Compliance Division,

2565 Plymouth Road, Ann Arbor, MI 48105.

The hearing on this proposal will be held at the Marriott Hotel and

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Conference Center, 1275 South Huron Street, Ypsilanti, MI, (313) 487-

2000, from 9:00 am until all testimony has been presented.

The public meeting to discuss the proposed HDE regulations will be

held Downtown Los Angeles Hyatt Regency, 711 South Hope Street, Los

Angeles, California. The public meeting will be conducted in two

sessions beginning at 2:00 p.m. and 7:00 p.m., with a dinner recess

before the 7:00 p.m. sessions.

This proposal, the draft regulatory text, and the draft Regulatory

Impact Analysis (RIA) are available electronically and can be obtained

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 and via the internet. Details on how to access

TTNBBS and the internet are included in Section XIII of SUPPLEMENTARY

INFORMATION.

FOR FURTHER INFORMATION CONTACT: Chris Lieske, U.S. EPA, Engine

Programs and Compliance Division, (313) 668-4584.

SUPPLEMENTARY INFORMATION:

I. Introduction

Air pollution continues to represent 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 precontrol

rates. However, continued industrial growth and expansion of motor

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

than five years after passage of major amendments to the Clean Air Act

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

the ozone and PM National Ambient Air Quality Standards (NAAQSs) by the

deadlines established in the Act.\1\ Furthermore, other states which

are approaching or have reached attainment of the ozone and PM NAAQSs

will likely see those gains lost if current trends persist.

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

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In recent years, significant efforts have been made on both a

national and state level to reduce air quality problems associated with

ground-level ozone, with a focus on its main precursors, oxides of

nitrogen (NOX) and volatile organic compounds (VOCs).\2\ 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.

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\2\ VOCs consist mostly of hydrocarbons (HC).

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NOX control is now seen as a critical strategy to control

ozone levels, which 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 deemed

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 an

effective strategy for reducing ozone where its levels are high over a

large region (as in the Midwest and Northeast). As a result, attention

has turned to controlling NOX emissions as a key to improving air

quality in many areas of the country.

Current projections show total NOX emissions decreasing

slightly during the next few years as stationary and mobile source

control programs promulgated under the 1990 CAA amendments are phased

in. However, the downward trends in NOX pollution will begin to

reverse and NOX emission inventories will begin to rise by the

early or middle part of the next decade due to growth in stationary and

mobile source activity. In this timeframe, emissions from mobile

sources will account for about half of all NOX emissions and

heavy-duty vehicles are projected to represent about one quarter of

mobile source NOX emissions. In most areas, a significant increase

in ground-level ozone is expected to accompany the rise in NOX

emissions. Levels of PM are also expected to rise, both because of the

expected increase in numbers of PM sources and because NOX is

transformed in the atmosphere into fine nitrate particles that account

for a substantial fraction of the airborne particulate in some areas of

the country (a process called ``secondary particulate formation'').

Given these expected trends and the absence of new emission control

initiatives, the Agency believes that some of the nation's hard-won air

quality improvements will begin to be seriously threatened early in the

next decade.

Over the past decade, ambient air measurements and computer

modeling studies have repeatedly demonstrated that ozone is a regional-

scale issue, not just a local issue, in part because ozone and its

precursors, NOX and VOC, are often transported across large

distances. Thus, 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.

The states have jurisdiction to implement a variety of stationary

source emission controls. In most regions of the country, states are

implementing significant stationary source NOX controls (as well

as stationary source VOC controls) for controlling acid rain, ozone, or

both. In many areas, however, these controls will not be sufficient to

reach and maintain the ozone standard without significant additional

NOX reductions from mobile sources. Generally, the Clean Air Act

specifies that standards for controlling NOX, HC, and PM emissions

from new motor vehicles must be established at the federal level.3

Thus, the states look to the national mobile source emission control

program as a complement to their efforts to meet air quality goals. The

concept of common emission standards for mobile sources across the

nation is strongly supported by manufacturers, which often face serious

production inefficiencies when different requirements apply to engines

or vehicles sold in different states or areas.

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\3\ The CAA limits the role states may play in regulating

emissions from new motor vehicles. California is permitted to

establish emission control standards for new motor vehicles, and

other states may adopt California's programs (Sections 209 and 177

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 focused on heavy-duty trucks (ranging from

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

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

use have developed new technological approaches in response to periodic

increases in the stringency of emission standards.4 However, the

technological characteristics of heavy-duty engines, particularly

diesel engines, have so far prevented achievement of emission levels

comparable to today's light-duty

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gasoline vehicles. While diesel engines provide advantages in terms of

fuel efficiency, reliability, and durability, controlling NOX

emissions is a greater challenge for diesel engines than for gasoline

engines. Similarly, control of PM emissions, which are very low for

gasoline engines, represents a substantial challenge for diesel

engines. Part of this challenge is that most traditional NOX

control approaches tend to increase PM, and vice versa.

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\4\ Highway heavy-duty engines, sometimes referred to as highway

HDEs in this proposal, are used in heavy-duty vehicles, which EPA

defines as highway vehicles with a gross vehicle weight rating over

8,500 pounds.

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Despite these technological challenges, there is substantial

evidence of the ability for heavy-duty highway engines to achieve

significant 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 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 heavy-duty vehicles is discussed further in

Section IV of this proposal and in the associated Regulatory Impact

Analysis (RIA).

Recognizing the need for additional NOX and PM control

measures to address air quality concerns in several parts of the

country and the growing contribution of the heavy-duty engine sector to

ozone and PM problems, EPA issued an Advance Notice of Proposed

Rulemaking (ANPRM) on August 31, 1995. In the ANPRM, the Agency sought

early comment on the general framework of a program to reduce emissions

from the heavy-duty engine category. The Agency has been pleased that a

broad range of interested parties have responded to the ANPRM with

their comments. To the extent possible, EPA has considered and

addressed these comments in the preparation of this Notice of Proposed

Rulemaking (NPRM). EPA continues to encourage comment on all aspects of

the proposed program; where ANPRM commenters may believe that this

action fails to address their comments, EPA encourages them to resubmit

those comments in the context of this formal proposal.

This preamble is organized as follows: Section II.A. summarizes the

public health and environmental concerns from ozone, PM and their

precursors; Section II.B. discusses the connection of these emissions

to air quality trends and the regional nature of the ozone and PM

problems; Section II.C. presents trends in overall nationwide NOX,

VOC, and PM emissions; Section II.D. presents the current and projected

future contribution of heavy-duty vehicles to overall emissions;

Section II.E. summarizes the overall rationale for the action being

proposed; Section III. then describes in detail the standards and other

provisions being proposed as well as background on the regulation of

highway heavy-duty engines; Section IV. summarizes the technological

feasibility of the proposed program; Section V. reviews the results of

EPA's economic and environmental analyses; Section VI. discusses the

potential role of several incentive-based programs; and Section VII.

provides information about the formal public comment process, including

a public hearing. The actual proposed regulatory language is available

in the public docket and electronically (see ADDRESSES above and

Section XIII. for further information).

II. Need for New NOX and VOC Emission Control

A. Health and Environmental Impacts of Ambient NOX and VOC: Ozone,

Particulate Matter, and Other Effects

Oxides of nitrogen (NOX) comprise a family of highly reactive

gaseous compounds that contribute to air pollution in both urban and

rural environments. 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), highway sources (such as light-duty and

heavy-duty vehicles) and nonroad sources (such as construction and

agricultural equipment). Ambient levels of NOX can be directly

harmful to human health and the environment. More importantly from an

overall health and welfare perspective, NOX contributes to the

production of secondary chemical products that in turn cause additional

health and welfare effects. Prominent among these are ozone and

secondary PM formation. Each of these phenomena is briefly discussed in

this proposal and in more detail in the Regulatory Impact Analysis.

Much of the evaluation of the health and environmental effects

related to NOX found in this section and in the Regulatory Impact

Analysis (RIA) were also discussed in the August 31, 1995 ANPRM.5

EPA encourages comment on the Agency beliefs expressed in this proposal

and in the RIA.

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\5\ Information cited in this section and other related

information on health and environmental effects related to NOX

and VOC are available from the Regulatory Impact Analysis and other

documents found in Docket A-95-27.

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1. Direct Health Effects of NOX

The component of NOX that is of most concern from a health

standpoint is nitrogen dioxide, NO2. EPA has set a primary

(health-related) NAAQS for NO2 of 100 micrograms per cubic meter,

or 0.053 parts per million. Direct exposure to NO2 can reduce

breathing efficiency and increase lung and airway irritation in healthy

people, as well as in the elderly and in people with pre-existing

pulmonary conditions. Exposure to NO2 at or near the level of the

ambient standard appears to increase symptoms of respiratory illness,

lung congestion, wheeze, and increased bronchitis in children.6

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\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).

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2. Indirect Health and Welfare Effects of NOX and VOC

In addition to the direct effects of NOX, the chemical

transformation products of NOX also contribute to adverse health

and environmental impacts. These secondary impacts of NOX include

ground-level ozone, nitrate particulate matter, acid deposition,

eutrophication (plant overgrowth) of coastal waters, and transformation

of other pollutants into more dangerous chemical forms. Each of these

is discussed below and in the Regulatory Impact Analysis. Also,

volatile organic compounds (VOCs), composed of a very large number of

different hydrocarbons (HC) and other organic compounds, are primary

precursors to ozone. The health and environmental effects of these

compounds as a class are generally considered in terms of their effect

on ozone and are discussed below and in the RIA. Health or other

effects of individual toxic compounds are not separately addressed in

this proposal.

a. Ozone

NOX and VOCs are primary precursors to ground level ozone

(O3). As discussed later in this proposal, ozone tends to be a

regional phenomenon in which elevated levels of ozone can develop over

wide areas.

Ozone is a highly reactive chemical compound that can affect both

biological tissues and man-made materials. Ozone exposure causes a

range of human pulmonary and respiratory health effects. While ozone's

effects on the pulmonary function of sensitive individuals or

populations (e.g., asthmatics) are of primary concern, evidence

indicates that high ambient levels of ozone can cause respiratory

symptoms in healthy adults and

[[Page 33424]]

children as well. For example, exposure to ozone for several hours at

moderate concentrations, especially during outdoor work and exercise,

has been found to decrease lung function, increase airway inflammation,

increase sensitivity to other irritants, and impair lung defenses

against infections in otherwise healthy adults and children. Other

symptoms include chest pain, coughing, and shortness of breath.7

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\7\ Air Quality Criteria Document for Ozone and Related

Photochemical Oxidants (External Review Draft), EPA/600/P-93/004aF-

cF, 1996.

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Recent studies focusing on chronic lung effects are also being

evaluated as part of EPA's review of the current ozone NAAQS. Repeated

exposures in laboratory animals suggest a cumulative impact,

potentially causing permanent structural changes to respiratory

tissues.8 Extrapolation of these results to humans raises concern

that individuals who have been exposed to ambient air containing high

levels of ozone each summer of their lives may experience a reduced

quality of life in their later years.9

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\8\ Gross, K.B., White, H.J. (1987) ``Functional and pathologic

consequences of a 52-week exposure to 0.5 PPM ozone followed by a

clean air recovery period,'' Lung 165:283-295.; Huang, Y, Chang, L.-

Y, Miller, F.J., Crapo, J.D. (1988) ``Lung injury caused by ambient

levels of ozone,'' J. Aerosol Med. 1:180-183; Tyler, W.S., Tyler,

N.K., Last, J.A., Gillespie, M.J., Barstow, T.J. (1988) ``Comparison

of daily and seasonal exposures of young monkeys to ozone,''

Toxicology 50:131-144.

\9\ See, for example, Euler, G.L.; Abbey, D.E.; Hodgkin, J.E.;

Magie, A.R. (1988) ``COPD symptom effects of long-term cumulative

exposure to ambient levels of total oxidants and nitrogen dioxide in

California Seventh-Day Adventist residents,'' Arch. Environ. Health

43:279-285.

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As described in more detail in the RIA, the presence of elevated

levels of ozone is of concern in rural areas as well. Because of its

high chemical reactivity, ozone causes injury to vegetation. This

injury has been observed at ozone levels above and also below the

current ozone NAAQS; EPA in is the process of reconsidering the

appropriate level of the ozone NAAQS in light of such evidence.

Although the action proposed is not being proposed for the purpose of

reducing crop damage from ozone, it is of interest to note that

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 injury in many crops, which reduces their marketability and value.

Finally, there is evidence that exposure to ambient levels of ozone

existing in many parts of the country may be 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.

b. Nitrate Particulate Matter

The conversion of NOX into fine particulate matter (such as

ammonium nitrate) is of significant human health and environmental

concern. In general, air pollutants collectively called particulate

matter (PM) are divided into primary and secondary sources. Primary

sources 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. Ambient PM is related to

several adverse health and environmental effects.

At the present time, data is not available to precisely partition

PM-10 into its primary and secondary PM components. Most of the well

developed nationwide PM-10 inventories are based only on primary

sources, but inventories for some PM-10 nonattainment areas have

identified the primary and secondary PM. From the available data, it is

clear that the roles of primary and secondary PM vary geographically.

For example, ammonium nitrate is a significant portion of the PM-10

inventory in cities in the western states (e.g., Denver, Salt Lake

City, Los Angeles) and a smaller portion of total PM in cities in the

eastern states (e.g., Philadelphia, New York). As discussed in the RIA,

EPA estimates that the NOX to Nitrate conversion rate varies from

near zero to about 20 percent, with a U.S. average in the order of

about 5 percent. While there is not data available on this at the

present time, it is reasonable to assume that NOX emissions from

heavy-duty engines are converted to nitrate at the same rate as

NOX from other sources.

The existing NAAQS for particulate matter were set in 1987. The

primary standards, intended to protect human health, are an average

concentration of 150 micrograms per cubic meter (g/m3)

over a 24-hour period and an average concentration of 50 g/

m3 annually. PM-10 was selected as the indicator for particle

pollution based on lung deposition studies. PM-10 includes all

particles in the size range of 10 micrometers or less. Particles

smaller than 2.5 micrometers are capable of penetrating deeper into the

lungs and air sacs. The secondary standards, intended to protect

against damage to the environment, were set identical to the primary

standards.

