7
Other Case Studies

Light-duty vehicles (LDVs) have had the longest emissions-regulation history of any mobile sources and have raised many of the key policy and technical issues related to mobile-source emissions control. Regulation of non-LDV vehicles and engines, however, has raised several new issues that are important to state emissions standards. This chapter presents four case studies of emissions standards for non-LDV vehicles and engines:

  • Spark-ignition marine outboard and personal watercraft engines. This case study of a newly regulated source is also one of the few instances where a state (New York) has exercised its opt-in authority to adopt a California emissions standard for a nonroad engine. (Texas has also adopted California's standards for large spark-ignition engine.)

  • On-road heavy-duty engines. EPA’s 2007 standards, which include fuel sulfur limits, are technology forcing and projected to result in widespread use of exhaust after-treatment.1 California has adopted nearly identical standards after 2007, although there are differences for 2005 and 2006. Some other states have chosen to adopt California’s program over federal regulations.

  • Small nonroad spark-ignition (SI) engines. Small SI engines, primarily in lawn and garden equipment, are important sources of non-

1  

After-treatment is used here and throughout this chapter to mean removal of pollutants in the exhaust gases after they have exited the engine. This term refers to only one part of typical emissions control on present day mobile sources, which integrates fuel properties, engine modifications, and exhaust treatment.



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State and Federal Standards for Mobile-Source Emissions 7 Other Case Studies Light-duty vehicles (LDVs) have had the longest emissions-regulation history of any mobile sources and have raised many of the key policy and technical issues related to mobile-source emissions control. Regulation of non-LDV vehicles and engines, however, has raised several new issues that are important to state emissions standards. This chapter presents four case studies of emissions standards for non-LDV vehicles and engines: Spark-ignition marine outboard and personal watercraft engines. This case study of a newly regulated source is also one of the few instances where a state (New York) has exercised its opt-in authority to adopt a California emissions standard for a nonroad engine. (Texas has also adopted California's standards for large spark-ignition engine.) On-road heavy-duty engines. EPA’s 2007 standards, which include fuel sulfur limits, are technology forcing and projected to result in widespread use of exhaust after-treatment.1 California has adopted nearly identical standards after 2007, although there are differences for 2005 and 2006. Some other states have chosen to adopt California’s program over federal regulations. Small nonroad spark-ignition (SI) engines. Small SI engines, primarily in lawn and garden equipment, are important sources of non- 1   After-treatment is used here and throughout this chapter to mean removal of pollutants in the exhaust gases after they have exited the engine. This term refers to only one part of typical emissions control on present day mobile sources, which integrates fuel properties, engine modifications, and exhaust treatment.

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State and Federal Standards for Mobile-Source Emissions road emissions nationwide. The most recent California emissions standards regulate evaporative emissions on such engines for the first time and are expected to require catalyst after-treatment on more types of engines than in previous regulations. These California standards drew increased attention because of economic and safety issues related to controlling emissions from small SI engine equipment. Voluntary programs. A number of incentive-based nonregulatory programs have provided for significant cost-effective emissions reductions in nonattainment areas. SPARK-IGNITION MARINE OUTBOARD AND PERSONAL WATERCRAFT ENGINES The 1990 Clean Air Act (CAA) amendments focused regulatory attention on reducing emissions from nonroad vehicles and engines. In the 1991 “Nonroad Vehicle study” to Congress, EPA found that recreational marine engines contributed approximately 30% of the total hydrocarbon (HC) emissions from nonroad sources, second only to small SI lawn and garden engines (EPA 1991). Data presented in the figures in Chapter 2 confirm that percentage in 2002. Most recreational marine emissions come from SI engines, which can be divided into two groups: outboard and inboard engines. Outboard engines typically hang on the hull of a boat and are traditionally light two-stroke engines. Personal watercraft (PWC) commonly have two-stroke jet drives and have been regulated with marine outboard engines as discussed below. Inboard engines are within the hull of the boat and are mostly derivations of four-stroke automobile engines. Separate standards apply to SI outboard and PWC engines, and this case study focuses on those sources. Early rule-makings note that EPA was most concerned about outboard and PWC engines since they use two-stroke engine technology with much higher rates of HC emissions then inboard or stern-drive engines (61 Fed. Reg. 52087 [1996]). EPA Standards for Outboard and Personal Watercraft Engines Stringency The U.S. Environmental Protection Agency (EPA) finalized first-time HC and nitrogen-oxide (NOx) emissions standards in 1996 for out-

