United States Air and Radiation EPA420-R-99-014
Environmental Protection June 1999
Agency
vvEPA Heavy-Duty Diesel
Emission Reduction
Project Retrofit/Rebuild
Component
> Printed on Recycled Paper
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EPA420-R-99-014
June 1999
of
Third for the
of
Regional and State Programs Division
Office of Mobile Sources
U.S. Environmental Protection Agency
Prepared for EPA by
NESCAUM
Northeast States for Coordinated Air Use Management
NOTICE
This technical report does not necessarily represent final EPA decisions or positions.
It is intended, to present technical analysis of issues using data which are currently available.
The purpose in the release of such reports is to facilitate the exchange of
technical information and to inform the public of technical developments which
may form the basis for a final EPA decision, position, or regulatory action.
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Heavy-Duty Diesel
Emission Reduction Project
Retrofit/Rebuild Component
prepared by NESCAUM
for the U.S. Environmental Protection Agency
for
Management
1Ğ98
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NESCAUM Recommendations for
Use of Urban Bus Program
certified retrofit/rebuild equipment
and
Third party verification system
and
Model state policies
for
The Retrofit/Rebuild of Heavy-Duty Diesel Engines
March 1999
Prepared by:
NESCAUM
Northeast States for Coordinated Air Use Management
129 Portland Street
Boston, MA 02114
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Table of Contents
Executive Summary ES-1
Introduction 1
A. Background 1
B. Project Objective 2
C. Project Participants 2
I. Use of Federal Urban Bus Program Certified Technologies
in Heavy-Duty Engines Not Affected by the Federal
Urban Bus Program 3
A. Recommendations for Use of Oxidation Catalysts Certified
with the Urban Bus Program Use in Heavy-Duty Engines 3
B. Available Data on Emission Reductions from Oxidation Catalysts 4
C. Engine Specific Technologies Certified with the Urban Bus Program 8
D. Accuracy of Expected Emission Reduction Estimates 8
II. Third Party Verification 11
A. Third Party Verification Structure 11
B. Role of Third Party Verifier 14
III. Testing Requirements 18
A. Establishing Emission Reduction Potential (verification data) 18
B. In-use testing requirements 18
IV. Protocol for Calculating SIP Credits 24
A. Retrofit Website 24
B. SIP Credit Calculation Procedure 28
C. Baseline and Post-Baseline Emission Rates 29
D. Methods for SIP Credit Calculation 30
E. Credit Calculation Formulas 30
V. Model State Guidance Policies 35
A. Highway Vehicle Retrofit Strategies 39
B. Nonroad Retrofit Strategies 56
C. Funding Opportunities for Promoting the Retrofit of HD Engines 76
List of Tables & Charts
Table 1-1 Equipment Certified & Status of Notifications of Intent
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to Certify Urban Bus Equipment 5
Table 1-2 Summary of Available Data for Oxidation Catalyst
Use in HDD 6
Table III-1 Detail of Requirements for Retrofit Technologies 22-23
Table V-1 Gasoline School Bus NOx Emissions in the NESCAUM Region 44
Table V-2 Cost Effectiveness of TWC NOx Credit Generation 44
Table V-3 1998 NESCAUM Region Construction Equipment Emissions 61
Table V-4 U.S. Primary Pollutant Emissions from Diesel Marine Engines 66
Table V-5 Proposed EPA Emissions Standards for Marine Vessels 67
Table V-6 Vessel Types in Boston Harbor 68
Table V-7 SCR Use in Marine Vessels Worldwide 69
Table V-8 Proposed Emissions Performance Standard 71
Table V-9 Costs of SCR Retrofit 72
List of Figures
Retrofit/Rebuild Program Flowchart 13
Figure One National Bus Population 40
Figure Two Boston Harbor Marine Vessel NOx Emissions by Vessel Type 68
11
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Executive Summary
The purpose of this document is to expand the use of retrofit pollution control
technologies in heavy-duty engines through the development of consistent guidelines for
voluntary retrofit programs. Such programs would be targeted to heavy-duty vehicles not
affected by the federal Urban Bus Program and would include control technologies not
certified under that program as well as Urban Bus Program certified technologies.
Specifically, this document recommends 1) a protocol for calculating state implementation
plan (SIP) credits for voluntary retrofit projects; 2) the structure of a third party retrofit
verification system for retrofit technologies; and 3) an in-use testing program to ensure
that emission reduction credits claimed are achieved in the field. The last chapter of this
document outlines model state policies to reduce heavy-duty engine pollution through
retrofit initiatives.
This effort builds on the above mentioned United States Environmental Protection
Agency (EPA) initiative begun in 1993 to reduce urban residents' exposure to diesel
exhaust, the Urban Bus Retrofit/Rebuild program. The program requires that urban buses
operating in metropolitan areas with populations over 750,000 be equipped with EPA
certified retrofit pollution control devices such as oxidation catalysts or be rebuilt using
certified low emission components at the time of engine overhaul. To date,
approximately 10,000 of 42,000 eligible urban buses have been retrofitted or rebuilt as a
result of the program. Two states, New Jersey and California, have undertaken retrofit
programs or guidelines as well. These efforts are intended to expand the significant
emission reductions gained through the federal Urban Bus Program by promoting the use
of pollution reducing technologies on the existing heavy-duty fleets in those states.
The need for reducing emissions from the nation's in-use heavy-duty diesel fleets
is clear. Current inventories estimate that heavy duty engine emissions comprise 33% of
all nitrogen oxides (NOx) pollution and 80% of all particulates (PM) from mobile sources
in the Northeast states.1 Emissions from these engines contribute to serious air pollution
problems in the region. NOx causes eutrophication of lakes and streams, acid rain, and is
a precursor to ozone which aggravates lung disease. Hydrocarbon (HC) emissions are
also ozone precursors and are made up, in part, of toxic substances such as benzene,
toluene, and 1,3 butadiene, some of which are known carcinogens. PM emissions are very
high from diesel engines and are known to aggravate lung diseases such as asthma,
emphysema, and bronchitis. In addition, PM has been labeled a probable human
carcinogen by EPA and a toxic air contaminant by the California Air Resources Board. In
order for states to achieve air quality goals, significant reductions in heavy-duty diesel
emissions will need to be made.
1 "Heavy-Duty Engine Emissions in the Northeast" NESCAUM May, 1997.
ES-1
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The recommendations contained in this document are based on discussions of a
workgroup organized by the Northeast States for Coordinated Air Use Management
(NESCAUM). The workgroup was created to provide guidance to state and local
agencies, as well as to private organizations that plan to retrofit heavy-duty diesel
vehicles with pollution control devices. It included input from state and federal agency
staff, testing laboratories, and control equipment manufacturers. In addition, a draft of
these guidelines was distributed to EPA regional offices and the heavy-duty engine
manufacturers. Their comments and suggestions were reviewed and incorporated by the
workgroup into the recommendations contained in this report.
Primary Recommendations
All of the recommendations detailed below represent the views of the
Retrofit/Rebuild workgroup and NESCAUM.
1. Use of Urban Bus Program Certified Technologies
Oxidation catalysts certified with the Urban Bus Program should be eligible
without administrative or peer review for use in any highway heavy-duty engine, with
states being allowed to claim a 20 percent reduction for PM, a 40 percent reduction for
carbon monoxide (CO), and a 50 percent reduction for HC. These credits may be claimed
before a project is implemented. Verification of emission reductions should be conducted
during or after project implementation by 1) a review of retrofitting records and 2)
through in-use emissions testing. These recommendations are detailed in Chapter I,
section D and Chapter III.
For use of technologies certified with the Urban Bus Program that are engine
specific such as rebuild kits, the workgroup recommends that a PM emission reduction
credit of 20 percent be granted automatically when the rebuild kits are used in engines that
the technologies are certified for under the Urban Bus Program. Chapter I, section B
describes the credit allowed for ".1" technologies. As with the use of oxidation catalysts,
reporting and in-use testing recommendations for rebuild kits are detailed in Chapters ID
and III.
2. Use of Technologies Not Certified with the Urban Bus Program
For all products that have not been certified with the Urban Bus Program,
emissions testing should be conducted by the manufacturer to determine the emission
reductions potential (percent reductions) of the retrofit/rebuild product. Similar data
should be required for the voluntary program as are required for certification with the
Urban Bus Program (see Chapter III, section A for a detailed description). An engineering
analysis should be conducted by the manufacturer to determine which engines the
ES-2
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retrofit/rebuild equipment may be used on. These data and analysis will be reviewed by
the third party verifier to establish the emission reduction level and applicability for
engine families for the voluntary retrofit program.
ES-3
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3. Third Party Verification System
A third party verification system should be established which consists of an
administrator and a peer review committee. The workgroup recommends that
Environment Canada be the administrator for this program. The administrator will
process all applications to the retrofit/rebuild program, review data for thoroughness,
organize the work of the peer review group, make decisions on the level of in-use testing
required, and communicate with EPA. The peer review committee should consist of
temporary volunteer members from industry, laboratories, and trade organizations (such
as the Society of Automotive Engineers) with expertise in heavy-duty engines and retrofit
equipment. The committee will make determinations for emission control devices on the
level of in-use testing, completion of the in-use testing requirement, acceptability of in-
use testing method, emission reduction potential of emission control products, and engine
families that control equipment can be used with.
4. In-use Testing Requirement
In order to verify the emission reductions claimed from retrofit projects and to
assess control equipment durability a percentage of all emission control products installed
as part of a retrofit/rebuild program should be tested in-use. The procedure for
establishing the number of units to be tested in the field is outlined in Chapter III and is
adapted from EPA's in-use compliance testing requirements for new pleasure craft marine
engines. An in-use testing trigger should be established for different types of technologies
based on unit sales. A 70% pass rate on tested units will be needed in order for devices to
"test out" of the in-use requirement.
5. Calculating SIP Credits
In order to calculate SIP credits from retrofit projects, baseline emission factors
for heavy-duty engines to be retrofitted needs to be established. The workgroup
recommends that Federal Test Procedure (FTP) certification data for engine families be
used as baseline emission rates for retrofitted engines. Emission reduction percentages (as
recommended in this document for devices certified with the Urban Bus Program and as
established by the third party verifier for devices not certified with the Urban Bus
Program) can be applied to these baseline rates. Mass emissions reductions can be
calculated for individual fleets using the formulas detailed in Chapter IV and information
available to fleet operators such as vehicle mileage, hours in operation, or fuel
consumption. In some cases, states may choose to develop baseline emission rates
through testing of heavy-duty engines in-use. The states will need to develop a testing
plan in coordination with EPA to determine these baseline levels.
ES-4
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6. Retrofit/Rebuild Program Information/Website
The workgroup recommends that if possible all retrofit/rebuild devices certified
with the Urban Bus Program and all devices "verified" through third party review be
listed on a retrofit/rebuild website which states and others interested in undertaking
retrofit projects can easily access. The retrofit website could provide SIP credit
calculation formulas, information on emission control products, applicable engines, and
EPA certification data for engine families.
7. Model State Retrofit Policies
States have policy and funding options to increase the use of retrofit devices to
reduce heavy-duty diesel pollution. Retrofitting heavy-duty vehicles and machines to
reduce PM, HC, CO, toxics, and in some cases NOx, can assist states in reaching air
quality standards. Executive orders, contract requirements, and agency policies represent
potential methods to increase the use of retrofit devices. Funding from federal sources
such as the Congestion Mitigation Air Quality Improvement program (CMAQ), state
funding in the form of bond issues and agency budgets, and supplemental environmental
monies can provide financial support for retrofit projects. The last section of this report
outlines model retrofit policies that have been used in the region, funding sources, and
example strategies to increase the use of pollution control equipment.
ES-5
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Introduction
A. Background
There are approximately 4.2 million heavy duty diesel vehicles (both highway and
nonroad) operating in the United States. These vehicles and equipment emit millions of tons of
fine particulates and ozone-forming pollutants annually. Current inventories estimate that heavy
duty diesel emissions comprise 33% of all nitrogen oxides (NOx) and 80% of all particulates
(PM) from mobile sources in the Northeast states.2 The contribution from this sector is rising as
the nation's diesel fleets continue to grow and as vehicle miles traveled increase. Emissions from
these engines contribute to serious air pollution problems experienced in many areas of the
country. NOx causes eutrophication of lakes and streams, acid rain, and is a precursor to ozone
which aggravates lung disease. Hydrocarbon (HC) emissions are also ozone precursors and are
made up, in part, of toxic substances such as benzene, toluene, and 1,3 butadiene, some of which
are known carcinogens. PM emissions are very high from diesel engines and aggravate lung
diseases such as asthma, emphysema, and bronchitis. In addition, particulates have been labeled
a probable human carcinogen by the EPA. Furthermore, the California Air Resources Board
(CARB) has labeled PM a toxic air pollutant.
In the long term, reductions in heavy-duty diesel pollution will be achieved through the
implementation of more stringent federal emissions standards for new engines. When
implemented, EPA's rule for Control of Emissions of Air Pollution from Highway Heavy-Duty
Engines will reduce NOx by 50% in the year 2020. Likewise, EPA's rule for Control of
Emissions of Air Pollution from Nonroad Diesel Engines to be phased in between 1999 and
2008, will reduce NOx by 50% and PM by 16% by the year 2020. In the near term, however,
much needs to be done to reduce emissions from existing engines if state air quality goals are to be
met. Achieving emissions reductions from in-use diesels is needed because older engines pollute
at much higher rates than newer ones due to deterioration and less stringent emission standards.
The Urban Bus Retrofit Program begun in 1993 was a first step in addressing the problem
of in-use heavy-duty diesel emissions. This initiative was the first to require the retrofit of
heavy-duty engines to achieve emissions below the original certification levels for the engines.
The program was designed to take advantage of commercially available retrofit/rebuild devices
that reduce heavy-duty engine emissions significantly. Examples of these devices are oxidation
catalysts, fuel borne catalysts, and new engine components configured for low emissions such as
pistons and cam shafts.
While oxidation catalysts have been used by heavy-duty engine manufacturers to meet
emission standards as original equipment (1.9 million medium and heavy-duty trucks have been
equipped with catalysts in recent years), retrofit of existing engines with the same emission
"Heavy-Duty Engine Emissions in the Northeast" NESCAUM May, 1997.
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control devices have been, until the initiation of the Urban Bus Program, uncommon in this
country. As part of that program the emission reduction potential of installing oxidation
catalysts and other types of add-on equipment in older engines was demonstrated. Engine
dynamometer testing has shown that certified technologies have the potential to reduce
particulate emissions by as much as 80%.3 In-use emissions testing conducted at the time of
retrofit/rebuild and one year later on the same buses shows that significant PM, CO, and HC
reductions are achieved.4
B. Project Objective
The purpose of the NESCAUM effort described in this report is to encourage the use of
both Urban Bus Program certified retrofit/rebuild kits and non-certified technologies by
developing a standardized method for states to calculate SIP credits for retrofit projects. The
current lack of a standardized method hinders the use of retrofit technologies in heavy-duty
engines. Specifically, a protocol for actual credit calculation is needed, a third party verifier to
assume responsibilities similar to EPA's in the federal Urban Bus Program, and lastly,
recommendations on technology matches between retrofit equipment and heavy-duty engines are
needed. This guideline document attempts to address these gaps and in so doing, encourage the
use of retrofit/rebuild equipment to reduce emissions from heavy-duty engines.
C. Project Participants
The NESCAUM retrofit/rebuild workgroup was comprised of members from state and
federal regulatory agencies, emission control equipment manufacturers, and testing laboratories.
The recommendations in this report reflect a consensus of the workgroup participants arrived at
during bi-weekly discussions over a period of eight months. The resulting recommendations
reflect the collective experience, opinions, and judgment of the workgroup participants as well as
opinions expressed by the Engine Manufacturers Association.
In the next section, recommendations for the use of Urban Bus Program certified
technologies are detailed.
3 "Environmental Fact Sheet" U.S. Environmental Protection Agency, Office of Mobile Sources, March, 1997.
4 "Urban Driving Cycle Results of Retrofitted Diesel Oxidation Catalysts on Heavy-Duty Vehicles: One Year
Later," Kevin F. Brown, Greg R. Rideout, Jeffery E. Turner. SAE 970186, February, 1997 and "Urban Driving
Cycle Results of Retrofitted Diesel Oxidation Catalysts on Heavy Duty Vehicles" in SAE 960134, Kevin Brown
and Greg Rideout, 1996
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I. Use of Federal Urban Bus Program Certified Technologies in Heavy-
Duty Engines Not Affected by the Federal Urban Bus Program
Currently, seventeen products are certified with the Urban Bus Program and three others
are under review. Table 1-1 on page 5 summarizes the certified technologies and the types of
engines that can be retrofitted with the devices. The workgroup recommends that for the
purposes of voluntary retrofit projects, control technologies certified under the federal Urban
Bus Program be divided into two categories: engine specific and non-engine specific. Currently,
oxidation catalysts are the only examples of technologies that are not engine specific because they
are applicable to broad categories of engines. Engine specific technologies are rebuild kits that are
manufactured for a certain engine family. The recommendations for these two categories of
control equipment are described below.
A. Recommendations for Use of Oxidation Catalysts Certified with the Urban Bus Program in
Heavy-Duty Engines
The workgroup recommends that oxidation catalysts certified with the Urban Bus
Program be eligible without administrative or peer review for use in any highway heavy-duty
engine, with states being allowed to claim a 20 percent reduction for PM, a 40 percent reduction
for CO, and a 50 percent reduction for HC. These credits may be claimed before a project is
implemented. The workgroup recommends that states and/or emission control manufacturers
verify emissions reductions during or after project implementation in two ways by 1) conducting
a review of retrofitting records and 2) in-use emissions testing. Details on these
recommendations are found in Chapter I, section D and in Chapter III.
The workgroup recommends that percent reductions be used, as opposed to a gram per
mile or gram per brakehorsepower hour reduction since mass emission reductions will vary from
engine to engine depending upon "engine out" or baseline emissions. Using the percent
reductions will allow for different mass emissions reductions to be calculated for many different
engine families. States may calculate mass emissions reductions for retrofitted engines by
multiplying the baseline emission rates by the percent reductions. This method is detailed in
Chapter IV. This method assumes that oxidation catalysts will achieve a minimum of 20 percent
reduction for PM, 40 percent reduction for CO, and 50 percent reduction for HC in all heavy-
duty engines. These recommendations for oxidation catalysts certified with the Urban Bus
Program are based on emission reduction data that are detailed in the next section.
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B. Available Data on Emission Reductions from Oxidation Catalysts
Data on emission reductions attributable to oxidation catalysts are available from several
sources. The first are test results that were provided to EPA by emission control manufacturers
as part of the Urban Bus Program. These data were gathered from both two and four stroke
engines and from worst case engines (highest emitters). Another source of information is data
that have been published in Society of Automotive Engineering (SAE) journals. Four SAE
papers have been written on emission reductions achieved by the retrofitting of urban buses and
trucks with oxidation catalysts. Other sources of information on catalyst function are engine
manufacturers and emission control equipment manufacturers (additional data not submitted to
Urban Bus Program). Lastly, several projects have been conducted in Europe to assess the
effectiveness of oxidation catalysts. Table 1-2 on page 6 summarizes the results of the available
studies.
Taken together, these studies provide data for 60 heavy-duty diesel two and four stroke
engines. The data support the assumption that use of oxidation catalysts in both two and four
stroke engines achieve PM reductions ranging from 19 to 50% with an average PM reduction of
approximately 33%. The data also supports the assumption that reductions of emissions ranging
from 50 - 90% for HC and 45 - 90% for CO can be achieved.
Establishing these percent reductions for Urban Bus certified oxidation catalysts will
mean that these technologies will be available for credit generation in voluntary retrofit projects
without review by the third party verifier. The exemption of Urban Bus Program certified
oxidation catalysts (and possibly other broadly applicable technologies in the future) from initial
review by the third party verifier is based upon the testing data summarized in table 1-2 and
attached to this report showing that a minimum of 19 percent PM, 50 percent CO, and 45
percent HC reductions are achieved when different types of highway heavy duty engines are
retrofitted with oxidation catalysts. The percent reductions chosen by the workgroup represent
nearly the lowest recorded emissions reductions in all of the available studies and are thus
conservative.
Use by the states of the recommended conservative reduction percentages will
compensate for possible lower than average emission reductions that could occur when oxidation
catalysts are installed in a wide variety of engines. The workgroup does not anticipate that
emissions will fall below the recommended percent reductions, a more likely scenario will be that
reductions will be greater than estimated. However, the conservative numbers provide a safety
factor in case emission reductions are lower in certain engines.