Since the last review of the PM-10 NAAQS in 1987, many

epidemiological studies of PM-10 exposure at levels below the existing

24-hour and annual standards have associated higher levels of particle

pollution with increased occurrence of illness and death (e.g.,

increased hospital admissions, aggravation of bronchitis and asthma,

and premature deaths). Based on studies of human populations exposed to

high concentrations of particles and on laboratory studies of animals

and humans, there are major human health concerns associated with PM.

These include deleterious effects on breathing and the respiratory

system, aggravation of existing respiratory and cardiovascular disease,

alterations in the body's defense mechanisms against foreign materials,

direct and indirect damage to lung tissue resulting in fibrosis,

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 emphysema-like conditions

or cardiovascular diseases, chronic obstructive pulmonary disease,

those with influenza, asthmatics, the elderly, and children. PM-10 also

soils and damages materials, and fine particles are a major cause of

visibility impairment in the United States.10

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\10\ Air Quality Criteria for Particulate Matter (External

Review Draft), EPA-600/AP-95/001a-a, April 1995.

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All particles in the atmosphere scatter light and, hence, reduce

visibility. However, light is scattered most efficiently by particles

with a diameter of 0.5-1.0 micrometers. Secondary particles such as

nitrates are in this size range. As discussed in the RIA, in locations

such as the western U.S., where the ambient levels of SO2 tend to

be low, EPA believes nitrate particles are major contributors to

visibility attenuation.

c. Other Secondary Effects of NOX

NOX is a major contributor to acid deposition. The damage

caused by acid deposition continues to be documented and includes

acidification of surface waters and soil, reduction in fish

populations, damage to forests and associated wildlife, soil

degradation, damage to materials, monuments, buildings, etc., and

reduced visibility.11

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Effects of acid deposition are most pronounced during springtime

snowmelts, when ``pulses'' of highly acidic water, often containing

high concentrations of toxic aluminum, enter lakes and streams. In

addition, nitrogen compounds deposited on ecosystems can transport

acids already contained in the soils and thus contribute to the

acidification of those ecosystems. Although one commenter on the ANPRM,

API, challenged the importance of NOX control in reducing acid

deposition, EPA believes that geographically broad controls like those

proposed in this action represent a cost-effective method of reducing

overall levels of deposited acid.12

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\11\ ``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.

\12\ More information about EPA's position on the relationship

between NOX and acid deposition may be found as item II-A-13 in

Docket A-95-28, titled Draft Report: Adverse Effects of Nitrogen

Oxides and Benefits of Reductions.

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Another secondary effect of NOX emissions is their role in the

overgrowth of algae and other plants and oxygen depletion

(eutrophication) in coastal estuaries in the eastern part of the

country, including the Chesapeake Bay, as well as other estuaries and

coastal waters.13 Airborne nitrogen compounds act as fertilizers

for plant growth, contributing an estimated 25 percent of nitrogen

loading in some coastal waters. In waters where nitrogen compounds are

the limiting factor, eutrophication is resulting in the reduction or

loss of commercially valuable aquatic/marine species as well as

diminution of water-related recreational activities. EPA addressed this

effect on estuaries in the ANPRM and received no comments counter to

the Agency's assessment; comment on this issue is encouraged.

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\13\ Deposition of Air Pollutants Into the Great Waters: First

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

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EPA encourages comment on all aspects of its review of the human

health and environmental impacts of ozone, NOX, and PM (especially

secondary nitrate PM), both in this preamble and in the Regulatory

Impact Analysis.

B. Need for NOX and VOC Control To Address Ozone and PM Issues

1. Regional NOX Control as a Strategy for Addressing Regional

Ozone Problems

The precursors to ozone and ozone itself are transported long

distances under some commonly occurring meteorological conditions.

Specifically, concentrations of ozone and its precursors in a region

and the transport of ozone and precursor pollutants into, out of, and

within a region are very significant factors in the accumulation of

ozone in any given area. Regional-scale transport, as it is discussed

in this proposal, may occur within a state or across one or more state

boundaries. Local source NOX and VOC controls are key parts of the

overall attainment strategy for nonattainment areas. However, the

ability of an area to achieve ozone attainment and thereby reduce

ozone-related health and environmental effects is often heavily

influenced by the ozone and precursor emission levels of upwind areas.

Thus, for many of these areas, EPA believes that attainment of the

ozone NAAQS will require control programs much broader than strictly

locally focused controls to take into account the effect of emissions

and ozone far beyond the boundaries of any individual nonattainment

area.

EPA therefore believes that effective ozone control requires an

integrated strategy that combines cost-effective reductions in

emissions from both mobile and stationary sources. EPA's current

initiatives, including the national highway heavy-duty engine standards

proposed in this action, are components of the Agency's integrated

ozone reduction strategy.

By the time the 1990 amendments to the Clean Air Act were passed,

the understanding that many areas face regional-scale ozone problems

was well established. Before 1990, the Act required states to address

the contribution of their pollution to other areas' attainment of the

ozone standard. Then, in the 1990 amendments, Congress included

additional provisions for states to address regional ozone transport in

their efforts to reach attainment by the statutory deadlines (the

Northeast Ozone Transport Region and Commission resulted from these

provisions). Since 1990, the understanding of regional transport of

ozone precursors and ozone itself has continued to expand.

The problem of regional transport of ozone and its precursors is

widely recognized by the states. In response to concerns about this

problem raised by state environmental commissioners comprising the

Environmental Council of the States (ECOS), EPA has worked closely with

states in the Ozone Transport Assessment Group (OTAG) to develop

various recommended control measures intended to address the regional

nature of ozone. Similarly, state and local air administrators, under

the auspices of STAPPA and ALAPCO, recently passed a unanimous

resolution endorsing national NOX emission regulations.14

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\14\ See comments from STAPPA/ALAPCO in Docket A-95-27.

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As the understanding of the photochemical phenomena related to

ozone has developed, NOX control options have received increasing

attention. Especially in addressing regional-scale ozone problems,

control of NOX has emerged as the primary strategy. VOC control,

by comparison, is seen as most effective in addressing localized ozone

peak concentrations found in or near major urban areas. As discussed

further below, EPA has conducted modeling studies in recent years

covering the eastern half of the U.S., which have reinforced the

understanding that regional-scale control of NOX emissions will be

essential to reducing the levels of transported ozone in large areas of

the Northeast, Southeast, and Midwest. EPA believes that ozone problems

in California also represent regional problems that would be

susceptible to regional NOX control. Thus, the extent of local

controls that will be needed to attain and maintain the ozone NAAQS in

and near seriously polluted cities is sensitive both to the amount of

ozone and precursors transported into the local area and to the

specific photochemistry of the area. In some cases (e.g., portions of

the Northeast Corridor, the Lake Michigan area, Atlanta, and

California) preliminary local modeling performed by the states

indicates that it will likely not be feasible to find sufficient local

control measures for individual nonattainment areas unless transport

into the areas is reduced in some manner. EPA has carefully considered

this important relationship between local and regional NOX

controls for individual areas and regions and for the country as a

whole, as summarized in the next sections. EPA requests comment on

these issues as well as general comments on the need for regional-scale

NOX controls.

a. Action by States and EPA To Achieve CAA Air Quality Goals

Title I of the 1990 Clean Air Act amendments (Sections 181-185(b),

generally) established an aggressive strategy for ozone nonattainment

areas to come into compliance with the ozone NAAQS. (The case of

attainment of the PM NAAQS is discussed in section B.3. below.) The

Act's strategy provides the framework for action by states and EPA for

national, regional, and local controls. Under these provisions, states

are expected to submit State Implementation Plans (SIPs)

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demonstrating how each nonattainment area will reach attainment of the

ozone NAAQS. Based on the degree that ozone concentrations in an area

exceed the standard, the Act spells out specific requirements that

states must incorporate into their attainment plans and sets specific

dates by which nonattainment areas must reach attainment.

For nonattainment areas designated as serious, severe, or extreme,

state attainment demonstrations involve 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 that

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, based on a two-phase approach for the submittal of

ozone SIP attainment demonstrations.15 Under Phase I, the state is

required to conduct limited UAM modeling and submit a plan implementing

a set of specific local control measures to achieve major reductions in

ozone precursors. Phase II involves a two-year process during which

EPA, the states, regional associations, and other interested parties

can improve emission inventories and modeling and identify regional

measures that may be needed to supplement the local controls of Phase

I. These improved analyses are then to be considered by states in

identifying additional local control measures that may be needed to

attain the NAAQS by the statutory dates. Currently, under Phase I of

the process, states are submitting plans and EPA is taking action to

approve or disapprove them.

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\15\ Memorandum from Mary D. Nichols, Assistant Administrator

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

Attainment Demonstrations, March 2, 1995.

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As part of these Phase I submittals, some states have indicated

that on the basis of preliminary information, locally based stationary

source NOX controls in those nonattainment areas would not be

helpful--or, in a few cases, would be detrimental--to attainment of the

ozone NAAQS. These states have petitioned EPA under Section 182(f) of

the Act for exemptions from local NOX stationary source controls

they would otherwise be required to implement under Reasonably

Available Control Technology (RACT) and New Source Review (NSR)

regulations. In general, Section 182(f) provides that waivers must be

granted if states show that reducing NOX within a nonattainment

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

same nonattainment area.\16\ This section of the Act was added in 1990

in recognition of the fact that NOX reductions within some

nonattainment areas can increase ozone concentrations.

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\16\ ``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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Section 182(f) of the Act also requires EPA to limit the assessment

of state petitions to the effect that NOX reductions within a

nonattainment area are likely to have on that local area's ability to

meet the NAAQS (i.e., this section of the Act does not permit an

assessment of pollutant transport into and out of the area). However,

in their modeling supporting their overall attainment demonstrations

under Phase II, states will need to project the levels of ozone and

precursors that are transported into the area (these assumptions are

called ``boundary conditions''). In many areas, the boundary conditions

used in Phase II modeling will need to assume that significant

reductions in ozone and NOX will be accomplished upwind. Thus, in

Phase II of the current process, it will be necessary for states and

EPA to consider the impacts of NOX controls at both the local and

regional levels in assessing how attainment can be achieved. As

described below, in most cases, EPA believes that broad, regional ozone

and NOX control in upwind areas will be necessary for Phase II

demonstrations even where Phase I modeling results currently indicate

that local NOX controls may be unnecessary or detrimental.

b. Local NOX Exemptions' Relation to Regional NOX Control

Needs

The state petitions for exemption from local RACT and NSR

requirements so far granted by EPA fall into three categories: (1) EPA

approved four state petitions for areas (Dallas and El Paso, TX,

Birmingham, AL, and northern Maine) for which Phase I modeling shows

that the areas will attain the ozone NAAQS without additional NOX

controls (there is no analysis for these areas showing NOX

controls are either beneficial or detrimental); (2) EPA granted

exemptions for five areas (Baton Rouge, LA, Beaumont, TX, Houston, TX,

the Lake Michigan area, and Phoenix, AZ) after Phase I modeling showed

that local NOX controls could worsen peak ozone concentrations in

the nonattainment areas; (3) EPA approved ten other petitions based on

monitoring data that shows the areas attained the ozone NAAQS without

additional NOX controls (there is no analysis for these areas

showing NOX controls are either beneficial or detrimental). It is

important to note that only five exemptions that have been granted

assert that NOX controls would be detrimental to attainment plans.

It is very important to view EPA's granting of exemptions from

local NOX controls in some areas under Phase I of the attainment

process in the broader context of the ultimate Phase II determinations.

Although EPA believes that it is reasonable to initiate new control

programs to address regional ozone problems on the strength of

information already available (see Section II.E. below), a better

overall picture of regional and local air quality phenomena for each

area will exist once Phase II demonstrations are completed. Some

commenters on the ANPRM have argued that EPA's granting of local

NOX exemptions for some areas during Phase I of the process should

be interpreted as a conclusion by the Agency that no further NOX

controls--local, regional, or national--will be necessary for these

areas to reach and maintain attainment or that such controls would be

harmful. API commented that EPA ``has failed to reconcile [the] two

incongruous policies,'' referring to the initiation of new regionally

based controls in a period when local NOX exemptions are being

granted in some areas. Similarly, the National Petroleum Refiners

Association (NPRA) stated that they view such simultaneous action to be

``contradictory and arbitrary.'' For several reasons, EPA believes that

such characterizations fail to recognize the limited role of local

NOX exemptions within the broader Phase II attainment

demonstration process.

First, because most of the NOX waiver petitions contain no

modeling analyses and many of those that contain modeling analyses are

being supplemented with improved Phase II modeling, EPA's approval of

each NOX exemption has been granted on a contingent basis.\17\

That is, a monitoring-based exemption lasts for only as long as the

area's monitoring data continue to demonstrate attainment. Thus, if a

violation is monitored (prior to the area being redesignated as being

in attainment) the exemption would be revoked and the

[[Page 33427]]

requirement to adopt NOX controls would again apply. Similarly,

any modeling-based exemption may need to be withdrawn if updated

modeling analyses for Phase II reach a different conclusion than the

Phase I modeling on which the exemption was based.\18\

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\17\ ``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.

\18\ NOX Supplement to the General Preamble, 57 FR 55628

(Nov. 25, 1992).

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Second, as discussed above, Section 182(f) of the Act does not

permit EPA to consider regional-scale NOX issues when acting on

state petitions for exemptions from local NOX controls. Because

NOX has been shown to be effective in reducing regionally

transported ozone, the broader modeling under Phase II is expected to

show that many areas will need regional NOX controls to counter

expected growth and maintain or reach attainment. Where this occurs, it

might also lead to withdrawal of exemptions from local NOX

controls.

