Non-Conformance Penalties for
Heavy-Duty Diesel Engines Subject
to the 2010 NOx Emission Standard
The U.S. Environmental Protection Agency (EPA) is adopting
nonconformance penalties (NCPs) for heavy heavy-duty diesel
engines that can be used by manufacturers of heavy-duty diesel
engines unable to meet the current oxides of nitrogen (NOx) emission
standard. These penalties, which are assessed on a per-engine basis,
allow a manufacturer to produce and sell nonconforming engines
upon payment of penalties. The actual penalties reflect how close the
engines are to meeting the standard - the cleaner the engines are, the
lower the penalties will be.
What are Non-Conformance Penalties?
Non-conformance penalties (NCPs) are monetary penalties that allow a vehicle or
engine manufacturer to sell engines that do not meet the emission standards. Under
a penalty structure previously established by regulation, manufacturers unable to
comply with the applicable standard may choose to pay penalties, which are assessed
on a per-engine basis.
The Clean Air Act outlines the key requirements of an NCP program. The Act
requires that:
• The penalties increase with the degree of non-compliance with the emission
standard and that the penalties increase over time,
• Emissions under an NCP program may not go above an upper limit estab-
lished by regulation,
• The NCPs remove any competitive disadvantage that might otherwise accrue
to a manufacturer that is complying with the standards.
SEPA
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
EPA-420-F-12-049
August 2012
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Which Engines and Vehicles are Covered?
EPA is establishing NOx NCPs for 2012 and later highway heavy heavy-duty diesel engines.
These are the engines used in the largest highway trucks and buses. The standard for these
engines is 0.20 grams NOx per brake-horsepower-hour (g/hp-hr).
Why is EPA Establishing These Penalties?
NCPs were authorized for heavy-duty engines under the Clean Air Act to provide flexibility
that fosters long-term improvement in emissions without forcing manufacturers out of the
market. A 1985 rulemaking established the three basic criteria for determining the eligibility of
emission standards for NCPs in any given model year. First, the emission standard in question
must have become more difficult to meet. Second, substantial work must have been required in
order to meet the emission standard. Third, a technological laggard must exist or be likely to
develop. A technological laggard is considered to be a manufacturer who cannot meet a particu-
lar emission standard due to technological difficulties and who, in the absence of NCPs, might
be forced from the marketplace. EPA has determined it is appropriate at this time to establish
NCPs for this emission standard because these three NCP criteria have been met.
What are the Penalty Levels?
The actual penalties that a manufacturer would pay for each non-complying engine are deter-
mined by formulas that already exist in the federal regulations. The Final Rule specifies certain
parameters that determine the amount a manufacturer must pay, when used in these formulas,
along with the emissions of the engine. Key parameters that determine the NCP a manufacturer
must pay are EPA's estimated cost of compliance for a near worst-case engine and the degree to
which the engine exceeds the emission standard (as measured from production engines). Engine
emissions may not exceed an upper limit designated in the regulations. EPA has established an
upper limit of 0.50 g/hp-hr NOx in this Final Rule. The figure below provides the calculated
per-engine penalties up to $3,775 for emission rates between 0.20 and 0.50 g/hp-hr NOx for
2012 model year heavy heavy-duty engines. The maximum penalties will increase by several
hundred dollars per engine each year for later model years.
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2012 Heavy Heavy-Duty Engine NCR
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What are the Total Costs?
NCPs generally have minimal adverse economic impacts. Use of them is optional, and manu-
facturers will likely choose whether or not to use NCPs based on their ability to comply with
emissions standards. Manufacturers that choose to make use of the NCPs will incur those costs,
which are based, in part, on the cost of complying with the emission standards. Without NCPs,
a manufacturer that has difficulty meeting the standards has only two alternatives: fix the non-
conforming engines, perhaps at a prohibitive cost, or not produce/sell them. The availability of
NCPs provides noncomplying manufacturers with a third alternative, yet protects those manu-
facturers that have incurred the costs of complying with the standards.
For More Information
You can access the Final Rule and related documents on EPA's Office of Transportation and Air
Quality (OTAQ) Web site at:
www.epa.gov/otaq/hd-hwy.htm
For more information on these and related rules, please contact EPA through EPA OTAQ
Public Inquiries at:
www.epa.gov/otaq/oms-cmt.htm
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