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Table 1-1
Equipment Certified & Status of Notifications of Intent
to Certify Urban Bus Equipment
March 18, 1999
Air Docket A-93-42
Certifier
1. Engelhard 1
2. Engelhard 2
3 . Detroit Diesel Corp. (DDC)
4. Cummins
5. Twin Rivers Technologies
6. Johnson Matthey 1
7. DDC 2
8. Engelhard 3
9. Engine Control Systems (ECS)
10. Johnson Matthey 2
11. ECS2
12. Engelhard 4
13. Nelson Industries
14. DDC 3
15. Johnson Matthey 3
16. Engelhard 5
17. Turbodyne Systems, Inc.
18. DDC 4
19. Engelhard 6
20. Johnson Matthey
Equipment Description
Exhaust catalyst (CMX) for 2 stroke/cycle
Exhaust catalyst (CMX) and cermatized engine
parts
Engine upgrade kit for DDC 6V92TA MUI's
Life Cycle Cost Evaluation
Engine upgrade for Cummins L10
4 stroke/cycle
Biodiesel, exh cat (CMX) & timing retard:
2 stroke/cycle engines
Exhaust catalyst (CEM 1) for 2 stroke/cycle
Engine upgrade kit for DDC 6V92TZ DDECIFs
ETX 2002 kit: Exhaust catalyst, ceramitized parts,
& engine upgrade parts for DDC 6V92TZ MUI
(0.10)
Exhaust catalyst (OCM) for 2 stroke/cycle
Exhaust catalyst (CEM) & engine mods for DDC
6V92TA MUI (0.10)
Exhaust catalyst (OCM) for 4 stroke/cycle
Exhaust catalyst (CMX) for 1992 - 1993 Cummins
L10EC
Exhaust catalyst for 2 stroke/cycle
TurboPac, exhaust catalyst (OCM), and engine
upgrade for DDC 6V92TA MUI (0.10)
Exhaust catalyst (CEM) & engine mods for DDC
6V92TA MUI (0.10)
ETX 2002 kit: Exhaust catalyst, ceramitized parts
and engine upgrade parts for DDC 6V92TZ DDEC 2
(0.10)
TurboPac & exhaust catalyst (OCM) 6V92TA MUI
(0.10)
TurboPac, exh cat (OCM, and engine upgrade for
6V92TA DDEC (0.10)
ETX Plus Technology for DDEC II engines (.1)
CEM Cat Muffler for 4 s/c engines
Federal Register Notice:
Effective Certification
Date
60 FR 28402, 05-31-95
60 FR 47170, 09-11-95
60 FR 51472, 10-02-95
EPA Ftr, 06-24-96
61 FR 37734, 07-19-96
60 FR 64046, 12-13-95
EPA Ltr, 09-20-96
61 FR 54790, 10-22-96
EPA Ltr, 03-28-96
61 FR 16733, 04-17-96
61 Fr 37738, 07-19-96
EPA Ltr, 02-38-97
62 FR 12166, 03-14-97
EPA Ltr, 12-02-96
62 FR 746, 01-06-97
EPA Ltr, 09-08-97
62 FR 60079, 11-06-97
63 FR 4445; 01-29-98
EPA Ltr, 02-12-98 63 FR 13660; 03-
20-98
EPA Ltr, 10-14-97, 62 FR 63159;
11-26-97
EPA Ltr, 04-06-98 63 FR 26798; 05-
14-98
EPA Ltr, 10-21-98 63 FR 66798; 12-
03-98
EPA Ltr, 07-01-98 63 FR 50225; 09-
21-98
Under review
EPA Ltr, 10-02-98
Under review
Under review
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Table 1-2
Summary of Available Data for Oxidation Catalyst Use in HDD
Study/Report
Urban Bus and
Engelhard data
SAE9601345
SAE9701866
SAE 9329S27
SAE9501558
London Bus9
Report MBK
961165
Engelhard
Report
#98034210
APIA paper11
Number and
Types of Engines
19 four stroke and
10 two stroke
5 four stroke and 2
two stroke
5 four stroke and 5
two stroke
4 four stroke
two stroke buses
6 four stroke
1 four stroke
two stroke
PM Reductions
38% avg. for
two stroke
27% avg. for
four stroke
32.8% avg. for
all vehicles
24% avg. for all
vehicles
44-60% avg. for
all vehicles
32-41%
45%
49% avg. for
three catalysts
19-44%
HC Reductions
51% avg. for
two stroke avg.
64% avg. for
four stroke
75.9% avg. for
all vehicles
50-90% for all
vehicles
n/a
60-70%
86%
93% avg. for
three catalysts
50-90%
CO
Reductions
n/a
67.1% avg. for
all vehicles
45-93% for all
vehicles
n/a
90%
92%
98%
45-93%
5 Brown, K., Rideout, G. "Urban Driving Cycle Results of Retrofitted Diesel Oxidation Catalysts on Heavy Duty
Vehicles," SAE 960134, 1996.
6 Brown, K., Rideout, G., and Turner, J. "Urban Driving Cycle Results of Retrofitted Diesel Oxidation Catalysts
on Heavy Duty Vehicles: One Year Later," SAE 970186, 1997.
7 Clerc, J., Miller, R., McDonald, C., and Schlamadinger, H. "A Diesel Engine/Catalyst System for Pick-up and
Medium-Duty Trucks" SAE 9329821993.
8 Voss, Adomaitis, Feldwisch, Borg, Karlsson, and Josefsson, "Performance of Diesel Oxidation Catalysts for
European Bus Applications," SAE 950155 1995.
9 Millbrook Proving Ground Ltd. "Evaluation of a Reformulated Catalyst Developed by Lubrizol on Exhaust
Emissions on London Double Decker Buses." Report No. MBK 961165, January 1997.
10 Millbrook Proving Ground Ltd. "Evaluation of Catalysts developed by Engelhard on Exhaust Emissions on
London Double Decker Buses," Report No. 980342, April 21, 1998.
11 Brown, K., Rideout, G., and Turner, J. "Long Term Emission Evaluation of In-Service Transit Buses at OC
TRANSPO. Paper delivered at the 1997 APTA Bus Operations, Technology, and Maintenance Conference.
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Oxidation catalysts are the only broadly applicable technology currently certified with
the Urban Bus Program. In the future, however, other broadly applicable technologies may
become certified with the program. If this is the case, the workgroup recommends that the third
party verifier (described in Section II) determine the level of percent reductions for the
technology by a careful analysis of emissions testing data.
The above sections describe the available credit that can be claimed by states when heavy-
duty highway engines are retrofitted with oxidation catalysts certified with the Urban Bus
Program. In the case of retrofit of heavy-duty nonroad engines both land-based (construction
equipment, agricultural equipment, gen sets, and locomotive engines) and marine based (ship
engines and auxiliary power units) with oxidation catalysts, the review committee may need to
establish the percent reductions that can be claimed after an examination of available data. In this
case, oxidation catalysts certified with the Urban Bus program will be considered as technologies
not certified with the Urban Bus Program (described in Section II).
Technologies certified with the Urban Bus Program will also be considered with those
that are not certified with the program in the case of a request from the manufacturer for a greater
percent reduction. For example, a manufacturer of an Urban Bus Program certified technology
may want to verify a product to a greater emission reduction level than is established in these
guidelines. In this case, emission control equipment manufactures will need to provide additional
testing data and/or an engineering analysis to the third party verifier to establish the emission
reduction level and applicable engines.
Fine Particulates
While the study of fine particle concentrations in the exhaust of heavy-duty engines
equipped with oxidation catalysts is relatively new, three reports are available which have
examined the numbers and size of particulates in exhaust from oxidation catalyst equipped
heavy-duty engines. The studies compared the numbers and sizes of particles both before and
after installation of retrofit equipment. All three studies showed that no increase in the number
and no decrease in the size of parti culates was found. An excerpt from one of these studies,
published by the Health Effects Institute, is appended to this report. Since fine particles are
highly respirable and deliver toxins deep into the lung, any decrease in the size of particles
emitted from heavy-duty engines increases the risk of aggravated lung disease. The three
available studies demonstrate that in an initial examination of this issue, oxidation catalysts do
not increase the number or decrease the size of fine particles in diesel exhaust.
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C. Engine Specific Technologies Certified with the Urban Bus Program
Technologies certified with the Urban Bus Program which are designed for specific
engines are rebuild kits. These kits contain components which reduce emissions from heavy-
duty engines. Typical components are pistons and cam shafts. In the Urban Bus Program
rebuild kits are certified to one of two levels of emission reduction: 25% and . 1 grams per brake
horsepower hour (g/bhp-hr). The workgroup recommends that these kits be pre-approved for
use with the engines they were certified for under the federal Urban Bus Program without
approval from the review committee.
For . 1 g/bhp-hr certified kits using engine-specific components, the workgroup
recommends that these kits be pre-approved for the engines they are certified for and that the
emission reduction credits for PM be calculated as a percentage derived from the engines'
certification level and . 1. For the technologies which also employ an oxidation catalyst a further
credit of 40% CO and 50% HC is recommended by the workgroup. However, if the
manufacturer of the technology wishes to verify that the retrofit/rebuild kits can be used in
engines other than those specified under the Urban Bus Program, then additional data must be
given to the third party verifier supporting the manufacturer's claim, the proposed use of the
technology, and the amount of credit to be granted.
For . 1 certified technologies that are not engine specific, the review committee should
establish the emission reduction potential and the applicable heavy-duty engines. This would be
the same review process used to verify all other non-engine specific emission control equipment
(other than oxidation catalysts).
For use of rebuild kits certified to the 25% PM emission reduction level, the workgroup
recommends that a 20% PM reduction credit be automatically granted for the use of these kits in
the engines they are certified for use with under the Urban Bus Program.
D. Accuracy of Expected Emission Reduction Estimates
An important aspect of credit calculation is determining the level of uncertainty in the
estimated emissions reductions. While the above referenced studies present data on emissions
reductions from a representative sample of two and four stroke engines, some uncertainty exists
in extrapolating the existing data on these engines to all heavy duty engines. Two issues related
to this are addressed below 1) establishing accurate estimates of retrofit project emission
reductions; 2) compensating for variability resulting from program implementation.
First, the goal of establishing accurate estimates of emissions reductions will be furthered
by state screening of engines to be retrofitted and the exclusion of those that are not well suited
for retrofit equipment. For example, engines with extreme wear (those engines that will soon
need to be replaced) are not good candidates for retrofitting. Additionally, manufacturers of
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emission control equipment will need to carefully assess the engines which they retrofit. For
example, proper sizing of catalysts and use of appropriate pipe sizes will be necessary to ensure
that the maximum emission reduction is achieved and backpressure is not increased beyond
manufacturer specifications.
Second, variability in the implementation of a retrofit program could result, for example,
from greater or lesser participation in the program than anticipated. If a different number of
vehicles are equipped with emission control devices than expected this will change the emission
reductions achieved by a retrofit project. In order to compensate for such variability, records will
need to be kept by fleet operators so that states may verify the numbers of vehicles that have
been retrofitted. States may need to revise SIP credit calculations according to the actual number
of vehicles retrofitted during the course of a program.
The next sections describe the workgroup recommendations on record keeping, reporting,
labeling, and warranty provisions which should be followed by states and emission control
equipment manufacturers in order to reduce the uncertainty in calculating emission reductions
from retrofit projects.
Reporting Program Results
In order to accurately evaluate retrofit program results, the workgroup recommends that
states or others initiating retrofit projects develop a system for monitoring projects. Comparing
projected emissions with actual emission reductions achieved can be done by keeping careful
record of the numbers of vehicles retrofitted and if possible the miles traveled in fleets of
retrofitted vehicles. These records can be used to re-calculate emission reductions mid-way
through the project and at the project's end. Reporting requirements are described below.
A state's obligations with respect to voluntary mobile emission reduction programs
(VMEPs) must be enforceable at the state and federal levels. Under this policy, the state is not
responsible, necessarily, for implementing a program dependent on voluntary projects. This is
so since voluntary projects under VMEP can be conducted by private groups. An example of
such a project might be the retrofit of construction equipment at the site of a large project which
is intended to mitigate emissions from the project. However, if the state is claiming SIP credits
from the project then the state is obliged to monitor, assess and report on the implementation of
voluntary actions and the emission reductions achieved from the voluntary actions and to remedy
in a timely manner emission reduction shortfalls should the voluntary measure not achieve
projected emission reductions.
Careful reporting will allow for enforcement of retrofit projects. CFR section 85.1404
outlines the reporting requirements for fleet operators who are retrofitting fleets as part of the
Urban Bus Program. These requirements will be adopted for fleet operators retrofitting heavy-
duty engines as part of voluntary projects. The requirements state:
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The operator of any (vehicle) for which this subpart is applicable shall maintain and
retain the following adequately organized ... records. Each operator shall keep such
records until the useful life of the oxidation catalysts is achieved.. (1) General records.
The records required to be maintained under this paragraph shall consist of all
purchase records, receipts, and part number for parts and components used in the
rebuilding of (vehicle) engines.
In addition to reporting requirements, a warranty will be made by emission control
equipment manufacturers that guarantees emissions reductions for a certain period of time to be
set for each oxidation catalyst by the manufacturer. This will also be used in credit calculation.
Warranty of Emission Control Equipment
The same warranty that is required under the Urban Bus Program should be required by
retrofit emission control equipment manufacturers for technologies being used as part of this
voluntary retrofit program (as detailed in section 85.1409). It reads:
As a condition of certification the retrofit/rebuild equipment certifier shall
warrant that if the certified equipment is properly installed and maintained as
stated in the written instructions for proper maintenance and use, the
equipment will not cause a (vehicle) engine to exceed the emission
requirements of this subpart and the emission standards set forth in 40 CFR
part 86. This retrofit/rebuild equipment warranty shall extend for (number of
miles to be specified), (b) As a condition of certification, the retrofit/rebuild
equipment certifier shall provide an emissions defect warranty that if the
certified equipment is properly installed and maintained as stated in the
written instructions for proper maintenance and use, the equipment certifier
will replace all defective parts, free of charge. This emissions defect warranty
shall extend for a period of (number of miles to be specified) miles from when
the equipment is installed.
The period of credit life shall be no more than the emissions warranty. User voiding of
the mechanical warranty voids the emission warranty.
Monitoring vehicles for enforcement purposes will be made possible by labeling all
vehicles that have been retrofitted.
Labeling requirements
All retrofit equipment should be affixed with a label that states the model and serial
number of the emission control equipment and the name of equipment certifier. The label must
be durable and readable for the in-use compliance period of the equipment.
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II. Third Party Verification
The workgroup recommends that a group be established to conduct third party
verifications. This section describes the third party verification system and the role of the
verifier. The responsibilities of the third party verifier include 1) reviewing applications and
screening applicants; 2) making determinations on emission reduction potential and which engines
the technologies can be used with; and 3) overseeing the in-use testing program.
A. Third Party Verification Structure
The workgroup recommends that the third party verifier be comprised of three groups: 1)
an administrative group; 2) a voting review committee; and 3) a non-voting review group. In
addition, we recommend that EPA have oversight responsibilities in the program and veto power
on any decisions made in the retrofit program. The following sections describe the roles of each
of the three groups. The decision making processes in the third party verification system are
illustrated in the flowchart on page 13. Arrows indicate how information will be exchanged
between EPA, the administrative group, and the review committee. Dotted lines indicate points
in the third party review process where information on decisions or testing data is sent to EPA,
but no response is needed in order for further decisions to be made.
1. The Administrative Group
The administrative would oversee the retrofit program, interact with applicants and
participants, organize the review committees (both voting and non-voting), and communicate
with EPA. The workgroup recommends that Environment Canada's Emissions Research and
Measurement Division (ERMD) assume the responsibilities of the administrative body. ERMD
has agreed to do so and will devote two full time staff members to the retrofit program once it is
established. Environment Canada already has an environmental technology verification program
which will assist the ERMD in its efforts to set up the retrofit verification system. In addition,
ERMD has conducted extensive testing of retrofitted heavy-duty diesel vehicles and has much
experience with both heavy-duty engine and emission control technology. This experience
provides the Division staff with valuable insights that will be needed in the administration of the
voluntary program.
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2. The Review Committee
The committee would analyze data submitted to the program administrator and have
decision making authority on issues such as the level of in-use testing required (within the
guidelines set out in this document) and types of engines that the retrofit/rebuild equipment can
be used with. The committee could be comprised of five voluntary, temporary experts in the
field of in heavy-duty engines and retrofit technology. Eligible members could be, for example,
automotive engineers, laboratory personnel, and retired industry members (but not those
currently employed in the emission control equipment industry). The committee should make
decisions by a majority vote. At any time, a member of this group may raise an objection about
any matter related to the voluntary retrofit program by sending a letter to EPA. EPA may elect
to follow up on the objection by investigating the matter further.
3. Non-Voting Review Committee
In addition to the voting review committee, a non-voting review group should be
established by the administrator. This group should also consist of volunteers with knowledge of
heavy-duty engines and retrofit equipment. State air pollution control program staff and
industry members could comprise this group which could be made up of up to ten or twenty
people. The group should have access to all of the data which the review committee analyzes.
At any time, a member of this group may raise an objection about any matter regarding the
voluntary retrofit program by sending a letter to EPA. These objections and/or comments should
be made accessible to the public. EPA may elect to follow up on the objection by investigating
the matter further.
4. EPA Role
The workgroup recommends that EPA provide oversight to the retrofit program. The
Agency should have access to all data included in application packages, in-use testing data, and
any other data submitted to the administrator. We recommend the following: 1) although EPA
would not vote on a regular basis as part of the review committee, it will be a member of the
voting group; 2) when EPA votes, its vote should count as six votes, i.e. if EPA decides to
become involved on an issue, EPA would have the final decision on that issue; and 3) EPA may
occasionally step in where needed, for example, if an audit of a testing lab is deemed necessary.
In addition, the workgroup recommends that any member of the review committee can
submit an appeal to the committee and/or EPA at any time regarding any aspect of the approval
process. In other words, if a problem becomes apparent on a previously approved product or
procedure, there will be an avenue to bring this to public scrutiny.
Last, the final decision to grant SIP credits to states for retrofit projects will rest with the
EPA regional authorities.
12
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B. Role of Third Party Verifier
1. Review of Applications and Screening Applicants (administrative group)
The first step in the application process will be for the applicant to submit a one page
summary of the technology and testing procedure to the administrator prior to and/or prior to
conducting testing. The summary will be reviewed by the group specifically to determine if
special approval needs to be made for alternative testing procedures (see Chapter III, section A
for a description of accepted testing procedures). The administrative group will review this
summary in a timely manner and give comments to the submitting company.
Second, the administrator will receive and review all applications which will include 1)
engine or chassis dynamometer testing data, 2) an engineering analysis which makes
recommendations on the engine families the control equipment can be used with, and 3) an
application form. The administrator will review the material for completeness and pass the data
on to the review committee and to EPA by print or electronic format. The review committee and
administrator will attempt to complete their reviews within 60 days.
2. Review Committee Decisions
The review committee will make five different types of decisions for all emission control
equipment products: 1) which "path" the control equipment falls into; 2) which engines the
control equipment can be used with; 3) what percent reductions can be claimed by states when
they use the retrofit equipment in pre-determined engine families; 4) acceptability of the in-use
testing method as proposed by the emission control equipment manufacturer; and last 5) a
determination as to whether the in-use testing requirement has been fulfilled for the program.
a. Path Determination
The committee will review information on a given product and will designate it as
belonging in one of three "paths" or groupings in the retrofit program. The products will be
designated as belonging to one of the three paths according to how well established the
technology is and the available performance history for the product. The first path is reserved
for Urban Bus Program certified products and these products are exempt from an initial review
by the committee, except in certain instances as described in the next paragraph. Therefore, some
products certified with the Urban Bus Program will not be reviewed by the third party verifier in
order to establish percent reductions or the types of engines the products can be used with.
The second path is reserved for technologies not certified with the Urban Bus Program
which have an established performance history (such as oxidation catalysts not certified with the
Urban Bus Program and fuel borne catalysts registered with EPA). The third path is for
technologies which are new and innovative and for which little field experience exists, such as
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particulate filters and mobile source selective catalytic reduction. The purpose of placing a
technology or product into one of the three paths is to designate different levels of in-use testing.
Technologies for which little field experience exists will require in-use testing to begin sooner than
for more established technologies to guard against a possible shortfall of credits that could occur
if new technologies are less effective in reducing emissions than anticipated.
As mentioned previously, path one technologies will be treated as path two in some
instances. For example, if manufacturers of Urban Bus Program certified rebuild kits opt to
establish that kits can be used in different engines than they are certified for, testing data and/or
an engineering analysis to demonstrate the applicability to the different engines will need to be
submitted to the third party verifier. In this case a review of the testing data and the engineering
analysis will need to be conducted by the third party verifier before information on the product
can be made available to states through the voluntary program. Furthermore, a manufacturer may
wish to demonstrate higher emission reduction levels than the different values recommended in
this report. For example, if a manufacturer has data showing that an oxidation catalyst certified
with the Urban Bus Program can achieve a 30 percent PM reduction in certain engines, that
manufacturer may want the product to be listed with the voluntary program at the higher PM
reduction level. Again, data to substantiate this will be required as well as a review by the third
party verifier. In this case, it may be possible to apply for additional credit retroactively for up
to five years.
b. Engineering Analysis Demonstrating Applicability
to Engine Families
The retrofit device manufacturer will submit to the administrator an engineering analysis
conducted either in-house or by an outside group. The analysis will use sound engineering and
judgment to determine what engine families the retrofit/rebuild equipment can be used in.
Particulate matter composition soluble organic fraction estimates, exhaust temperature, duty
cycle and other operating conditions will be considered in the engineering argument. Relational
data may be used with logical and reasonable assumptions. The committee will review the
engineering analysis to determine which engine families the control equipment can be used with.
In reviewing the submission, the review committee will use good engineering and scientific
judgment and analyze all submitted data on a given product to make its determination. The
review committee will document each decision and submit records to the administrator so that the
analysis can be justified if EPA opts to review the committee decision.
c. Percent Reductions
The emission control equipment manufacturer will supply either engine or chassis
dynamometer testing data to support emission reduction claims for a given product. The percent
reduction levels will be established by calculating the difference between baseline or engine out
emissions and post-baseline (or post retrofit) emissions. For example, post-baseline PM
15
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emissions in gr/bhp-hr of .2 would be divided by baseline PM emissions of .3. This figure would
then be subtracted from one to arrive at the percent reduction. The committee will review all data
generated by the applicant to determine the amount of credit that can be claimed by states or
others that retrofit heavy-duty engines with the applicant's product. The data to be generated is
specified in Section III. A. The committee will chose conservative percent reductions for PM,
CO, HC, and NOx (if applicable) after reviewing all of the submitted data.
d. Overseeing In-use Testing
The committee will review the spot test method proposed by the emission control
equipment manufacturer. If it is approved, the manufacturer will use this method in the field to
test the emission control equipment (in-use testing described in Section III.B.3). The
manufacturer will not be required to have the spot check method developed at the time of the
submission of the application materials. Rather, the method must be approved by the time spot
testing is triggered. The manufacturer will also propose a method for dynamometer testing
should it be triggered.