Third, EPA has separate authority under the CAA (Section

110(a)(2)(D)) to require a state to reduce emissions from sources where

there is evidence showing that transport of such emissions would

contribute significantly to nonattainment or interfere with maintenance

of attainment in other states. For example, local NOX controls may

need to be reinstated if Phase II modeling shows that additional

reductions in that area are needed for attainment and maintenance in

downwind areas, superseding any NOX exemption that may have been

granted under Phase I. If this need arises, Section 110(a)(2)(D) would

provide EPA the authority to require such additional reductions.

EPA therefore believes that decisions about initiating new NOX

control programs that have a regional-scale effect are appropriately

made based on the best understanding available at that time of the

broad attainment needs of all areas. As is discussed below for several

regions of the country, there is strong evidence that regional-scale

controls will be needed to achieve and maintain attainment. As a part

of the Phase II assessments, the impact of and need for NOX

control and the continuation or withdrawal of local NOX exemptions

would be taken fully into account. Thus, in assessing EPA's overall

NOX policy, it is important to understand the limited and perhaps

temporary nature of exemptions from NOX controls in some areas

within the context of the anticipated implementation of broader,

regional NOX control strategies upon completion of the Phase II

modeling.

An important issue that states and EPA will consider during the

Phase II process is the interaction between prospective regional

control programs and local air quality conditions. For nonattainment

areas that are granted local NOX exemptions based on the lack of

need for additional NOX controls (this covers the great majority

of current and pending exemptions, as shown above), introducing

regional controls that have an effect both inside and outside the

nonattainment area is generally not expected to harm air quality within

the area. In the few areas where Phase I modeling indicates that

reduction of NOX in the area could increase ozone in some

locations, a balancing of all relevant factors will be necessary if

Phase II modeling reinforces that a significant potential problem

exists. For example, if ozone and NOX transported into the area

would be significantly reduced by regional-scale controls, the absolute

level of ozone within the area would drop, changing the photochemistry

of the area and potentially offsetting any localized detriment to air

quality that might still be introduced by the regional controls (e.g.,

cleaner trucks within the area).

In its comments on the ANPRM, API referred to recent modeling

studies performed by the Modeling Ozone Cooperative, which API says

challenge EPA's earlier conclusions about the need for NOX control

in the Northeast. EPA is aware of and is reviewing the results of these

modeling studies. Based on EPA's evaluation of these studies to date,

the Agency finds that these studies in fact support EPA's previous

conclusions that broad regional-scale controls will be necessary for

the Northeast and other areas to attain and maintain the ozone NAAQS.

As API observes, these studies also predict that NOX reductions

may increase ozone levels in several areas. API also cites modeling

performed by the Lake Michigan Air Directors Consortium (LADCO), which

appears to predict similar results for the Lake Michigan area. As

described below, the LADCO studies do however, suggest that reductions

in regional ozone at the boundary of their modeling domain will likely

play a key role in determining whether the NAAQS can be attained with

local VOC-oriented control measures.

EPA is concerned about these results and is interested in

additional modeling to further explore the degree to which NOX

control programs may increase ozone in some areas. Questions not

answered by current modeling include (1) how the results change if

additional stationary and mobile source NOX and VOC control

programs are assumed to be implemented by the time the heavy-duty

engine emission standards proposed in this action would be in place and

(2) whether urban-scale modeling of higher resolution can shed more

light on how widespread potential areas of increased ozone might be.

EPA expects that on balance it will continue to be preferable to

achieve regional-scale NOX and ozone reductions whenever possible,

even where current modeling indicates that increases in ozone may occur

in parts of some areas. EPA requests comments on this general

assessment, as well as on the discussions of individual regions below;

comments including additional data and modeling results that challenge

or reinforce EPA's views will be particularly valuable.

2. Role of Regional-Scale NOX Control in Addressing Ozone Problems

in Several Regions of the U.S.

EPA believes that the best data and modeling available show that

NOX in several large geographic areas of the country will continue

to contribute greatly to ozone problems in nonattainment areas well

into the future. Together, these areas account for about 87 percent of

nationwide NOX emissions from heavy-duty vehicles (see Chapter 7

of the RIA). Several of these regions are discussed individually below.

Where there are existing or pending exemptions from local NOX

controls in the region, their relationship to regional-scale NOX

controls is also discussed.

a. Eastern United States

There is a growing body of evidence that reducing regional ozone

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

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

Southeast and the Northeast, to attain and maintain the ozone NAAQS.

Regional Oxidant Modeling (ROM) studies conducted by EPA (called the

ROMNET and Matrix studies) reinforce that reducing NOX emissions

in large geographical regions is the most effective approach for

reducing ozone levels in those large regions.19 At the same time,

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

reductions in VOC emissions may be

[[Page 33428]]

key to reducing locally generated peak ozone concentrations.20

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\19\ 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.

\20\ Because of the significant role that NOX plays in

atmospheric chemistry, additional regional NOX control can also

be very helpful in addressing the problems of year-round NOX

deposition in the Chesapeake Bay and other nitrogen-limited lakes

and estuaries and acid deposition and visibility degradation in the

eastern U.S. (as well as parts of the West).

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

In its analysis supporting the approval of a Low Emission Vehicle

program in the mid-Atlantic and Northeast states comprising the Ozone

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

analyses to evaluate in detail the degree to which NOX controls

are needed.21 22 These studies showed that NOX emissions must

be reduced by 50 to 75 percent from 1990 levels throughout the OTR.

These studies showed that VOC emissions must also be reduced by 50 to

75 percent in and near the Northeast urban corridor. The studies also

concluded that transport of ozone and precursors from upwind areas both

inside and outside the OTR contributes significantly to ozone

predictions in much of the OTR.

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\21\ The Northeast Ozone Transport Region (OTR) is comprised of

the states of Maine, New Hampshire, Vermont, Massachusetts, Rhode

Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware,

Maryland, and the Consolidated Metropolitan Statistical Area that

includes the District of Columbia and northern Virginia.

\22\ 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 studies have become available confirming 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.23 Taken together, these studies strongly support

the view that NOX emissions must be reduced in the range of 50 to

75 percent throughout the OTR and that VOC emissions must be reduced by

the same amount in and near the Northeast urban corridor to reach and

maintain attainment.

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\23\ 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.

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Among the Northeast states, only Maine, based on unique air

trajectory patterns, has sought an exemption from local NOX

control; this exemption is granted for the northern part of the state.

b. The Southeast

A recent Southern Oxidant Study report describes the results of

research showing that, in the South, relatively high concentrations of

ozone are measured in both rural and urban areas.24 These

pervasive levels of ozone, while for the most part not in excess of the

current ozone NAAQS, form a background into which individual urban

plumes are interspersed. Preliminary modeling analyses performed by the

State of Georgia Department of Natural Resources suggests that it will

be very difficult to meet the NAAQS in Atlanta during episodes similar

to those modeled episodes, given the high background levels of ozone

that appear to prevail in the South. Further analyses of monitored data

by Southern Oxidant Study investigators suggest that the background

ozone levels are likely to be more responsive to reductions in NOX

emissions than in VOC emissions. There are no petitions at this time

for local NOX exemptions in this region.

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\24\ ``The State of the Southern Oxidant Study (SOS): Policy-

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

Carolina State University, April 1995. See this reference for all

statements in this paragraph.

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c. The Lake Michigan Area

Modeling studies performed to date for the states surrounding Lake

Michigan (Wisconsin, Illinois, Indiana, and Michigan) under Phase I of

their attainment demonstrations clearly indicate that reducing ozone

and precursors transported into the nonattainment areas would have a

significant effect on the number and stringency of local control

measures needed to meet the ozone NAAQS.\25\ These studies suggest that

without such region-wide reductions, the necessary degree of local

control will be very difficult to achieve, even with very stringent

local controls. The EPA Matrix study referenced above reinforces that

regional NOX control will be effective in reducing ozone across

the Midwest region. Taken together, the information available to date

suggests that additional reductions in regional NOX emissions will

probably be necessary in meeting the NAAQS in the Chicago/Gary/

Milwaukee area and downwind (including western Michigan), even though

currently available modeling shows that there may be a detrimental

effect from applying NOX controls locally in and near the major

nonattainment areas, in the absence of regional controls.

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\25\ Lake Michigan Ozone Study; Lake Michigan Ozone Control

Program: Project Report, December 1995.

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EPA has granted an exemption from local NOX controls for

several areas in the Lake Michigan region based on Phase I modeling.

Phase II modeling is underway by these states, which the Agency is

hopeful will clarify the conditions under which NOX controls might

cause an increase in ozone in the future, the magnitude of such an

increase, and the parts of the nonattainment areas in this region in

which this may occur.

d. Eastern Texas

There has been only limited modeling work focusing on the air

quality characteristics of the eastern Texas region to date. The State

of Texas has requested and been granted exemptions for the Houston and

Beaumont/Port Arthur nonattainment areas, based on Phase I modeling

that predicted that additional local NOX controls could worsen the

ozone problem. New modeling is underway by the state, but there is not

yet enough data to draw conclusions about the potential effect of

transport of ozone and its precursors on these areas. This uncertainty

has led the state to request that the exemptions from local NOX

controls in these areas be granted on a temporary basis while more

sophisticated modeling is conducted.

e. California

The State of California has submitted their ozone SIP to EPA for

approval, relying on both NOX and VOC reductions for most

California nonattainment areas, comprising most of the populated

portion of the state, to demonstrate compliance with the NAAQS.

Specifically, the revised SIP projects that the following NOX

reductions are as follows: South Coast, 59 percent; Sacramento, 40

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

Valley, 49 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.

EPA has granted exemptions from local NOX controls within

three California nonattainment areas; EPA believes that these actions

do not affect the broader need for regional NOX controls in large

parts of the state for ozone and PM NAAQS attainment and maintenance.

3. Secondary PM Formation as a Regional Issue

Measurements of ambient PM in some western U.S. urban areas that

are having difficulty meeting the current NAAQS for PM-10 have

indicated that secondary PM is a very important component of the

problem. Nitrates

[[Page 33429]]

(e.g., ammonium nitrate) are a primary constituent of this secondary

PM. For example, on days when PM-10 is high in Denver, about 25 percent

of the measured particulate is ammonium nitrate. In the Provo/Salt Lake

City area, secondary PM accounts for approximately 50 percent of the

measured PM, with nitrates being an important component of the

secondary particulate. Secondary nitrate PM levels as high as 40

percent of the 24-hour PM-10 NAAQS standard have been measured in the

Los Angeles Basin and concentrations of nitrate PM about one third of

the NAAQS have been measured in the San Joaquin Valley.\26\

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\26\ Summary of Local-Scale Source Characterization Studies,

EPA-230-F-95-002, July, 1994.

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NOX is a critical reactant in the complex chemical reactions

which eventually result in the formation of atmospheric nitrates. Thus,

control of NOX emissions from heavy-duty vehicles will have a

positive effect in reducing atmospheric ammonium nitrate. Because the

atmospheric chemistry of secondary PM formation has common attributes

to that of ozone, secondary PM also tends to be a regional, rather than

a strictly local phenomenon. For this reason, EPA believes that, as is

the case for ozone, regional NOX controls can be very effective in

reducing secondary PM over a significant area. For example,

California's revised SIP concludes that secondary formation of nitrate

particulate (primarily ammonium nitrate) contributes to the particulate

problem in the South Coast Air Basin and the San Joaquin Valley. The

Agency requests comment on the role of secondary particulate in PM-10

nonattainment in specific areas and the effect of regional NOX

controls on such emission; comments that include additional data will

be particularly valuable.

The sources that contribute to PM levels can vary significantly

from area to area. In many areas in the western U.S., re-entrained

fugitive dust emissions dominate the overall PM emissions inventory. In

large urban areas, however, direct PM emissions from heavy-duty diesel

vehicles, as well as the secondary PM from NOX produced by all

heavy-duty vehicles, are believed to contribute significantly to

elevated PM levels.

As can be seen from the discussion above, NOX emissions have a

number of different fates in the atmosphere. In some situations, such

as the formation of atmospheric ozone, NOX is used as a catalyst

but not consumed. A single NOX molecule can potentially be

involved in many photochemical reactions producing several ozone

molecules. In other cases, such as the formation of nitrate particulate

and acid precipitation, NOX is consumed. All NOX eventually

leaves the atmosphere in dry gas, particulate deposition, or in wet

deposition. NOX has a mean residence time in the atmosphere on the

order of several days.

It is clear that heavy-duty vehicle NOX emissions have a role

in the formation of ozone, nitrate particulates, and acid

precipitation. The relative partitioning varies across the country

depending on factors such as geography, meteorology, and the

concentration of other atmospheric pollutants. This preamble and the

RIA contain information and analyses describing the positive impact of

this proposal on ozone, PM, and other environmental effects, which EPA

believes form a strong basis for this proposal. EPA is conducting

additional studies to further refine our understanding of the role of

NOX in the formation of ozone and nitrate PM. EPA requests comment

and data regarding the relative partitioning of NOX emissions.

C. National Emission Trends Related to Ozone and PM

1. National NOX and VOC Emissions Trends

Figure 1 displays projected total NOX emissions over the time

period 1990 to 2020, including a breakdown between stationary and

mobile source components over the same period.\27\ Figure 2 presents

similar data for VOC emissions for the period 1990 to 2010 (later-year

projections for VOC are under development).\28\ As the figures show, a

similar pattern is projected for both of these ozone precursor

emissions. Initially, the projections indicate that national

inventories will decrease over the next few years as a result of

continued implementation of finalized CAA stationary and mobile source

NOX control programs. After the year 2000, however, when

implementation of these CAA programs is largely completed and the

pressure of growth continues, these downward trends are expected to

reverse, resulting in rising national VOC and NOX emissions.

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\27\ A discussion of the data used for projecting emissions from

various sources is found in the Regulatory Impact Analysis.

\28\ The data in these and the succeeding figures in this

proposal are discussed in the RIA, and take into account the

expected effects of various CAA control programs that have been

promulgated at the time of the modeling. These include 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 or

other programs are not reflected in the data. In these figures,

nonroad emission data includes emissions from a broad range of

nonroad sources including locomotives, aircraft, and marine vessels.