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State and Federal Standards for Mobile-Source Emissions FIGURE 7-1 EPA model-year 1998-2006 exhaust (HC + NOx) emissions standards curves for recreational marine outboard and personal watercraft engines. Note that the emissions standards at the smallest levels, approximately less than 5 horsepower, reach an upper maximum and do not correspond to the equation given in the text. *Grams per kilowatt-hour. Source: CARB 1998b. boards and PWC. Because it is typically more difficult to reduce emissions on a given type of engine as its rated power decreases, the EPA emissions standards are a function of the rated power of the engine. Furthermore, the standards become progressively more stringent from the beginning of the regulations in model-year 1998 to 2006. The formula (EPA 1996a) for calculating the emissions standards as a function of rated power of the engine is where HC + NOx is the level of the emissions standards in grams per kilowatt hour, P is the rated power of the engine, and A* and B are coefficients that decrease each year between 1998 and 2006. Manufacturers are allowed to meet the standard as a corporate average. A graphic depiction of the formula is presented in Figure 7-1. Scientific and Technical Analysis As noted above, EPA identified a need for emissions standards for the SI sources based on their contribution to emissions. A regulatory im-

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State and Federal Standards for Mobile-Source Emissions pact analysis (RIA) accompanying the regulations included technical feasibility, economic impacts, and environmental impact analyses (EPA 1996a). These analyses are summarized below. HCs are the pollutant of concern from outboards and PWC because large quantities are emitted from standard two-stroke engines. Candidate technologies listed in the RIA to meet EPA standards were four-stroke engines, direct-injection two-stroke technology, and catalyst additions. Switching to four-stroke engines or direct-injection technology would result in both significant reductions in HC emissions and improvements in fuel economy. Four-stroke engines were especially promising because of the growing availability of these products. Manufacturer and in-house test data demonstrated a 75-95% reduction in HC emissions by switching from traditional two-stroke to four-stroke engines, a 75-90% reduction by switching from traditional two-stroke to two-stroke engines with direct injection, and a 65-75% reduction by adding a catalytic converter (EPA 1996a). EPA also found that switching to four-stroke or direct-injection increased NOx emissions, although the increases were small compared with the HC benefits. EPA states that manufacturers could use such technologies as exhaust gas recirculation (EGR) and better air and fuel control to counter the NOx increases. Projected engine changes to meet the EPA standards were expected to have several other impacts. For example, switching from traditional two-stroke engines would mean using approximately 30% less fuel, which previously was exhausted unburned (EPA 1996a). EPA stated that engines would be easier to start and have improved performance, faster accelerations, and less smoke, fumes, and noise (61 Fed. Reg. 52087 [1996]). EPA stated that, in its view, the regulations did not violate or conflict with safety mandates. Although EPA acknowledged that the Coast Guard was concerned about fuel-injection systems on marine vessels, EPA believed that manufacturers would work with the Coast Guard to ensure the safety of fuel-injection systems, which were already in use on some outboard engines (EPA 1996a). EPA’s estimates of technology costs were based on confidential data provided by manufacturers. Cost and cost effectiveness estimates were not presented for specific technologies because of the possibility of associating specific technologies with specific manufacturers based on those data. Rather, EPA presented its cost method for a fictitious engine family and presented the range of marginal manufacturing costs and cost-effectiveness across potential combinations of technologies and engines

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State and Federal Standards for Mobile-Source Emissions without identifying which technologies were used for which engine family (EPA 1996a). In assessing economic impacts, EPA noted that a small number of engine manufacturers dominated the SI marine industry. As part of the RIA, EPA contracted with two independent companies to gather information on engine and vessel markets. EPA estimated that total annualized costs due to the rule-making would reach a near-term peak of $370 million in 2006, roughly 8% of projected retail expenditures in that year. The estimated average per-engine-cost increase to the consumer would be $700 in 2006, which takes into account $480 in fuel savings. EPA estimated a 75% reduction in HC emissions, approximately 550,000 tons nationwide, from the sources under consideration by 2025 as a result of its rule. A qualitative discussion of air quality and of health and welfare benefits was also included for ozone; no modeling was completed to estimate the effects of the rule on ambient concentrations. Estimated emission-reduction benefits for benzene, 1,3-butadiene, formaldehyde, acetaldehyde, and carbon monoxide were presented along with an assessment of the expected health and welfare impacts of lower concentrations of each pollutant. However, these health and welfare impacts were not quantified or monetized (EPA 1996a). The California Air Resources Board Standards for Outboard and Personal Watercraft Engines Stringency In 1998, the California Air Resources Board (CARB) adopted new exhaust emissions standards for outboard and PWC marine engines to take effect in model-year 2001. In adopting the rule, CARB stated that the regulations were designed to harmonize as closely as possible with federal rules. The regulations included corporate averaging and used EPA test procedures and test cycles for certification and testing. CARB’s standards took EPA’s model-year 2006 exhaust standard for HC and NOx and applied it to model-year 2001. CARB also set two lower tiers of standards at 80% and 35% of the 2006 value to begin in 2004 and 2008, respectively. The emissions standards calculated as a function of power rating are shown graphically in Figure 7-2. Water quality was also ex-