Once spot testing has been triggered, emission control equipment manufacturers will begin
testing units in the field. All of the data from spot testing will be sent to the administrator and to
the review committee. The committee will be responsible for making a final decision on whether
or not the percent passing rate has been achieved. If the spot testing rate is not achieved the
review committee will decide if dynamometer testing should begin. This decision will be made in
conjunction with the administrator and the emission control equipment manufacturer. In some
cases, further spot testing may be done before dynamometer testing begins.
e. Determination of Compliance with In-use Testing Requirement
The committee will review all of the spot testing (and possibly dynamometer testing)
data to determine if the required number of units have been tested in the field and if the necessary
passing rate has been achieved. If the data shows that this rate has been achieved then the review
committee will notify the emission control equipment manufacturer that the in-use testing
requirement has been satisfied for a given product.
f Test for Additional Credit Beyond that Established
as a Minimum
States and emission control equipment manufacturers may want to conduct additional
testing to establish greater reductions from retrofit projects than the default values previously
recommended. This may occur in two cases. First, emission control manufacturers could
conduct testing to establish that control equipment achieves higher than default reductions. For
example, oxidation catalysts certified with the Urban Bus Program will receive a 20 percent PM
reduction credit automatically. If an emission control equipment manufacturer wants to establish
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that a given technology can achieve a greater percent reduction, they will provide additional data
to the third party verifier and verified information will be posted on the retrofit website. Testing
data will need to be collected either using chassis or engine dynamometer methods.
In a second case, states may want to conduct testing to show that baseline emissions are
higher than are assumed in the SIP credit calculation. Since the credit calculation is based upon
certification testing data and could be different than emissions in-use, state testing of fleet
vehicles could determine a higher mass baseline emission rate. Applying emission reduction
percentages to this higher baseline rate will result in a greater mass emissions reduction. Testing
to determine higher baseline emissions will need to be conducted in-use.
De-certification
The emission control equipment being used as part of this voluntary program may be de-
certified or de-listed as is the case in the Urban Bus Program if: 1) the technology becomes de-
certified under the Urban Bus Program (as described in 40 CFR 85.1413); 2) use of the certified
equipment is causing engine emissions to exceed emission requirements for any regulated
pollutant; 3) use of the certified equipment causes or contributes to an unreasonable risk to
public health, welfare or safety or severely degrades drivability operation or function; 4) in-use
testing requirements and subsequent dynamometer testing indicates the technology is not
performing as approved; or 5) a manufacturer opts out of the program.
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III. Testing Requirements
This section describes workgroup recommendations on the testing requirements for both
technology verification and in-use testing. In addition, the types of testing data that are
recommended for submission to the third party verifier are also detailed. Table III-l summarizes
the requirements and sales volume triggers.
A. Establishing Emission Reduction Potential (verification data)
1. Default Test Procedure for Verification
The testing data requirements for all technology verifications will be equivalent to that
which is specified for the federal Urban Bus Retrofit/Rebuild program as described in CFR part
85.1406. As with the federal urban bus retrofit program the accepted test method will be the
Federal Test Procedure (FTP). Any applicant submitting data generated using the FTP test will
not need prior approval from the review committee of the testing procedure. The applicant will
follow the data generation requirements as outlined in part 85.1406.
If it is not appropriate to use the FTP cycle or if a technology developer wants to
generate data using a test cycle that is different from the FTP, then the workgroup recommends
the use of: 1) test methods recommended by EPA, such as the 8-mode cycle for verification of a
technology with nonroad engines; 2) test methods recommended by CARB; 3) the Central
Business District cycle (CBD) or the New York Bus Composite Cycle (NYBCC) for chassis
dynamometer testing.
2. Possible Alternative Testing Cycles
If a technology developer has already generated data using a cycle that is not included as a
default testing method then the cycle will need to be reviewed by the administrative group and
the review committee. Such cycles could include, for example, the R49. In such a case the 60
day review period limit will not be valid.
B. In-use testing requirements
Once a pre-determined number of retrofit/rebuild kits have been installed in heavy-duty
engines, a sales volume trigger will require emission control equipment manufacturers to begin
testing units in the field to ensure they are working properly. Table III-l describes the volume
triggers that apply to different types of retrofit/rebuild equipment. The equipment will first be
"spot-checked" using cost effective methods to determine if emission reductions are being
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achieved. For example, a potential method for testing CO emissions reductions resulting
oxidation catalysts in-use could be to use an electrochemical portable analyzer with probes
inserted both upstream and downstream of the oxidation catalyst. The engine could be loaded
using a brake stall test, a rolling acceleration, or by driving the vehicle on a normal operating
route. Another potential in-use testing method could be to measure hydrocarbon emissions with
a flame ionizer detector (FID).
Other in-use testing methods will need to be devised for technologies such as rebuild kits
and fuel borne catalysts. Manufacturers of such types of emission control equipment may need
to pick a number of vehicles that are candidates for engine rebuild or additive use (for example)
and designate those engines for baseline testing before the retrofit/rebuild and then again after
retrofit/rebuild to measure post-baseline emissions. In these cases, issues such as engine drift or
the change in baseline emissions that can occur over time will need to be addressed.
Engines to be spot-checked will be determined by (to the extent possible) a random
process. The results will be submitted to the review committee. Should EPA determine strong
bias in testing, EPA may require corrective action, i.e. additional spot-checks of non-represented
engines. A random sample should include a mix of end-user entities as well as mileage/usage
accumulations.
1. Spot-Testing Overview
The Workgroup recommends that the in-use testing requirements be modeled after EPA's
mandatory requirements for in-use testing of marine pleasure craft engines. For each product
(emission control equipment product) once the number of units in the field have reached a certain
sales volume trigger (as outlined in Table 2) field testing of the product will begin. After the pre-
determined number of units have been put in service, four units must be field tested in-use at a
mileage or hours accumulation of over half of the manufacturer's designated useful life. The
following sequence would then occur:
If testing is successful (i.e. all units pass) then in-use testing ceases;
If testing is unsuccessful and the cause can be attributed to the product and not to
maintenance or other engine related problems, then for each failed unit, two or more units
would be evaluated up to a maximum often. If the failure is engine or maintenance related,
then the manufacturer could re-test on another vehicle.
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For example,
1) if one of four units fails, two more units must be evaluated. If both of these units
pass, then testing would be considered successful (>70% success rate) and in-use
testing ceases;
2) if both of these units fail, four more units would have to be field tested and all four
units would have to pass in order to meet the 70 percent requirement for in-use
testing to cease. If any of the units fail, then the review committee would recommend
dynamometer testing because the 70 percent success rate had not been achieved and a
total often units have been tested which is the maximum limit (according to the
marine rule). The manufacturer may have the option to request to extend the in-use
testing program in order to achieve a 70 percent success rate in lieu of dynamometer
testing. The review committee would be left to determine at what point during the
extension, dynamometer testing should be performed. If the manufacturer
demonstrates a 70 percent success rate during the extension, in-use testing would
cease.
3) If one of the two additional units fail (<70 percent success rate), two more units
would be tested.
4) If both of these units pass (>70 percent success rate), testing is considered successful
and in-use testing ceases.
5) If both fail (<70 percent success rate), dynamometer testing would be recommended
because a 70 percent success rate could not be achieved with in-use testing limited to
ten units. Again, the manufacturer would have the option to request an extension to
the in-use testing program.
The above is just one example. Consider the case where two of the initial four units
failed. This would mean that all ten units would have to be evaluated in order to achieve the
seventy percent criteria and only one additional failure would be allowed. In the event that three
of the initial units failed, the seventy percent criteria could only be achieved by testing all ten
units with no additional failures. If all four failed, the seventy percent criteria could not be
achieved and dynamometer testing would be recommended with the option for the manufacturer
to request an extension.
In the event of a failure on dynamometer testing, EPA would automatically be notified.
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2. Dynamometer Testing
In addition to a "spot check" method such as using an electrochemical portable analyzer,
a more comprehensive testing method needs to be developed by the product manufacturer in the
case of dynamometer testing. For example if an oxidation catalyst fails spot tests and must then
be tested in dynamometer tests, then a potential testing method would be to remove the catalyst
and attach it to a "slave" engine in a testing lab. Another possibility could be to test on a mobile
chassis dynamometer. As in the case of verification testing, the third party verifier will
automatically approve of a method that uses either the FTP or other EPA approved test cycles,
CARB approved test cycles, the CBD, and the NYBC cycles. Alternative cycles may be used,
but must first be approved of by the review committee. A pass rate of 66.7% must be
established or credit will be revoked. The manufacturer may conduct as many tests as are
necessary to achieve this percent pass rate.
3. Backpressure Measurement
In addition to emissions testing, backpressure measurements will be taken during field
testing to ensure that retrofit equipment is not increasing backpressure beyond manufacturer
specifications in retrofitted engines.
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Table III-l
Detail of Requirements for Retrofit Technologies
PATH
Path
Description
Example
Technologies
I
Urban Bus certified retrofit/rebuild
kits
Technologies certified with the
Urban Bus Program in the future will
be included.
Current Urban Bus certified
technologies
n
Technology is in widespread use;
demonstrated in-use durability
experience; good knowledge of
emission reduction
mechanism/reduction potentials
Non-urban bus certified catalysts,
registered fuel borne catalysts
m
New technology, little experience or use.
Little in -use/durability experience.
Little knowledge of emission reduction
mechanism/reduction potentials
Selective catalytic reduction
Pre-Credit Requirements
Certification
Engine
Family
Spot Check
Urban Bus certified product,
Requirements already completed
Use of oxidation catalysts
automatically approved for all
heavy-duty engines; for engine
specific technologies only specified
engines are approved; all others must
be supported by engineering analysis
and approved by review committee.
Develop accepted spot-check
procedure before 500 units are in the
field
FTP dynomometer testing by a
recognized lab, or other pertinent
data; applicability analysis,
durability analysis
Engine family recommendation by
review committee
Develop accepted spot-check
procedure
FTP dynomometer testing by a recognized
lab, applicability analysis, durability
analysis
Engine family recommendation by
review committee
Develop accepted spot-check procedure
Information Posted on Retrofit Website
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Table III-1 (continued)
Detail of Requirements for Retrofit Technologies
PATH || i || n I m
Post-Credit Requirements
Number of
Units in Use by
Manufacturer
Less than 100
Units
101-1,000
Units
1001+ Units
10,000 plus
units
In-use
Verification
Requirements
Performance
review by
review
committee
Confirmation
of performance
review by
review
committee,
results
submitted to
EPA
In-use Testing
Requirements
spot testing
begins
In-use
Verification
Requirements
Performance
review by
review
committee
Confirmation of
performance
review by
review
committee,
results submitted
to EPA
In-use Testing
Requirements
spot testing
begins
In-use Verification
Requirements
Performance review
by review
committee
Confirmation of
performance review
by review
committee, results
submitted to EPA
In-use Testing
Requirements
spot testing begins
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IV. Protocol for Calculating SIP Credits
In this chapter, methods for calculating SIP credits from retrofit projects are
described. The SIP credit calculations requires that baseline emission rates be established
and emission control equipment reductions be applied to those baseline rates. In addition
to baseline emission factors and percent reduction levels other information will be
necessary in order for states to complete the SIP credit calculations. Details of this
information and where it can be obtained are described in this chapter. The chapter has
four sections:
1) Section A describes a retrofit website to assist states in SIP credit calculations;
2) Section B provides an overview of the SIP credit calculation procedure;
3) Section C proposes baseline and post-baseline emission factors;
4) Section D identifies three formulas for SIP credit calculation;
A. Retrofit Program Information/Website
The workgroup recommends that a retrofit website be developed which will
provide much of the information needed to complete SIP credit calculations from retrofit
projects. It is recommended that EPA maintain this website and develop links to EPA
databases containing heavy-duty engine emissions factors, brake specific fuel
consumption, and other information needed for the calculation of SIP credits resulting
from heavy-duty retrofit projects. All of the information to be included on the website is
detailed below.
Retrofit products verified through the voluntary program
The website should include a list of the products certified with the Urban Bus
Program and all of those "verified" by the third party system proposed in this report.
For each product listed on the website, the manufacturer name and contact information
should be included. For products which are verified by Environment Canada and the
review committee, as proposed in this report, information on retrofit/rebuild products
should be posted on the website after the review committee has completed its analysis
and approval of the manufacturer's application. The site will need to be updated
periodically to include newly verified products. In addition to products which are
approved by the Urban Bus Program and by the proposed third party verification system
another avenue for inclusion in the program may be possible in the future. Currently,
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several technology verification programs exist that are organized by states, such as the
Massachusetts "STEP" program, or by professional organizations such as the Civil
Engineering Research Foundation. In the future, the proposed third party verifier may
sign reciprocity agreements with other certification/verification programs. If this is the
case, all of the products made available through the reciprocity agreement/s should be
posted on the retrofit website. Specifically, the product name, manufacturer, contact
person and telephone number, and technology type should be listed.
A list of engines which can be retrofitted with verified products
In addition to information on verified retrofit products, engine models which the
emission control equipment may be used with will be posted on the website. As
mentioned in previous sections, these engine families will be determined through an
engineering analysis conducted either by the emission control equipment manufacturer or
by a contractor hired by the manufacturer. The analysis will be reviewed by the third
party verifier and, if approved, information on the engines which can be retrofitted with a
given product will be posted on the retrofit website. In some cases, this information may
simply indicate that a product is available for use with any highway heavy-duty engine.
For example, oxidation catalysts currently certified with the Urban Bus Program would be
in this category of control equipment. Other products may be listed for use with a few
specific engine models. This would be the case with rebuild kits which are manufactured
for certain engines.
Percent reductions for each product
As with applicable engines, approved emission reduction percentages for each
product will be included in the website. As mentioned previously, data supporting the
percent reductions will be gathered during engine dynamometer or chassis dynamometer
testing and be presented to the third party verifier. Once the reductions are approved by
the third party verifier they will be posted on the retrofit website. For instance, if a
product is verified to reduce PM by 20 percent in all heavy-duty highway engines then
the 20 percent reduction figure should be listed next to the product and applicable
engines. In some cases, a product may be verified to reduce PM by 20 percent (for
example) in one engine family and 27 percent in another engine family. If so, then the
website will indicate the different levels of reductions that can be achieved in the various
engines. While the above example mentions PM emissions, the same level of detail for
percent reductions will be provided for all pollutants.
To the extent possible, each product should have the percent reductions listed in a
way that makes it easy for the website user to compare different reductions for various
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products. In this way the user can choose the equipment which will result in the highest
pollution reduction for the fleet to be retrofitted.
The information for engine families, applicable retrofit products, and percent
reductions may be organized in a table similar to the one found on the next page. The
table provides an idea as to the types of information that will be posted on the website
but does not necessarily represent the most efficient method of presenting the
information. For example, it may prove easier to use the table if the data is organized by
engine family rather than retrofit product.
Other information
In order to complete SIP credit calculations, states will need to have access in
some cases to fuel sulfur adjustment factors, factors to convert between gr/bhp-hr to
grams per mile, fuel density, a conversion factor for grams to tons, and average load
factors. The purpose of these data will be described in Section D.
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Sample Retrofit Website Product and Engine Information Table
Manufacturer
Cummins
Detroit Diesel
Engine Control
Systems
Engelhard
Johnson &
Matthey
Nelson Industries
Product/
Technology
Rebuild kit
Rebuild kit
OCM catalytic
converter
CMX-5
catalytic
converter
CEM catalytic
converter
exhaust
catalyst
Engine
Applications12
Cummins L-10
DD 6V92 TA
MUI
all heavy duty
diesel engines.
same as above
same as above
same as above
PM percent
reduction
20%
20%
25%
25%
25%
25%
CO percent
reduction
n/a
n/a
40%
40%
40%
40%
NOx percent
reduction
N/a
N/a
N/a
N/a
N/a
N/a
HC percent
reduction
n/a
n/a
50%
50%
50%
50%
: In this table engine models are listed. Conversely, on the retrofit website engine families will be listed.
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Website Design
In the following sections, methods for calculating mass emission reductions from retrofit
projects are described. Ideally, once the retrofit website is established, states will be able to
calculate these reductions on the site by using interactive forms. The purpose of developing the
interactive pages of the website is to create a "user friendly" system that states will be able to
use to estimate emission reductions from retrofit projects. An interactive format would provide
menus of options, list the order in which information should be input, and allow for the inclusion
of data found in EPA databases. The interactive site will allow the user to calculate SIP credits
on the website forms.
Several features will need to be developed for the website in order to create this "user
friendly" system. First, the workgroup recommends that EPA link databases containing
certification data on pollutant levels for engine families. If this is done, the website user will not
need to research baseline emission rates but rather will have the information readily available.
Once the baseline emission rates are established for individual engine families in a fleet the
percent reductions for retrofit products (found in another table in the retrofit website) will then
be applied to the baseline emission rates. Other information needed to complete calculations
such as fuel sulfur adjustment factors should be automatically linked to engines certified in years
prior to the introduction of low sulfur diesel. Average load factors and tables of conversion
factors should be made available to the user through menus of options. A means for easily
incorporating data selected in linked files should be developed. For example, double clicking on
the data could automatically incorporate it into credit calculations.
In the next sections the calculation procedure to be used to calculate SIP credits is
presented. Section B provides an overview of the protocol and Section C details the specific
formulas and their explanations.
B. SIP Credit Calculation Procedure
The general procedure for calculating SIP credits from retrofit projects will be as follows:
1) Establish baseline emission factors for PM, HC, CO, and NOx (if applicable) for each
engine family in a fleet to be retrofitted;
2) Multiply the emission reduction percentages (as recommended in this document or as
established by the third party verifier) for the control equipment that will be retrofitted
onto fleet heavy-duty diesel engines to the baseline emission levels for those engines;
3) Convert the mass emission reduction level from gr/bhp-hr to one that can be applied to
hours of operation, fuel consumption, or miles traveled;
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4) Multiply the mass emission reduction level by the usage factor (miles to be traveled,
remaining usage hours, or fuel to be consumed) to obtain total emission reductions for the
engine families;
5) Multiply this figure by the fraction of usage that will occur within the state;
6) Repeat this process for all pollutants and all engine families in the fleet;
7) Add the mass emission reductions for different engine families together for each pollutant
to arrive at total mass emissions reductions for the retrofit project.
In the following sections the information and the formulas needed to calculate the SIP credits
are detailed.
C. Baseline and Post Baseline Emission Rates
The first step in calculating SIP credits from retrofit projects will be establishing baseline
emission levels for engines that will be retrofitted. Since in-use data for a wide variety of engines
is not available, the workgroup recommends that data for heavy-duty engine families generated
during Federal Test Procedure (FTP) certification tests be used as default baseline emission levels
for retrofitted heavy-duty engines. Use of this data will provide emission factors for specific
engine families. The data will not account for emissions deterioration that may occur over time
and thus the baseline emissions levels will be conservative.
The workgroup recommendation is based on the assumption that establishing emissions
for engines through in-use testing is too expensive to be practical. States may opt, however, to
conduct emissions testing to establish baseline emissions rates for retrofitted heavy-duty engines.
In this case, the emission reduction credits that are generated from a retrofit project are likely to
be greater than if the default baseline levels are used due to the fact that in-use testing will
account for emissions deterioration which occurs from variable maintenance practices and engine
wear. The number of engines to be tested in order to establish the baseline levels will need to be
determined by states in coordination with EPA regional offices.
In some cases it may be appropriate for states or fleet operators to use baseline emission
factors that are available from in-use testing. For example, if emission factors are available on a
gram per gallon of fuel or gram per mile basis for engines that will be included in a retrofit project
then these emission factors could be used. These emission factors may be available from in-use
testing projects conducted by states, regional organizations, federal agencies, or testing
laboratories. For example, the federal Department of Transportation, state environmental
protection agencies, and Environment Canada have conducted extensive emissions testing of
urban buses. These data could be used for baseline emission rates in lieu of the data gathered
during FTP certification for the engines. For example, a municipality not required under the
Urban Bus Program to retrofit its urban bus fleet could retrofit its city buses and use existing in-
use baseline emissions levels. An advantage of using data gathered during chassis dynamometer
testing, as is the case with much of the available urban bus emissions data, is that it is expressed
in grams per mile units. These units allow for a more simplified calculation of emission
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reductions than does the use of certification data. This is because certification data needs to be
converted from gr/bhp-hr to gr/mi.
Other testing programs for marine engines, construction equipment, and heavy-duty
trucks could provide emission factors in grams per mile, grams per gallon of fuel, or grams per
hour which in some cases could be used for baseline emission factors. States should coordinate
with their regional EPA offices on the use of emissions factors developed through in-use testing.
In order to establish mass emission reductions from retrofit projects, the workgroup
recommends that baseline emission factors be multiplied by the percent reductions established
for each retrofit/rebuild product. These percent reductions must first be established through
emissions testing by an established laboratory and be approved by the third party verifier. The
multiplication of baseline emission rates by reduction percentages for each pollutant will yield a
mass reduction amount for each pollutant. For example, if a product is verified to reduce PM by
25 percent in a given engine and the baseline emission rate is .3 gr/bhp-hr, then the mass emission
reduction level will be .3 * .25 = .08 gr/bhp-hr. This calculation is detailed in Section D.
The next two sections discuss several methods for SIP credit calculation and present the
formulas needed to estimate mass emission reductions from retrofit/rebuild projects.
D. Methods for SIP Credit Calculation
The workgroup recommends that states use one of three methods to calculate SIP credits
that result from retrofit projects. The method used will depend on the type of equipment
retrofitted and the information available to the operator. The recommended method is to use fuel
consumption to calculate SIP credits. If fuel consumption data is not readily available then hours
of operation should be the second method used. Lastly, vehicle mileage can be used to determine
SIP credits. Providing the three possible methods for SIP credit calculation will allow for the
retrofitting of a variety of vehicles. For example, nonroad equipment often do not have
odometers, therefore fuel consumption and hours of use are the only methods to determine
emission reductions. Additionally, these two methods provide a more accurate estimate of
emission reductions than does the calculation involving mileage due to the difficulty in converting
from gr/brhp-hr to grams per mile. The three formulas for these calculations are detailed in the
next section.
E. Credit Calculation Formulas
This section details the credit calculation formulas that may be used to determine
emission reduction credits achieved from retrofit projects. The first formula calculates emissions
reductions using mileage data.
