Diesel Retrofits: Quantifying
and Using Their Emission
Benefits in SIPs and Conformity
Guidance for State and Local Air
and Transportation Agencies
&EPA
United States
Environmental Protection
Agency
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Diesel Retrofits: Quantifying
and Using Their Emission
Benefits in SIPs and Conformity
Guidance for State and Local Air
and Transportation Agencies
Transportation and Climate Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
&EPA
United States
Environmental Protection
Agency
EPA-420-B-14-007, February 2014
Supersedes EPA-420-B-06-005
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SECTION 1: INTRODUCTION 6
1.1 What is the purpose of this guidance? 6
1.2 How can emission reductions from retrofit projects be used to meet SIP and conformity
needs? 7
1.2.1 On-road and nonroad retrofit projects in SIPs 7
1.2.2 On-road retrofit projects in transportation conformity 8
1.2.3 Nonroad retrofit projects in transportation conformity 8
1.2.4 Retrofit projects in general conformity 9
1.3 What vehicles, engines, and equipment does this guidance address? 9
1.4 What is a retrofit proj ect? 9
1.5 What are the requirements for using vehicle, engine, or equipment replacements in SIPs
and conformity? 10
1.6 How does this guidance relate to the Voluntary Mobile Source Emission Reduction
Program SIP guidance? 11
1.7 Can a state require retrofits of on-road and nonroad vehicles, engines, or equipment? 12
1.8 Does this guidance create any new requirements? 13
1.9 Who should I contact for additional information? 13
SECTION 2: QUANTIFYING RETROFIT EMIS SIGN REDUCTIONS 14
2.1 How do you quantify emission reductions from retrofit projects? 14
2.2 What are MOVES and NMIM and why should they be used to quantify emission reductions
from retrofits? 14
2.3 How should the data included in MOVES and NMIM be used when quantifying emission
reductions from retrofits? 15
2.4 Can you use MOVES or NMIM to estimate emission reductions from retrofit projects for
uses other than SIPs or conformity determinations? 16
2.5 How do you use MOVES201 Ob to quantify emission reductions from retrofit projects? 16
2.5.1 Pollutant 17
2.5.2 Pollutant Process 17
2.5.3 Fuel Type and Source Type 18
2.5.4 Initial Calendar Year and Final Calendar Year of Retrofit Implementation 18
2.5.5 Initial Model and Final Model Year Retrofitted 18
2.5.6 Fraction of Fleet Retrofit 18
2.5.7 Effectiveness of the Retrofit 19
2.6 How do you use MOVES to quantify emission reductions from vehicle or engine
replacements? 20
2.7 How do you use NMIM to quantify emission reductions from nonroad retrofit projects? 21
2.7.1 Differences between "fleet specific" and "fleet wide" retrofit projects 21
2.7.2 The retrofit parameters 22
2.7.3 The fleet information parameters 23
2.8 How do you use NMIM to quantify emission reductions from vehicle, engine, or equipment
replacements? 25
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SECTION 3: USING EMISSION REDUCTIONS IN SIPS 27
3.1 What are the basic requirements for using emission reductions in SIPs? 27
3.1.1 Quantifiable- 27
3.1.2 Surplus- 27
3.1.3 Federally Enforceable - 28
3.1.4 Permanent- 29
3.1.5 Adequately Supported - 29
3.2 How can the estimated emission reductions be used for SIP purposes? 30
3.3 What would a state submit to EPA to meet the requirements for incorporating a retrofit
project in a SIP? 31
3.4 Are there any other types of SIPs that could include emission reductions from retrofit
projects? 31
3.5 What monitoring and record keeping should occur to document retrofit emission
reductions? 32
3.5.1 What should the state air agency monitor and record? 32
3.5.2 How long should the state air agency maintain records? 32
3.6 What validation and reconciliation should occur for emission reductions in SIPs approved
under the VMEP guidance? 33
3.7 What penalties can EPA impose for not complying with Clean Air Act requirements? 33
SECTION 4: USING EMISSION REDUCTIONS IN TRANSPORTATION CONFORMITY
DETERMINATIONS 34
4.1 What is transportation conformity? 34
4.2 What kinds of retrofit projects can be used in transportation conformity determinations? 34