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State and Federal Standards for Mobile-Source Emissions FIGURE 7-2 HC and NOx Tier 1 will begin in 2001 (EPA’s 2006 model year standard); Tier 2, which is 80% of Tier 1, will begin in 2004; and Tier 3, which is 35% of Tier 1, will begin in 2008 Note that the emissions standards at the smallest levels, approximately less than 5 horsepower, reach an upper maximum and do not correspond to the equation given in the text. *Grams per kilowatt-hour. Source: CARB 1998b. pected to benefit from reduced unburned-fuel emissions, and CARB ac counted that as an important benefit of the rule. Scientific and Technical Analysis CARB’s technical feasibility assessment for their proposed standards included an evaluation of commercially available two-stroke carbureted and direct-injection engines and four-stroke engines (CARB 1998b). Data from federally certified direct- injection two-stroke engines showed emissions to be about 85% lower than emissions from carbureted two-stroke outboard engines. Compared with the emissions from conventional carbureted two-stroke engines, the emissions from four-stroke engines were typically 75-90% lower. Direct-injection two-stroke engines could meet the first and second tiers of the proposed standards, but compliance with the third tier would probably require addition of a catalyst (CARB 1998b). Emissions data collected by EPA demonstrated that existing four-stroke engines could easily comply with the proposed California Tier 1 and Tier 2 standards, and many already complied with the

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State and Federal Standards for Mobile-Source Emissions proposed Tier 3 standards. Engine manufacturers had expressed concern about 4-stroke engines, including their larger size, heavier weight, and increased cost. However, four-stroke engines were found to offer similar power-to-weight ratios and consume less fuel and oil, thereby offsetting increases in purchase costs. For exhaust after-treatment, engine modification and use of catalytic converters were considered technically feasible (CARB 1998b). Cost analysis for compliance with Tier 1 and Tier 2 standards for outboard engines took into account horsepower rating, annual engine sales, emissions-control requirements under the national and California standards, carbureted two-stroke and controlled engine emissions levels, incremental engine prices, and fuel-economy improvements and associated savings. For different horsepower engines, CARB estimated the number of additional emissions-controlled engines that would have to be sold, the associated retail prices, and the lifetime emissions benefits (CARB 1998b). Estimating cost of compliance with Tier 3 standards required a different approach because outboard engines and PWC were not manufactured with catalysts at the time of the assessment. Therefore, CARB conducted a cost assessment similar to that for adding a catalyst to four-stoke engines. CARB estimated additional statewide emissions reductions for outboard engines and PWC by 2010 and 2020 that would be achieved through the accelerated implementation of the EPA emissions standards (CARB 1998b). Estimates of reductions were obtained using the OFFROAD inventory computer model (CARB 2004e), which showed substantial additional reductions for reactive organic gas (ROG) and smaller additional reductions for NOx. One benefit of accelerated implementation of the EPA standards was the faster elimination of carbureted two-stroke engines. These engines, as noted above, eject as much as 30% of their fuel into the air and water uncombusted and are a significant source of HCs (some of which are ozone precursors) and hazardous air pollutants (HAPs) (CARB 1998b). Section 11346.3 of the California Government Code requires state agencies to assess the potential for adverse economic impacts on California business enterprises and individuals when proposing to adopt or amend any administrative regulation. The assessment must include a consideration of the impact of the proposed regulation on California jobs; business expansion, elimination, or creation; and the ability of California business to compete. CARB expected that the proposed regulations would not impose a significant cost burden on marine engine manufac-