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[[Page 33431]]

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[[Page 33432]]

In its comments on the ANPRM, API observed that monitoring data

from some areas show progress in reducing ozone. EPA agrees that this

progress appears to be occurring and the Agency believes that this

progress may continue for the next few years in many areas as current

NOX and VOC programs are implemented. As shown in Figures 1 and 2

above, however, EPA believes that, in the absence of significant new

control efforts, the current downward trends in ozone precursor

emissions will be reversed in the middle of the next decade. The Agency

also believes that the projected increase in emissions will again

increase ozone levels in urban areas. EPA continues to examine this

issue and welcomes new modeling analyses that relate NOX and VOC

emission trends to ozone levels.

2. 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, it is appropriate to focus on the ``controllable''

portion of the particulate pollution problem when considering the need

for PM controls. The result is shown in Figure 3, which displays

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

including secondary nitrate PM, 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, including NOX controls, mobile source and industrial

source PM emissions are expected to rise after 2000.

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[[Page 33434]]

Currently, there are 82 PM-10 nonattainment areas across the U.S.

As discussed in section II.B.3. above, in some areas of the West,

nitrate particulate represents between 15 and 40 percent of total

particulate matter. The level of nitrate PM is a function of the

availability of NOX. It is appropriate to expect that the relative

proportions of nitrate particulate caused by stationary and mobile

sources are similar to the relative contributions of NOX by these

source categories. Thus, based on the NOX projections of Figure 1,

which EPA believes are generally typical of NOX projections in the

West, EPA estimates that about half of total nitrate PM is caused by

mobile sources, or about one tenth of total PM-10 in the western part

of the country. In the eastern part of the country, peak fine

particulate matter levels occur in the summer, primarily because

photochemical processes involving SO2 and NOX driven by

strong sunshine accelerate the formation of sulfate and nitrate

particulate matter. Thus, reducing NOX over a broad area is one

strategy for reducing the net fine particle formation in the East. EPA

requests comment, including applicable data whenever possible, on its

assessment of the relationship of NOX to ambient nitrate PM.

D. Contribution of Heavy-Duty Vehicles to Mobile Source Emissions

Heavy-duty vehicles represent about 12 percent of nationwide

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

of HC emissions) and PM throughout the country. This section reviews

EPA's current estimates of the contribution of heavy-duty vehicles to

the nation's ozone, PM, and NOX air pollution problems now and

into the future. The projections presented here incorporate the

emission reductions from all national mobile source emission control

programs for which final regulations were in place at the time of the

modeling and are discussed further in the RIA.

1. National Mobile Source NOX Emissions Trends

Figure 4 shows the total mobile source NOX inventory by

emission source (light-duty vehicles, heavy-duty vehicles, and nonroad

engines) projected over the next 25 years. For light- and heavy-duty

vehicles, the figure shows a decline in emissions over the next decade

as current programs phase in. The figure also shows, however, that this

current downward trend is projected to end, resulting in a return to

current NOX levels in the absence of further controls. Nonroad

emissions are projected to rise throughout the period.

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[[Page 33436]]

2. National Mobile Source VOC Emissions Trends

Figure 5 shows the total national mobile source VOC inventory by

emission source. As with the NOX emission projections in Figure 4,

this 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 heavy-duty vehicles and nonroad engines are

projected to rise gradually throughout this period.

[[Page 33437]]

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[[Page 33438]]

3. National Mobile Source PM Emissions Trends

EPA's latest projected trends for directly emitted mobile source

emissions of PM-10 are shown in Figure 6. The figure shows that over

the next 15 years the contribution of heavy-duty vehicles and other

highway sources to PM-10 pollution are expected to decrease

significantly and then remain relatively constant well into the next

decade.

[[Page 33439]]

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[[Page 33440]]

The emission data on which Figure 6 is based do not include

secondary nitrate PM-10 produced by the transformation of NOX in

the atmosphere. EPA believes that for those areas where secondary PM

formed from NOX is a problem, the proportions of total secondary

PM that may be attributed to different emission source categories

mirror the proportions of total NOX emissions from those sources

in those areas. Thus, based on the trends for NOX emissions shown

in Figures 1 and 4 above and assuming that the availability of ammonia

in the atmosphere remains roughly constant, the contribution of heavy-

duty vehicles to secondary PM problems can be expected to decline

slightly in the next few years and then to begin to increase again,

likely reaching and exceeding current levels after about 2020. Also

based on Figures 1 and 4, EPA believes that on average the proportion

of total nitrate PM that may be attributed to heavy-duty vehicles is in

the same range as the proportion of total NOX contributed by these

vehicles, or roughly 10 percent.

As discussed earlier in this proposal, EPA has not completed its

assessment of the relative importance of fine PM to health and welfare

concerns as compared with PM-10. As a result, EPA has not yet developed

specific projections showing the contribution of heavy-duty vehicles to

total fine particulate emissions. However, since nearly all mobile

source related PM, both directly emitted PM and secondary nitrate PM

formed from NOX emissions, falls in the fine particulate category,

it follows that the relative contribution of heavy-duty vehicles to

total fine particulate is greater than their contribution to total PM-

10.

E. Conclusions

1. The Rationale for Controlling Heavy-Duty Vehicle Emissions

EPA believes that immediate proposal of new emission standards for

highway heavy-duty engines is appropriate. The decision to issue this

NPRM is based on thorough consideration of a range of relevant factors,

as described above. Section II.A. presented the serious effects to

human health and the environment of elevated levels of ozone and other

chemical products of NOX emissions, including secondary PM . That

section describes a range of serious respiratory health effects that

have been closely connected to exposure to ozone levels exceeding the

NAAQS, which exist in many areas of the country. In light of the many

years of research by many parties into the health effects of ozone, the

Agency believes that a clear picture has emerged that, not only those

with existing respiratory conditions, but also healthy adults and

children are in danger of experiencing medical problems and a reduced

quality of life when exposed to elevated levels of ozone. Also

discussed were the variety of health concerns that have been associated

with exposure to PM at levels above the current NAAQS. Beyond these and

other serious health concerns, Section II.A. also discussed major

impacts on vegetation, crops, coastal estuaries, visibility, and other

effects that result from the transformation of NOX into ozone,

acid deposition, and nitrate PM formed from NOX. The current NAAQS

levels reflect the need to address exposure to ozone and PM wherever

the NAAQS standards are exceeded.

Section II.B. discussed EPA's belief that the widespread exposure

of people to elevated ozone levels will continue and worsen in the

absence of major regional-scale reductions in NOX. This section

discussed the regional characteristic of the ozone problem and how

various large areas of the country are projected to require regional-

scale NOX controls to reach and maintain attainment of the ozone

standard. EPA believes this remains true even where local NOX

control waivers must be granted under the CAA. This section also noted

that regional-scale control of NOX would be beneficial in reducing

the formation of secondary PM in some areas of the western U.S. and

would thereby assist these areas in reaching and attaining the PM

NAAQS.

Section II.B. also presented projections of emissions over the next

20 to 30 years to help assess the likelihood of continued air quality

problems in the future. In general, EPA's most recently developed

emission inventories show that national levels of ozone precursors will

tend to drop slightly, but only temporarily, after which they will

return to current levels. The link of these projected future emissions

to the formation of ozone was reinforced by recent air quality modeling

projecting continued ozone problems in major areas of the country in

the absence of new controls. The information assembled in this section

leads EPA to believe that a strong need exists for new regional-scale

NOX control programs over large areas of the country if the

negative trends are to be arrested and reversed. Similarly, the data on

PM suggests that secondary PM reductions will be helpful in reversing a

national trend of increasing PM emissions, especially in the western

states.

Section II.C. presented national mobile source emission inventories

over the next 20 to 30 years, divided into the key mobile source

categories. These presentations showed that heavy-duty vehicles

contribute significantly to mobile source NOX , VOC, and PM

emissions and to the overall trends in mobile source emissions into the

future. In its comments on the ANPRM, API gave several reasons why

projections of future emission inventories may be in error and

questioned the future contribution of heavy-duty vehicle emissions.

Although EPA believes that the projections presented in this proposal

can be improved and will continue to take actions to improve them, the

Agency believes that they represent the highest quality estimates

available today. As such, they clearly indicate that heavy-duty

vehicles will remain significant contributors to these emissions well

into the future.

After consideration of all the available information, including

comments received on the ANPRM, EPA believes that heavy-duty vehicles

contribute significantly to air pollution, which has a serious impact

on health and the environment. The Agency believes that this body of

information on balance supports taking action to revise heavy-duty

engine emission standards, which will reduce NOX, HC, and

secondary PM from this segment of mobile sources.

2. Appropriateness of a National Heavy-Duty Vehicle Program

EPA further believes that the mobile source emission control

program proposed in this action is most appropriately national in

scope, for several reasons. First, as summarized above, the regional

character of both ozone and secondary PM formation leads EPA to believe

that major new NOX controls over large regions of the country are

needed to achieve the regional-scale ozone and PM reduction many areas

require. Control of NOX from heavy-duty vehicles and other mobile

sources are effective approaches to such regional control since the

resulting control covers a wide area. Second, heavy-duty vehicles, like

other mobile sources, represent an emissions source that itself crosses

boundaries of nonattainment areas, states, and regions. A mobile source

control program that covers only certain parts of the country has the

disadvantage of allowing high-emitting vehicles to travel regularly

into areas with more stringent requirements, compromising the

effectiveness of the program. Finally, the structure and marketing

patterns of the engine and vehicle manufacturing industries would make

it impractical and inefficient for a

[[Page 33441]]

patchwork of different emission standards to be enacted in various

parts of the country. Rather, for engine manufacturers to achieve

economies of scale and to concentrate research and development

resources most effectively, EPA believes it is most practical to

establish a single set of emission requirements applying to engines in

trucks and buses used anywhere in the country. A key reason why EPA,

CARB, and engine manufacturers agreed to a Statement of Principles was

the potential for nationally harmonized requirements for heavy-duty

vehicles.

3. Issues of Timing

EPA also believes that for the anticipated benefits of new highway

heavy-duty engine emission standards to be available when they are

needed, it is best to finalize such a program in the near future. There

are several reasons for and positive consequences of expeditious

promulgation of new emission requirements for heavy-duty engines. The

primary reason to begin the process now is that the current emission

and air quality projections discussed above project a need in many

areas of the country for significant additional emission reductions in

the post-2000 period to reach and maintain attainment.

In addition, the highway heavy-duty engine manufacturers have

communicated to EPA that to meet the stringent standards proposed in

this action for model year 2004 and later, they need to have the

precise emission requirements affecting them in place and begin work

toward those goals very soon. The industry's perspective is based on

its expectation that the standards proposed here would represent a very

significant technological challenge requiring large investments by the

members of the industry. EPA's technology assessment is consistent with

the industry view. If new standards are established by approximately

the end of 1996, about two years will be available before the proposed

1999 technology review for manufacturers to marshall appropriate

resources to achieve significant technological progress. Then, if such

progress is confirmed at that time, about four years will remain for

additional resources to be assembled and the new technologies to be

developed and incorporated into 2004 model year engines. Based on the

Agency's technology assessment as of the time of this proposal, EPA

agrees that it is best to set the process in motion now to achieve the

full benefits of cleaner heavy-duty vehicles beginning in 2004.

Another compelling reason to initiate the process of enacting new

heavy-duty engine emission requirements soon is that the Agency is

proposing to encourage voluntary marketing of cleaner engines,

especially engines that incorporate new technologies, earlier than 2004

(see Section III.B. below for proposed changes to the Averaging,

Banking, and Trading program). An expeditious completion of the

rulemaking process would encourage manufacturers to consider such

options in the earliest possible model year.

State air quality planners will also benefit if the program

proposed in this action can be formally established soon. States must

soon finalize ozone SIPs demonstrating attainment in the years ahead,

and expeditious EPA action on additional heavy-duty vehicle emission

reductions will allow states to know whether to incorporate expected

reductions from heavy-duty vehicle controls into their SIPs. At the

same time, any significant delay in promulgation might also require a

delay in the year of implementation past 2004, postponing the full

benefit of the program as an air quality strategy. For this and the

other reasons given in this section, EPA plans to finalize the proposed

requirements as soon as possible should the Agency reach a final

determination that such a program is warranted.

III. Proposed Program for Reducing Highway HDE Emissions

A. Background on Highway HDE 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

(HDEs) are used in a wide range of heavy-duty vehicle categories, from

small utility vans to large trucks. Because one type of HDE 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 an HDE consists of exercising it over a prescribed duty

cycle of engine speeds and loads using an engine dynamometer.

Highway HDEs are categorized into diesel and otto-cycle

(predominantly gasoline-fueled) engines with each, in some cases,

having different standards and program requirements. EPA has further

subdivided heavy-duty diesel engines (HDDEs) into three

subclassifications or ``primary intended service classes''; light,

medium, and heavy HDDEs. HDDEs are categorized into one of the three

subclasses depending on the GVWR of the vehicles for which they are

intended, the usage of the vehicles, the engine horsepower rating, and

other factors 29. The subclassifications allow EPA to more

effectively set requirements that are appropriate for the wide range of

sizes and uses of HDDEs. With one exception, emission standards are the

same for HDDE in all of the subclasses but other programmatic

requirements differ as appropriate. Engines used in ``urban buses''

(large transit buses)30, which fall mostly in the heavy HDDE

subclass, have somewhat different standards and program requirements.

The standards and program requirements for the various categories and

types of engines are discussed below and in following sections, as

appropriate.

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

\29\ 40 CFR Part 86.090-2.

\30\ 40 CFR Part 86.093-2.

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

Emissions from HDEs 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 HDEs is to perform work and that there is a

large variation in work output among the engines used in heavy-duty

applications. This system allows EPA to apply the same standards to a

very wide range of engines.

Emission standards have been in place for highway diesel and

gasoline-fueled HDEs 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 HDEs and for PM from urban buses. 42 U.S.C.