4.3 How can the emission reductions from on-road retrofit projects be included in
transportation conformity determinations? 35
4.4 How can the emission reductions from nonroad retrofit projects be included in
transportation conformity determinations? 36
4.5 How is EPA supporting the use of emission reductions from nonroad retrofit projects in
transportation conformity? 37
4.6 What is a safety margin? 37
4.7 When can a safety margin be established in a SIP? 38
4.8 What are the benefits of establishing a safety margin at the time that an RFP SIP,
attainment demonstration, or maintenance plan is initially submitted? 38
4.9 Why should an area start developing a safety margin now? 39
4.10 What are the features of a safety margin? 39
4.11 What is a trading mechanism? 40
4.12 When can a trading mechanism be established in a SIP? 41
4.13 Why develop a trading mechanism as a stand-alone SIP revision? 41
4.14 What would a SIP with a trading mechanism look like? 41
4.15 What are the features of a trading mechanism? 42
4.16 Does the public have the opportunity to comment on trading? 43
4.17 Are there any examples of transportation conformity-related trading mechanisms that
were approved into the SIP? 43
4.18 Are there any other ways to establish a trading mechanism for a nonroad retrofit project?
44
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4.19 How can I get additional technical assistance in using the emission reductions from a
nonroad retrofit proj ect in transportation conformity? 44
SECTION 5: USING EMISSION REDUCTIONS IN GENERAL CONFORMITY
DETERMINATIONS 46
5.1 How can the estimated emission reductions be used for general conformity determinations?
46
5.2 How can retrofit projects be used to meet the general conformity requirements? 46
5.3 Is a SIP revision required if a source with a facility-wide emissions budget wants to
implement a retrofit project at the facility? 47
5.4 What requirements would potentially limit the use of retrofit projects in the general
conformity program? 48
5.5 Why are SIPs required for use of nonroad retrofits in transportation conformity but not
required for general conformity? 48
APPENDIX A: 50
ESTABLISHING AND USING A SAFETY MARGIN TO ALLOW EMISSION REDUCTIONS
FROM NONROAD RETROFITS TO BE USED IN TRANSPORTATION CONFORMITY
DETERMINATIONS 50
A. 1 What is an example of establishing and using a safety margin? 50
A.2 What is the most expeditious process for establishing a safety margin that results from a
nonroad retrofit proj ect? 51
A.3 Have any areas included safety margins in their SIPs? 53
APPENDIX B: 56
ESTABLISHING AND USING A TRADING MECHANISM TO ALLOW EMISSION
REDUCTIONS FROM NONROAD RETROFITS TO BE USED IN TRANSPORTATION
CONFORMITY DETERMINATIONS 56
B. 1 What is an example of establishing and using a trading mechanism? 56
B.2 Does a trading mechanism have to be included in a SIP? 57
B.3 What is the most expeditious process for establishing a trading mechanism in a SIP, and
how long will it take? 57
B.4 Has any state adopted a trading mechanism into its SIP this quickly? 59
APPENDIX C: 62
MODEL RULE FOR TRADING EMISSION REDUCTIONS FROM NONROAD RETROFIT
PROJECTS FOR TRANSPORTATION CONFORMITY 62
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SECTION 1: INTRODUCTION
1.1 What is the purpose of this guidance?
Technology is available to reduce diesel vehicle and engine emissions in a cost-effective
way. The ability to use diesel emission reductions for state implementation plan (SIP) and
conformity purposes gives states and localities additional incentive to implement diesel retrofit
projects. Diesel retrofit technologies reduce pollution from the existing diesel engine fleet by up to
90% for paniculate matter (PM), up to 75% for nitrogen oxides (NOx), and up to 90% for volatile
organic compounds (VOCs). Many diesel retrofit projects are being successfully implemented
around the country. Clean diesel projects already initiated are expected to result in approximately
20,000 tons of particulate matter reduced over the life of the projects, with estimated public health
benefits of about $5 billion.