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State and Federal Standards for Mobile-Source Emissions turers within the state because most manufacturers are large and located outside California. Annual costs of the proposed regulations were estimated to be around $33 million in 2001, $20 million in 2004, and $21 million in 2008. Those costs were expected to be passed on by manufacturers to marine engine buyers, resulting in an increase of about 14% in average retail prices of a marine engine. The impact on retail sales of these additional costs was anticipated to be minimal, as the most important factors in the purchase of a marine vehicle include the cost of maintenance, which should be reduced in the newer engines, and fuel efficiency, which should improve substantially with the availability of direct-injection two-stroke engines and improved four-stroke engines (CARB 1998b). New York Adoption of CARB Standards During the summer of 1999, New York was out of attainment of the National Ambient Air Quality Standards (NAAQS) for the 8-hr ozone standard for 38 days, and the New York City metropolitan area was out of attainment for the 8-hr standard for 26 days. To help bring nonattainment areas into compliance with the NAAQS, the state sought additional ways to reduce emissions of compounds that result in ozone formation. Emissions from PWC were identified as one such source; PWC were responsible for 8,850 tons of volatile organic compounds (VOCs) and 39 tons of NOx emissions in 1999 (NYDEC 2003). In 2000, the New York state legislature amended its Environmental Conservation Law by adding language that would allow for the adoption of regulations consistent with the California emissions reductions and labeling regulations for new SI marine engines used in PWC. The legislative objective of these changes was to “reduce emission of hydrocarbon and oxides of nitrogen into the air as well as exhausted into the water, from SI engines, specifically personal watercraft engines.” The state cited reductions in particulate matter (PM) emissions as an additional benefit of the proposed regulations. The adoption of the PWC regulations would be incorporated into the state implementation plan (SIP). The proposed PWC regulations were identical to California PWC regulations. The New York program included the implementation of increasingly more stringent PWC emissions standards between 2001 and 2008, and the application of new test procedures for new and in-use engines. New York found that the CARB standards resulted in PWC emis-

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State and Federal Standards for Mobile-Source Emissions sions 59% lower than the federal program for the average horsepower engine for 2001 and 49% lower for 2004. The total estimated cost of implementation for New York was determined from the incremental cost estimates generated by CARB and the PWC fleet estimated for the year 2004. The New York Department of Environmental Conservation (DEC) agreed with CARB that cost increases would be passed on to the consumer but found that the impact on sales would be reduced by the resulting increase in fuel efficiency, lower maintenance costs, and a demand for new technologies offering performance advantages. No substantial impact on employment was expected, as the marine engine manufacturing industry accounted for only 0.9% of manufacturing jobs in the state (NYDEC 2003). HEAVY-DUTY-VEHICLE ENGINE STANDARDS Current Standards Emissions standards for highway heavy-duty trucks and buses have traditionally been less stringent than those for light-duty passenger cars and trucks. Emissions standards apply to the engines and not the vehicles, and early regulations have been met primarily by engine modifications rather than exhaust after-treatment. More details on early standards for these engines are given in Chapter 4. In 1995, EPA, CARB, and engine manufacturers signed a statement of principles (SOP) that recognized the need for significant controls on highway HDV engines, particularly for NOx and PM, and ensured regulatory certainty for the industry (EPA 1995). The SOP included agreements to achieve the following: Reduce NOx emissions standards to roughly 50% of 1998 standards beginning in model-year 2004. Harmonize certain California and federal standards for HDV engines. Evaluate the role of fuel in achieving even lower future emissions. Research achieving NOx and PM emissions as low as 1.0 grams per brake-horsepower-hour (g/bhp-hr) and 0.05 g/bhp-hr, respectively. The latter PM emissions limit already applied to urban buses.

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State and Federal Standards for Mobile-Source Emissions Model-Year 2004 Rule EPA adopted rules in 1997 (62 Fed. Reg. 54694 [1996]) that included a 2.4 g/bhp-hr (NOx plus nonmethane hydrocarbon [NMHC])2 emission standard to take affect in model year 2004. Emission standards for carbon monoxide (CO) and PM continued at their 1998 levels of 15.5 and 0.10 g/bhp-hr, respectively. In 1999, California adopted those same emissions standards for model-year 2004 HDVs. Since most HDV engines are in trucks that conduct interstate transport, many of these sources in California are not registered there; thus, California has an interest in a stringent national standard. In 1999, EPA also reaffirmed their standards after determining that the technology would be available to achieve those levels of emissions by 2004. Consent Decree In 1998, the U.S. Department of Justice, EPA, CARB, and seven major engine manufacturers reached a settlement over the manufacturers’ use of software programs that allowed better fuel economy at cruise speeds but resulted in excess NOx emissions. The software had been used on most model-year engines in the 1990s, and the NOx emission increases were not detected with standard federal test procedure (FTP) certification. Although manufacturers declared that existing regulations allowed this fuel-saving strategy, EPA declared this practice illegal. The result of the settlement included civil penalties and a consent decree in which manufacturers agreed to perform the following: Reprogram the software controlling the engine if the engine was rebuilt, also referred to as chip reflash. Meet the model-year 2004 emissions standard for NOx and NHMC in 2002 nationwide. Certify engines using a supplemental steady-state test procedure based on European certification tests (the EURO III European stationary cycle [ESC test]) and require that engine emissions not exceed 1.25 times the FTP emissions limits under certain operating conditions (the not-to-exceed [NTE] rule). The ESC and NTE test procedures would 2   Manufacturers had the option of certifying at 2.4 g/bhp-hr the NMHC and NOx standard or at 2.5 g/bhp-hr with a limit on NMHC of 0.5 g/bhp-hr.