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

The current exhaust emission standards for highway heavy-duty

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

urban buses, which specify more stringent PM levels than those applying

to other HDEs, are displayed separately in the table.

[[Page 33442]]

Table 1.--Highway Heavy-Duty Emission Standards

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

Diesel

Year HC (g/bhp- CO (g/bhp- NOX (g/bhp- particulate

hr) hr) hr) (g/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

Otto-cycle HC

(g/bhp-hr) CO

(g/bhp-hr) NOX

(g/bhp-hr) Evaporative

HC

(g/test)

1991-97:

(A)..................................................... 1.1 14.4 5.0 3.0

(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. Gross Vehicle Weight Rating (GVWR).

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

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

This table does not contain all applicable standards. A complete set of standards may be found in 40 CFR Part

86.

Under section 202(a)(3), emission standards for highway HDEs 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

HDE 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 HDEs 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 highway

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

B. Description of Today's Proposal

In this action, EPA proposes a comprehensive program to address the

significant contribution of highway HDEs to ambient pollutant

concentrations and the resultant air quality problems around the

country. The proposed program consists of stringent new emission

standards, changes to maintain the durability of HDE emissions in use,

and changes to the current Averaging, Banking, and Trading regulations

to encourage the early introduction of cleaner engines and new

technology.

1. Emission Standards

a. Standards Proposed in Today's Action. EPA proposes new emission

standards for model years 2004 and later. These standards are in the

form of combined non-methane hydrocarbons plus nitrogen oxides (NMHC +

NOX) and are presented in units of g/bhp-hr. They would apply to

otto and diesel cycle engines fueled by gasoline, diesel, methanol, and

gaseous fuels and their blends. Manufacturers would have the choice of

certifying their engines to either of two optional sets of standards:

2.4 g/bhp-hr NMHC + NOX

or

2.5 g/bhp-hr NMHC + NOX with a limit of 0.5 g/bhp-hr on NMHC

EPA proposes that all other emission standards and other requirements

applying to model year 1998 and later model years remain unchanged.

For the most part, EPA expects that either of these standards will

result in the essentially the same NOX and NMHC emission rates in-

use. As is discussed elsewhere in the proposal and in the supporting

RIA, EPA expects that the proposed standards will generally result in

NMHC levels of about 0.4 g/bhp-hr and NOX levels of about 2.0 g/

bhp-hr. Most, but not all, HDEs now have HC certification levels of 0.5

g/bhp-hr or less. The standards will result in modest NMHC reductions

for the HDE class taken as a whole and will serve as a cap against

increases in NMHC emissions as manufacturers implement NOX control

strategies. The expected NOX levels would result in reductions of

50 percent as compared to the 1998 standard. For administrative

simplicity, EPA would prefer only one standard and based on current HC

certification levels the 2.4 g/bhp-hr standard seems most appropriate.

However, the manufacturers would prefer the flexibility of the

alternate standard and EPA sees no environmental harm from offering

this option. EPA asks comment on whether two standards are appropriate

and why.

The form of the proposed standards differs in some aspects from the

current and 1998 model year standards for HDEs presented in Table 1.

First, EPA is proposing a combined standard (NMHC+NOX) instead of

separate standards. EPA is using this approach because for in-cylinder

control strategies there is a tradeoff between HC and NOX control.

Thus, expressing the requirements as a combined standard provides the

manufacturers some small amount of additional flexibility. Further, EPA

sees no environmental harm from providing this flexibility. While there

is not a direct one to one trade-off in every area of the country, both

pollutants are generally considered key ingredients in the formation of

ozone. Thus a little more control of one pollutant at the expense of

the other should provide essentially the same air quality benefits as

if the engines were meeting separate standards for NOX and NMHC at

comparable levels (nominally 2.0 g/bhp-hr NOX and 0.4 g/bhp-hr

NMHC). Second, EPA is proposing an NMHC standard instead of a total HC

[[Page 33443]]

standard. This approach is being proposed primarily because methane is

largely unreactive in the formation of ozone and thus its control would

not help to achieve the ozone air quality objectives of this proposal.

This is not intended to suggest that the control of methane is not

valuable in the context of other environmental objectives EPA may

consider in the future, but methane emissions from these engines are

only a small fraction of their total HC and thus foregoing control at

this time is reasonable. Both the use of an NMHC standard and the use

of a combined standard is also consistent with the current California

LEV program requirements for medium-duty vehicles and the requirements

for HDEs prescribed in section 245 of the 1990 amendments to the Clean

Air Act.

The proposed standards (rooted in the California Federal

Implementation Plan and identified in the SOP) represent a reduction of

more than 50 percent in NOX and NMHC/HC over current requirements.

Reductions of this magnitude are a significant challenge, especially

for diesel HDEs, and will require a major research and development

effort to achieve. At this time there is not one firm set of

technologies to be applied to all diesel HDEs to achieve the proposed

standards. Diesel HDEs will need to consider approaches from a number

of different technological strategies and control hardware which have

been identified and assessed in a few laboratory programs and then

apply their choices to their 2004 models. In many cases these

strategies and hardware have not been used on production diesel engines

and there are substantial development challenges ahead to apply this

technology cost effectively with due consideration to impacts on

operating and maintenance costs as well as engine durability.

Regulatory enhancements such as the proposed revisions to the

Averaging, Banking, and Trading program (as discussed below) will also

help to enhance overall feasibility of the standards for all engine

models. As is discussed elsewhere in proposal and in the supporting

RIA, EPA believes the proposed standards while very challenging are

technically feasible and otherwise appropriate in the context of

section 202(a)(3). With about eight years remaining before the 2004

model year, manufacturers have an unprecedented amount of leadtime to

fully assess, develop, and optimize the various control approaches and

to integrate them into their 2004 model year products in a manner which

minimizes engine costs and fuel impacts and does not raise safety

concerns. Indeed the widespread support of the HDE industry for the SOP

tends to support EPA's conclusion.

While there are promising technologies and aftertreatment control

strategies which otto cycle (gasoline) HDEs may employ to achieve the

proposed standards, these still require development if they are to be

applied to all different otto-cycle engine models and the standards are

to be met in use. EPA believes it will be easier technologically for

otto-cycle (gasoline) HDEs to achieve the proposed standards but

proposes the same standards for otto and diesel cycle HDEs for two

reasons. First, work is required to apply these technologies/

aftertreatment control strategies to all otto cycle engines. EPA

expects that much of this progress will be made in response to the 1998

HDE NOX standard and others in response to market competitive

pressures. Nonetheless, EPA still expects that some models will need to

develop and employ technology/aftertreatment control upgrades to meet a

2.4 g/bhp-hr NMHC + NOX standard. This may especially be the case

for the few otto-cycle HDE families which may not employ closed loop

control, fuel injection systems with catalysts before 2004. Second,

because otto and diesel cycle HDEs compete in the market place, there

is a degree to which for market equity reasons it is appropriate to

apply standards of equivalent stringency to both classes of engines.

This approach reduces the possibility that emission standards could

have disruptive effect on the HDE market. Both EPA and the California

Air Resources Board have set HC and NOX standards of equivalent

stringency for otto-cycle and diesel HDEs in the past.

b. 1999 Rulemaking Review

EPA proposes to conduct a special review in 1999 to reassess the

appropriateness of the standards under the CAA including the need for

and the technological and economic feasibility of the standards at that

time. Before making a final decision in this review regarding the

appropriateness of these standards under the CAA, EPA intends to issue

a proposal regarding this issue and offer an opportunity for public

comment on whether the standards continue to be technologically

feasible for implementation in 2004 and consistent with the CAA.

Following the close of the comment period, EPA would issue a final

agency decision under section 307 of the CAA.

If in 1999 EPA finds the standards to not be feasible for model

year 2004 or otherwise not in accordance with the Act, EPA will propose

adjusted standards which do not exceed the following:

2.9 g/bhp-hr NMHC + NOX

or

3.0 g/bhp-hr NMHC + NOX with a limit of 0.6 g/bhp-hr on NMHC.

However, if EPA determines that the feasibility of the standards

requires diesel fuel changes and EPA does not engage in rulemaking to

require such changes, EPA will propose adjusted standards which do not

exceed the following:

3.4 g/bhp-hr NMHC + NOX

or

3.5 g/bhp-hr NMHC + NOX with a limit of 0.7 g/bhp-hr on NMHC.

The standards finalized in the rulemaking initiated by today's

proposal would stay in effect unless revised by this subsequent

rulemaking procedure. EPA has included language in the proposed

regulatory text regarding the 1999 review.

Over the next several years EPA will be actively engaged in

programs to evaluate technology (engine/fuel quality) interactions/

developments and progress toward meeting the proposed standards through

in-house programs and coordination with the involved industries. To aid

in this process EPA has established a working group under its Mobile

Sources Technical Advisory Sub-Committee to the CAA Advisory Committee

to solicit technical advice and input from engine, fuel, and related

experts from around the country. If as a result of this evaluation, EPA

reaches the view that the available information is sufficient to

indicate that the feasibility of the standards may depend on

modifications to diesel fuel, any potential for diesel fuel changes

could then be considered within the context of the 1999 Review. EPA

recognizes that any consideration of potential fuel diesel

modifications must be appropriate under section 211(c) of the CAA

(including considerations of cost, cost effectiveness, and other

relevant cost considerations), and is especially sensitive to the

substantial leadtime requirements that may be associated with fuel

modifications.

Based on the information presented in the RIA and in section IV of

this proposal, EPA believes the proposed standards are technologically

feasible and otherwise appropriate under the CAA. Nonetheless,

especially for diesel engines, it is clear that a significant amount of

research and development will be needed to comply. The alternate

standards discussed above are designed to serve as a backstop in the

event that

[[Page 33444]]

the 1999 review leads to the conclusion that a revision is appropriate.

Based on the technical analysis in the RIA, these levels represent

upper limits for these potential revisions. If during the course of the

review EPA concludes that a revision is appropriate, a rulemaking will

be conducted to determine the appropriate level for the model year 2004

and later standards.

c. Other Issues Related to HDE Emission Standards. Several

commenters to the ANPRM expressed concern with the levels of the

emission standards EPA is proposing today. Representatives of

environmental organizations and several states argued that EPA should

propose more stringent standards for one or more pollutants. While EPA

believes at this time that today's proposed program represents the best

combination of standards that are achievable given our current

understanding of technological constraints, as explained below, and the

other criteria set forth in CAA section 202(a)(3), EPA remains open to

additional information and will consider finalizing more stringent

standards in this action or proposing more stringent standards by

separate action if such standards are warranted.

In comments the Agency has received thus far, commenters generally

address potential standards for NOX and PM separately and somewhat

independently. These comments urge the Agency to propose an NMHC +

NOX standard low enough to assure that NOX levels of 2.0 g/

bhp-hr are reached by all diesels, expressing concern that a 2.4 or 2.5

g/bhp-hr NMHC + NOX standard will actually translate into 2.2-2.3

g/bhp-hr NOX, not the 2.0 g/bhp-hr level applied in the California

Federal Implementation Plan (FIP) to model year 2002 engines. These

commenters also suggest that a PM standard of 0.05 g/bhp-hr be

proposed, equal to the level which currently applies to urban buses.

The Agency believes that because of the close interaction among

NOX, NMHC, and PM emissions from diesel engines, decisions about

proposed emission standards cannot be made independently from one

another. As described below in section IV, EPA believes that reaching

all the standards proposed today simultaneously will require a very

large technological effort on the part of diesel HDE manufacturers.

Based on the information available today, the Agency believes that the

scale of the effort which will be required is such that if NOX,

NMHC, or PM standards lower than those proposed here were to be

required, the feasibility of implementing the program for the 2004

model year would be threatened. That is, while manufacturers may be

able to achieve lower emission levels for some engine models, at this

time EPA does not believe that this would be feasible, on average, for

the full line of engines manufacturers will likely be offering in 2004.

(The technological assessment on which EPA based a 2.0 g/bhp-hr

NOX emission standard in the California Federal Implementation

Plans assumed that only engines sold in California, not all engines

nationally, would be affected.) Regarding a specific comment that a

combined NOX + NMHC standard allows NOX emissions

significantly higher than the 2.0 g/bhp-hr NOX goal, the Agency

accepts the intention of the engine industry to reach levels very close

to 2.0 g/bhp-hr. This also seems likely from a technical perspective

since at best modest NMHC reductions can be achieved over current

levels. By combining the NOX standard with NMHC, EPA proposes to

allow a small degree of flexibility to manufacturers which succeed in

achieving very low NMHC levels in conjunction with the proposed

NOX and PM standards. However, the Agency does not expect that the

opportunity to take advantage of that flexibility will be frequently

used and expects that on average in-use NOX levels would be

approximately 2 g/BHP-hr.

As is the case for NMHC, for many in-cylinder control strategies

there is a trade-off between NOX and PM emission rates. In-

cylinder techniques which reduce NOX may increase PM and vice-

versa. For HDDEs, EPA expects that most manufacturers will rely on in-

cylinder NOX control techniques as opposed to aftertreatment

devices. Some of these techniques are likely to put upward pressure on

PM levels, and thus will require special optimization to ensure that PM

levels are not increased. A simultaneous reduction in the PM standard

could have an adverse effect on the feasibility of the NMHC + NOX

standard. Nonetheless, EPA recognizes the need for and value of

additional reductions in PM emission rates and asks for comments on

this matter.

EPA encourages further, detailed comment on the appropriateness of

the proposed levels for NMHC + NOX and PM in light of the

technological interactions of their formation and control. EPA will

consider finalizing standards different than those proposed today to

the degree that comments and analysis support such action. However, the

interactions among the pollutants would require a reassessment of all

pollutants if a more stringent standard is to be considered for any one

pollutant.