The purpose of this document is to provide guidance on quantifying and using emission
reductions from on-road and nonroad diesel vehicles, engines, and equipment that have been
retrofitted with emission reduction technology. This guidance document describes how to quantify
and use reductions of NOx, VOCs, PM2.5, PMio, and carbon monoxide (CO) in ozone, PM2.5, PMio,
nitrogen dioxide (NO2), and CO nonattainment and maintenance areas. You can use the emission
reductions resulting from implementing a retrofit project in a SIP to help achieve reasonable further
progress (RFP), attainment of the national ambient air quality standard (NAAQS or "standard"), or
maintenance of the NAAQS; and in transportation conformity and general conformity
determinations. This guidance document is updated to reflect the new quantification procedures to
use EPA's latest on-road emissions model, the MOtor Vehicle Emissions Simulator (MOVES)
model.l For nonroad emissions, the nonroad portion of the National MOBILE Inventory Model
(NMEVI) is the preferred way to estimate benefits of retrofit programs. State and local agencies
developing SIPs and conformity analyses for California should consult with EPA Region 9 for
information on the current version of EMFAC approved for use in California and for information on
how to quantify emission reductions from retrofit projects.
Retrofit projects provide a unique and cost-effective opportunity for state and local
governments to reduce pollution from on-road and nonroad diesel vehicle and equipment fleets, and
as a result, could assist areas in attaining the NAAQS. The current transportation law, Moving
Ahead for Progress in the 21st Century (MAP-21), continues to provide federal funding for on-road
retrofits under the Congestion Mitigation and Air Quality Improvement Program (CMAQ), and
funding for diesel retrofit projects.2 MAP-21 recognizes the importance of diesel retrofit projects
and other mobile source emission reduction strategies and directs states and metropolitan planning
organizations (MPOs) to give priority for use of CMAQ funds for projects that reduce fine
particulate matter emissions, including diesel retrofits in PM2.5 nonattainment and maintenance areas.
The law also notes that states and MPOs continue to have final CMAQ project selection authority.
1 The previous version of this document, EPA420-B-06-005, was released in June 2006. Today's version supersedes the
previous document.
2 23 U.S.C 149(b)(8)
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This guidance also fulfills the directive from the Energy Policy Act of 20053 that requires
EPA to provide SIP guidance for retrofit projects under the diesel emission reduction provision (also
known as "DERA") and takes the additional step of providing guidance for crediting retrofits in
conformity determinations. In addition to assisting MPOs and states in evaluating diesel retrofits for
CMAQ project selection, we anticipate that this guidance will also be useful for implementing the
DERA program. DERA authorizes federal funds for retrofit projects that reduce diesel emissions
from existing engines.
This guidance is focused on quantifying emission reductions from diesel retrofits for SIP and
conformity purposes and therefore has an intended audience of air quality and transportation
planners. Other audiences can use this guidance for quantifying emissions reductions for non-SIP or
conformity purposes by reading Section 1 for background and referring to Section 2 of the guidance
for quantifying emission reductions. This guidance document is written for current and future
NAAQS as well as current and future versions of MOVES. EPA will re-evaluate the applicability of
this guidance as needed.
1.2 How can emission reductions from retrofit projects be used to meet SIP and
conformity needs?
This guidance is intended to facilitate the development of retrofit projects as a cost-effective
way to achieve needed emission reductions while ensuring that these projects meet SIP and
conformity requirements. This document describes several different options for the use of emission
reductions from retrofit projects to meet both near term and longer term SIP and conformity needs.
State and local air and transportation agencies should work together to determine how
reductions from diesel retrofits should be used given local air quality needs. The interagency
consultation process can also be used to identify retrofit projects to implement for future SIP or
conformity needs. If those reductions are used in the near term for conformity, then state and local
agencies should work together to determine what additional retrofit projects could be implemented
to meet any additional air quality needs.
Under any of the options highlighted below, it is in the best interests of state and local
agencies to act as quickly as possible to get retrofit projects in place. Retrofit projects will provide
their greatest benefits in the near term, while significant numbers of vehicles, engines, and
equipment built before EPA's 2007/2010 on-road and 2008 nonroad standards remain in the fleet.