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1. Formula for calculating SIP credits using mileage data:
This formula requires a conversion from gr/bhp-hr to gr/mi. Information to be provided
by the fleet operator includes the number of vehicles to be retrofitted, the fuel consumption for
the vehicles, the model make and year of the engines, the fraction of miles traveled within the
state, remaining mileage in the fleet vehicles, and the fuel economy of the vehicles. Information
linked to the retrofit website will include baseline emissions data, brake specific fuel
consumption, fuel density, and the fuel sulfur factor for older engines.
MERCpollutant
(CL - FSAF) * % Reduction * CFbhp-hr/mile * Nvehicles * FM * FMWD * CFunits
The different components of the equation are described below:
CL = The original EPA new engine certification level (g/bhp-hr) of the engine family.
FSAF = The fuel sulfur adjustment factor (in g/bhp-hr). For some older engine families
certified with high sulfur fuel, this is the amount CL has already been reduced due
to the use of low sulfur fuel. For all pollutants except PM, FSF = 0.
Percent reduction =
This figure is the effectiveness of the retrofit equipment. For example, the percent
reductions will be 20% for particulates, 50% for hydrocarbons, and 40% for
carbon monoxide for oxidation catalysts. This value represents the effectiveness
of the retrofit equipment and is always expressed as a fractional reduction.
CFbhp-hr/mile =
This is the factor to use when converting form g/bhp-hr to g/mile. (Below a
description of the calculation is provided).
Nvehicles = The number of vehicles with the same emissions certification numbers.
FM = The remaining average vehicle(s) mileage. This value represents the
average expected vehicle life remaining until the fleet is retired or
overhauled, whichever occurs first. The value should be determined from
historical fleet records of similar vehicles in similar operations with
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similar histories. For example, if at the time the retrofit equipment is
installed, a municipal agency's records indicate that it operates 12 year old
sanitation trucks and that historically their sanitation trucks operate for 17
years then the remaining fleet mileage will be 5 years times the number of
miles traveled per year times the number of vehicles to be retrofitted in the
fleet.
FMWD = The fraction of mileage within the requesting district. This value is always
between 0 and 1.
CFunits = 1.1 * 10-6 tons/gram or .0000011 tons/gram. The appropriate conversion factor
that converts the calculated reductions from grams into tons.
Description of Conversion Calculations
Two additional calculations will need to be conducted in order to complete the above
formula. The first calculation adjusts for differing fuel sulfur levels used during engine
certification. The second formula is applicable only to the conversion of gr/bhp-hr to gr/mi when
mileage data is being used to calculate mass emission reductions.
Fuel Sulfur Adjustment
Engines originally certified prior to the 1994 model year may have been certified with fuel
which contains a higher sulfur content than currently available fuels. A heavy-duty diesel engine
currently being fueled with a lower sulfur fuel than the fuel with which it was originally certified,
may already be emitting significantly less PM than the original certification level documented. In
this case, the baseline PM emission level needs to be adjusted according to the fuel sulfur
adjustment factor. For HC, CO, or NOx the FSAF always equals zero because these pollutants
are not affected by the fuel sulfur level. PM emissions, however, are affected by fuel sulfur
levels and the adjustment is calculated as follows:
FSAF
where:
BSFCg/bhp-hr =
FSFcert
BSFCb/bhp-hr * .0917 * (FSFcert - FSF in-use)
The brake specific fuel consumption of the engine family in units of
g/bhp-hr.
The fuel sulfur fraction of the fuel used to certify the engine family.
Typical value = .002(.2%)
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FSFin-use = The fuel sulfur fraction of the fuel currently used with the fleet. Typical
value = .0005 (.05%).
Conversion calculation from gr/bhp-hr to gr/mi (CF bhp-hr/mile)
When the formula for calculating mass emission reductions using mileage data is used, a
conversion from gr/bhp-hr to gr/mi is needed. This conversion is described below.
CF bhp-hr/mi
fuel density/brake specific fuel consumption * (fuel economy*(mi/gallon))
These equations need to be calculated for each different engine family that comprise a
fleet. For example if there are three types of engine families in one fleet the calculation will need
to be done three times. In addition, the calculation must be done for each pollutant. The
resulting reductions (for all engine families in a fleet) are added together to obtain the total amount
of pollutant reductions that can be included as credit in a state SIP.
2. Formula for calculating emission reduction credits using fuel consumption
The formula that follows is similar to the one described above for calculating emissions
reductions using mileage data. Many of the terms in the following formula are the same as in the
mileage calculation formula. Readers should refer to the description of the terms above for
clarification. The formula for calculating credits using fuel consumption utilizes gallons of fuel
consumed for fleet vehicles. Fleet operators will need to know: the number of gallons of fuel
consumed by fleet vehicles (on a per engine family or model basis) per year; the number of years
the vehicles will be in operation; the number of gallons consumed within state; the model year
and make of engines; and the number of vehicles to be retrofitted. Information to be provided on
the retrofit website will include: baseline emissions factors in gr/bhp-hr; brake specific fuel
consumption; fuel density; and the fuel sulfur factor for older model years. The different
elements of the formula are described in the previous section with the exception of variables that
are described below.
MERCpollutant
(CL - FSAF) * % Reduction / BSFCg/ bhp-hr * FD * Nvehicles * FG * FGWD * CFunits
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Where FD is the fuel density and FG is the number of gallons expected to be consumed
during the vehicle life, and FGWD is the percent of gallons to be consumed in the state.
Fleet operators who use gallons of fuel consumed during the remaining useful life of the
vehicle to estimate emission reductions will not need to calculate the conversion from gr/bhp-hr
to gr/mi. This will greatly simplify the emission reduction credit calculation formula. In addition,
the uncertainty involved in converting to gr/mi will be eliminated, thus the above formula
provides a more accurate estimate of emission reductions than does using fleet mileage data. For
these reasons, the above formula is recommended for use in calculating emissions reductions from
retrofit projects. The exception to the above statements would occur if states used emission
factors (in gr/mi) developed during in-use chassis dynamometer testing. Using these emission
factors would allow for a simplified credit calculation using mileage data and would also avoid the
uncertainty involved in converting gr/bhp-hr to gr/mi.
The next formula requires that hours of operation be used to calculate emission reductions
from retrofit projects. Like the formula described above which uses fuel consumption to
calculate emission reductions, the formula described below avoids the conversion from gr/bhp-hr
to gr/mi. In addition, this formula is well suited to nonroad machines and equipment which often
do not have odometers.
3. Calculating SIP Credits using Hours of Use
The following formula can be used to calculate mass emissions reductions from hours of
operation data for fleet vehicles. The fleet operator will need to provide the following
information: number of vehicles to be retrofitted, hours of useful life left for each vehicle, model
year and make of engines, fraction of hours driven in-state. The retrofit website will provide
information on baseline emissions factors; average load factors; fuel density; and the fuel sulfur
adjustment factor for older model years.
MERCpollutant
(CL - FSAF) * % Reduction * ALF * Nvehicles * H * HWD * CFunits
In this equation ALF is the average load factor, H is the number of hours left to be
traveled by the fleet and HWD is the percent of those miles to be traveled in the state.
Summary
This chapter detailed three methods and three formulas for calculating mass emission
reductions that result from retrofit projects. Each of the formulas assumed that FTP
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certification data gathered in emissions testing of new engines would be used for baseline
emission factors. As mentioned in the chapter, other baseline emission factors could be used that
have been generated during in-use chassis dynamometer testing. If in-use data are used by states
for baseline emission factors, the above detailed formulas would not be appropriate for the
calculation of mass emission reduction levels that result from retrofit projects. States should
coordinate on the development of appropriate credit calculation formulas with their regional EPA
offices if in-use baseline emission factors are used.
In the next chapter, state policies to encourage and require the use of retrofit equipment in
highway and nonroad heavy-duty diesels are described.
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V. Model State Retrofit Policies
Chapter IV outlined how states could establish SIP credits for heavy-duty retrofit
projects. This chapter details ways in which states can develop and fund retrofit projects to
reduce heavy-duty engine emissions. It does not cover options for retrofitting federally owned
heavy-duty vehicles. Heavy-duty engines used in highway and nonroad applications are
extremely durable and new emission standards for engines are phased in over a relatively long
period.13 Given that diesel engines last up to 25 years in some cases, older, higher emitting
heavy-duty engines will be in service for the foreseeable future. Since pollutants from these
engines contribute to a host of air quality problems, state regulators are exploring near-term
options for reducing emissions from this sector. One of the most promising strategies is the use
of retrofit kits to upgrade the emissions control capabilities of older heavy-duty engines. This
chapter discusses a broad range of regulatory and market-based strategies to promote and
encourage the retrofit of heavy-duty engines.
The chapter is divided into three sections. Section A focuses on retrofit strategies for
highway vehicles, including mandatory and incentive programs for both public and private
vehicles. Section B describes retrofit strategies for nonroad vehicles. Because states are pre-
empted by the federal government from mandating the retrofit of nonroad engines, this section
focuses on fee mechanisms and other market-based strategies that can be used to encourage
retrofits. In sections A and B, three specific retrofit strategy examples are used to augment the
discussion by providing programmatic and technical details for retrofit of different types of
heavy-duty engines. Section C describes federal and state funding opportunities for retrofit
initiatives. The section also describes federal incentive programs (Voluntary Mobile Source
Emission Reduction Program and the Economic Incentives Program) allowing states to claim SIP
credits from retrofit projects.
A. Highway Vehicle Retrofit Programs
Heavy-duty trucks and buses are well suited for retrofit initiatives. This is the case
because: 1) highway heavy-duty trucks and buses must register with the state, and thus the size
and composition of this fleet is better known than that for the nonroad sector; 2) these vehicles
are predominantly fleet-based which lends to economies of scale for retrofit projects; and 3) state
13 New highway engine emission standards for NOx will be introduced in 2002 or 2004, and the PM
standard as proposed, will remain at the current level (.1 g/bhp-hr) until 2007. For nonroad engines,
phase in began in 1996 and will continue through 2008. Appendix B provides a table on phase-in of
standards for nonroad engines.
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and local governments own or contract with a relatively large number of vehicles and therefore are
positioned to affect successful programs.
A variety of factors need to be considered in developing effective retrofit strategies for
highway vehicles, including: fleet mileage, the number of vehicles participating in a retrofit
project, the duty cycle of these vehicles, current emission levels, and contractual arrangements
between state agencies and the fleet. Understanding these elements will help to determine the
type and quantity of pollutants to be reduced, the type of retrofit equipment to be used, and the
policy options to use for initiating a retrofit project. While mandatory retrofit programs for
highway heavy-duty vehicles are possible, programs targeting public fleets and/or voluntary
programs may be more viable in the near-term. Moreover, the experience gained through
implementing public fleet retrofit projects will provide regulators with information about the
appropriate application of these technologies with regard to private fleets. Sub-section 1
describes several policy options for encouraging or requiring the retrofit of state and local fleet
vehicles. A specific strategy analyzing technology and policy options for school buses is
included as an example of how to evaluate and structure an effective program for retrofitting
government owned or contracted fleets. Sub-section 2 discusses retrofit strategies and mandatory
programs for privately owned heavy-duty highway vehicles.
1. State Programs to Retrofit Publicly Owned Vehicles
Of the fleet vehicles on the road in the U.S. today, 25 percent are government owned or
operated.14 The percent is considerably larger if all of the vehicles that operate under government
contract for student transport, construction, waste hauling, and other purposes are included.
Consequently, state and municipal owned/operated vehicles provide important opportunities for
emission reducing retrofit projects. In this section, a number of policy options are presented for
decision makers to consider when initiating retrofit of state owned vehicles. This list is not
exhaustive but provides a starting point with which to consider initiating a retrofit project. States
have several options which fall generally into the following two categories: 1) adopting agency
policies on the retrofit of state fleet vehicles; and 2) passing laws or issuing executive orders
requiring retrofit of state fleet vehicles.
State agencies such as transportation, highway and sanitation departments have the
authority to retrofit all or some of the vehicles that they own. Many current retrofit projects
have been initiated by states and/or state agencies as a means to reduce emissions from diesels in
public fleets. Several mechanisms for both voluntary and mandatory introduction of retrofit
projects are discussed below.
1 Commercial Carrier Journal, August, 1996
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a. Transit Authorities
Transit buses, while relatively small in total numbers, represent an important target fleet
since these vehicles operate in the most heavily populated areas. Under EPA's Urban Bus
Retrofit Program, transit buses that operate in consolidated metropolitan statistical areas
(CMSAs) with populations of 750,000 or more are required to be retrofitted with advanced
emission control devices at the time of engine rebuild. Transit buses operating in CMSAs with
populations less than 750,000 are not covered by the federal urban bus retrofit requirements.
Transit authorities could retrofit urban buses not covered by the federal urban bus
program with technologies certified under this program to reduce diesel bus emissions. For
example, those cities that have populations less than 750,000 could opt to retrofit their urban
buses. Another approach would be to retrofit buses with technologies that achieve even greater
reductions than those certified with the Urban Bus Program. The New York Transit Authority
provides an example of such an effort in its program to retrofit fifty urban buses in Manhattan
with continuously regenerating particulate traps. The traps will reduce PM, HC, and CO
pollution up to 90 percent. The use of very low sulfur diesel is a key component of the project.
Project participants include the trap manufacturer, fuel suppliers, and the New York City Transit
Authority. Funding for the project is provided in part by the New York State Environmental
Bond Act discussed later in this chapter.
While the New York program does not involve the adoption of a specific retrofit policy
on the part of the Transit Authority, such a policy could be adopted. Precedents for this type of
policy exist in alternative fuel programs. For example, the New York City Department of
Transportation (DOT) provides a model in its policy to replace all of its 1,100 diesel powered
urban buses with CNG vehicles. Transit authorities could adopt similar policies on the retrofit or
rebuild of in-use heavy-duty diesels to low emission configurations.
b. Transportation, Sanitation, Highway, and Parks Departments
Transportation, highway, sanitation, and parks departments operate significant numbers
of heavy-duty trucks. These trucks are used to collect garbage, operate on public works projects,
and maintain public parks. These heavy-duty vehicles would be good candidates for retrofit
since the states and local governments have access to the vehicles and generally maintain them at
state or local facilities. Retrofitting could take place at the time of regularly scheduled
maintenance by mechanics on site. In addition, funding for the retrofits could come directly from
the departments that are initiating the retrofit projects or the departments/agencies could apply
for federal grants or state funds (see section C).
c. Airport, Port, and Bridge and Tunnel Authorities
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Authorities often operate heavy-duty vehicles which maintain roads, airport runways,
bridges, and other public facilities. These authorities could opt to retrofit all publicly owned
heavy-duty vehicles operating at the facilities. An example of such a program is the Manchester
Airport retrofit project. Manchester airport in New Hampshire is undergoing a major expansion
funded by an airport bond issue. As part of the expansion, all sixty of the airport's diesel
vehicles will be retrofitted with oxidation catalysts certified with the federal Urban Bus
Retrofit/Rebuild Program. Equipment to be retrofitted includes deicers, pavers, scrapers, and
dump trucks. In addition, specifications for future new diesel vehicle purchases may include
language requiring that oxidation catalysts be installed before delivery.
An example of an initiative to retrofit all public vehicles operating in school districts,
public works, sanitation, parks, and other state and local agencies is the New Jersey retrofit
program. In February of 1998, Governor Whitman issued an executive order establishing a
retrofit program for the states's entire public fleet of highway heavy-duty diesels. Up to 10,000
vehicles will be retrofitted with oxidation catalysts certified under the EPA Urban Bus Retrofit
Program. All government owned or operated diesel-powered trucks weighing over 18,000
pounds and built prior to 1994 are eligible to participate in the program. Diesel-powered buses
owned or operated by school districts are also eligible. Retrofitting will be conducted free of
charge to fleet operators. New Jersey estimates that 400 tons of VOC and 130 tons of PM will
be reduced annually when the program is fully implemented. NOx pollution will not be reduced
since oxidation catalysts do not reduce NOx.
The above described retrofit programs for state owned heavy-duty vehicles are voluntary.
Another means of achieving the retrofit of public fleet vehicles is to mandate the retrofit of state
and/or local vehicles by law or executive order.
d. Mandatory Retrofit of State Vehicles: Laws and Executive Orders
While the above described New Jersey executive order does not require the retrofit of all
public vehicles (state and local agency participation is voluntary) executive orders can establish
mandatory programs. Executive orders have been used in the Northeast states to require the use
of alternative fuel vehicles. In 1996, then Massachusetts governor, William Weld issued an order
requiring the Department of Procurement and General Services (DPGS) to purchase alternative
fuel vehicles in the following percentages:
1997-10% Alternative fuel
1998 - 15% Alternative fuel and 5% zero emission vehicles (ZEVs)
1999 - 25% Alternative fuel and 5% ZEVs
2000 - 50% Alternative fuel and 10% ZEVs
2001 - (and later) 75% Alternative fuel and 10% ZEVs.
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The Department of Environmental Protection and the Executive Office of Transportation
and Construction have the task of developing and implementing the plan to purchase the
minimum alternative fuel and ZEV vehicles. The Massachusetts initiative covers only the
purchase of new light-duty government vehicles, however similar executive orders could be issued
to require the retrofit of heavy-duty fleet vehicles.
Like the Massachusetts executive order, New York City's Local Law 6 mandates the
purchase of an increasing percentage of alternatively fueled vehicles every year. The law states
that in each year a progressively greater percentage of alternative fuel vehicles must be purchased
by city agencies. The law aims to replace the entire city fleet with alternative fuel vehicles over
the next ten years. A similar ordinance could be passed by New York or other cities requiring the
retrofit of all state or city owned heavy-duty vehicles.
(1) Structuring Mandatory Programs
A mandatory retrofit project of state owned vehicles might be structured in two phases.
In phase one, all state agencies would report back to the agency organizing the retrofit project on
the number of eligible vehicles for the program and provide information on the eligible vehicles
(engine model year, size, and mileage). In phase two, a schedule would be established requiring a
certain percentage of fleet vehicles to be retrofit in each year of the program. Another approach
to retrofitting public fleet vehicles would be to adopt a phase-in similar to the proposed New
Jersey program. In this initiative, emission control equipment manufacturers are required as part
of their contract with the state to develop an inventory of state fleet vehicles, contact fleet
operators, and arrange for the retrofitting to take place with oversight from state agencies.
Below, the first of the three example strategies, the retrofit of school buses, is presented.
Separate strategies are considered for gasoline and diesel-powered buses due to different available
technologies and funding options for the two types of vehicles. A market-based incentive
scheme involving the generation of NOx credits which can be sold to finance a retrofit project is
discussed. The purpose of the example strategies is to present a method to decide which vehicles
to retrofit and how to structure a program. As in the other examples in this chapter, evaluating
potential retrofit projects takes place in three steps:
1) Determine the contribution of the source to the emissions inventory;
2) Determine appropriate retrofit technologies and potential emissions reductions;
3) Determine retrofit policy based upon contractual arrangements, ownership, and
funding opportunities.
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Example Strategy: Retrofit of School Buses
Step One: Determine Contribution to Emissions Inventory
With over 500,000 vehicles in operation nationwide school buses comprise 82% of the
total bus fleet (see Figure 1). 15
Figure One: National Bus Population
d School Bus
^B Transit Bus
I 1 Intercity Bus
I 1 Other Bus
School buses tend to accumulate fewer miles annually then transit or inter-urban buses
but because of their substantial numbers the annual miles traveled by this fleet is significant.
Based upon TIUS data and vehicle registration figures in the eight states that comprise the
NESCAUM region, there are an estimated 62,000 school buses that travel a total of 682 million
miles annually. Emissions data gathered during in-use school bus testing provide a gram per mile
NOx emission rate and TIUS data provide an estimate of annual mileage traveled per bus. Using
these data, an approximate amount of pollution can be derived for the Northeast school bus fleet.
The following assumptions are made regarding school bus operation:
1) School buses drive 11,000 miles per year (TIUS data).
2) School buses emit 11 grams of NOx per mile (in use testing data).16
3) There are 62,000 buses in the region (TIUS data).
Given these assumptions, the total NOx emissions for all school buses in the NESCAUM
states equals 8,255 tons per year, a significant contributor to regional NOx pollution. In addition,
the region's diesel powered school buses emit a significant amount of PM.
is "J992 Truck Inventory and Use Survey" (TIUS) Census of Transportation, U.S. Department of Commerce.
16 Personal communication with Environment Canada and Southwest Research Institute staff.
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This pollution disproportionately impacts children who represent a particularly
vulnerable group with regard to the adverse effects of air pollution. Protecting school children
from bus emissions has become an even greater priority given that the EPA has labeled PM a
probable human carcinogen and CARB recently designated diesel particulate as a toxic air
contaminant. Further, the need to control school bus emissions is underscored by recent regional
monitoring data which indicate that levels of benzene, formaldehyde, acrolein, acetaldehyde, and
other toxic compounds are above ambient concentrations that present potential public health
concern. Mobile sources, including school buses, are thought to be large contributors to elevated
levels of ambient toxic compounds.
Because particulate exposure increases exponentially with proximity to the source,
reducing emissions in the vicinity of children provides critical public health benefits. For these
reasons, retrofitting in-use school buses with currently available PM, CO, and HC reducing
technologies such as oxidation catalysts and catalyzed particulate filters can be an important
strategy in minimizing harmful particulate and toxics exposure to children and pedestrians.
Furthermore, as compared to other types of heavy-duty vehicles (such as long haul trucks),
diesel powered school buses could produce greater amounts of PM due to their operation under
"stop and go" conditions which results in higher PM emissions on a gram per mile basis than
does a more steady state operation. Consequently for diesel buses, the installation of emission
control equipment to reduce PM should be a priority for retrofit programs.
Step Two: Evaluate Technology Options
Several retrofit technology options are available for school buses. The case study will be
split into two sections, the first dealing with gasoline vehicles and the second with diesel
powered vehicles.
Gasoline Powered School Buses
Approximately 44 percent of the NESCAUM school bus fleet is gasoline powered.