One commenter requested that EPA propose voluntary low emission

standards for NOX and PM which would apply between 1998 and 2003

at levels below the 4.0 g/bhp-hr NOX and 0.10 g/bhp-hr PM which

would be required in 2004. The ultimate purchasers of HDEs certified to

meet the voluntary low emission standards would be able to market the

emission credits generated. EPA asks for comment on the need for and

desirability of lower voluntary NOX and PM standards as a means to

encourage technological innovation and the value of such a program

given that manufacturers can already elect to certify to lower

standards (family emission limits) under the Averaging, Banking, and

Trading (A,B,&T) program. These extra emission reductions from these

HDEs could be sold for marketable credits provided there is not double

counting between the A,B,&T program and a user program.

Commenters also raised the issue of whether standards for otto-

cycle HDEs (gasoline-fueled) should be different, and more stringent,

than those for diesel-cycle HDEs. As commenters observe, the

technological challenge of achieving lower NOX levels

simultaneously with low NMHC levels has been less for otto- than

diesel-cycle HDEs in the past and current data suggests this may be the

case for the proposed 2004 standards. In 1996 there were seven otto-

cycle HDE families that certified to the existing standards with

combined NMHC+NOX levels below the level of the proposed

NMHC+NOX standard. However, of these seven, only about half had

actual test data to demonstrate emission levels which could allow them

to certify to the level of the proposed standards. Durability test data

on others indicates that they would be unable to meet a 2.4 g/BHP-hr

NMHC+NOX standard at the end of their useful life period.

Lower certification levels for some families does not necessarily

lead to the conclusion that levels significantly less than the proposed

standards are achievable by all families in the near term. Indeed, the

industry has raised concern that even if the level of the proposed

standard can be achieved on laboratory prototypes in the near term,

some engine models will require additional work to gain the additional

emission reductions needed to account for the effects of production and

test variability and the deterioration in the efficiency of emission

controls in use. Industry has suggested that a prototype engine

emission rate about 1 g/BHP-hr less than the proposed standard is

needed to be assured of compliance by production engines.

[[Page 33445]]

Nonetheless, the recent engine and emission control system

improvements and the resultant reduction in the NMHC+NOX emission

levels of many of the current otto-cycle families clearly indicate that

the proposed standards are feasible by the 2004 model year. Some

concern has been expressed that the proposed standard may be more

difficult for otto-cycle engines used in heavier vehicles (>14,000 lbs

GVWR). If not formulated properly, the efficiency of their catalysts

may be reduced by heat stress which occurs during the longer periods of

high load operation which are characteristic of some of these vehicles.

However, the fact that otto-cycle HDEs with these lower emission rates

are used in vehicles of all weight classes suggests that vehicle design

and use patterns do not govern the feasibility of low NOX catalyst

technology. EPA believes that any technological feasibility concerns

for otto-cycle HDE families required to meet the proposed standard can

be resolved within the next eight years.

Given the relatively low NMHC+NOX certification levels of some

current otto-cycle engines and the available leadtime, EPA requests

comment on setting the NMHC+NOX standard for otto-cycle engines in

the range of 1.5-2.0 g/BHP-hr. In addition to comments on technological

feasibility, EPA requests comment on the appropriateness of a lower

standard in the context of emission inventory benefits, environmental

need, costs of compliance (purchase and operating), energy impact,

safety, and market equity concerns. Comments regarding market equity

should address how different levels of NMHC+NOX standards for

otto- and diesel-cycle engines would affect the market relationship

between these technologies. EPA also requests comment on whether

implementing a separate standard for otto-cycle engines (which are

largely gasoline-fueled engines) would be an appropriate change from

the historical ``fuel neutral'' nature of EPA's emission standards for

NMHC and NOX emissions from HDEs, and whether such a change could

adversely affect the development of and use of clean alternative fuels.

EPA also requests comment on another alternative approach for otto-

cycle engines. Under this approach, manufacturers could voluntarily

elect to certify these engines to the proposed standard significantly

earlier (i.e., model year 1999, 2000, or 2001 instead of 2004) as an

alternative to meeting the more stringent standard discussed above

(1.5-2.0 g/bhp-hr) in 2004. In this concept, the more stringent 2004

standard for otto-cycle engines either would not apply or would apply

to a model year after 2004 to a manufacturer that elected to meet the

proposed standard early. This approach would have the benefit of

providing early emission reductions and, to the extent that

manufacturers choose the proposed standard early, would help reduce the

potential market equity impacts mentioned above since the same standard

would apply to both otto- and diesel-cycle engines. While EPA may not

impose on highway heavy-duty engines NOX standards more stringent

than 4.0 g/bhp-hr for any model year before 2004 (CAA sections

202(b)(1)(C) and (a)(3)(B)(ii)), EPA believes it retains authority to

offer manufacturers the voluntary option of complying with a NOX

plus NMHC standard of 2.4 g/bhp-hr beginning before model year 2004.

EPA requests comment on the appropriateness of finalizing this concept.

Should a commenter favor this concept, they should specify the version

they prefer (i.e., implementation date of the 2.4 g/BHP-hr standard or

implementation date and numerical value of a later more stringent

standard. EPA seeks comment on the technical feasibility and

appropriateness in the context of environmental need, costs of

compliance, energy impact, safety and market equity for the option

supported. The public docket contains a memo further discussing each of

the alternative approaches to otto-cycle HDE standards as laid out

above.

Finally, several commenters encouraged EPA to reconsider the role

of alternative fuel technologies in reaching low emission levels. EPA

believes HDE technologies using alternative fuels can reach or exceed

the emission standards proposed today. For this reason, EPA has for

many years supported, and continues to support, expanded use of

optimized alternative fuel engines. The Agency is pleased that

development of HDEs which use alternative fuels is continuing and that

some of these engines have been marketed, usually for specialized

purposes. However, it does not appear that a major shift in the market

toward alternative fuel HDEs is underway, and EPA does not believe at

this time that the HDE manufacturing industry is in a position to shift

a significant amount of its production toward non-petroleum fuels by

the year 2004. Thus, EPA believes it is likely that petroleum-fueled

HDEs will continue to dominate the HDE industry well into the next

century, and the Agency does not believe that EPA action that could

theoretically force a faster shift toward alternative fuel technologies

(e.g., extremely low emission requirements for all engines) would be

effective in the absence of a strong market demand for such engines.

Therefore, the Agency believes that it is appropriate to base new

proposed HDE emission standards on the projected capabilities of

petroleum-fueled engines rather than on the current or projected

capabilities of alternative fuel engine technologies. If the stringent

standards proposed today, while achievable by petroleum-fueled engines,

are indeed relatively easy for some alternative fueled engines to meet,

the result may be the introduction of alternative fueled HDEs that are

both acceptable to the market and priced competitively. From the

Agency's perspective, such a market-based promotion of alternative fuel

technologies would be a positive result of today's proposed action.

d. Non-conformance Penalties. Section 206(g) of the Clean Air Act

requires EPA to allow an HDE manufacturer to receive a certificate of

compliance for an engine family which exceeds the applicable standard

(but does not exceed an upper limit) if the manufacturer pays a non-

conformance penalty established by EPA through rulemaking. The NCP

program established through rulemaking is codified in Subpart L of 40

CFR 86. EPA plans to address provisions related to NCPs for the

proposed 2004 model year standards in conjunction with the 1999 review

discussed above.

2. In-use Emissions Control Elements

a. Introduction. Historically, EPA has viewed in-use emissions

deterioration as a problem associated more with gasoline engines than

with diesel engines. For NOX emissions, EPA has tended to be less

concerned with diesel engine emissions deterioration because diesels

are currently equipped with fewer aftertreatment or other emission

control 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

resulted in improved performance, fuel economy, and durability as well.

As described below in Section IV. A., as standards are reduced

diesel HDE manufacturers will likely continue to strive to meet the

standards through engine, air intake, and fuel systems redesign.

However, they may find it necessary to introduce new technologies, such

as exhaust gas recirculation (EGR), which function solely to reduce

emissions. Long-term emissions performance becomes a

[[Page 33446]]

greater concern with the addition of such emissions control

technologies. 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. This is of particular concern because the heavy-

duty engine market has demanded longer-lasting engines, and

manufacturers have been successful in increasing engine life. It is

EPA's understanding that some current large engines accumulate in

excess of 500,000 miles before being rebuilt and are used for several

hundred thousand more miles after rebuild. Thus, failure of emissions

controls early in the engine's life could offset a significant portion

of the expected benefit associated with the more stringent standards

proposed today.

As described below, EPA is proposing revisions to its current

regulations regarding in-use emissions control including changes to

useful life, emissions related maintenance and warranty provisions.

These changes are intended as updates to current requirements which

will further encourage engine manufacturers to use emissions controls

that will have a high degree of durability, and that perform well in

use without an unreasonable degree of owner involvement. EPA is also

proposing other basic provisions to help encourage the maintenance and

repair of emissions controls after the regulatory useful life is

reached, and especially during engine rebuild. The proposals would be

effective beginning with 2004 model year engines. EPA believes that the

industry is fully capable of responding to the challenge of achieving

the benefits of low emissions standards, not just in the early years of

engine life, but throughout the time that the engine is in-use. EPA

requests detailed comments, with as much supporting rationale as

possible, on all of the following proposals.

b. Revisions to Current Regulations

To help ensure the durability of new emissions related technology

used to meet the new standards, EPA is proposing revisions to its

current regulations in the areas of ``useful life'', ``emissions

related maintenance'', and ``emission defect and performance

warranties''.

i. Useful life

As provided in section 202 of the Clean Air Act, EPA specifies the

``useful life'' periods for the various heavy-duty engine types. The

regulatory useful life is the period of time or operation during which

manufacturers are liable for emissions compliance. Manufacturers are

responsible for making sure their engines meet emissions standards not

just at the time of certification and production but also for the

regulatory useful life of the engines. EPA has the authority to test

engines selected from the production line and from the in-use fleet to

determine compliance with this requirement. EPA can require

manufacturers to recall and repair engines in an engine family if

testing of properly maintained and used engines or other information

indicates that a substantial number of engines in the engine family do

not meet emissions standards during the useful life. EPA's ongoing

programs for production-line auditing (Selective Enforcement Auditing)

and in-use recall are two primary EPA enforcement mechanisms for engine

emissions standards. The statutory authority for these programs is

found in Sections 206 and 207 of the Clean Air Act.

Currently for heavy-duty on-highway engines, the useful life is

generally defined as eight years or 110,000 miles for light heavy-duty

diesel engines (HDDEs) and gasoline heavy-duty engines, eight years or

185,000 miles for medium HDDEs, and eight years or 290,000 miles for

heavy HDDEs, whichever comes first.31 These mileage values were

originally chosen to roughly correspond to the prevailing average

engine lives before retirement (for smaller engines) or major engine

rebuilds (for larger engines). Since the middle 1980s, manufacturers

have increased very significantly the mechanical durability of heavy-

duty diesel engines, allowing the engines to go many more miles before

rebuild. Also, the annual vehicle miles travelled (VMT) for newer line-

haul trucks has increased which results in the trucks reaching the end

of their defined useful life more quickly. It is not uncommon for line

haul trucks to reach their current maximum useful life of 290,000 miles

well before the years useful life interval.

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\31\ 40 CFR 86.096-2. The Clean Air Act Amendments of 1990

specify a minimum useful life years limit of ten years for heavy-

duty engines with respect to any standard that first becomes

applicable after the 1990 amendments were enacted. 42 U.S.C. 7521

(d)(2). Standards adopted after the Amendments such as the urban bus

particulate standard and the 1998 and later model year NOX

standard have a useful life years limit of ten years (e.g., 40 CFR

86.098-2). Standards adopted before the Clean Air Act Amendments of

1990 have a useful life years limit of eight years.

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The first part of the following discussion concerns the mileage

portion of the useful life. The years useful life interval is much less

critical because it is not generally the limiting interval. EPA is

proposing to make the years portion consistent at ten years for all

heavy-duty engines and standards beginning with the 2004 model year.

The discussion of the years interval proposal follows the proposals and

discussion regarding mileage.

The engines of greatest concern to EPA are those in the heavy

heavy-duty diesel engine category because they, for the most part, are

the engines that tend to reach the end of the useful life quickly and

then continue to accumulate many more miles than the current useful

life before needing to be rebuilt. Published warranty information

indicates that the major engine components of heavy HDDEs are warranted

for 500,000 miles in most cases and extended base engine coverage is

often available for up to 5 years/500,000 miles. Since the repair or

replacement of some of the components covered by the warranties due to

wear is fundamental to rebuilding, the warranties are one good

indication that some engines greatly exceed EPA's current useful life

miles limit of 290,000 miles. Also, it is commonly accepted in the

trucking industry that, with sound maintenance practices, today's heavy

HDDEs last much longer than 290,000 miles before rebuild.32

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\32\ Comments of American Trucking Association, Inc., October

17, 1995, Docket A-95-27, II-D-40.

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Although EPA could perhaps justify proposing an increase of the

heavy HDDE useful life requirement to 500,000 miles or more based on

how long engines are lasting today before rebuild, EPA believes that a

somewhat lower value is appropriate. Engine manufacturers have stated

that they will be challenged to meet the proposed new standards and an

extremely long useful life could affect the feasibility of the 2004

standards. EPA acknowledges that the length of the useful life can

affect the feasibility of the standards. EPA believes that the program

goal of ensuring durable emissions control designs would be achieved

through a 50 percent increase in the useful life up to 435,000 miles.

This value represents a meaningful increase in the useful life without

potentially compromising the feasibility or cost effectiveness of the

2004 standards. Additionally, other programs, as described below, can

help ensure emissions controls continue to operate properly after the

end of the useful life. The end of the useful life does not necessarily

mean the end of good in-use emissions performance.

Not all heavy HDDEs are used in line-haul trucks which accumulate

miles very quickly. A small minority of heavy

[[Page 33447]]

HDDEs are used in urban (transit) buses and other urban vehicles that

accumulate miles much more slowly. For example, urban buses average

about 13 miles per hour (including idle time) 33 and about 40,000

miles per year.34 For urban vehicles such as urban buses, a useful

life of 435,000 miles would be excessive because of their slow mileage

accumulation rates. EPA has addressed such concerns in other

regulations by adopting an hours limit that is equivalent to a miles

limit which is set to reflect typical operation of heavy-duty engines.