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State and Federal Standards for Mobile-Source Emissions be required in addition to the FTP and applied up to model-year 2004 engines when the consent decree expired. CARB later adopted a rule requiring the additional ESC and NTE test procedures to apply to model-years 2005 and 2006 engines as well. Model-Year 2007 Rule In 2001, EPA finalized the most stringent emissions standards to date for HDV engine emissions standards for model year 2007, referred to hereafter as 2007 HDV engine standards. A PM emission standard of 0.01 g/bhp-hr is to begin with model-year 2007. NOx and NMHC standards of 0.20 g/bhp-hr and 0.14 g/bhp-hr, respectively, will be phased in for model-years 2007-2010 diesel engines; the standards will apply to 50% of sales in model-years 2007-2009 and 100% of sales in model year 2010.3 A major part of this control effort is the coincidental low-sulfur fuel regulations, which limit diesel-fuel sulfur content to 15 parts per million (ppm) beginning phase-in in 2006. Present day diesel-fuel sulfur limits are 500 ppm; however EPA estimated in 2000 that diesel fuel in the United States on average contained sulfur at 340 ppm (EPA 2000c). Manufacturers are required to certify engines by using the supplemental steady-state test procedure and NTE rule beginning with model-year 2007 as part of these standards. California will adopt the same emissions standards and test procedures for HDV diesel engines beginning with model-year 2007. The emissions standards require a reduction of more than 90% in NOx and PM from new engines by 2010. The 2007 HDV engine standards are technology-forcing and are expected to require widespread use of new types of exhaust after-treatment devices. EPA conducted two biennial assessments of the feasibility of meeting these standards. The last assessment in March 2004 concluded that manufacturers were on track to achieve the required emissions reductions. Despite EPA, CARB, and manufacturers having worked cooperatively to achieve a uniform standard for HDV engines, a number of legal disputes arose over the standard. Engine manufacturers and their trade association (EMA) challenged the NTE rule in courts, arguing that NTE 3   Although not discussed here, gasoline engines for HDVs are also subject to the same standards beginning with 2008 and 2009. Separate standards that apply to the whole vehicle, as opposed to the engine, for HDV gasoline engines also apply during this period.

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State and Federal Standards for Mobile-Source Emissions example, fumes igniting from a small spark from carbon or from smoldering debris. CARB’s initially proposed evaporative regulations requiring pressurized fuel tanks also raised concerns as a potential explosive hazard. The issue of burn and fire hazards from emissions-control equipment was not a new concern. LDV and motorcycle manufacturers voiced similar concerns when the widespread use of catalytic converters was first promoted by emissions standards in the 1970s. In addition, catalytic converters had been used on handheld equipment preceding EPA’s Phase II standard for this equipment (EPA 2000d). EPA and CARB have given consideration to safety in their rule-makings. EPA is required by the CAA to “take into account safety factors associated with application of emission control technologies to non-road engines and vehicles” (CAA section 213(a)(4)). CARB is required to “determine the technological feasibility of the adoption or amendment of the standard or regulation. That determination shall include, but is not limited to, the availability; effectiveness, reliability, and safety expected of the proposed technology in an application that is representative of the proposed use” (California Health and Safety Code section 43013(e)(2)). Safety concerns associated with catalyst use were discussed qualitatively in the Phase II RIAs for handheld and nonhandheld small-engine standards. EPA stated that low-efficiency catalysts had been in use on some handheld products and met existing standards. To comply with new emissions standards and meet Forest Service equipment temperature requirements, EPA acknowledged the limitations of using high-efficiency (high-temperature) catalysts and discussed how catalyst use would need to be balanced with reductions in engine-out emissions. EPA (2000d) concluded that “the engine and equipment manufacturer must carefully consider the cooling and safety implications of catalyst installation and reflect this in its design strategy for the engine and equipment.” CARB addressed safety to some extent in its Tier 3 emissions standards. In a proof-of-concept study for CARB performed by Southwest Research Institute (SwRI), catalysts were attached to stock engines and equipment to demonstrate the ability to meet proposed emissions limits. As part of this study, SwRI also measured temperatures of the mufflers with and without catalysts for an estimate of how surface temperatures change with the addition of a catalyst (see Figure 7-5). CARB (2003d) suggested that a catalyst combined with a heat shield resulted in equipment surface temperatures in the range of those measured near mufflers from existing noncatalyzed engines (see Figure 7-5). CARB’s staff paper