1.2.1 On-road and nonroad retrofit projects in SIPs
One option is to use retrofit reductions to help demonstrate RFP, attainment, or maintenance
3 See Energy Policy Act of 2005, Title VII, Subtitle G (sections 791 to 797) at
http://www.epa.gov/oust/fedlaws/epact 05.htm
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in upcoming SIP submissions. On-road and nonroad retrofit projects are subject to the same SIP
requirements as any other control measures. This guidance document provides the necessary
information to include retrofit projects in a SIP, including a calculation method that ensures that
emission reductions calculated for the retrofit project are consistent with the rest of the SIP. State
and local agencies can include these retrofit projects in the SIPs being developed to meet the
applicable NAAQS, but they will want to consider implementing them as soon as possible to ensure
the maximum available reductions from the retrofit projects. General SIP requirements for retrofit
projects are described in Section 3 of this document.
1.2.2 On-road retrofit projects in transportation conformity
Alternatively, state and local agencies could also use on-road retrofit projects to meet
transportation conformity requirements now or in the future with little additional effort beyond what
is required to properly implement the project and quantify the emission reductions. These
reductions could be incorporated into a transportation conformity determination without
making any change in the SIP. Section 4.3 of this document explains this process.
1.2.3 Nonroad retrofit projects in transportation conformity
This document also provides guidance on options for using reductions from nonroad retrofit
projects in regional emissions analyses for transportation conformity determinations (see Section 4).
These options require a SIP revision before they can be implemented. One option, adding a
safety margin to the SIP, could be implemented in the context of the process of developing a new
SIP to meet an applicable NAAQS. SIP safety margins have been implemented and used to meet
transportation conformity requirements many times in the past. We have provided detailed
information on how this option works in Section 4 and Appendix A.
Another option for using the nonroad retrofit reductions in transportation conformity
determinations is to include a trading mechanism in the SIP. This can be done as a SIP prior to the
completion of an RFP or attainment SIP. We have provided detailed information on how to
implement a trading mechanism as a SIP in Section 4 and Appendix B. To help reduce the time
needed to develop, submit and approve a trading mechanism SIP, we have provided a model trading
rule in Appendix C. States that adopt this rule without significant revisions could expect an
expedited approval by EPA.
EPA also notes that reductions from retrofits can be applied as mitigation measures in
quantitative PM2.5 or PMio hot-spot analyses for project level conformity determinations. The
methodology in Section 2 of this guidance can be used for such analyses. For further background on
PM hot-spot analyses, see EPA's Transportation Conformity Guidance for Quantitative Hot-spot
Analyses in PM2.5 and PMio Nonattainment and Maintenance Areas at
www.epa.gov/otaq/stateresources/transconf/proiectlevel-hotspot.htmtfpm-hotspot
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1.2.4 Retrofit projects in general conformity
Finally, this guidance also provides information on the use of retrofit reductions to meet
general conformity requirements (see Section 5). The use of nonroad retrofit reductions in
general conformity does not require a SIP revision.
1.3 What vehicles, engines, and equipment does this guidance address?
This guidance focuses on emission reductions from heavy-duty on-road and nonroad diesel
vehicles, engines, and equipment, and fuels.4 This guidance excludes locomotive and marine
applications because they are not currently contained in NMTM. New emission standards, enacted in
2001, affected all on-road heavy-duty highway vehicles and engines, starting in 2007 model year,
with an additional set of NOx requirements beginning in 2010. Tighter emission standards
(Nonroad Tier 4) were phased in for 2008 and future model year nonroad engines. Ultra-low sulfur
diesel fuel (15 ppm sulfur content) was required for on-road use beginning in October 2006. For
nonroad vehicles, engines, and equipment, low sulfur diesel fuel (500 ppm sulfur content) was
required beginning in 2007, with ultra-low sulfur diesel fuel required beginning in 2010. In general,
this guidance applies to the retrofit of vehicles, engines, and equipment manufactured before those
standards took effect and that will not have to comply with EPA's 2007/2010 on-road and 2008
nonroad regulations. This guidance document can be used, however, for emission reductions from
retrofits of post-2007/2010 and post-2008 vehicles, engines, and equipment if such activities meet
the definition of "retrofit" discussed below.