Options for retrofitting gasoline engines at this time are limited to three way catalysts (TWCs)
such as those used in passenger cars. TWCs reduce NOx, CO, and HC. Gasoline powered
heavy-duty engines have historically not been equipped with TWCs (like passenger cars) because
emissions standards for these engines have not been stringent enough to require the use of exhaust
emission controls. In addition, there has been a lack of federal pressure to reduce emissions from
these existing sources such as that provided for diesels through the Urban Bus Retrofit Program.
At the federal level, gasoline and diesel engines have historically been certified to the same
emissions standards. In California, however, CARB has established more stringent standards for
gasoline powered vehicles weighing less than 14,000 Ibs than for the same weight diesel powered
vehicles.17 EPA is considering promulgating separate standards for gasoline and diesel powered
17 CARB, The California Low-Emission Vehicle Regulations for Passenger Cars, Light-Duty
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heavy-duty engines because of the different potential reductions that can be achieved for diesel
and gasoline engines.18 The more stringent standards being considered by EPA are based, in part,
on the fact that TWCs can reduce NOx emissions in gasoline powered heavy-duty engines by
more than 80 percent. Existing gasoline engines retrofitted with TWCs could also achieve an 80
percent reduction in NOx emissions.
Diesel Powered School Buses
A retrofit strategy for diesel powered school buses would aim to reduce PM, HC, toxics,
and CO. Currently there are no commercially available technologies to reduce NOx from diesel
powered school buses. Commercially available retrofit devices and emerging technologies which
could in the near future reduce diesel school bus emissions are discussed below.
Oxidation catalysts can reduce particulate emissions by 25% and HC and CO emissions
by 50%-90%. Oxidation catalysts are commercially available at this time. Oxidation catalysts
are often installed like a standard muffler replacement on a vehicle and require no maintenance.
The installation process takes about one hour. The cost for oxidation catalysts ranges from $500
to $2,000 per unit.
Catalyzed particulate filters can reduce PM emissions by as much as 90 percent, and HC
and CO emissions 50 - 90 percent. While filters have been used widely in the mining and
materials handling sectors, they have not been used widely on highway diesel engines. There are
two types of particulate filters; passive and active. Passive filters can be installed on vehicles
which have high exhaust temperatures (380 degrees centigrade for 25 percent of the time). Most
school buses do not have exhaust temperatures that reach these levels. However, a program to
determine whether or not this is the case would need to be undertaken before deciding whether or
not to proceed with a filter retrofit project. The other type of particulate filter, active filters, do
not require high exhaust temperatures. The active particulate systems rely on electrical
regeneration of the filter each night and thus requires the availability of shore power. New active
filters are being designed so that only twenty minutes of regeneration will be needed for every
eight hours of operation. This will still require that a retrofitted bus be near an outlet once every
two days (depending upon usage) for 20 minutes. Filters currently cost up to $10,000, however,
economies of scale could reduce this cost to below $1,000.
Certain fuel additives have been shown to reduce NOx and PM emissions in heavy-duty
engines. Increasing the cetane number from 42 to 50 can achieve a 6 percent reduction in NOx
emissions, as well as an 8 percent reduction in PM. In addition, several additives are registered
with EPA that reduce heavy-duty diesel emissions. Another strategy, emulsion of diesel fuel,
has been shown to reduce NOx emissions 30 percent. The use of low sulfur fuel reduces
Trucks and Medium-Duty Vehicles, sections 1960.1,1956.8,1965, 2061, 2062 and
2101, title 13, California Code of Regulations, as of February 1, 1999
18 EPA, "Control of Emissions of Air Pollution from Highway Heavy-Duty Engines" Oct. 1997.
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particulate pollution from heavy-duty engines and enhances the performance capabilities of
oxidation catalysts and catalyzed filters.
Finally, other potential options for retrofitting diesel buses include selective catalytic
reduction and lean NOx catalysts. However, the application of SCR in mobile sources is very
new and thus there is a need for significant pilot program implementation before a large scale
retrofit is considered. Similarly, lean NOx catalysts are still in the development stage and pilot
programs for in-use vehicles are needed to evaluate the emission reduction potential of this
technology.
Step Three: Evaluate Policy and Funding Options
School districts either own or contract out the operation of their bus fleets. For school
buses that are operated by contractors, retrofit could be required as a condition of contract award.
For those buses operated by school districts, a retrofit policy could be adopted by the district.
Alternatively, legislation could be passed requiring the retrofit of all school buses in-state.
Awareness and concern about school bus emissions varies considerably among school
districts. Some cities such as Syracuse, NY and Erie, PA have funded the purchase of
compressed natural gas powered school buses in an effort to reduce student exposure to bus
emissions. More frequently, school districts have minimal budgets and do not place a high
priority on reducing school bus emissions. As a result, in most instances, funding for retrofit
projects will need to come from the state or federal government. The need for state and/or federal
funding is underscored by the existence of statutes which require school districts to be
compensated for complying with mandatory programs. For example, Proposition 2 1/2 in
Massachusetts requires that the Commonwealth of Massachusetts fund mandatory programs
imposed on municipalities. New Hampshire has similar legislation which reads:
"Any state agency, when administering federal mandates, shall not mandate or assign to
any political subdivision any new, expanded or modified programs or responsibilities additional
to the federal mandate in such a way as to necessitate additional local expenditures by the
political subdivision unless such programs or responsibilities are fully funded by the state or
unless such programs or responsibilities are approved for funding by a vote of the local legislative
body of the political subdivision" (Part 1, Article 28-a of the New Hampshire Constitution).
In the next section a market strategy for funding the retrofit of gasoline powered school
buses is discussed.
Market strategy for funding gasoline powered school bus retrofit
Since gasoline powered vehicles could be retrofitted with TWCs, it might be possible to
develop NOx credits from a gasoline powered school bus retrofit program. Due to the large
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number of gasoline school buses operating in the NESCAUM region, there is potential to
generate significant mobile source NOx emission reductions through such a retrofit initiative.
Table V-l shows the potential NOx benefits from the retrofit of gasoline powered school buses
in the region. Consideration needs to be given to the fact that gasoline powered school buses may
not operate during the entire ozone season. In order to properly estimate potential benefits of
this retrofit program, surveys of school bus activity during the summer months should be
undertaken.
Table V-1: Gasoline School Bus NOx Emissions (NESCAUM Region)
Number of
gasoline buses
(NESCAUM
region)
27,280
NOx
emissions g/mi
per bus
11 g/mi
NOx emissions
tons/year/bus19
.13 tons/yr
NOx emissions in tons/year for
the NESCAUM bus fleet
3,632 tons
Assuming a conservative NOx reduction rate of 80 percent, if the entire fleet of gasoline
powered buses in the region were retrofitted with oxidation catalysts, 2,900 tons of NOx could
be removed from the region's air each year. Over the life of the buses in the region (assuming
they operate for six years after being retrofitted) this would equal a total NOx emission reduction
of 17,433 tons.
Below, an analysis of the cost effectiveness of funding retrofits through NOx credit sales
is presented. First, the cost of retrofitting with TWCs must be estimated. TWCs can be
installed for approximately $500 per unit on most engine models. For some engine
configurations, the retrofit of existing engines with TWCs may also require changes to the fuel
system to ensure that the engines run at stoichiometry (balanced air/fuel ratio). These changes
would increase the cost of retrofitting from $500 to $1,500 per bus. Using these estimates, the
cost per ton of NOx reduced is calculated for the retrofit of gasoline school buses and is
presented in following table.
Table V-2: Cost Effectiveness of TWC NOx Credit Generation
Cost per bus retrofit
$500 (without fuel
system changes)
$1,500 (including fuel
system changes)
Tons of NOx reduced per
bus (over six years)
.62 tons
.62 tons
Cost per ton of NOx reduced
$806 per ton
$2,4 19 per ton
9 assumes each bus runs 4 hours per day, 180 days per year
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At $806 per ton, the retrofit of gasoline powered school buses represents a very cost-
effective NOx reduction strategy, especially compared to other mobile source options. This cost
falls within the EPA definition of "highly cost effective" (defined as $2,000 per ton) methods for
reducing NOx emissions under the 1998 Section 110 SIP call20 Where fuel system changes are
needed in addition to the catalyst, the cost-effectiveness is calculated at $2,419 per ton. In this
scenario, the cost per ton of NOx reduced is higher than the EPA definition of highly cost
effective and thus other options for reducing NOx could be more cost competitive. The above
calculations do not factor in reductions in HC that will be achieved through retrofitting school
buses with TWC. If these reductions are factored in, the overall cost-effectiveness of this
strategy should be even more favorable.
For gasoline powered vehicles, states could initiate a retrofit program which would
quantify NOx reductions for possible sale as mobile source emission reduction credits. In
addition to selling or trading NOx credits, federal and state funding such as CMAQ, bond
initiatives, and other sources could be used to fund a gasoline powered school bus retrofit project.
Given the lack of experience in retrofitting heavy-duty gasoline engines, a pilot program
should be undertaken before attempting to implement large-scale retrofit initiatives. A pilot
program would: (1) provide more reliable cost estimates for the retrofitting of gasoline school
bus engines with three way catalysts; (2) demonstrate the durability and acceptability of the
catalyst technology; and (3) verify the emission reductions that can be achieved and the
strategy's cost-effectiveness.
Funding options for diesel powered school buses
Currently available retrofit strategies for diesel school buses do not reduce NOx emissions
and thus there is little opportunity to pay for diesel vehicle retrofits through a sale of pollution
credits. However, such projects could be funded by CMAQ or other federal and/or state
mechanisms. The other options described later in this chapter such as bond issues, supplemental
environmental projects (SEP) funds, and dedicated funds could all be used to finance the retrofit
of diesel powered school buses in the region.
Summary
The retrofit of school buses offers several advantages over other fleets of heavy-duty
vehicles. First, retrofitting school buses would reduce direct exposure to children from heavy-
duty vehicle emissions. Second, the buses are publicly owned or operated thus simplifying
regulatory action to initiate a retrofit project for these vehicles. Third, the bus engines are similar
(approximately 4 models comprise the majority of the 600,000 vehicle engines nationwide). This
fact would simplify any large scale retrofit project. Fourth, the buses travel a substantial number
' PR Vol. 63 pp 57,355 - 57,538, October 27,1998.
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of miles and thus retrofitting would provide a significant environmental benefit. Such retrofit
projects would most likely have to be funded by state and/or federal funds.
2. Retrofit of Privately Owned Vehicles
This section discusses strategies for designing, funding, and implementing the retrofitting
of private fleet vehicles. The section focuses in part on the legal mechanisms that would be
needed and on mechanisms such as cap and trade programs to provide emissions reductions in
private fleets. Cap and trade and/or fee based programs would require emissions reductions from
fleets which could be complied with through the use of a variety of means, retrofitting being one
of these mechanisms.
The federal programs adopted to encourage the use of incentives to reduce mobile source
emissions (EIP and VMEP which are described in Section III) assume that states will provide
incentives for private fleet operators to reduce emissions from their vehicles. This section
discusses both incentives and mandatory programs that states can implement to reduce heavy-
duty engine emissions from private fleets. Under VMEP and EIP, the emission benefits from
both incentive and mandatory programs could be used for SIP credit purposes. The first section
provides a discussion of various incentives that can be provided to private fleets and the second
section describes mandatory programs.
a. Market Incentives
Traditional "command and control" approaches to regulating pollution yield emission
reductions at a direct financial cost to the regulated entity. Because companies are more
competitive when their costs are lower, they have a disincentive to reduce emissions. However,
if companies can realize financial benefits or competitive advantage from emission control
initiatives, they will have an economic incentive to pursue such reductions. The goal of market-
based programs is to provide the incentive to utilize pollution control systems and approaches.
From an economic standpoint, market approaches can "internalize" the cost of air pollution.
These approaches offer three primary advantages over traditional command and control
regulation by:
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1. providing an incentive for companies to achieve reductions in excess of the level required by
law or earlier than required;
2. increasing compliance flexibility for regulated entities: those that can make reductions cost-
effectively, do so; those for whom reductions are prohibitively expensive can turn to the
market rather than apply technology; and
3. creating financial value for additional emission reductions that will lead industry to find new
solutions to reducing its emissions.
Although considerable progress has been made in developing effective technologies to
reduce vehicle pollution, control programs have often fallen short of their full potential. This
failure is related to the fact that market signals tend not to reinforce regulations and often actually
work against these regulations. For the heavy-duty sector, regulators should examine
opportunities to use the market system to induce private and public entities to make
transportation choices that are aligned with other societal objectives, including healthful air
quality and energy efficiency and diversity. This approach is designed to incorporate the social
and environmental costs, currently borne by the general public, into business and government
decisions related to transportation.
To maximize the potential impact of incentive programs for heavy-duty vehicles, it is
important to understand the fundamental nature of this sector and how it differs from that for
light-duty vehicles. For example, since a large portion of the emissions from light-duty vehicles
arise from "discretionary" vehicle use, incentives for this sector may target reductions in vehicle
use by encouraging individual to either combine trips or pursue alternate, cleaner means of
transportation. In the case of heavy-duty vehicles operated almost exclusively for commercial
purposes, business-related incentives are already in place to encourage the efficient use of these
vehicles and typically have little to do with concerns about air quality. Because the number of
trips and mileage accumulated by the fleet represent a basic cost of doing business, companies
seek to minimize both in order to maximize their profits. Acknowledging this and other
differences provides for a more focused evaluation of market-based options for this sector.
(1) Preferential Parking
Parking incentives programs could be initiated by municipalities to provide "clean"
heavy-duty vehicles preferential access to the most conveniently located parking spaces. For
example, retrofitted vehicles could be given preferential parking on city streets, at airports and
other "traffic magnets." Preferential parking status could be triggered by an emissions level that
approaches that of CNG engines (for example). Vehicles meeting the criteria would be given
some form of identification for enforcement purposes. Because "time is money," the provision
of preferential parking to reduce travel and wait time could serve as a viable incentive for
companies to retrofit some segments of their fleets with emission control devices. The incentive
would obviously be greater for fleets comprised of local delivery vehicles.
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(2) "Green" Contracts
States and/or state agencies may require retrofitting of vehicles operating on public works
projects as a condition of contract award. This strategy is important since it greatly expands the
numbers of eligible vehicles working on public works projects that can be retrofitted, and it
allows for introduction of retrofit devices into private fleets. This approach will be detailed in
example strategy B. Another approach is to encourage retrofitting during the bidding process for
public works projects. For example, waste hauling, student transport, and street
repair/maintenance contracts are often awarded by states and/or municipalities to private fleets.
The heavy-duty vehicles in these fleets could be retrofitted with emission control equipment.
State and city contracts could include provisions awarding additional "points" on a bid by
companies that include retrofitted vehicles in their project fleets. Given the importance of
government contract work for many private fleets, properly constructed preferential contract
awards appear to represent a potentially strong incentive mechanism. Those companies whose
fleets are comprised partly or entirely of retrofitted vehicles would have an advantage over
companies with only conventional diesel vehicles not equipped with emission control devices.
(3) Differential Tolls
This approach is similar to congestion pricing programs that apply differential usage fees
for vehicles using roads, tunnels and bridges, depending on the time of travel. Higher fees are
charged during peak traffic hours, with a sequential reduction in the fee as congestion levels are
reduced. Under an emissions-based scheme, "clean" heavy-duty vehicles would pay lower tolls
than comparable higher emitting vehicles. A process would need to be designed to ensure that
only trucks with certified retrofit equipment receive a discount. Such a system would require
that electronic debit systems could "recognize" a retrofitted vehicle. This might require
significant changes be made to the toll collection system. Program implementation would require
up-front capital for public awareness, the development of fee structures and an enforcement
program. If fees for dirtier vehicles were increased, the program could be revenue neutral once
established.
Recently, congestion pricing has become a reality with the construction of new, private
toll roads with variable fees and the installation of electronic toll debit systems in several cities.
In New York City, for example, "EZ-Pass" is an automatic debit system used on the toll bridges
in the city. Recently, New York initiated a congestion pricing scheme on the Tappan Zee bridge
through the EZ-Pass system. During off peak times, trucks are being charged a lower fee to enter
the city than during peak times. This fee system could be revised to automatically charge a lower
rate to trucks that are retrofitted. The EZ Pass administration would need to keep records
indicating which EZ Pass holding trucks are retrofitted. In addition, a system of qualifying
emission control equipment would need to be developed. The third party verification process
described in Chapters I - IV of this document could be one option for the qualification of
emission control devices.
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(4) HOV Lane Use
High occupancy vehicle lanes are designated freeway lanes reserved for use by vehicles
with two or more passengers (buses/van/carpools), often only during peak commuting hours. In
some cities, natural gas vehicles are being given access to HOV lanes, regardless of the number of
passengers, as an incentive to purchase and use these vehicles. Heavy-duty vehicles retrofitted
with certified or verified emission control devices could also be given access to HOV lanes.
(5) State Tax Incentives for the Purchase of Retrofit Equipment
In some states, tax incentives have been established for fleet operators who purchase
alternative fuel vehicles. Similar incentives could be adopted for the purchase of retrofit devices.
A tax credit toward the purchase of a retrofit device would reduce the taxable income for the state
taxpayer equivalent to a portion or the full cost of the retrofit equipment. This measure would
provide an incentive to taxpayers to purchase retrofit devices which is not realized at the point of
purchase, but separately with submission of state income tax forms. Under this measure, the
potential savings are not reflected in the purchase price. As a state-wide program, individuals
and businesses who do not support retrofit of heavy-duty diesels will be subsidizing retrofit
device use through their taxes since the costs of such a measure would be in the reduction of the
tax base for the state. As with all state tax credits, the incentive would apply only to vehicles
registered in-state.
States could increase the benefit of the above described market mechanisms by offering
the incentives as a package. For example, the economic benefit gained from enjoying a lower toll
rate may be minimal compared to the cost of retrofitting a truck. However, the economic benefit
of variable toll rates, tax incentives, and preferential parking combined could more than
compensate a truck owner for the initial cost of a retrofit device.
(6) Emissions Budgets and Caps
This section describes the use of budgets and caps to achieve reductions in emissions
from projects or activities that employ heavy-duty vehicles. In a budget system, "target"
emission levels are established for regulated sources; incentives are offered to over-comply with
target levels and disincentives levied against those whose emissions exceed the target. Such
schemes are likely to be more cost-effective in the presence of a trading system. Emissions
trading among regulated entities encourages the most cost-effective solutions by enabling the
regulated community the option of purchasing credits to offset emissions from sources with
fewer or more expensive control options. The ability to generate, use and sell emission credits
provides the incentive for over-compliance through strategies such as engine retrofit. The
primary features of such a trading system include:
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clearly identified source category(ies);
a target emissions reduction goal for the affected sources over a prescribed time period;
an allocation system for the distribution of emissions allowances to the affected sources; and
a monitoring and "true-up" process.
Since the emissions budget approach provides certainty regarding the level of emissions
reductions from the targeted sources in a given time period, states are able to rely on emissions
budget programs as enforceable control measures in their SIPs. Examples of some possible
heavy-duty emissions budget strategies are discussed below.
As explained, market-based strategies are intended to provide an economic incentive to
implement control options capable of reducing emissions beyond required levels. Absent the
incentive, a less expensive control technology might be selected that nominally meets the
emissions limit but fails to achieve surplus reductions. The following examples highlight
programs that could be adopted to encourage the use of low emission engine and aftertreatment
technology.
(i) Example Emissions Budget Programs
As states begin to implement inspection and maintenance (I/M) programs for heavy-duty
trucks and buses, they might consider options designed to encourage the use of emission retrofit
technologies. One such option would be the establishment of a variable emission fee system
whereby, owners of vehicles not meeting the prescribed limit for a particular pollutant would
have to pay a fee and those with emissions significantly below the standard would receive a
rebate. To ensure the repair of gross emitters, a maximum emissions level would have to be
established.
One approach would involve a two-tiered emission standard concept. The primary
standard would represent the ultimate pass/fail level for NOx and PM emissions; any vehicle
failing this standard would have to have the engine repaired and re-tested. The secondary, more
stringent standard would be used to assess an incremental emission fee or rebate.
The above described program would depend upon the existence of state heavy-duty
vehicle periodic inspection programs for gaseous and particulate emissions. While such programs
are likely sometime in the future, states in the region are focused currently on developing smoke
inspection programs. A possible approach to establishing an inspection program for NOx, HC,
and CO could be to use existing water break dynomometers in heavy-duty repair facilities in
conjunction with the purchase of electrochemical and/or non-dispersive infrared detectors for
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NOx, CO, and HC emissions. Particulate emissions could be measured with a gravimetric
method. California has been directed by its legislature to explore options for heavy-duty vehicle
emissions testing. The results of the California study could provide states in the Northeast with
options for the development of gaseous inspection programs in the region.
The emissions fee approach could also be used in conjunction with the smoke opacity
testing programs being implemented in some states and considered in many others in the
Northeast and elsewhere. A roadside smoke testing program has the added advantage of covering
both in-state and out-of-state vehicles. This approach provides incentives for truck operators to
apply any number of control options to their vehicles to limit emissions. Alternatives may
include converting a portion of their fleet to cleaner fuels, the purchase of low emitting engines,
adding aftertreatment devices, or through improved vehicle maintenance practices. As in the
above described program to establish a variable fee system for paniculate emissions, this program
would establish an incremental emission fee or rebate for smoke emissions from heavy-duty
diesel vehicles.