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State and Federal Standards for Mobile-Source Emissions FIGURE 7-5 Results of research at Southwest Research Institute under contract to CARB to test surface-temperature effects of adding catalysts to small SI engines. a, at 250 hr; b, at 125 hr. Abbreviation: B&S, Briggs and Stratton. Source: CARB 2004g. includes a discussion of manufacturers concerns and points out that heat shields and other insulating material were being used by many manufacturers to reduce temperature around mufflers. Manufacturers, however, critiqued SwRI methods in comments submitted to CARB, raising concerns that they did not measure the areas of highest temperatures, which were observed by manufacturers to reach up to 1100F in some muffler locations without the use of a heat shield (CARB 2004g). In response to some early manufacturer safety concerns, CARB relaxed its proposed standards, thus reducing the required catalyst efficiency and resulting in lower exhaust and equipment temperatures (CARB 2004g). With respect to practical catalyst use, CARB states that “much of the effort needed to make the catalyst system operate on equipment is the responsibility of product engineers working for either the engine or equipment manufacturers” (CARB 2004g). Manufacturers remained concerned about safety after CARB’s regulations were adopted, and voiced concerns to this committee on the issue (Guerry 2004). Furthermore, the National Association of State Fire Marshals (NASFM), the California Fire Chiefs Association (CFCA), and the CPSC also expressed concerns to CARB of the potential burn and fire hazard associated with their proposed and final regulations (inferred from comments in CARB 2004g). The CFCA and NASFM later sent

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State and Federal Standards for Mobile-Source Emissions letters to members of Congress and EPA voicing their concern that CARB had moved forward with catalyst-forcing standards while ignoring safety concerns (Congressional Record S14469, Nov. 12, 2003). CARB agreed to participate in a pre-implementation cooperative safety study with manufacturers and fire officials, although its regulations remained unchanged. Congress later passed the Bond Amendment, which specifically charged EPA to “give appropriate consideration to safety factors (including the potential increased risk of burn and fire) associated with compliance with the California standards” when considering a waiver request from California for small SI engine standards (P.L. 108-199 Division G Section 428). Furthermore, Congress passed legislation in 2005 requiring EPA to perform a technical study on safety issues before EPA proposes new small-engine emissions standards (P.L. 109-54 Title II Section 205). The results of the CARB/manufacturer study and the EPA study were not available to the committee before finalizing this report. Although the focus of the safety discussion for small SI engines was on fire and burn hazards, the committee notes that stricter emissions standards reduce inhalation exposure of hazardous fumes for operators of small SI engine equipment. (Inhalation exposure is discussed, for example, in CARB [2000e] and Dost [2003].) It might be appropriate to consider reduced inhalation exposure in combination with the increased burn and fire hazard when considering safety of small-engine equipment. VOLUNTARY PROGRAMS Incentive Programs A number of NAAQS nonattainment areas faced with the need to reduce emissions dramatically have used voluntary programs or programs that provide financial incentives for reducing emissions from federally preempted sources. These programs are important in that they provide an alternative to the development of state emissions standards. Because the programs typically track what types of sources are being reduced and the cost-effectiveness of emissions reductions, they provide an opportunity to compare the costs of emissions controls for preempted sources with the costs of controls on non-preempted sources. Many of the voluntary or incentive-based programs that have been or are being implemented at the federal, state, and local levels in the United States focus on either on-road HDV diesel-engine fleets or nonroad equipment.

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State and Federal Standards for Mobile-Source Emissions These programs include the following: Federal Programs U.S. Department of Transportation (DOT) Transportation Equity Act for the Twenty-First Century (TEA-21) Congestion Mitigation and Air Quality Improvement Program (CMAQ) U.S. Department of Energy (DOE) Energy Policy Act of 1992 (EPAct) State and Alternative Fuel Provider Program Federal Fleet Program Private and Local Government Fleet Program Alternative Fuel Petition Program Clean Cities Program EPA Office of Air and Radiation Programs Voluntary Diesel Retrofit Program Clean School Bus USA California Programs California Air Resources Board Diesel Risk Reduction Plan Carl Moyer Program California Department of Transportation (Caltrans) Greening the Fleet Program South Coast Air Quality Management District’s Mobile Source Air Pollution Reduction Review Committee Funding Program Sacramento Emergency Clean Air and Transportation Program San Joaquin Valley Emergency Clean Air Attainment Program Gateway Cities Clean Air Program Port of Los Angeles and Port of Oakland Clean Air Programs Bay Area Air Quality Management District’s Transportation Fund for Clean Air Program Programs in Other States Texas Commission on Environmental Quality’s Texas Emissions Reduction Plan Houston-Galveston Area Council Clean Cities/Clean Vehicles Program New York State Department of Environment Conservation’s Clean Water/Clean Air Bond Act Program Puget Sound Clean Air Agency’s Diesel Solutions Program

