(i) The engine being dressed, (the "base" engine) must be a heavy-duty highway, land-based nonroad, or locomotive engine, certified pursuant to 40 CFR Part 86, 40 CFR Part 89, or 40 CFR Part 92. The base engine must be certified to the standards that apply at the time the base engine manufacturer completes assembly of the engine. We don't allow stockpiling of uncertified engines.
(ii) The dressing process must not involve any changes that can reasonably be expected to increase engine emissions. This includes a requirement that engine cooling and aftercooling systems stay within the ranges specified by the original engine manufacturer.
(iii) The original emissions-related label must remain on the engine.
(iv) The dressing company must report annually to us the models that are exempt under this provision.
(v) The engine model must not be primarily for marine application.
The goal of our engine dressing provisions is to eliminate the burden of certification and other compliance requirements where we have confidence that engines already certified to comparable standards from other programs will meet marine engine emission standards. Moreover, the certificate holder for the base engine continues to be liable, under the terms of the original certification, for the emissions performance of the dressed engine. We will nevertheless require, as we proposed, that a company certify dressed engines under 40 CFR Part 94 if the majority of engines produced are for marine application. This prevents a company taking advantage of the engine dressing exemption to produce marine diesel engines under, for example, a land-based nonroad diesel certificate, even though the engine might be used almost exclusively for marine application. Companies that produce engines qualifying for the engine dressing exemption will be exempt from the certification requirements and prohibited acts of 40 CFR Part 94, Minimal reporting and labeling requirements apply to these engines, as described below.
Companies that produce marine versions of their base engines may qualify for the engine dressing exemption if they meet the established criteria. Base engine manufacturers utilizing the dressing exemption must submit marine-specific emission data on their dressed marine engines. In addition, we may request marine-specific data from the original engine manufacturer if another company is dressing their engines for marine application. We would use this data for oversight to determine the validity of the exemption. Except for this testing responsibility, the discussion of engine dressing applies equally whether an original engine manufacturer or a post-manufacture marinizer produces the marine engine.
Heavy-duty highway engines are certified to a much different test cycle, which has in the past prevented us from accepting a highway engine certificate for nonroad applications for certification. Now that we are proposing to revise the standards and test procedures for these engines to control steady-state emissions, we can be more confident that they will adequately control emissions in a marine application. Thus, any certified heavy-duty highway, nonroad, or locomotive engine will be eligible for the dressing exemption.
Engine manufacturers might use averaging, banking, or trading to produce land-based engines that are certified with emission levels exceeding the comparable marine emission standard. These engines could not meet the proposed engine dressing criteria. Unlike an original engine manufacturer, a post-manufacture marinizer has no control over this. We have therefore simplified the criteria to say that any engine must be certified to land-based standards that apply to that engine at the time the dressing company buys the engine. This is true regardless of whether the original engine was certified using emission credits under the ABT program. Similarly, our NTE provisions do not apply to dressed engines, unless NTE provisions are in place for the certified base engine.
Engines that qualify as dressed engines are exempt from the marine emission standards. We therefore will not treat these as regulated marine engines. If we find that a company with an engine dressing exemption does not, in fact, meet the criteria spelled out in the regulations, the engines are not exempt and we may pursue enforcement for selling uncertified marine engines and/or tampering with certified engines.
We are including in the final rule a requirement that dressing companies put a label on each exempted engine stating the name of the dressing company and the fact that the engine was marinized without affecting emission controls. This will make clear that the engine is acceptable for use in a marine vessel. In addition, dressing companies will need to give us minimal notification that they are modifying certified engines. This can be done once annually for a company's whole range of dressed marine engines.
In addition to the labeling requirement, we encourage engine manufacturers to inform companies dressing their engines of these requirements. This will not only aid us in educating affected companies, it may help protect engine manufacturers from exposure to liability if their engines are ever found in a marine vessel without proper documentation.
G. Foreign-Trade Exemption
Oceangoing vessels with Category 3 propulsion engines typically have additional Category 1 and Category 2 engines onboard. We are adopting a provision that will allow owners of qualifying vessels to obtain an exemption from the national emission requirements for Category 1 and Category 2 engines that are installed on any U.S.-flagged vessel engaged in foreign trade or other overseas operation. We expect that ship owners will buy MARPOL-compliant engines because ships that travel to foreign ports will eventually need to demonstrate compliance with the Annex VI NOx limits to get an International Air Pollution Prevention Certificate for their vessels. While the proposed regulation text inadvertently limited this to auxiliary engines, the exemption applies equally to propulsion engines that meet the criteria. This provision will allow all engines on qualifying vessels to meet solely the international requirements. This exemption will go into effect at the same time as the implementation of the domestic emission standards for these engines.
A vessel owner can obtain this exemption if it can be demonstrated to the Administrator's satisfaction that the vessel: (a) Will spend less than 25 percent of its total engine operation time within 320 nautical kilometers (200 nautical miles) of U.S. territory; or (b) will not operate between two United States ports, as evidenced by the vessel having solely a registry endorsement from the Coast Guard. The second qualifying criterion was described in the preamble to the proposed rule, but was inadvertantly omitted from the proposed regulation text. For installation of new or replacement engines on used vessels, the vessel's service record can be used to show where the vessel will be operated. For a new vessel, however, this determination must be made before it is placed into service, so it will not be possible to use the vessel's service record to make the determination described in (a). Instead, application to the Administrator for this exemption can rely on the vessel owner's business plans for the vessel, as well as on records from other vessels under the owner's control, any features of the vessel that will tend to limit its use within the specified area, or such other information as the Administrator shall request.