For example, the smoke standards might be set at 40 percent opacity (primary) and 20
percent opacity (secondary). A vehicle emitting 60 percent opacity would fail the test and the
owner would be required to repair the emission failure. A truck with a PM measurement of 30
percent opacity would pass the primary standard, but would be assessed an emissions fee based
on the product of 10 percent opacity (difference between the measured emissions and the
secondary standard) and the number of miles traveled since the last inspection. A truck with a
PM measurement of 10 percent opacity would receive a rebate, based on the 10 percent emission
rate difference multiplied by the number of miles traveled since the last inspection. These
programs could cover both private and publicly owned vehicles. In this program standard
opacimeters being used at roadside heavy-duty vehicle inspection stations would be used as the
measurement technology. This option may be difficult to implement for several reasons (for
example, some states do not test vehicles which are emitting very low levels of smoke) but it
does provide an example of how an emissions budget approach could be taken.
b. Mandatory Retrofit Programs for Private Fleets
The above described programs are all market based incentives and thus private fleets
would not be required by law to participate. This section describes mandatory programs that
states may be able to initiate under the CAAA and state air pollution control laws. States are
pre-empted under Section 209 of the Clean Air Act Amendments from requiring controls of new
heavy-duty engine emissions. However, Section 209 provides states with the authority to
require controls for in-use heavy-duty vehicles. Under the Clean Air Act, states may be able to
undertake mandatory retrofit programs for in-use private fleet vehicles as long as the burden of
the program falls on vehicle owners, rather than engine manufacturers. However, there is no case
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law on this subject and thus a challenge to any mandatory program could constitute a test case.
State law must also provide the authority to require retrofit of heavy-duty vehicles.
States have authority to regulate pollution under state air pollution control laws which
derive from the police powers of the state to intervene in issues of health, safety, and welfare.
Some state air pollution control laws provide broad power to regulate sources which cause or
contribute to conditions of air pollution. States with broad power to regulate under the state air
pollution control laws have the authority to establish mandatory retrofit programs. States
without such broad authority may need additional legislative authority to establish a mandatory
fleet retrofit program. States may also have the authority to require the retrofit of heavy-duty
vehicles under state motor vehicle laws. Conversely, if a state mandatory retrofit program makes
registration contingent upon vehicle retrofit then research will be necessary to ensure that the
statute allows for such programs.
Several issues must be considered when states structure engine retrofit strategies for
private fleets of heavy-duty vehicles, including: environmental and public health goals; fleet
characterization; phase-in mechanisms; and compliance/enforcement approaches. Each of the
considerations is discussed in some detail below.
(1) Environmental and Public Health Goals
The size and nature of a heavy-duty engine retrofit program will largely be a function of
the pollutants targeted and the level of emission reductions desired. For this sector, the primary
concerns are NOx and particulate emissions. States in the Northeast and elsewhere will need to
identify new control options for ozone precursors as part of the SIP process related to the new
eight-hour NAAQS for this pollutant. One control option could be to reduce NOx emissions
from diesel generators using currently available SCR technology. There are hundreds of
generators located in the region which emit significant amounts of NOx. Similarly, NOx
reductions from a truck and bus retrofit might represent a viable ozone control strategy.
In addition to NOx control, achieving reductions in particulates is of interest both for
future attainment of the new fine particle NAAQS and to reduce direct exposure to the harmful
constituents in diesel exhaust. The first retrofit strategy detailed in this chapter (school buses)
would have as its main goal the reduction of children's direct exposure to PM and toxics. This
and other projects could be established to reduce urban residents' exposure to PM (like the
Urban Bus Program) and to address environmental justice concerns. Given that different retrofit
technologies target different pollutants, the goals of the retrofit program must be clearly
articulated.
(2) Fleet Characterization
As a first step in crafting appropriate regulations for this sector, states will need to
develop detailed profiles of privately owned fleets of trucks and buses. In many states, this
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represents a difficult challenge since departments of motor vehicles often do not collect and
report fleet information to the level of detail needed for this type of program. Fleet profiles are
critical for several reasons. First, they enable regulators to determine the breakdown of engine
models powering the fleet in order to assess the availability of appropriate retrofit kits. Second,
vehicles with newer and lower emitting engines may not need to be included if the incremental
reductions associated with the installation of retrofit technologies cannot be cost-effectively
achieved. Finally, the fleet characterization enables regulators to predict the emission benefits
associated with a retrofit initiative.
A key challenge to developing accurate fleet profiles relates to the inter-state travel
typical of heavy-duty fleet vehicles. Since individual states can only require retrofits for those
vehicles registered in their jurisdiction, a significant portion of the heavy-duty vehicles operating
on their roadways would not be subject to these rules. Emission inventories for highway motor
vehicles are often based on traffic counts taken by state departments of transportation. These
counts do not distinguish between vehicles registered in-state and out-of-state. Similarly,
vehicles registered in a state with a retrofit requirement may spend a considerable portion of their
time operating in other jurisdictions. Consequently, the benefit estimated for a private fleet
retrofit program must account for these factors. One approach to this issue could be the
establishment of a regional retrofit program. Such a program would facilitate fleet
characterization for states and yield increased environmental benefits for all states in the region.
(3) Phase-in Mechanisms
Given the potential adverse consequences of a requirement for all fleet vehicles to comply
according to the same time schedule, a phase-in approach would appear preferable for mandatory
engine retrofit programs. Several models exist for structuring a phase-in component for such a
program. Retrofits could be required only at the time of rebuild or according to a regular schedule
based on a gradual retrofit of fleet vehicles. This determination could be predicated on the age of
engine models used in fleet vehicles. Alternatively, the scope of the program could be determined
according to cost criteria or the availability of a specified number of certified retrofit kits. For
example, additional geographic areas or smaller fleets could be brought into the program if the
cost of retrofit technology decreased by some pre-determined amount or the number of certified
kits exceeded a given threshold.
The phase-in approach used in Stage II vapor recovery programs represents a model that
may be adaptable for heavy-duty engine retrofit programs. The Stage II program, requiring filling
stations to install evaporative emission control devices on gasoline filling nozzles, was phased-in
according to the gasoline throughput total of individual gasoline retailers. While the cutpoints for
station size tended to differ in individual state programs, the concept of requiring earlier
installation at larger stations was used in most programs. This approach served several
purposes: (1) it spread out the compliance period to minimize distribution impacts; (2) it
accounted for the fact that only a limited number of contractors existed to conduct the physical
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work; and (3) it ensured that the bulk of the emission reductions were realized in the early years
of the program. Size thresholds could be incorporated in a mandatory retrofit program using the
number of vehicles to determine when each fleet must comply. For example, large fleets of over
100 vehicles might be required to comply in the first year of the program, medium size fleets
within three years, and small fleets (under ten vehicles) within five years of program adoption.
(4) Compliance and Enforcement
Given the program similarities, the compliance and enforcement strategies used in the
federal Urban Bus Retrofit Program would appear to represent viable options for retrofit
programs targeting private fleets of trucks and buses. The Urban Bus Program offers two
primary compliance options for fleet operators: a performance-based approach and an emissions
averaging scheme. While this initiative targets only particulate emissions, the compliance
approaches used would be suitable for other pollutants of interest such as NOx.
The performance-based approach in the federal bus program requires affected vehicles to
meet a particulate emission standard of 0.1 g/bhp-hr, effective at the time of engine rebuild or
replacement. The requirement is automatically waived if no equipment with a cost of less than
$7,940 has been certified to enable compliance with the 0.1 g/bhp-hr standard. The Urban Bus
program contains fallback requirements for "waived" engine families. These waived urban bus
engines must be retrofit with equipment that provides a 25 percent reduction in particulate
emissions, relative to levels emitted with the original engine configuration. In 1998, the first 0.1
gram technology was certified with the Urban Bus Program, thus providing the technology for
compliance with the more stringent standard for many engine families.
The second compliance option within the Urban Bus program is an emissions averaging
system requiring affected urban bus operators to meet an annual average fleet particulate
emissions level. Under this scheme, each affected fleet operator must meet a declining annual
average emission target level for fleets (TLF). The TLF is calculated (in grams per brake
horsepower-hour) for each year of the program beginning in 1996. For any given year, the
average particulate emissions level from all of the operator's pre-1994 model year urban buses
must be at or below the TLF established for that calendar year. An operator's TLF for a
particular calendar year is calculated as follows:
1993
TLFCY = ( E (BMY)x(WPMY))
MY=CY-15
1993
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£ (BMY)
MY=CY-15
Where:
C7is the calendar year
MFis the model year
BMY is the number of urban buses of that model year in the operator's fleet as of January 1, 1995,
plus any urban buses of that model year added to the fleet after January 1, 1995.
WPMY is the weighted average of projected particulate emissions for urban buses of that model
year.
The TLF for a particular calendar year is calculated based on the EPA's determination of
the projected emission level for each engine model year in the operator's pre-1994 model year
urban bus fleet. Operators must comply with a TLF until all pre-1994 urban buses have been
retired from the operator's fleet.
Either of these methods included in the federal Urban Bus program could be adapted by
states for enforcing a mandatory retrofit program for private fleet vehicles. Another approach
might involve the use of fleet emissions caps as described on page 49. This approach is not
necessarily technology-based. Rather, the goal is to reduce total emissions from a fleet through
the establishment of an emissions cap and allowing the fleet operator to comply through any
combination of emission reduction strategies. Retrofitting would be one of the possible
strategies. A detailed discussion of the emissions budget system is included in the following
section on nonroad engine retrofitting.
Summary of Highway Vehicle Retrofit Options
This section described several options states can use to introduce retrofit devices into the
existing heavy-duty fleet and methods to structure retrofit programs. Some of the descriptions
were of actual, ongoing projects and others were hypothetical examples (as in the example school
bus retrofit strategy). Some of the options presented can be used now by states to achieve real
reductions from heavy-duty vehicles. Others require significant program development.
All of the current retrofit projects being undertaken by states (New Jersey Department of
Transportation, New York City Transit Authority, Massachusetts Highway Department, and
Manchester Airport programs) are to retrofit public fleet vehicles or fleets that are under contract
to state and/or localities. Retrofit of public fleets poses few legal and administrative challenges to
states. For this reason, this approach is currently the most viable and represents an important
starting point for states that desire to increase the use of retrofit devices. Since a significant
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number of heavy-duty vehicles are publicly owned, retrofitting these trucks and buses could
provide significant emissions reductions (as is seen from the New Jersey emission reduction
estimates) and could establish the viability of retrofit programs. Furthermore, if state and local
retrofit programs are expanded to include all vehicles under contract to states, the emissions
reduction benefits of retrofit projects can be greatly increased. Expanding retrofit requirements to
state contracted fleets also allows for the introduction of retrofit devices into private fleets
without the legal and administrative challenges associated with initiating mandatory programs.
The market incentive options outlined in this chapter were hypothetical only but state
development of such programs in the future could prove to be important methods for encouraging
retrofitting. Market incentive programs, like programs to retrofit state fleet vehicles, do not pose
the legal challenges that mandatory programs do and would allow states to encourage the retrofit
of private fleet vehicles. Some of the market incentive examples used in the chapter would
require substantial program development before they could be considered by states. For
example, the fleet emissions cap scheme would require the development of state-wide inspection
programs for gaseous and possibly particulate emissions.
The program outlined in this section which would be the most difficult for states to
initiate is a mandatory retrofit requirement for privately owned heavy-duty vehicles. Initiating a
mandatory program would require legal research into authority to require retrofitting under the
CAAA and state air pollution control laws. In addition, such programs would require inter-
agency cooperation to set up the legal mechanism for linking retrofit to registration renewal. This
is not to say that such programs cannot be undertaken. Rather, mandatory programs represent a
long term option as opposed to a near term option.
At this time, retrofit technologies for trucks and buses are limited to oxidation catalysts
and, for some vehicles, particulate filters. New applications of existing technologies, i.e.: retrofit
of HDD trucks with selective catalytic reduction (as opposed to stationary generators); and
TWC use in heavy-duty gasoline engines (as opposed to gasoline passenger cars) may in the
future reduce truck emissions by 90 percent. However, demonstrations need to be carried out
before these technologies can be broadly applied to truck engines.
The next section describes state programs to encourage the use of retrofit devices in
nonroad vehicles such as construction equipment and marine vessels. Since a precedent setting
lawsuit significantly restricted states' abilities to require retrofit of nonroad engines, retrofit
strategies for these engines are somewhat different than for highway engines.
B. Nonroad Retrofit Strategies
NESCAUM's 1997 report entitled Heavy Duty Engine Emissions in the Northeast
concluded that nonroad engines emit twenty percent of all NOx in the region. In addition, EPA
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estimates that nonroad engines emit 48 percent of mobile source particle pollution.21 Since
nonroad equipment powered by diesel engines tend to have relatively long useful lives, retrofit of
the in-use fleet appears to represent an important tool for reducing nonroad engine pollution.
This section focuses on strategies for reducing emissions from in-use diesel engines used in
airport ground support vehicles, construction equipment and marine vessels. These fleets are
targeted because they are important components of the NOx and PM emission inventories in the
Northeast and because the nature of their operation lends to a variety of feasible retrofit options.
An important constraint when developing in-use strategies for nonroad equipment is the federal
preemption precluding states from mandating the retrofit of nonroad engines. The following
section describes this preemption and presents various alternatives to mandatory retrofit.
1. State Preemption from Requiring Retrofit of Nonroad Engines
Historically, states have been given authority under the CAAA to regulate in-use engine
emissions from mobile sources through inspection and maintenance programs, in-use emissions
standards, and other means. However, a recent lawsuit brought by the Engine Manufacturers
Association (EMA) 22 resulted in a change to the nonroad engine rule which preempts states from
requiring the retrofit of in-use nonroad engines to control emissions.23
In June, 1994, EPA issued regulations covering emissions from heavy-duty nonroad
engines. This regulation precluded individual states from adopting regulations governing
emissions from new engines. Two years later, in the case Engine Manufacturers Association v.
EPA, the DC Court of Appeals held that the preemption extends to both new and in-use engines.
In 62 FR, EPA states "EPA believes that states are precluded from requiring retrofitting of used
nonroad engines..." While this decision imposes considerable constraints on state authority to
regulate emission from this sector, states retain some options with regard to reducing in-use
emissions from nonroad engines. In the EMA case, the court upheld that portion of EPA's rule
allowing states to regulate the use and operation of nonroad engines. The rule reads:
"EPA believes that states are not precluded under section 209 from regulating the use and
operation of nonroad engines, such as regulations on hours of usage, daily mass emission limits,
or sulfur limits on fuel; nor are permits regulating such operations precluded, once the engine is
no longer new."
According to the rule, while states cannot explicitly mandate the retrofit of in-use nonroad
engines, they can establish programs to encourage the use of engine retrofit technology in
21 EPA, "Control of Emissions of Air Pollution from Nonroad Diesel Engines," 1997
22 Engine Manufacturers Association v. EPA 88 F 3d 1075 (1996)
23 "Control of Air Pollution: Emission Standards for New Nonroad Compression-Ignition Engines at or
Above 37 Kilowatts; Preemption of State Regulation for Nonroad Engine and Vehicle Standards;
Amendments to Rules" December, 1997,62 FR 67733
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construction, agricultural and other nonroad equipment such as diesel generators. One alternative
is the use of emission caps and/or budgets. With regard to nonroad engines, caps or budgets
could be established for individual fleets, for specific projects, or by activity. States are
cautioned that daily mass emission limits should not be set so low that it is impossible to comply
with them absent the use of retrofits.24
2. Developing Emissions Budgets to Reduce Nonroad Emissions
This section describes the use of budgets and caps to achieve reductions in emissions from
projects or activities that employ heavy-duty nonroad vehicles and equipment. The use of
economic incentives is likely to be most effective when combined with the establishment of
emission caps and/or budgets and they are likely to be more cost-effective in the presence of a
trading system. States might consider adopting NOx/PM emissions budgets for nonroad fleets
operating within the state or a given nonattainment area. An emissions budget program for these
fleets would require: identifying target fleets; establishing a baseline of emissions for the sector;
assessing reduction needs and options; establishing the future year emissions target; and
allocating emissions to each covered fleet.
To affect reductions from this source sector, the target budget must be carefully calculated
to ensure that actual emissions reductions take place. The budget approach, a declining mass
emission target, or a declining fleet average emission rate gives the owner/operator the discretion
to obtain reductions wherever they can be achieved most cost-effectively. Especially when
implemented on a broad scale, this flexibility allows the market to drive demand for cleaner
technology and fuels, without agencies mandating specific technologies or reformulations.
Because of the aggregated emissions tracking used by the budget system, reductions that are
relatively expensive from some vehicle categories or models can be foregone in favor of less
expensive reductions from others. Designing a declining total over time provides ongoing
incentives for improvements in emissions reduction options for the affected sources. The
effectiveness of this approach is contingent upon the presence of a target source category with
units that are of a known quantity, whose ownership/operation is centralized, and that operate
within a limited geographic area. These characteristics can be met by certain heavy-duty nonroad
vehicles especially construction and marine fleets such as water shuttle ferries.
The lack of good inventories for either nonroad equipment or emissions from these units
represents a difficult obstacle to the development of accurate budgets for this sector. A budget
system is not viable without good emissions and fleet data. However, the recent work conducted
by EPA for their NONROAD emissions model and NESCAUM's efforts to characterize and
24 40 CFR Part 89 Appendix A of Subpart A. 62 PR at 67736, December 30,1997
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quantify nonroad fleets in the region, provide better data and techniques for improving these
inventories.25
a. Retrofit of Airport Vehicles
The collective operations of airport vehicles contribute substantially to emissions of several
criteria pollutants. The ability to regulate these emissions has recently become of greater interest
to the USEPA, which has begun to work cooperatively with the Federal Aviation Administration
(FAA) to evaluate airport-related activities and emissions. Legislation exists that provides an
important source of funds to support emissions reductions at airports. In 1990, Congress passed
the Airport Improvement Program [49 U.S.C. App. 2202(a)(2)]. The original program provided
funding for "any construction, reconstruction, repair, or improvement of an airport (or any
purchase of capital equipment for an airport) which is necessary for compliance with the
responsibilities of the operator or owner of the airport..." Further authorizing legislation in 1992
added the CAA as one of the compliance obligations for which the program could fund
improvements.
The vast majority of airport vehicles are typically fueled by gasoline or diesel. However,
pressure to reduce emissions from airport ground service equipment and ground transportation
vehicles has begun to mount as a result of the desire to accommodate new flights and more
parking. In the 1970's the Massachusetts Federal Implementation Plan (FIP) imposed a parking
freeze at Logan Airport in order to reduce emissions from the airport. This parking freeze is still
in effect. Analysis conducted for the California's Federal Implementation Plan determined that
airports in the affected areas would need to reduce emissions from 20% to 45% from their 1990
levels to meet FIP targets. Effective approaches identified for airports in California could serve
as a model for airports in the NESCAUM region. Common airport support vehicles such as
forklifts, tugs, sweepers, mobile belt loaders, baggage tractors, de-icing trucks, and push-back
tractors could all be retrofitted with commercially available emission control equipment. For
vehicles which are not suited to alternative fuel use, retrofits provide a means to reduce
emissions.
(1) Airport Emission Budgets
Because as a group ground service equipment at airports emit significant amounts of air
pollution, they could be a target sector for an emissions budget strategy. For example, estimates
from Logan Airport in Boston indicate that ground service vehicles emit .68 tons of NOx per day
or 278.2 tons per year.26 Where actual in-use data is lacking on emissions from these equipment,
25 EPA, "June, 1998, Draft NONROAD Model,"Available Online; http://www.epa.gov/oms/nonrdmdl.htm , March
29, 1999 and "Nonroad Engine Emissions in the Northeast," draft NESCAUM report.
26 Boston Logan International Airport 1997, Annual Update, EOEA #3247/5146, August, 1998, P 6-8.
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the budget could still be designed using best engineering judgement to quantify emissions and
activity levels associated with these vehicles. Over time, more accurate information can be
gathered and used to refine the budget and reduction targets.
As an example, a NOx emissions budget could be established for a ground service fleet at
an airport so that total annual emissions from these units would have to be reduced by a specified
amount over time. Assuming a goal to reduce annual emissions by half, an annual cap would be
established accordingly. The airport authority or their contractors would be allowed to comply
through any combination of controls on the vehicles comprising the regulated fleet. Converting
some equipment to very clean alternative fuels, may enable the operators to meet their overall
reduction targets without needing to achieve reductions from other equipment where controls are
more costly. Compliance demonstrations would be based on hours of operation for these
vehicles derived either through monitoring or through a surrogate (e.g., equipment activity
multiplied by either an actual emissions rate or an average emissions rate) to determine total
emissions.
b. Other Budget Programs
In other budget programs, the company target would be derived from the relative
proportion of each individual company's operations or emissions to the category total. The final
process used for dividing up total emissions among the affected sources is less important than the
ability of the sources and the state to determine whether companies meet their respective targets
in future years. For private fleets, such reporting could be based on the use of an average
emission rate per vehicle, multiplied by seasonal or annual activity and idling levels.
Each year, the total tons represented by the emissions budget are distributed in the form
of allowances to the affected sources. This distribution process can be proportional to each
source's contribution to the category's total, as measured by historical, current or expected future
emissions, or by historical, current or expected future activity level. Alternatively, the
distribution process could be undertaken using an auction approach. At the end of each season or
year, each company must hold enough allowances to equal its total emissions. The original
allocation to the source may have been adequate to meet this requirement, or it may not. Because
the budget program may permit the trading of the allowances, sources holding excess allowances
may sell them to sources in need of allowances.
Where a company is capable of making cost effective emissions reductions, fewer
allowances will be needed for the true-up step. If allowances are valued at a cost-per-ton that
exceeds the cost of reducing emissions, companies have an incentive to undertake reduction
measures. As a result, companies with high emissions and high control costs have the option of
complying through the purchase of allowances rather than by obtaining reductions in their own
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vehicles. Thus, the budget program provides the emissions reductions needed by regulators in a
more cost-effective manner for the affected sources.
This approach is less effective for other heavy-duty source sectors whose geographic
range of operation would result in emissions occurring beyond the jurisdiction of the regulatory
authority implementing the budget program. In such cases, identifying an appropriate emissions
budget, proportionally allocating allowances, and "truing-up" is much more complex.
In the following case study an emissions budget approach is identified for private
construction projects in the region. An alternative strategy is presented for public works
projects.
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Example Strategy: Construction Equipment Retrofit
As in the other case studies in this chapter, evaluating potential retrofit projects takes place
in three steps:
1. Determine the contribution of the source to the emissions inventory;
2. Determine the appropriate retrofit technologies and potential emissions reductions;
3. Determine the appropriate policy based upon contractual arrangements, ownership, and
funding opportunities.