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State and Federal Standards for Mobile-Source Emissions Two of the largest incentive-based programs are the California Carl Moyer Program and the Texas Emission Reduction Program. Carl Moyer Program The State of California implements a voluntary incentive-based program called the Carl Moyer Program, which provides grant funds for the incremental cost of reducing emissions of NOx from federally preempted sources. The incentives are available for on-road and off-road sources, including heavy-duty trucks, marine engines, locomotive engines, stationary agricultural pump engines, forklifts, airport ground-support equipment, and auxiliary power units. The Carl Moyer Program is administrated by CARB, and approximately $150 million in grants were made between 1998 and 2002. Funds are provided by the state and by local air quality management districts. Recent legislation has expanded funding for the program to an anticipated $140 million per year. Both private companies and public agencies operating HDV engines in California are eligible to apply for the grants. CARB is currently revising the guidelines to address PM as well as HC emissions reductions. Participation in the Carl Moyer Program is summarized in Table 7-5, and the types of projects funded are shown in Table 7-6. The data in Tables 7-5 and 7-6 reveal a number of key features of the Carl Moyer Program. First, the estimated cost-effectiveness of the emission reductions is generally well below the cost of many of the control measures implemented in California. CARB cost-effectiveness estimates of proposed SIP measures average approximately $8,300 per ton of NOx reduced, the range being $1,000-$22,000 per ton of NOx reduced (CARB 2004h). Second, the emission reductions achieved through the program (4-16 tons per day of NOx statewide) are a small fraction of the emission inventory and the required emission reductions. Total NOx emission in the South Coast Air Quality Management District in 1997, for example, was estimated to be 1,024 tons per day (annual average day) (SCAQMD 2003). Finally, the program has grown because of its ability to continue to provide relatively low-cost emission reductions. Texas Emissions Reduction Plan The Texas Emissions Reduction Plan (TERP) was established in fiscal year (FY) 2002 by the Texas state legislature. The goal of TERP is

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State and Federal Standards for Mobile-Source Emissions TABLE 7-5 Program Summary by Fiscal Year of the Carl Moyer Program (through mid- 2003) Fiscal Year Number of Participating Districts Carl Moyer Funding ($ millions) Matching Funds from Districts ($ millions) NOx Reduction (tons per day) Average Cost-Effectiveness of All Projects Statewide ($ per ton) 1998-1999 16 24.5 12.25 4 3,000 1999-2000 20 19 9.31 7 <5,000 2000-2001 21 45 12.00 14 4,000 2001-2002 NA 16 ~8 16 NA 2002-2003 NA 19.68 ~9.8 NA NA Source: Chan et al. 2005. Reprinted with permission; copyright 2005, ENVIRON. TABLE 7-6 Project Summary for the First Three Fiscal Years of the Carl Moyer Program (through mid- 2003) Source Category and Equipment Type NOx (tons per year) Cost-Effectiveness ($ per ton) Heavy-duty line haul 41 2,570 Refuse haulers 432 6,563 Urban transit buses 413 4,715 School buses 4 10,039 Other on-road sources 116 5,756 Farm equipment 36 4,179 Construction 54 3,627 Other nonroad sources 52 3,587 Locomotives 22 1,160 Marine vessels 698 3,044

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State and Federal Standards for Mobile-Source Emissions Agricultural irrigation pumps 1,767 2,353 Forklifts (electric) 163 5,057 Total 3,798   Source: Chan et al. 2005. Reprinted with permission; copyright 2005, ENVIRON.

