For a more complete discussion of the rationale for the Tier 2 FEL upper limits for Category 1 engines the reader is directed to the most recent final rule concerning land-based nonroad engine emission standards.
Consistent with the land-based ABT programs from which the marine program is derived, ABT credits generated under this program do not expire and are not discounted. Also consistent with the recently finalized land-based nonroad diesel rule, credits generated on land-based engines may not be used for demonstrating compliance for marine diesel engines. We are concerned that manufacturers who produce engines used in both marine and land-based applications could effectively trade out of the marine portion of the program, thereby potentially obtaining a competitive advantage over small marinizers who sell only marine engines. For similar reasons, credits generated on Category 2 engines can not be used for Category 1 engine compliance. For similar reasons we proposed to prevent the use of credits generated on Category 1 engines from being used for Category 2 engines. Since the expressed concern does not apply to credit exchanges going from smaller to bigger engines, the final rule allows this. However, to account for the likelihood that Category 2 engines will undergo more rebuilds in their lifetime than Category 1 engines, manufacturers must discount any Category 1 engine credits by 25 percent if they are used for Category 2 engine compliance.
Effective immediately, early credit generation is available for all Category 1 and 2 commercial CI marine engines. Credits will be generated relative to the actual Tier 2 standards and will be undiscounted. However, if a manufacturer believes it should be allowed to generate credits relative to an engine family's pre-control emission levels (rather than the Tier 2 standards), it can choose to develop engine family-specific baseline emission levels. Credits will then be calculated relative to the manufacturer-generated baseline emission rates, rather than the Tier 2 standards. Engine manufacturers that are not post-manufacture marinizers generate baseline emission rates by testing three engines from the family for which the baseline is being generated, with the baseline calculated as the average of the three engines. Under this option, engines must still meet the Tier 2 standards for all pollutants to generate credits, but the credits will be calculated relative to the generated baseline rather than the Tier 2 standards. Any credits generated between a measured baseline and the Tier 2 levels will be discounted by reducing the measured baseline value by 10 percent. This is to account for the variability of testing in-use engines to establish the baseline due to differences in hours of use and maintenance practices.
Some early banking provisions apply uniquely to post-manufacture marinizers. In recognition of their small size, more difficult resource constraints and general reliance on engine manufacturers to produce base engines, additional flexibility is warranted to ease the transition to these rules. Therefore, post-manufacture marinizers may establish a measured baseline by testing a single engine. Consistent with the provisions of §94.209(a), the baseline established by this single engine may be used for broadened engine families, provided the marinizer starts with certified land-based engines. Also, they may certify an engine under the early banking program with an engine that does not meet the Tier 2 emission standards. However, since this program is only intended to ease the transition to full compliance with these standards and rules, the credits will only be available to post-manufacture marinizers through the 2007 model years.
In the recent rulemaking for nonroad diesel engines, we also set emission standards for marine diesel engines below 37 kW. These engines were also included in the land-based ABT program in that rule, with some restrictions. We are not changing the way we treat these small marine diesel engines. We are not integrating the ABT program in that rule with the requirements in this final rule, so we don't allow manufacturers to exchange credits for engines above and below 37 kW.
Credits may not be exchanged between Category 1 marine engine families and land-based nonroad engine families. As with the restriction of credit exchanges between engine families above and below 37 kW, this restriction applies because the stringency of the land-based standards was determined in the absence of the availability of credit exchange between marine and land-based engines. In addition, there are differences in the way that marine and land-based credits are calculated that are implicit in the calculation and that make the credits somewhat incompatible. The first is that the difference in test duty cycles means there is an implicit difference in load factor between the two. The second is that there are provisions in this final rule for varying useful lives of marine engine families, which are not included in the land-based nonroad regulations. In addition, as discussed above, the actual credit calculation equations for the two programs are different.
We don't allow trading between Category 2 engines and locomotive engines, because locomotive credits are calculated based on expected remaining service life (which could be many useful-life periods, due to the inclusion of the remanufacturing provisions for locomotives), whereas Category 2 marine engine credits are only calculated on the basis of a single useful life.
Participation in the marine diesel ABT program is voluntary. For those manufacturers choosing to use the program, compliance for participating engine families is evaluated in two ways. First, compliance of individual engine families with their FELs is determined and enforced in the same manner as compliance with the emission standards in the absence of an averaging, banking and trading program. Each engine family must certify to the FEL (or FELs, as applicable), and the FEL is treated as the emission limit for certification, production-line and in-use testing (as well as for any other testing done for other enforcement purposes) for each engine in the family. Second, the final number of credits available to the manufacturer at the end of a model year after considering the manufacturer's use of credits from averaging, banking and trading must be greater than or equal to zero.
The generation transfer and use of credits in the ABT program does not change the obligation of all manufacturers to meet the applicable standards. This provision is consistent with other mobile source ABT programs. The marine diesel engine certificates of both parties involved in the violating trading transaction could be voided ab initio (i.e., back to date of issue) if the engine family or families exceed emission standards as a result of a credit shortfall. A buyer of credits which are shown later to be invalid will only be required to make up the credit shortfall. There will be no penalty associated with the unknowing purchase of invalid credits.
The integrity of the marine diesel averaging, banking and trading program depends on manufacturers' accuracy in recordkeeping and reporting and our effectiveness in tracking and auditing this information. Failure of a manufacturer to maintain the required records would result in the certificates for the affected engine family or families being voided retroactively. Violations of reporting requirements could result in a manufacturer being subject to civil penalties as authorized by sections 213 and 205 of the Clean Air Act.