Step One: Determine the contribution of the source to the emissions inventory:
Table V-3: 1998 NESCAUM Region Construction Equipment Emissions
Connecticut
Maine
Massachuset
ts
New
Hampshire
New Jersey
New York
Rhode Island
Vermont
Total tons
NOx
(tons/yr)
12,475
3,821
34,447
4,462
27,534
52,884
2,597
2,086
140,310
PM
(tons/yr)
1,527
468
4,219
547
3,371
6,476
317
255
17,184
voc
(tons/yr)
2,282
699
6,302
816
5,036
9,674
474
381
25,668
CO
(tons/yr)
14,665
4,472
40,519
5,248
32,376
62,192
3,050
2,434
164,960
SOx
(tons/yr)
3,098
949
8,553
1,108
6,836
13,131
645
518
34,841
The above table shows a breakdown of construction equipment emissions in the eight
NESCAUM states calculated using EPA's NONROAD model. According to these estimates,
construction equipment emits approximately ten percent of all NOx pollution in the NESCAUM
region. Although there are fewer heavy-duty construction machines than registered heavy-duty
highway vehicles in the region, construction equipment emits almost as much NOx pollution as
the region's fleets of trucks and buses. This is because control of nonroad equipment emissions
has lagged behind highway engines. Thus, reducing construction equipment emissions could
represent an important SIP strategy given the large contribution this sector makes to the overall
NOx inventory in the region. Furthermore, since construction machines often operate in densely
populated urban areas, reducing NOx and PM emissions from this source is important to
reducing exposure to harmful emissions and for environmental justice concerns.
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Step Two: Determine Technology Options
Technology options differ for construction equipment depending upon the duty cycle of
the engines in-use. This section describes some of the options for retrofitting different types of
construction machines.
Earth Moving and other Heavy-Duty Equipment
Typical earth moving equipment such as excavators, backhoes, and bulldozers as well as
other heavy equipment such as cranes operate under transient conditions. While NOx reducing
control strategies such as SCR use on backhoes, wheeled loaders, and excavators may be possible
in the near future, no demonstrations have been made to date on construction equipment. Since
the technology is sensitive to transient modes of operation, demonstrations of the technology
need to be conducted prior to widespread use of SCR with construction equipment.
Oxidation catalysts and catalyzed particulate filters can be used to reduce PM, HC, and
CO emissions from earth moving equipment. A recent pilot project to retrofit construction
machines conducted by NESCAUM, New England Power, and MECA showed that oxidation
catalysts reduced PM emissions 23 percent, HC 42 percent, and CO 31 percent. Particulate
filters reduced PM by 89 percent and CO and HC 66 percent.27
In addition to oxidation catalysts and particulate filters, other emissions reduction
technologies exist such as electronic turbochargers. Turbochargers increase the transient response
relative to traditional turbochargers.
Stationary Generators and Similar Equipment
The control options for stationary generators and air compressors include PM, NOx, HC,
and CO emission reduction technologies. Stationary generators are suited to both PM and NOx
reduction strategies due to the steady state operations of the equipment. For PM, CO, and HC
reductions oxidation catalysts or catalyzed particulate filters can be used. Other technologies
such as electronic turbochargers and low sulfur fuel can be used to reduce PM emissions. Unlike
earth moving equipment that operate under transient conditions, generators run at steady state
conditions. This makes them suited for retrofit with NOx and VOC reduction technologies such
as selective catalytic reduction. Several field installations of SCR on stationary engines exist and
have shown NOx reductions up to 90 percent.
27 Ainslie, Cooper, McKinnon, Rideout "The Impact of Retrofit Exhaust Control Technologies on
Emissions from Heavy-Duty Diesel Construction Equipment" In Diesel Exhaust Aftertreatment, 1999,
SAE
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Step Three: Evaluate Policy and Funding Options
In this example strategy, construction equipment is divided into two categories: (1)
equipment owned or contracted by the states, municipalities, and authorities used on public
works projects; and (2) privately owned equipment used on private construction projects. The
reason for taking this approach is that policy options differ for equipment used for public works
projects and private construction work.
Public Works Projects
Roughly 20% of all heavy-duty construction equipment is involved in public works
projects such as road building and sewer/water infrastructure. Such publicly funded construction
projects can require or provide incentives for emission reductions by including preferential
consideration for contractors with "clean" construction equipment.
An example is the approach adopted by the Massachusetts Highway Department for
construction equipment working on the $11 billion Central Artery/Third Harbor Tunnel project
(the "Big Dig") in Boston. The Massachusetts Highway Department has begun requiring that
some new contracts include provisions stating that all diesel equipment will be retrofitted with
oxidation catalysts or catalyzed particulate filters. The contract requirement states "contractors
must retrofit all diesel equipment 50 horsepower and greater with either oxidation catalysts or
catalyzed particulate filters." The retrofit requirement is placed in the contract section which
dictates measures needed for control of diesel exhaust odor. Odor from construction equipment
is a source of significant public complaint, and oxidation catalysts and/or catalyzed filters reduce
or eliminate odor by lowering hydrocarbon emissions.
In addition to the contract requirement, Massachusetts Highway Department has initiated
a 70 machine retrofit initiative. As part of the program, contractors are requested to retrofit
approximately 25 percent of permanent equipment operating on the Big Dig. Backhoes, wheeled
loaders, excavators, and other machinery will be retrofitted. Massachusetts Highway
Department is funding this project. Over a period of six years the project will reduce 203 tons of
HC, PM, and CO pollution and 70 percent of toxic emissions such as formaldehyde and benzene.
Emission Budgets for Privately Operated Construction Projects
Retrofitting equipment being used on private projects, such as construction of office and
residential buildings, hotels, and other types of construction requires a different strategy.
Because states are pre-empted from requiring the retrofit of construction equipment, emissions
budgets or caps and/or restrictions on hours of operation will need to be used in order to
encourage the use of emission retrofit technology on private construction projects. For
construction projects financed by non-government entities, emissions budgets and daily mass
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emissions limits could be established for projects exceeding a threshold size, based upon a
quantitative measure such as cost.
Calculating Baseline Emissions from Construction Projects
Several methods could be used to calculate baseline emissions from construction projects;
one is described below. The method was developed by EPA in its 1991 nonroad study
("NEVES") and is also used in the new NONROAD model released last year.28 The following
information would be needed and could be used by state regulators to estimate baseline emissions
for construction projects:
1) equipment type
2) horsepower
3) hours of use per project
4) year of manufacture
The formula is as follows:
HPXALFXEFXHO
grams of pollutant per year per piece of equipment
Where:
HP = horsepower of the engine
ALF = average load factor for that type of equipment (from NONROAD model)
EF = emission factor (from NONROAD model)
HO = hours of operation during a given construction project
This formula would be used to calculate emissions for each type of equipment, each
horsepower category, and each criteria pollutant. Once the individual calculations have been
completed the emissions for each criteria pollutant, equipment category and horsepower are
summed to derive a total emissions baseline figure for a construction project.
Once an emissions baseline has been established for a construction project, a declining cap
could be established to ensure decreased emissions over time. The following reductions could be
established as part of a declining emissions cap:
Years 1999 - 2004 10% reduction for construction projects in a given nonattainment area
28 EPA "Nonroad Engine and Vehicle Emissions Study Report," Nov., 1991
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Years 2005-2010 20% reduction
Years 2011-2015 30% reduction
Years 2016 and later 40% reduction
Total emissions from these projects could be capped according to the above listed
declining schedule or could be capped proportional to project size, allowing the contractor to
obtain the needed reductions in the most cost effective manner. This approach could be extended
through the use of a trading mechanism, whereby a contractor would have an incentive to bring
the entire project to completion "under budget". The difference between the budget level and
actual emissions from the project could be sold as credits to aid in offsetting potential excess
emissions associated with another project. Taking a different approach, a bidder who may not be
well-positioned to claim cleaner engines or obtain cleaner fuel could achieve equivalent or even
greater emissions benefits by purchasing an amount of credits from another emissions source over
the life of the project that would equate to a substantial environmental benefit. Construction
companies could purchase alternative fuel construction equipment, retrofit in-use engines,
purchase equipment with "Blue Sky" engines, or buy pollution credits under the program.29
29 "Blue Sky" engines are EPA certified low emissions nonroad engines
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3. Retrofit of Marine Vessels
Although current inventory estimates suggest that marine vessels emit approximately four
percent of NOx emissions in the nation, the impact of these emissions is potentially greater than
for other sources for a number of reasons. First, these vessels tend to operate in urban non-
attainment areas. Additionally, large marine engines used to power barges, tankers, and other
ocean going vessels burn residual fuel which creates greater amounts of toxic emissions than does
the burning of number 2 diesel fuel commonly used in smaller marine vessels. Several retrofit
technologies are available to reduce criteria and toxic emissions from these engines. As with other
sectors, determining the most effective retrofit strategy will entail identifying the appropriate
engines for retrofit, the emission control technology to match the engine, and an implementation
strategy. This section discusses marine vessel retrofits and presents an example strategy as an
example of how such a program could be designed and implemented.
The emissions of primary concern from diesel marine engines are NOx, PM10/smoke,
VOCs, and toxics. They also emit CO and sulfur dioxide (SO2) at relatively high rates. In the
National Air Pollutant Emission Trends, 1900-1994, EPA estimated that in 1994, marine diesel
engines emitted 158,000 tons of NOx, 17,000 tons of PM10, and 39,000 tons of VOC. Table V-
4 provides a breakdown of national marine vessel emissions by year.
Table V-4: U.S. Primary Pollutant Emissions from Diesel Marine Engines
Year
1970
1980
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
NOx (thousands of
short tons)
34
93
110
118
125
138
147
145
146
151
154
158
PM10 (thousands of
short tons)
4
10
12
13
13
15
16
16
16
16
16
17
VOC (thousands of
short tons)
8
23
28
29
31
35
37
36
37
38
38
39
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In 1994, marine diesel engines in the NESCAUM region emitted 1,664 tons PM10, 2,480
tons VOC and 11,464 tons of NOx. Marine vessel emissions from New Jersey accounted for
approximately 70% of all emissions from this sector in the region. Of primary concern is the fact
that emissions from this sector are increasing, while those from many other sectors are declining.
a. Marine Vessel Emissions Regulations
To address the problem of increasing marine vessel emissions, the US EPA has proposed
new emissions standards for marine diesel engines that will take effect beginning in 2004.30 The
rule will significantly reduce emissions from marine engines similar to those used in land based
applications (construction and agricultural) and for those similar to locomotive engines over the
next two decades. However, for large marine engines much less stringent International Maritime
Organization (IMO) regulations will apply. The IMO standards are close to uncontrolled levels
and imposition of these standards will only result in an eight percent reduction in large marine
vessel NOx emissions by the year 2030. At the same time, emissions from these slow speed
vessels represent the majority of marine vessel pollution in some Northeast ports.
TABLE V-5: Proposed EPA Cl Marine Engine Emissions Standards
Engine size
Category 1:
less than 5 litres displacement
per cylinder
Category 2:
5 -20 litres displacment per
cylinder
Category 3:
Greater than 20 litres
displacement per cylinder
NOx standards (g/kWh)
Tier II: 7.2 g/kWh
Tier III: 4 g/kWh
Tier II: 7.2 g/kWh
Tier III: 5 g/kWh
9.8, 45*n('02), 17 g/kWh
PM standards (g/kWh)
Tier II: .4,.3,.2
Tier III: no standard
Tier II: .27
Tier III: no standard
No standards
While the proposed marine engine rule will reduce emissions over the long term for
category 1 and 2 engines, retrofitting can reduce emissions in the near term from in-use vessels.
Moreover, the proposed EPA rule will not significantly reduce emissions from large marine ocean
going vessels and thus retrofitting provides one of the only options for reducing emissions from
these category of ships. Below, the third retrofit strategy is presented which details options and
technologies to reduce marine vessel pollution.
As in the other case studies in this chapter, evaluating potential retrofit projects takes
place in three steps:
30 EPA "Control of Emissions of Air Pollution from New CI Marine Engines at or Above 37 kW, Proposed
Rule," December, 1998.
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1) Determining the relative emissions contribution from different types of vessels;
2) Identifying appropriate technology options; and
3) Assessing policy and funding options.
Example Strategy: Retrofit of Marine Vessels
Step One: Determine the contribution to the emissions inventory
In 1998, NESCAUM conducted a marine vessel emissions inventory for the Boston
Harbor. As part of the inventory, data was collected on the numbers of ship arrivals and
departures and the length of stay in the Boston Harbor for 1996. Data was collected for
commercial, pleasure craft, fishing, and harbor vessels. The following table shows a summary of
the numbers and types of marine vessels operating in the Boston Harbor. The table shows that
most of the vessels operating in the harbor are privately owned. The major exceptions are
military ships and some of the water shuttle ferries which provide commuter services to and from
Boston.
Table V-6: Vessel Types in Boston Harbor
Operation/Vessel Type
Military
Construction barges
Pleasure craft
Fishing boats
Harbor tugs
Commercial
Sightseeing
Water shuttle
Ownership/Operators
U.S. Navy
Corporations
Private owners
Private owners
Boston Fuel Transport
Shipping companies
Private tour companies
MBTA, Massport
Number of Vessels
500
Variable
2,000
300
20
1,000 trips per year
30
27
Activity rates and fuel consumption data for the ships was used to calculate emissions for
the different types of vessels. Figure two shows the NOx emissions contribution from the most
common fleets of vessels using Boston Harbor. Data on vessel activity in Boston Harbor was
obtained from "Waterborne Transportation Lines of the U.S." and from surveys of vessel
operators.
Figure Two: Boston Harbor Vessel NOx Emissions by Vessel type
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ntugs
fishing
n oo m me roi £
The analysis shows that the majority of NOx emissions come from commercial vessels
weighing over 100 tons. While this is the case for Boston Harbor, the composition of the fleet at
other ports may vary considerably. For example, Newport, Rhode Island is likely to have a
much higher contribution from pleasure craft than from commercial vessels due to the fact that it
is a primary destination for pleasure craft boaters. Understanding the composition of the vessels
using the facility will help in crafting an appropriate and cost-effective retrofit strategy for a
given port.
Step Two: Determine Technology Options
The engines powering marine vessels are well suited to several types of emission
reduction technologies. First, commercially available devices such as oxidation catalysts can
reduce PM, HC, and CO emissions in marine engines. Oxidation catalysts can be expected to
reduce PM by 25 percent on average (if diesel fuel containing 500 ppm or lower sulfur is used),
HC 50 - 95 percent, and CO by 45 - 90 percent. Requirements such as sufficient exhaust gas
temperatures can generally be met when retrofitting marine engines with oxidation catalysts.
Particulate filters could also be used in marine engines to reduce PM emissions by 90 percent
where engine exhaust temperatures are sufficient.
Marine diesel engines are also well suited to the use of selective catalytic reduction (SCR)
because these engines frequently perform in steady state modes while entering and leaving ports.
Maneuvering into berths can require transient operation but this represents a relatively small
percentage of the vessel operating time. SCR use in marine engines can achieve extremely low
NOx and HC emissions.31 When SCR is used in conjunction with an oxidation catalyst, both low
PM and NOx emissions can be achieved. Recent incentives established in European ports have
spurred the installation of urea SCR systems in a limited number of ships. Table V-7 lists marine
SCR applications as of 1996 and shows the level of emission reductions achieved. As indicated
in this table, this technology achieves greater than a 90% reduction in NOx.
31 HC were reduced by 90% and NOx by 96% "Emission Control in Marine Engines" Diesel & Gas Turbine
Worldwide, March 1994.
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Table V-7: SCR Use in Marine Vessels Worldwide
32
Ship
Pacific
Success
Pittsburgh
Delta Pride
New
Horizon
Aurora
Serenade
Symphony
Scandica
Year
1990
1990
1991
1992
1992
1994
1995
1995
Operating
area
California
California
California
California
Baltic
Baltic
Baltic
Skagerrak and
Baltic
Ship type
Bulk
carrier
Bulk
carrier
Bulk
carrier
Bulk
carrier
Ferry
Ferry
Ferry
Supply
Engine type
Two stroke 7.8
MW propulsion
Two stroke 7.8
MW propulsion
Two stroke 7.8
MW propulsion
Two stroke 7.8
MW propulsion
Four stroke 2.5
MW propulsion
Four stroke 3
MW propulsion
Four stroke 3
MW propulsion
2x4 stroke 1.3
MW propulsion
and 4x4 stroke
.25 MW auxiliary
Installatio
n type
New build
New build
New build
New build
New build
Retrofit
Retrofit
Retrofit
NOx
reducti
on
92%
92%
92%
98%
98%
90%
90%
96%
SCR can be used with relatively high fuel sulfur levels (1 percent by weight) but such high
sulfur fuel may have an impact on the durability of the emission control equipment. Four ships
equipped with SCR technology are currently running on 1 percent sulfur fuel. Other ships are
operating on lower sulfur fuel ranging from 1 percent to .05 percent.
The experience to date suggests that it takes from ten to fifteen days in the shipyard to
install an SCR unit. The SCR reactors can be tailor-made for a particular application, with
consideration for space concerns. The SCR unit can be delivered in sections so as to fit through
existing passages. Equipping marine auxiliary and propulsion engines with SCR is generally
thought to be technically feasible and reasonable in cost.
Step Three: Determine Policy Options
As indicated in Table V-6, most of the marine vessels operating in Boston Harbor are
privately owned. Figure Two showed that most of the emissions come from commercial vessels,
pleasure craft, and tugs. However, commuter ferries represent a significant source of emissions at
this port. These ferries are operated by public entities: the Massachusetts Port Authority
(Massport) and the Massachusetts Bay Transportation Authority (MBTA).
32 Table reproduced from "Warship Application of Compact Selective Catalytic Reduction Plant for
Diesel Exhaust Emission Control" Lt. Cdr B L Burlingham, BSc, Ceng, MIMarE, RN, The Institute of the
Marine Engineers' Third International Naval Engineering Conference and Exhibition, April, 1996.
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Different retrofit strategies might be considered for private and public fleets operating in
the Boston Harbor. State preemption of mandatory nonroad engine retrofit limits the options for
privately owned vessels. Consequently, an emissions cap or fee program could represent the
best approach for reducing emissions from the private fleet. Conversely, more direct strategies
such as mandatory retrofit requirement may be viable for publicly operated ferries.
Retrofit of Publicly Operated Vessels
Public agencies or quasi public authorities such as the MBTA and Massport could set an
emissions performance standard for vessels operating under agency or authority contract.
Currently, three companies operate a total of twenty vessels year round and each have three year
contracts with the MBTA or Massport. A performance standard could be adopted for new
contracts. The EMA court decision specified that caps must be set at a level which does not
specifically require retrofit of marine vessels. A sufficiently stringent performance standard
could be developed which could be complied with through the use of a variety of technologies,
such as compressed natural gas, retrofits, reformulated diesel fuel, and other control strategies.
The operator would choose which control technology to use based on cost effectiveness and ease
of implementation. A potential model for commuter boat emissions standards is as follows:
Table V-8: Proposed Emissions Performance Standard
Medium speed
boats
130 rpm
-------
Power plant operators could group several mobile source emission reduction programs in
order to generate enough emission reductions to comply with their permit requirements. The
mechanism for such a program could occur in several steps. First, the power plant would agree
to the retrofit option and provide funding for the equipment purchase and installation. Then a
credit calculation would be developed. The retrofit would be in place for one year at which time
the power plant would submit an estimate of emission reductions that occurred during the first
year. For every year afterward, the power plant would submit data on hours of operation at full
load and idle to substantiate emission reduction claims. This option would only work in the case
where the ferries were operating close to a site that required offset credits in order to be
permitted by the state. Significant work would need to be done to establish an enforcement
mechanism for this credit generation scheme. Below, the cost benefit of establishing NOx credits
through an SCR retrofit program are detailed.
Table V-9: Costs of SCR Retrofit
Engine
horsepower
750 hp
3,000 hp
Catalyst Cost
$7,000
$20,000
Urea Tank Cost
$1 per gallon
capacity
$1 per gall on
capacity
Injection Cost
$8,500
$12,500
Annual Urea
Cost
FC*.06*.7
FC*.06*.7
Table V-9 details SCR system hardware, tankage, and injector system costs as well as a
method for calculating annual urea cost. The urea cost is calculated by multiplying the annual
gallons of fuel consumed (FC) by six percent (the average consumption of urea is approximately
4 to 6 percent of total diesel fuel consumption). This product is then multiplied by the cost per
gallon of urea (70 cents) to predict annual costs. For a boat that consumes 150 gallons of diesel
per day, the urea cost would be $6.30 per day or $2,299 per year. The capital costs for the SCR
retrofit would be approximately $16,000 per 750 horsepower engine.
Assuming all 27 of the Boston Harbor commuter ferries were to be retrofitted to achieve a
70 percent NOx reduction rate, then approximately 123 tons of NOx would be reduced each year.
Over five years this reduction would equal 616 tons of NOx. If all 27 vessels are retrofitted at a
cost of $864,000 (assumes two 750 hp engines per ship are retrofitted at a cost of $16,000 per
engine) then the cost per ton of NOx reduced over the five years is $1,402. If the SCR systems
remain on the ships for longer than five years then the cost would be reduced substantially. For
example, if the SCR systems are operational for seven years the cost per ton is reduced to
$1,000. This estimate does not include the annual cost of the urea or potential administrative
costs.
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Fee based program for reducing emissions from private vessels
The credit generation scheme presented in the last section was developed for publicly
operated ships. The scheme relied in part on contract requirements to reduce marine vessel
emissions. In some ports, large privately operated commercial vessels are the greatest source of
NOx. For example, ocean going tankers and cruise ships emit 60 percent of the NOx and PM
pollution in the Boston Harbor. As mentioned at the beginning of this section, current IMO and
EPA proposed emissions standards will not significantly reduce pollution for these large vessel
engines. Therefore, state programs to encourage emission reductions from these ships are needed
if emissions reductions are to be achieved. The following section describes an existing variable fee
system that could be used as a model for Northeast ports.