Vehicles that accumulate mileage more slowly than typical for heavy-

duty vehicles would reach the hours interval before the mileage

interval. In keeping with this approach, EPA proposes to add an hours

limit of 13,000 hours to the useful life for heavy HDDEs. The 13,000

hours limit is based on other hours and miles equivalents used in

existing EPA regulations regarding heavy-duty engines.35

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\33\ ``National Transit Summaries and Trends For the 1993

National Transit Database Section 15 Report'', Federal Transit

Administration, May 1995.

\34\ ``Data Tables For the National Transit Database Section 15

Report Year'', Federal Transit Administration, December 1994.

\35\ 40 CFR 86.094-25 (b)(4) contains several hours and miles

equivalents for HDDEs all of which are based on the ratio of one

hour to 33.3 miles of operation.

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EPA, however, is concerned that the hours interval being proposed

could, in effect, relax the useful life from its current level, as

would be the case in instances when vehicles would reach 13,000 hours

before reaching 290,000 miles. Given the average speed for urban buses

of 13 miles per hour, this would be likely to occur frequently. To

ensure that the addition of an hours limit does not result in a useful

life less than the current useful life in any instance, EPA proposes

not to allow the hours limit to be effective until after an engine

reaches 290,000 miles. In summary, EPA proposes a useful life for heavy

HDDEs of 435,000 miles, 13,000 hours, or ten years, whichever occurs

first, but in no case less than 290,000 miles.

EPA requests comments on two alternative approaches to adopting an

hours limit of 13,000 hours. The first option is to not have an hours

interval and retain the useful life mileage interval of 290,000 miles

for urban bus engines with an increase of the mileage interval to

435,000 miles for all other heavy HDDEs. This would simplify

regulations but could disadvantage engine manufacturers where engines

are used in slow moving urban vehicles other than urban buses, such as

solid waste haulers. The second option is to set the hours interval to

be equivalent to the number of hours it takes an urban bus, on average,

to accumulate 290,000 miles. Using the 13 miles per hour estimate from

above, the hours interval would be 22,300 hours. With this second

option, EPA also requests comments on whether or not a minimum useful

life of 290,000 miles is appropriate. These two alternatives may work

well for urban buses but may not be as appropriate for other urban

heavy-duty vehicles.

Currently the years component of the useful life is eight years for

some standards and ten years for others depending on whether the

standards were adopted before or after the Clean Air Act Amendments of

1990. Standards promulgated after the Clean Air Act Amendments, such as

the 1998 4.0 g/bhp-hr NOX standard, are required to have a useful

life years limit of 10 years. EPA proposes to make the useful life

years limits consistent for all pollutants and for all heavy-duty

engines by raising the years component of the useful life so that it is

ten years in all cases. The change affects the carbon monoxide and

particulate matter standards (except the urban bus particulate

standards which are already at ten years). EPA regards this change as a

simplification of the regulations with very little or no impact on the

stringency of the standards because EPA believes that vehicles will

reach the mileage limits before the years limits in almost all cases.

EPA requests comments on the appropriateness of the useful life

proposals described above. In particular, EPA seeks comments on the

appropriateness of the 435,000 mileage limit, the appropriateness of

treating engines used in urban vehicles differently from other heavy

HDDEs, and the appropriateness of the proposed 13,000 hour limit.

ii. Emissions-Related Maintenance

The frequency of emission-related maintenance actions that

manufacturers require owners to perform as a condition of their

emissions warranties is another issue that affects the actual in-use

emission performance of engines. If such required maintenance is more

than the vehicle owner is likely to perform due to cost or

inconvenience, then in-use emissions deterioration can result.

Therefore, EPA currently imposes limits on the frequency of maintenance

that can be required of HDE owners for emissions related items. These

limits also apply to the engine manufacturer during engine

certification and durability testing. The requirements currently apply

for the useful life of the engine. Table 2 summarizes current

regulations regarding the mileage interval limitations for the

maintenance manufacturers may specify on certain emissions-related

items for heavy-duty diesel engines (HDDEs). Engine manufacturers

cannot require maintenance to be performed any more often than is noted

in the table but may specify longer periods. The intervals are in miles

or hours, whichever occurs first.

Table 2.--Current Intervals for Emission-related Maintenance \1\

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

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

50,000 miles or 1,500 hours 100,000 miles or 150,000 miles or None listed.

for all heavy duty diesel 3,000 hours for 4,500 hours for

engines (HDDEs). Light HDDEs. Medium and Heavy

HDDEs.

EGR systems including all Turbocharger......... Turbocharger......... Catalytic converter.\2\

related filters and control

valves \2\.

PCV valve \2\................. Fuel injectors....... Fuel injectors.......

Fuel injector tip cleaning.... Electronic engine Electronic engine

control unit, control unit,

sensors, and sensors, and

actuators \2\. actuators \2\.

Particulate trap \2\. Particulate trap \2\.

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

\1\ Source 40 CFR 86.094-25.

\2\ Critical emissions-related components.

Table 2 notes components that EPA considers ``critical emissions-

related components'' and EPA has additional requirements for these

components (see 40 CFR 86.094-25 (b) (6)). Specifically, manufacturers

must show that

[[Page 33448]]

maintenance which the manufacturer requires for a critical emission-

related component has a reasonable likelihood of being performed by the

operator in use. The engine manufacturer has a variety of options for

making such a demonstration such as showing that component degradation

will also cause vehicle performance to degrade or by using visual

displays to notify the driver that maintenance is needed.

EPA believes that revising the maintenance intervals for certain

technologies is appropriate in order to adequately cover the

technologies which manufacturers may use to meet the proposed 2004 and

later model year standards. The new standards may prompt the use of EGR

on heavy-duty diesel engines and an increased interval for EGR valves

and tubing will help ensure adequate system durability. Similarly, EPA

believes that catalytic converters should be added to the list of

emission-related components for HDDEs for which a minimum interval is

specified, also to ensure adequate durability. Except for the recent

use of catalytic converters for particulate control, neither technology

has been used significantly for HDDEs in the past. Accordingly, EPA

proposes for EGR valves and tubing and catalytic converters that

manufacturers specify maintenance no more often than the intervals

shown in Table 2 for other technologies; 100,000 miles or 3,000 hours,

whichever occurs first, for light HDDEs and 150,000 miles or 4,500

hours for medium and heavy HDDEs. For EGR system filters and coolers,

EPA proposes that the maintenance interval would remain 50,000 miles/

1,500 hours due to manufacturer concerns that a longer interval for

these components may not be feasible.

In addition, there is the possibility that new technologies not

listed in Table 2 could be used to meet the proposed standards.

Therefore, EPA proposes to apply the same maintenance intervals as

listed above for most components, 100,000 miles or 3,000 hours,

whichever occurs first, for light HDDEs and 150,000 miles or 4,500

hours for medium and heavy HDDE, to any additional add-on emissions-

related components that manufacturers introduce in the future. EPA

proposes to define add-on emission-related components for this purpose

as components whose sole or primary purpose is to reduce emissions or

whose failure will significantly degrade emissions control and whose

function is not integral to the design or performance of the engine.

EPA would also consider such components critical emission-related

components for purposes of 40 CFR 86.094-25(b)(6). EPA believes that

this proposal is necessary to provide the same minimum level of

durability for all emissions-related components (except EGR filters and

coolers) used to meet the standards. The minimum requirement will also

be helpful in the development of future technologies as it will provide

a clear minimum design target for technology development.

Maintenance requirements for gasoline-fueled heavy-duty engines and

light heavy-duty diesel engines are currently the same for EGR and

several other components due to the similarity in their duty cycles.

EPA believes that it is appropriate for the maintenance intervals for

EGR for light heavy-duty diesel engines and heavy-duty gasoline engine

to remain consistent with each other given this similarity. Therefore,

for otto-cycle (i.e., gasoline-fueled) heavy-duty engines, EPA proposes

that the maintenance interval for EGR valves and tubing be increased to

100,000 miles or 3,000 hours from the current 50,000 mile or 1,500 hour

interval. Because gasoline-fueled engines emit less particulate (which

can cause deterioration of the EGR system) than do diesel engines, EPA

does not believe that the change represents a particular challenge for

gasoline-fueled engines.

EPA requests comments on the proposed changes to the maintenance

intervals described above including comments on the length of the

intervals and the technologies for which intervals are being proposed.

Also, EPA requests comment on the definition of ``add-on emission-

related component'' offered here.

iii. Emissions Defect and Performance Warranties

Emissions warranties are provided by manufacturers as required

under Section 207 of the Clean Air Act. The performance warranty

provides that if a properly maintained vehicle or engine fails to

conform to EPA emissions requirements at anytime during the warranty

period, and such nonconformity causes the owner to have to bear a

penalty or other sanction, then the engine manufacturer is responsible

for remedying the nonconformity at its own cost.\36\ The defect

warranty provides that manufacturers are responsible for defects in

materials and workmanship which cause an engine not to conform with

applicable regulations. EPA currently requires that the emission defect

and emission performance warranties for heavy-duty gasoline engines and

light HDDEs last 5 years/50,000 miles and for medium and heavy HDDEs

last 5 years/100,000 miles, whichever occurs first, but in no case may

the warranty period be less than the manufacturer's basic mechanical

warranty period for the engine family.\37\

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\36\ While EPA is proposing to revise the performance warranty

period as discussed below, in accordance with Section 207(i) of the

Clean Air Act, EPA has not prescribed regulations under Section

207(b)(2) of the Act which require heavy-duty engine manufacturers

to provide performance warranties.

\37\ Useful life definition paragraph (6), 40 CFR Part 86.096-2.

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EPA proposes to clarify that the period of the warranty is to be in

no case less than the basic mechanical warranty period that the

manufacturer provides to the purchaser with the engine rather than the

general warranty period for the engine family. It is common for

manufacturers to provide negotiated mechanical warranties that are

longer than the published base warranties for the engine family. EPA

believes that this modification is appropriate because negotiated

warranties are prevalent and therefore the published warranty is not

reflective of the true mechanical warranty period in many cases. EPA

requests comments on this proposal.

c. Maintenance and Repair of Emissions Controls After the End of the

Useful Life

As discussed above, EPA regulates maintenance and repairs of

emissions control components that manufacturers may specify during the

useful life of the engines. However, these provisions will not ensure

emissions control for the full operating life of all heavy-duty

engines. Large diesel engines have an extremely long life that is

extended through rebuilding. If the vehicle owner and engine rebuilder

were to not properly maintain or repair emissions control components,

the controls could degrade and cause an unacceptable increase in

emissions. Because there may be no effect on engine performance, the

degraded components may otherwise go unnoticed for a significant

portion of the total life of the engine. Since HDEs are typically

rebuilt, EPA also believes it is appropriate to take steps to ensure

that emissions-related components used to meet the new standards

receive all needed maintenance and repair beyond the useful life

period. The proposals described below fall into two categories:

manufacturer requirements and engine rebuilding requirements. The

proposals are intended to help enhance the focus on emissions-related

components and the Agency does not believe that the proposals will

result in significant costs above those that would be incurred for

[[Page 33449]]

the proper maintenance/repair of emissions-related components. As with

the related provisions proposed above, EPA believes that these basic

provisions are necessary beginning with the 2004 model year because new

add-on emissions-related components which may require occasional

maintenance and repair may be used to meet the 2004 and later model

year standards.

i. Provisions Affecting Manufacturers

Manufacturers currently provide owners with comprehensive service/

maintenance manuals covering the maintenance necessary to keep engines

operating properly. If a manufacturer required maintenance on any

emissions-related components during the useful life, as described above

in 2.b.ii. of this section, maintenance procedures would be detailed in

this manual. EPA proposes to require that manufacturers, in addition,

include in the manual maintenance needed for emissions related

components after the end of the regulatory useful life, including

mileage/hours intervals and procedures to determine whether maintenance

or repair is needed. The recommended practices must also include

instructions for accessing and responding to any emissions-related

diagnostic codes that may be stored in on-board monitoring systems. The

recommended maintenance practices would be based on engineering

analysis or other sound technical rationale. In the event that an

emission-related component is designed not to need maintenance during

the full life of the vehicle, the manual would need to contain at a

minimum a description of the component noting its purpose and a

statement that the component is expected to last the life of the

vehicle without maintenance or repair. In addition, manufacturers would

be required to highlight in the manual any rebuild provisions adopted

by the Agency, as described in 2.c.ii. below, to ensure that owners and

rebuilders are aware of the requirements.

As described above in 2.b.ii. of this section, manufacturers must

ensure that critical emissions-related scheduled maintenance has a

reasonable likelihood of being performed in-use. Manufacturers may

elect to provide such assurance by using some form of on-board driver

notification when maintenance is needed on a critical emission related

component.\38\ The signal may be triggered either based on mileage

intervals or component failure. It is currently considered a violation

of the Clean Air Act's prohibition on tampering (Section 203(a)(3)) to

disable or reset the signal without also performing the indicated

maintenance procedure.\39\

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\38\ 40 CFR 86.094-25(b)(6)(ii)(C)

\39\ 40 CFR 86.094-25(b)(6)(iii)

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EPA proposes to require that manufacturers electing to use such

signal systems to ensure that critical emissions-related maintenance

has a reasonable likelihood of being performed must design the systems

so that they do not cease to function at or beyond the end of the

regulatory useful life. For example, if the signal is designed to be

actuated based on mileage intervals, it would have to be designed to

continue to signal the driver at the same intervals after the end of

the useful life. EPA does not propose, however, to hold the

manufacturer responsible or liable for recall due to signal failure in

instances where the signal fails to function as designed beyond the end

of the useful life. Manufacturer recall liability is limited to

failures during the regulatory useful life under Section 207 of the

Clean Air Act. (The manufacturer is also not responsible for repairs

when the signal does function after the end of the useful life unless

such repairs are covered by the emission warranty provided as described

above in 2.b.ii.)