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State and Federal Standards for Mobile-Source Emissions to reduce emissions of NOx from federally preempted sources in the non-attainment and near-nonattainment areas of Texas through voluntary incentive programs. TERP was initially funded at a level of approximately $20 million per year, and that funding has been increased to a level of approximately $130 million per fiscal year in 2004 and 2005. The current level of funding is projected to continue through 2008. The Texas Commission on Environmental Quality (TCEQ) administers TERP grants and other TERP financial incentives. TERP provides funding for cleaner on- and off-road engines, energy efficiency programs, cleaner fuel and other infrastructure programs, and research and development of new technologies. Emission reductions to be achieved through TERP have been incorporated into the ozone SIPs for the Houston-Galveston-Brazoria area (HGB) and the Dallas-Fort Worth area (DFW). Tables 7-7 and 7-8 summarize data on TERP-funded projects for FYs 2002, 2003, and part of 2004 in the HGB and DFW areas. To put the numbers in Table 7-8 in context, the 2007 NOx SIP budget for HGB is approximately 525 tons per day, 33 tons per day of which are TERP projects. Total NOx emissions in the HGB area in 1996 were projected to be approximately 1250 tons per day. Comparison of Tables 7-4 through 7-8 reveals many similarities between the TERP and Carl Moyer programs. In both states, the estimated cost-effectiveness of the emissions reductions is generally below the cost of many of the control measures that are implemented in the states. Second, the emissions reductions achieved through the program are a small fraction of the emissions inventory and the required emissions reductions. In TERP, specific goals were set for emissions reductions in the DFW and HGB areas. Although substantial resources have been expended on the program, and the program provides cost-effective emissions reductions, the HGB and DFW areas still have a shortfall of needed emission reductions, as shown in Figure 7-6 for HGB. (A similar shortfall is found in Dallas-Fort Worth.) CONCLUSIONS As discussed in Chapter 2, mobile sources other than LDVs are important contributors to emissions inventories. EPA’s and CARB’s regulations for these other mobile sources raised a variety of issues, as discussed in Chapter 7. The chapter also described incentive-based mobile-source emissions reductions programs an alternative to emissions stan-

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State and Federal Standards for Mobile-Source Emissions TABLE 7-7 Summary of TERP-Funded and -Recommended Projects to Date in the HGB and DFW Areas (as of November 2, 2004)   HGB DFW HGB and DFW NOx Emission Reduction (tons per day) FY 02 0.16 1.17 1.33 FY 03 0.62 0.33 0.95 FY 04 4.73 2.97 7.71 Total to Date 5.51 4.47 9.98 2007 SIP Goal 32.9 16.3 49.2 TERP Funding ($ in millions) FY 02 3.0 8.8 11.9 FY 03 12.8 1.7 14.5 FY 04 44.6 23.2 67.8 Total to Date 60.4 33.7 94.2 TERP Projects FY 02 24 11 35 FY 03 21 11 32 FY 04 76 97 173 Total to Date 121 119 240 TERP Average Cost-Effectiveness ($ per ton) FY 02 10,005 4,367 5,101 FY 03 8,104 3,009 6,792 FY 04 6,218 5,210 5,832 Average to Date 6,675 4,795 5,853 Source: Chan et al. 2005. Reprinted with permission; copyright 2005, ENVIRON. dards. The following conclusions are drawn from the case studies presented in this chapter: The biennial reviews of the 2007 HDV rule are similar to the biennial reviews of the zero-emission-vehicle mandate discussed in Chapter 6. These reviews of technological progress are beneficial to stakeholders and the public. Some states have indicated that they consider the adoption of California’s 2007 HDV standards, which are nearly identical to EPA’s, to be a safety net in case EPA delays federal standards. Small-engine emissions control poses special challenges to the design, production, and distribution of small-engine equipment. CARB has shown some flexibility in setting emissions standards for small engines to deal with some of the difficulties inherent in the nonintegrate

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State and Federal Standards for Mobile-Source Emissions TABLE 7-8 Summary of TERP- Funded and -Recommended Projects to Date in the HGB and DFW Areas by Emission Sources (as of November 2, 2004) Project Types Approved Amount ($) Total Project NOx Reduction (tons) Total NOx Emission Reduction (tons per day) Cost-Effectiveness ($ per ton) FYs 2002, 2003 and 2004 Projects by Type: HGB/DFW Combined Railroad projects 27,800,000 5,400 3.57 5,100 On-road vehicles 28,900,000 4,600 2.27 6,300 Nonroad vehicles and equipment 32,000,000 5,100 3.61 6,200 Commercial marine vessels 5,400,000 940 0.53 5,700 Total 94,200,000 16,000 9.98 5,900 Source: Adapted from Chan et al. 2005. Reprinted with permission; copyright 2005, ENVIRON.

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State and Federal Standards for Mobile-Source Emissions FIGURE 7-6 TERP NOx emission reductions to date versus the 2007 SIP TERP goal in the HGB area. Source: Chan et al. 2005. Reprinted with permission; copyright 2005, ENVIRON. industry. Manufacturers and fire safety officials have raised safety concerns about widespread use of heat-generating catalysts on lawn and garden equipment. Safety studies beyond normal EPA and CARB practices are ongoing; the committee did not have enough information to assess safety concerns fully. As a result of a 2003 law passed by Congress, small SI engines form a new regulatory category different from other mobile sources. California may set a second standard for those sources; however, the California standard for small SI engines is the only California standard that other states may not adopt under CAA section 177. Some states have devised nonregulatory, incentive-based emissions-control programs for mobile sources. These programs to date have provided emissions control from mobile sources that would not otherwise have been provided by regulation.