Swedish Fee Program34
Over 95 percent of Sweden's foreign trade is seaborne and water ferry traffic between
Swedish and foreign ports is substantial. In 1996 The Board of the Swedish Ports' and
Stevedores' Association reached agreement with the Swedish Maritime Administration (SMA)
and the Swedish Shipowner's Association to reduce marine vessel NOx and SOx emissions by 75
percent beginning in the year 2000. The agreement established environmentally differentiated
revenue neutral fees based upon NOx emissions and the sulfur content of the fuel used to power
the vessels. In the first eight months of the program, nearly one thousand vessels were operating
on low sulfur fuel. SCR and other NOx reducing technologies have also been introduced in
several vessels as a result of the program.
Ferries using 0.5 percent by weight sulfur fuel and commercial vessels using 1.0 percent
by weight sulfur fuel are given a rebate on fees. Those using fuels with sulfur levels above 0.5
and 1.0 percent pay a fee that is proportional to the sulfur content of the fuel. The
differentiation of shipping lane dues is intended to eliminate the financial advantage of using high
sulfur fuel and encourage more vessels to convert to cleaner-burning fuel. Fees are also
differentiated according to NOx emissions. For ships with emission rates lower than 2 g/kWh
NOx, fairway fees will be reduced by 95 percent. For ships with NOx emissions between 2
g/kWh and 12 g/kWh, fees will be assessed in a linear fashion at some level below historic rates.
Vessels with emission rates above 12 g/kWh, will be levied fees that are higher than historic rates.
Low NOx technologies being considered for use in this program include SCR and emulsion.
34 "Environmental Differentiated Fairway and Port Dues" Swedish Maritime Administration,
Sjofartsverkets tryckeri, Norrkoping 3357-98
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The SMA, in conjunction with the Swedish Ports and Stevedore's Association, is
developing an information system for classifying ships that harbor administrators will be able to
access when they are assessing fees. All ships using low sulfur fuel and those equipped with
catalyzers to reduce NOx will be certified and registered in the information system. The SMA is
also encouraging Swedish port administrators to work with foreign ports which share frequent
ferry traffic to encourage the implementation of environmentally differentiated fee systems in
their ports.
Defraying the Costs of Low NOx Technology Installation
As an incentive to help defray the costs of installing SCR or other NOx reducing
technologies, ships with certified low emitting engines will be exempt from paying certain fees
(such as lighthouse fees) for two years. These fee exemptions will refund 40 percent of the low
NOx technology cost if they are installed before the year 2000 and 30 percent if they are installed
afterward.
Boston Harbor Fees
Various fees are levied on commercial vessels entering and leaving the Boston Harbor such
as those for pilot assistance and for use of port facilities and berths. Like the Swedish fee
system, these charges could be replaced with environmentally differentiated fees. As with other
mobile source market incentive programs, developing a regional fee system would be preferable to
a local incentive program. This is especially true with ports since they often compete for
shipping traffic. Thus, it may be beneficial for port emissions fee systems or emissions caps to
be developed on a regional basis so that individual ports will not be penalized for their efforts to
reduce vessel pollution.
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Summary of Nonroad Retrofit Strategy Options
This section described several options states can use to introduce retrofit devices into the
existing heavy-duty nonroad fleet and possible methods to structure retrofit programs. At this
time, one nonroad retrofit project is being undertaken in the region (Massachusetts Highway
Department program). Additionally, other states are considering nonroad retrofit projects. All
of the projects being considered or undertaken are aimed at mitigating the environmental impacts
of large construction projects. The programs will rely on funding from public agencies or on
funding from companies who are undertaking the projects. In order to initiate nonroad retrofit
programs, states and localities could retrofit their own nonroad equipment operating in public
works departments and landfills (for example). They may, as well, have leeway in requiring the
retrofit of nonroad equipment used on public works projects. The Central Artery/Tunnel project
in Massachusetts provides an example of a state agency requiring retrofit of nonroad engines
through contractual arrangements. Retrofit projects can be also be encouraged as part of an
environmental impact review process. These types of initiatives are the most viable at this time.
As described in this section, states are pre-empted from requiring retrofit of nonroad
equipment by the EMA court decision of 1997. As a result of this decision, states cannot require
retrofit of nonroad engines as they can for highway heavy-duty vehicles (as a prerequisite for
vehicle registration, for example). The EMA court did allow for other emission reduction
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strategies which could indirectly result in the retrofitting of nonroad engines. For example,
emissions caps can be established which could be complied with through a number of approaches
including: restricting hours of use, retrofitting, use of vehicles powered by Blue Sky engines, fuel
improvements, and other means. While requiring retrofit of nonroad machines as a condition of
contract award may not fall under the state preemption from requiring nonroad retrofit, the law
has not yet been tested.
The chapter provided ideas on how emissions caps could be developed (construction
example study, and declining caps for highway vehicle fleets). However, these ideas are only
theoretical at this point and require considerable thought and development before they can be
initiated by states. Important issues to consider when developing emissions budgets for
construction projects are the short time frame of the projects and the changing types of
equipment used during construction. States may wish to consider developing emissions budgets
and caps for other types of nonroad engines that may lend themselves more easily to an
emissions budget approach. For instance, marine vessels on contract to states or state agencies
may produce predictable emissions over long periods of time (ferries or tug boats for example).
These vessels may be easier to develop emissions budgets and caps for than construction
machines.
The technologies available for retrofitting nonroad engines at this time are oxidation
catalysts, fuel changes, and in some cases paniculate filters. For stationary generators and some
marine engines selective catalytic reduction can be used to achieve significant NOx reductions.
C. Funding Opportunities for Promoting the Retrofit of HD Engines
A variety of potential sources exist to fund the retrofitting of heavy-duty diesel engines
with emission control devices. The section describes the following specific mechanisms and cites
examples of current initiatives that rely on these sources of funding:
Congestion Mitigation Air Quality Improvement Funds (CMAQ)
Clean Air Partnership Fund
State Bond Issues
Earmarked State Funds
Supplemental Environmental Projects (SEPs)
1. Congestion Mitigation Air Quality Improvement Funds (CMAQ)
The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) and the re-
authorized 1998 Transportation Equity Act for the Twenty First Century (TEA-21) include
important planning and financial tools to assist states in achieving the broad goals of the Clean
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Air Act (CAA). ISTEA provided an enhanced transportation planning process for state and
metropolitan government that was both more flexible in terms of multi-modal options and better
integrated with the air quality planning process. TEA-21 extends this planning process through
the year 2004.
TEA-21 also continues the Congestion Mitigation and Air Quality Improvement
(CMAQ) program established under ISTEA. This program provides states with substantial
federal funds to support transportation projects that reduce motor vehicle emissions and
contribute to attainment of the National Ambient Air Quality Standards (NAAQS). The Act
targets $8 billion for CMAQ programs and projects. Funding is apportioned to states according
to a formula that accounts for the population of nonattainment areas and the severity of their air
quality problem. CMAQ is funding the New Jersey retrofit project described in the first section
of this chapter and could be used to fund similar retrofit programs for heavy-duty vehicles in
other states.
2. Proposed Clean Air Partnership Fund
EPA's proposed Clean Air Partnership Fund would earmark $200 million every year for
five years in "new resources for states, cities and tribes to reduce soot, smog, air toxics and
greenhouse gases that contribute to climate change. The money would go to new anti-pollution
technologies. It would foster public-private partnerships that help communities achieve their
clean air goals sooner than required." The establishment of this fund is contingent upon
Congressional approval of the proposed federal budget for the year 2000. If this fund is
established it could provide significant support for state retrofit initiatives to reduce heavy-duty
engine pollution.
4. State and Authority Bond Issues
State and municipal governments as well as authorities (such as port authorities) can be
granted the power to issue bonds from state legislatures. In some states, state law requires that a
ballot initiative be approved by the public. The law varies state to state on the types of entities
that can propose a bond issue and the extent to which bonds can be used to fund projects.
Generally, state legislatures either authorize a specific bond issue through legislation or they
establish a group, such as an authority, with the power to issue bonds. Some combination of the
above two options also takes place in some cases when bonds are approved.
When specific bond issues or the authority to issue bonds has been approved by the
legislature, bonds are sold and the funds are used to raise money for public works such as road,
sewage and water system, school, and public transportation improvement projects. In addition to
public works projects, bonds can be proposed to fund other programs, such as environmental
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initiatives. State funding in the form of bond issues can and are providing important support for
state retrofit projects. Specific bond initiatives supporting retrofit projects in the Northeast are
described below.
The New York legislature voted in 1998 to approve a 1.75 billion dollar bond act to be
used for environmental projects. The bond proposal was submitted to the legislature by New
York governor, George Pataki. Funds for clean water and safe drinking water projects total
$1,145 billion, $230 million is allocated to air quality programs and $375 million is allocated to
solid waste and municipal environmental restoration projects. The clean air projects include
government clean fueled vehicles and associated infrastructure; the purchase of alternative fuel
buses or the conversion of diesel buses to alternative fuels and the development of requisite
infrastructure.
The Manchester Airport retrofit project described earlier in this chapter is also being
funded by a bond issue. The bond is funding the expansion of the airport, and it will also be used
to cover the costs of the retrofit devices and installation.
5. Dedicated or Earmarked Funds
Another option for financing retrofit projects is to dedicate a percentage of registration
fees and/or penalty moneys associated with heavy-duty vehicles for the installation of emission
control devices. The California initiative described below explains how one such program works.
Other types of dedicated funds could be established from penalty monies from parking and
traffic violations. These funds could be used by states and or private groups for retrofitting
fleets. For example, certain commercial fleets accrue millions of dollars in parking tickets
annually. A percentage of these fines could fund the retrofit of a significant number of vehicles.
The California legislature recently passed two bills authorizing the establishment of the
Carl Moyer Memorial Air Standards Attainment Program. The Program allocates over $25
million for the purpose of reducing emissions from heavy-duty highway and nonroad vehicles
and machines. SB 1857 describes the funding mechanism and AB 1368 describes the types of
technologies that are eligible for funding through the program. The re-powering of diesel engines
with cleaner, new engines, alternative fuel vehicle purchases, and the retrofit/rebuild of in-use
engines are eligible for funding. Locomotive and marine vessel emission reduction projects are also
eligible.
SB 1857 delegates administration of the program to the air pollution control districts, air
quality management districts, and port authorities who can apply for funds. The bill requires
that civil penalties recovered by the State Air Resources Board from owners and operators of
heavy-duty diesel motor vehicles with excessive smoke emissions be deposited in a specified
account in the general fund. In addition, the bill would appropriate $50 million from the general
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fund to the Carl Moyer fund, which will be available for expenditure without regard to fiscal
year.
6. Supplemental Environmental Projects
Violations of state and federal environmental statutes can result in the levying of
substantial civil penalties. Typically the penalties are in the form of fines allocated to the general
fund. Occasionally, a portion of these fines are earmarked for Supplemental Environmental
Projects (SEPs) with a nexus to the violation. SEP funds from both federal and state enforcement
actions could in some cases be used to fund retrofit projects, as in a recent federal enforcement
action against seven heavy-duty engine manufacturers.35
The recent consent decree between the United States and seven heavy-duty engine
manufacturers may provide funds for retrofit projects to satisfy, in part, injunctive relief sought
by the federal government for excess NOx emissions from highway heavy-duty diesel vehicles.
The consent decrees establishes $109 million for the implementation of environmental projects
intended to mitigate the effects of over one million heavy-duty engines that have or will emit 15
million tons of excess NOx. Engine manufacturer proposed SEPs include nonroad and highway
SCR and lean NOx catalyst projects. In addition, compressed natural gas projects have been
proposed.
While some of the projects in this consent decree will be conducted exclusively by the
engine manufacturers, proposals received from states and other interested groups will be
considered for funding. A total of $22 million in potential funding for proposals submitted
during the comment period will be considered by the engine manufacturers and by EPA for
funding. Retrofit projects could be strong candidates for SEP monies. The above described
settlement is the largest in Clean Air Act history and could provide millions of dollars for retrofit
projects.
Another example of a litigation related environmental project is the retrofit of marine
vessels in California which resulted from labor groups contesting an environmental impact
statement. The retrofit of marine vessels was carried out voluntarily by the company as a result
of the litigation. This program is described below.
In San Francisco, the Bay Area Air Quality Management District (BAAQMD) imposed a
limit of 220 kg of NOx for USS-POSCO Industries (UPI) ships as part of a settlement related to
the environmental impact statement for a plant expansion. As a result, four vessels traveling
35 U.S. v. Cummins Engine Co. Civil Action No. 98-2546, U.S. v. Detroit Diesel Corporation, Civil
Action No. 98-2548, U.S. v. Caterpillar, Inc., Civil Action No. 98-2544, U.S. v. Mack Trucks, Inc. No. 98-
1495 and U.S. v. Renault Vehicles Industriels No. 98-2543; U.S. v. Navistar No. 98-2545, U.S. v. Volvo
Truck Corp. No. 98-2547.
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from Korea to San Francisco were equipped with SCR units. The vessels routinely travel 48
nautical miles within the BAAQMD jurisdiction which begins five miles west of the Golden Gate
bridge. Two to three hours before arrival at the BAAQMD boundary, the main engine fuel is
switched from normal heavy fuel to an ultra low sulfur marine diesel oil. The use of low sulfur
fuel allows for the SCR system to be effective during a wider range of exhaust gas temperatures
than it normally would be. This is important for the California bound ships because their
operations are frequently transient in nature while maneuvering in the Bay. This settlement and
the resulting environmental project is similar to a supplemental environmental project.
7. VMEP Program and SIP Credit Calculation
The policy and funding mechanisms described in this chapter outline ways that state staff
can think about and implement retrofit projects for heavy-duty engines. The federal government
has established significant sources of funding to encourage this and other emissions reduction
projects. In addition, EPA recently established the Voluntary Mobile Source Emission
Reduction Credit Program which allows states to claim SIP credits from voluntary mobile source
emission reduction projects, such as retrofit projects. The retrofit programs described in this
chapter could be eligible for SIP credit generation under this program.
In October 1997, the OMS released "Guidance on Incorporating Voluntary Mobile
Source Emission Reduction Programs in State Implementation Plans." The voluntary measures
guidance applies to innovative mobile source air quality programs that are voluntary or that are
operated by a non-governmental entity. This is a pilot program currently undergoing a 5-year
trial, and will be re-examined in 2002. Potential voluntary measures programs include employer-
based commuter choice, mobile source public education/outreach programs, small scale financial
mechanisms (those producing relatively small emission reductions), "ozone action day"
programs, and community-based transportation programs. State staff may find either the
Economic Incentives Policy (EIP) guidance or the voluntary measures guidance to be more
appropriate depending on the specific nature of the program. If states submit a program to the
EPA under the voluntary measures guidance, they do not need to follow the EIP guidance.
The EPA has limited the administrative requirements of programs developed under the
voluntary measures guidance because these programs are smaller in terms of the emission
reductions they produce, and because they can increase public awareness. States may use the
voluntary measures guidance to achieve up to 3 percent of the required reductions for each of the
criteria air pollutants or precursor for any applicable SIP requirement. The 3 percent cap per
criteria pollutant was instituted because states are not required to play a direct role in
implementing these programs, the programs are not directly enforceable against participating
parties, and there may less experience in quantifying the emission benefits from these programs.
Under the voluntary measures policy, state agencies must make a commitment that the program
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is conducted and monitored, and that states will make up for any reductions which are claimed
but not achieved by the program.
States may use the EIP guidance to implement programs which will generate emission
reductions beyond the 3 percent limit, or when state programs have already reached the 3 percent
limit under the voluntary measures guidance. Under the EIP Guidance, states are directly
responsible for ensuring that program elements are implemented. A program must be directly
enforceable as described in sections 5.0, 7.1, and 13.2 of the federal guidance. Actions and/or
emission reductions by identifiable sources are enforceable by states and/or by the EPA.
To determine the best policy for a program, consider the following.
Who will implement and operate the program.
The size of the program, and the cumulative size of all programs the state has developed
under the voluntary measures guidance
The enforceability of the program.
In general states should use the EIP guidance to implement transportation pricing programs (e.g.,
roadway pricing).
Chapter Summary
Heavy-duty engine emission control has lagged behind control of other sources such as
passenger cars and stationary sources. This lack of emissions control is compounded by the
durability of diesel engines. For example, estimates from registration data in the Northeast
indicate that 40% of trucks in the region are pre-1989 model year, and thus are uncontrolled for
particulates. In the case of nonroad engines, the disparity is even greater, given that all pre-1996
engines are uncontrolled. Due to this disparity in in-use emissions between heavy-duty vehicles
and other sources, heavy-duty engines contribute disproportionately to the emissions inventory
for NOx, PM, and toxics. As states work to attain air quality standards for these pollutants they
will increasingly look to the heavy-duty engine sector for reductions. Retrofit of in-use heavy-
duty diesels provides a means for states to reduce PM, CO, HC, and, in some cases NOx,
emissions from these engines. Controlling heavy-duty engine pollution could be the most cost
effective way to reduce NOx and PM at this time as compared with further control options for
cars and stationary sources.
Options for reducing PM, HC, CO and toxics include oxidation catalysts, fuel changes,
and particulate filters. While ambient standards for fine particulates may not require states to
reduce PM levels, public concern over smoke, odor, toxics, and PM from diesels has spurred
efforts to reduce diesel emissions such as retrofit initiatives. States are beginning to address
public concern over diesel pollution by initiating retrofit projects. Public concern over diesel
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emissions is often most pronounced in urban areas where residents are disproportionately
impacted by construction projects, marine vessel emissions and highway diesels. For this reason,
targeting fleets or projects for retrofit for which there will be substantial community support can
be important to the success of retrofit initiatives. The Central Artery/Tunnel project is an
example of a project which grew out of community concern over diesel emissions.
While the retrofit projects to date are geared toward reducing PM, HC, CO, and toxics, in
the future retrofit projects to reduce NOx emissions from heavy-duty diesels could achieve
significant reductions. For example, the studies in this chapter showed that reducing NOx from
school buses and from marine vessels costs approximately $800 to 1,500. The development of
emulsified fuels, additives, lean NOx catalysts, and NOx adsorbers may provide states with more
options to reduce NOx from heavy-duty engines in the future. While these options require
research and development, other options are feasible at this time. For example, the retrofit of
stationary generators with SCR provides an opportunity to reduce NOx emissions from the
hundreds of generators operating in the region.
The development of mobile source emission reduction credits for NOx could also
encourage retrofit of heavy-duty diesels in the future. The chapter listed several options for
generating NOx credits. A quantification mechanism and a method for trading these potential
credits, however, needs to be developed. Appendix A details CARB's guidelines for credit
generation which could be used by the Northeast states as a starting point in developing a credit
generation and trading program.
In the case of all retrofit projects, states need to assess the potential emissions reductions
opportunities available and then choose implementation strategies. The chapter provided a
number of ideas as to how this can be done.
The chapter listed a host of potential sources to fund heavy-duty engine emission control
retrofit initiatives. Some, like the federal CMAQ program are already available to states. As
outlined above, states and local governments have a variety of other mechanisms at their disposal
to fund such projects. Bond issues, earmarked funds and supplemental environmental penalties
are currently being used by some states to fund retrofit programs. These funds can and are being
used by states to initiate highway and nonroad retrofit projects to reduce in-use heavy-duty
diesel pollution.
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Appendix A
Credit Generation for Trading Purposes
CARS Guidelines for Mobile Source Emission Reduction Credits
The California Air Resources Board has provided guidance to the 34 air quality management
districts of the state for the development of mobile source emission reduction credit (MSERC)
program. These guidelines are substantively consistent with the 1986 USEPA Emission Trading
Policy Statement for Emission Reduction Credit (ERC) trading; that is, they require that the
reductions be surplus, quantifiable, permanent and enforceable.
Specific district programs are discussed below.
South Coast Air Quality Management District
Strategy #1: Rule 1612 - Clean On-Highway Vehicles (September. 1995}
Description: voluntary reductions of NOx, HC, CO, PM and SOx emissions to create MERCs
through the operation of low- or zero-emission on-highway vehicles within the boundaries of the
District.
Applicability: passenger cars, light-duty trucks, medium-duty vehicles and heavy-duty vehicles
that are registered and operated in the District for which optional emission standards have been
set by CARB.
Eligibility:
operation of a new heavy-duty vehicle, powered with engines certified to optional emission
standards
operation of repowered heavy-duty vehicles with engines certified to optional emission
standards
operation of heavy-duty vehicles, retrofitted to comply with optional emission standards
using certified conversion kits and using manufacturer approved facilities for the installation
of the certified conversion kits
operation of new low- or zero-emission heavy-duty vehicles that results in evaporative and
marketing loss emission reductions.
The vehicle operator must submit an application for MERCs which includes a description of the
repowering, retrofitting or purchasing project, and information characterizing both the baseline
engine and the new engine. Each year, the operator must submit actual vehicle miles traveled
documentation and ensure that all engine replacement and major engine overhauls are performed
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in accordance with specifications and procedures required by the engine or retrofit manufacturer
throughout the engine's life.
Credit life/discounts/design margin: MERCs are not discounted at the time of creation. They
expire two years after the date of issuance and are discounted by 20% at the time of use, unless
the use already provides for an offset ratio of greater than 1.0. Use must occur in the same
District in which the MERCs were created.
Strategy #2: Rule 1620 - Clean Nonroad Mobile Equipment (March. 1996)
Description: provides opportunity to generate NOx, HC, CO, PM and SOx mobile source
emission reduction credits on a voluntary basis through the operation of low- or zero-emission
off-road equipment within the District.
Applicability: any off-road mobile equipment or vehicle for which emission standards have been
adopted by CARB or EPA and for which optional emission standards have been specified. Such
equipment and vehicles would be used primarily off-highway to propel, move, or draw persons
or property in construction, commercial, industrial, mining, agricultural or forestry applications
within the District, including dozers, loaders, tractors, scrapers, graders, off-highway trucks,
forklifts, and utility service vehicles. Not included are utility and lawn and garden equipment,
off-road motorcycles, all-terrain vehicles, go-carts, golf carts, marine vessels, aircraft and
locomotives.
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