EPA believes these proposals will help ensure that information

necessary to care for critical emission related components through the

engines' entire life on the road will be widely available to owners,

rebuilders and others maintaining and repairing heavy-duty engines. EPA

requests comments on the proposals.

ii. Provisions Pertaining to Engine Rebuilding Practices

EPA has two concerns regarding the rebuilding of 2004 and later

model year engines, both related to new emissions related components

that may be added to the engine to meet the new standards. First, EPA

is concerned that during engine rebuilding, there may not be an

incentive to check and repair emissions controls that do not affect

engine performance. Second, EPA is concerned that there may be an

incentive to rebuild engines to a pre-2004 model year configuration due

to real or perceived performance penalties associated with 2004 and

later model year technologies. Such practices would likely result in a

loss of emissions control.

EPA currently does not have regulations concerning engine

rebuilding practices for heavy-duty engines other than requirements for

engines used in 1993 and earlier model year urban buses.\40\ Clean Air

Act Section 202(a)(3)(D) directed EPA to study heavy-duty engine

rebuild practices and the impact rebuilding has on engine emissions.

Based on the study and other information, EPA may prescribe

requirements to control rebuilding practices (whether or not the engine

is past its useful life), which in the Administrator's judgement cause,

or contribute to, air pollution which may reasonably be anticipated to

endanger public health or welfare taking costs into account. 42 U.S.C.

7521 (a)(3)(D). EPA conducted a study of engine rebuilding and

determined that current-technology engines, when rebuilt, generally

emit at levels near or below the certification standards that applied

to the engine when new and that regulations to control rebuild

practices did not appear to be warranted at that time.\41\

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\40\ 40 CFR Part 85, Subpart O, Urban Bus Rebuild Requirements.

\41\ ``Heavy-duty Engine Rebuilding Practices,'' EPA Final

Report by Tom Stricker and Karl Simon, March 21, 1995.

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In the ANPRM, EPA requested comments on establishing rebuild

requirements to promote continued in-use compliance for 2004 and later

model year engines. The Automotive Engine Rebuilders Association (AERA)

and other related associations stated in their comments on the ANPRM

that it is extremely unlikely that engine rebuilders would rebuild to

non-original specifications because such a product would not be

acceptable to the purchaser.\42\ AERA further commented that a rebuild

program where the rebuilder would be required to conduct certification

testing and be held liable for emissions performance in-use would be

unreasonable for the many rebuilders that are small businesses. AERA

commented that, given what is known about the rebuilding industry, EPA

has no basis for rebuild regulations.

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\42\ EPA Docket A-95-27, Docket II-D-41.

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EPA does not believe that a major program placing substantial new

requirements on the rebuilding industry needs to be proposed at this

time to adequately address the Agency's concerns described above, based

on comments received and EPA's findings regarding current industry

practices. Therefore, EPA does not propose regulations at this time

under the authority of Clean Air Act Section 202(a)(3)(D). However, EPA

does believe that establishing basic regulatory provisions regarding

engine rebuilding under Section 203 of the Clean Air Act (``Prohibited

Acts'') would help the rebuilding industry understand what is needed to

ensure that rebuilt 2004 and

[[Page 33450]]

later model year engines closely approximate original emissions

performance when they are rebuilt.

Clean Air Act Section 203(a)(3) states that it is prohibited for

``any person to remove or render inoperative any device or element of

design installed on or in a motor vehicle or motor vehicle engine'' in

compliance with regulations, either before or after its sale and

delivery to the ultimate purchaser. 42 U.S.C. 7522 (a)(3)(A). EPA

commonly refers to violations of this provision of the Clean Air Act as

tampering. Engine rebuilding practices are currently addressed in

general terms under EPA policies established under Clean Air Act

Section 203(a)(3) regarding tampering. The Agency has established a

policy that when switching heavy-duty engines the new engine must be

``identical to a certified configuration of a heavy-duty engine of the

same or newer model year''.\43\ EPA has also established policies

regarding the use of aftermarket parts during rebuild.\44\

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\43\ Engine Switching Fact Sheet, April 2, 1991. Docket A-95-27,

II-B-6.

\44\ ``Interim Tampering Enforcement Policy'', Mobile Source

Enforcement Memorandum No. 1A., June 25, 1974. Docket A-95-27, II-B-

5.

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EPA is proposing to codify these policies as they apply to

rebuilding and to propose new measures. The Agency believes that

rebuilding is currently a time when emissions control is restored,

along with the engine itself, and that the proposed provisions

described below will help ensure that this continues for the 2004 and

later model year engines. Currently, the engine and all emissions

related components are treated as a package for purposes of engine

certification and other programs and EPA believes it is important to

maintain this view at time of engine rebuild. The provisions proposed

below would specify what minimum action is necessary at time of rebuild

under Clean Air Act Section 203(a)(3) to ensure continued emissions

control.\45\ These provisions reflect what EPA believes will be common

practice for rebuilding engines, but also will help to focus attention

on new emission-related components used to meet the 2004 standards.

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\45\ Note that other actions not specified may also be

prohibited under Clean Air Act Section 203.

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EPA proposes that parties involved in the process of rebuilding or

remanufacturing engines (which may include the removal of the engine,

rebuilding, assembly, reinstallation and other acts associated with

engine rebuilding) must follow the provisions described below to avoid

tampering with the engine and its emissions controls.

(1) During engine rebuilding, parties involved must have a

reasonable technical basis for knowing that the rebuilt engine is

equivalent, from an emissions standpoint, to a certified configuration

(i.e., tolerances, calibrations, specifications) of the same or newer

model year as the engine being rebuilt. A reasonable basis would exist

if:

(a) Parts used when rebuilding an engine, whether the part is new,

used, or rebuilt, is such that a person familiar with the design and

function of motor vehicle engines would reasonably believe that the

part performs the same function with respect to emissions control as

the original part, and (b) Any parameter adjustment or design element

change is made only (i) in accordance with the original engine

manufacturer's instructions or (ii) where data or other reasonable

technical basis exists that such parameter adjustment or design element

change, when performed on the engine or similar engines, is not

expected to adversely affect in-use emissions.

(2) A replacement engine must be of (or rebuilt to) a configuration

of the same or later model year as the original engine. Thus, in

addition, under the proposed regulations a party supplying a rebuilt

engine would be prohibited from supplying a replacement engine that is

not rebuilt to a configuration of the same or later model year as the

trade-in engine.

(3) At the time of rebuild, emissions-related codes or signals from

on-board monitoring systems may not be erased or reset without

diagnosing and responding appropriately to the diagnostic codes,

regardless of whether the systems are installed to satisfy EPA

requirements under 40 CFR 86.094-25 or for other reasons and regardless

of form or interface. Diagnostic systems must be free of all such codes

when the rebuilt engines are returned to service. Further, such signals

may not be rendered inoperative during the rebuilding process.

(4) When conducting an in-frame rebuild or the installation of a

rebuilt engine, all emissions-related components not otherwise

addressed by the above provisions must be checked and cleaned,

repaired, or replaced where necessary, following manufacturer

recommended practices.

EPA proposes that any person or entity engaged in the process, in

whole or in part, of rebuilding engines who fails to comply with the

above provisions may be liable for tampering in violation of CAA

Section 203(a)(3). Parties would be responsible for the activities over

which they have control and as such there may be more than one

responsible party for a single engine in cases where different parties

perform different tasks during the engine rebuilding process (e.g.,

engine rebuild, full engine assembly, installation). EPA is proposing

no certification, recordkeeping, or other requirements of the rebuilder

or engine owner and there would be no in-use emissions requirements.

Because the above proposal represents what EPA believes would be

sound rebuilding practices for 2004 and later model year engines, EPA

does not believe that there are costs associated with the above

proposed requirements. Items 1 and 2 of the proposal closely reflect

established EPA policy regarding tampering (discussed above). Any

changes to rebuild practices will be due to the industry adjusting to

the use of new technologies. EPA believes that any added cost to the

rebuilding of the engines will be due to the technology used to meet

the standards and not due to the rebuilding provisions being proposed.

Additionally, EPA continues to have the authority to regulate

rebuilding if future studies or other information were to provide the

basis for such regulations. EPA views the proposal above as

preventative, in that it will help ensure that the rebuild industry is

aware of the new technologies and that rebuilding of engines with 2004

and later technology will not impact emissions negatively. EPA requests

comments on all aspects of the above proposal.

To ensure that engine rebuilders and others involved in engine

rebuilding are complying with the requirements and to maintain a level

playing field between those who follow the rules and those who do not,

EPA's enforcement office intends to take action against violations of

the rebuild provisions. EPA is concerned, however, that proving

violations will be difficult without some form of records available for

inspection.

EPA is considering the adoption of minor recordkeeping requirements

which EPA believes would be in line with customary business practices.

The Agency would then be able to inspect such records to determine

compliance with the rebuild provisions. The records would be required

to be kept by persons involved in the process of heavy-duty engine

rebuilding or remanufacturing and would have to include the mileage

and/or hours at time of rebuild and a list of the work performed on the

engine and related emission control systems including a list of

replacement parts used, engine parameter adjustments, design element

changes, emissions related codes and signals that are

[[Page 33451]]

responded to and reset and the response to the signals and codes, and

work performed as described in item (4) of the rebuild provisions

above. If it is customary practice to keep records for groups of

engines where the engines are being rebuilt or remanufactured to an

identical configuration, such recordkeeping practices would satisfy

these requirements. EPA would require such records to be kept for two

years after the engine is rebuilt.

EPA's intention with such record keeping requirements would be to

make basic records available to the Agency such that enforcement

officials would be able to understand what work was performed on an

engine during the rebuild process. EPA believes that those in the

rebuilding industry already keep detailed records on work performed on

engines as part of good business practices and therefore, EPA believes

that the above recordkeeping requirements would impose no additional

burden on affected businesses. Moreover, EPA has always had the

authority to request such records pursuant to section 208 of the Clean

Air Act and the above requirements would only standardize the records

available for EPA inspection. EPA requests comments on the above record

keeping requirements.

d. State Inspection/Maintenance Programs

Many states are currently in various stages of planning or

implementing inspection/maintenance (I/M) programs for trucks. The

programs are mostly focused on identifying trucks with high smoke

emissions, which usually result from tampering or poor maintenance, and

requiring their repair. EPA has received requests from several sources

including the American Trucking Association, the Engine Manufacturers

Association, and state organizations to become involved in the

development of truck I/M programs, with the hope that state programs

can be standardized under EPA guidance. Currently, programs may differ

widely from state-to-state causing a variety of problems for the

parties affected.

In response, EPA has begun an effort in this area with the goal of

developing a guidance document that states can use to establish

programs. EPA intends to address issues regarding testing procedures

and standards or pass/fail cut points for heavy-duty engine I/M

programs in coordination with interested parties. Although the guidance

document would not preclude states from designing programs differently,

it should help decrease program differences from state-to-state.

3. Revised Averaging, Banking, and Trading Provisions

Today's proposal makes changes to the heavy-duty engine averaging,

banking and trading (ABT) provisions. They are intended to enhance the

flexibility offered to manufacturers in meeting the stringent standards

being proposed and to encourage the early introduction of cleaner

engines, thus securing emissions benefits earlier than would otherwise

be the case. Further, the proposed ABT changes also allow EPA to

propose more stringent emission standards than it otherwise might,

since the flexibility provided by ABT lowers the costs to manufacturers

and makes it easier to meet the technical challenges of lower

standards.

Under a modified program proposed to be available to manufacturers

between 1998 and 2006 inclusive, credits could be earned without the

current ABT credit discounting or limited life provisions. These

credits could be used beginning in model year 2004 to ease the impact

of the new standards in their initial years of applicability. With the

exception of a minor adjustment in how credit exchanges are conducted

between families, other provisions of the existing ABT program would

remain essentially unchanged, including prohibitions on cross subclass

and cross combustion cycle ABT. A further description of the proposed

changes, including provisions designed to safeguard against any

potential adverse air quality impacts, is provided later in this

section.

a. Overview of the Current Averaging, Banking and Trading Program

The proposed changes come in the context of the existing ABT

program, the bulk of which was adopted in 1990. The existing program

includes otto and diesel cycle HDEs fueled by petroleum (gasoline and

diesel), gaseous fuels, and methanol (see 55 FR 30584, July 28, 1990

and 59 FR 43472, September 21, 1994), and is available for meeting

applicable NOX and particulate matter (PM) standards. The three

aspects of ABT: averaging, banking and trading, are briefly described

in the following paragraphs.

Within a given manufacturer's product line, averaging allows

certification of one or more engine families at levels above the

applicable emission standard (but below a set upper limit), provided

their increased emissions are offset by those from one or more families

certified below the same emission standard, such that the average

emissions from all the manufacturer's families (weighted by horsepower

and production) are at or below the level of the emission standard.

Averaging results are calculated for each specific model year. The

mechanism by which this is accomplished is certification of the engine

family to a ``family emission limit'' (FEL) set by the manufacturer,

which may be above or below the standard (an FEL above the standard may

not exceed a prescribed upper limit specified in the ABT regulations).

Once an engine family is certified to an FEL, that FEL becomes the

enforceable limit used to determine compliance during assembly line and

in-use compliance testing.

The second element of the current ABT program is banking. Banking

gives the manufacturer generating the credits in one model year the

option to defer their use until a later model year for averaging or

trading. Under the current program, credits are discounted by 20

percent when banked and have a three year life. EPA believes banking

promotes the development and early introduction of advanced emission

control technology, which provides emission reduction benefits to the

environment sooner than would otherwise occur. An incentive for early

introduction arises because the banked credits can subsequently be used

by the manufacturer to ease the compliance burden of new, more

stringent, standards. For the same reasons, banking can promote the

introduction and use of clean alternative-fueled engines.

The final element of the ABT program is trading. Since averaging is

limited to a given manufacturer's own product line, the manufacturer

must have two or more engine families

This text is long and has been trimmed here. Open the source document for the complete record.