1.4 What is a retrofit project?
For the purpose of this guidance only, a "retrofit project" is defined broadly to include any
technology, device, fuel, or system that when applied to an existing diesel engine achieves emission
reductions beyond that currently required by EPA regulations at the time of its certification.
Therefore, for those existing vehicles, engines, or equipment that will not have to comply with
EPA's 2007/2010 heavy-duty on-road and 2008 nonroad standards, any additional emission
reduction beyond the current regulation of these vehicle, engine, or equipment emission levels is
considered a retrofit project. These technologies may include, but are not limited to, the following:
EPA "verified" emission control technologies (for example, oxidation catalysts and PM
filters and upgrade kits5)
4 On-road sources include vehicles used on roads for transportation of passengers and freight. These sources are also
sometimes referred to as highway sources. Nonroad sources include vehicles, engines, and equipment used for
construction, agriculture, nonroad transportation, recreation, and many other purposes. These sources are also
sometimes referred to as off-road sources. Within these broad categories, on-road and nonroad sources are further
distinguished by size, weight, use, and/or horsepower.
5 For a complete list of all EPA verified technologies, consult the list at the following web site:
http://www.epa.gov/cleandiesel/verification/verif-list.htm . Any diesel fuel and/or diesel fuel additive included on
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California's Air Resources Board (CARB) "verified" emission control technologies (see
paragraph below)
EPA certified engines6 as engine replacements (see Section 1.5)
Technologies that have not been verified by EPA or CARB and operational strategies are
beyond the scope of this guidance document.
In 2004, EPA signed a Memorandum of Agreement (MOA)7 with CARB to coordinate the
verification of diesel retrofit technologies. This MOA commits the agencies to establish reciprocity
in verification of hardware or device-based retrofits, and further establishes our joint commitment to
cooperate on the evaluation of retrofit technologies. This agreement commits EPA and CARB to
accept each other's verification of the amount of PM and NOx reduced by a particular retrofit
technology. Currently, EPA accepts CARB verified technologies, and CARB accepts EPA verified
technologies. Additionally, as retrofit manufacturers initiate and conduct in-use testing, both
agencies agreed to coordinate this testing so data generated may satisfy the requirements of both
agencies. This MOA is intended to expedite the verification and introduction into the market of
innovative emission reduction technologies. Additionally, this MOA reduces the effort needed for
retrofit technology manufacturers to complete verification.
The verification of diesel technologies is specific to particular types of vehicles, engines, or
equipment as defined in the "applicability" section of the EPA and CARB verified technology lists.
Verified retrofit technologies can be applied only to the vehicles, engines, or equipment specified in
those lists. For example, a technology that has been verified for on-road vehicles will not
necessarily be suitable for nonroad vehicles, engines, or equipment unless it is also been verified for
such use.
1.5 What are the requirements for using vehicle, engine, or equipment
replacements in SIPs and conformity?
In addition to the EPA and CARB verified retrofit technologies, this guidance also applies to
the use of EPA certified engines as engine replacements,8 or the early replacement of older vehicles
or equipment (e.g., bulldozers) with cleaner vehicles or equipment. Emission reductions that result
from vehicle, engine, or equipment replacements that would have occurred through normal attrition
EPA's list or verified technologies is required to be registered in accordance with regulations at 40 CFR 79, Registration
of Fuels and Addititives. An engine upgrade kit consists of parts (e.g., turbo charger, fuel injector, pistons, etc) that are
used to rebuild an older engine to an engine configuration which is certified to meet more stringent current federal
emissions standards.
6 For a complete list of all EPA certified large on-road and nonroad engines, consult the list at the following web site:
www.epa.gov/otaq/certdata.htm.
7 The MOA is at the following web site: http://www.epa.gov/cleandiesel/documents/epa-arb moa.pdf. The CARB
verified technology list can be found here: http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm.
8 Engine replacement is sometimes referred to as an engine "repower;" EPA uses only the term "replacement" in this
guidance.
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are considered to be the result of normal fleet turnover and are not addressed by this guidance. The
effects of fleet turnover are already included in the MOVES and NMEVI/NONROAD models.
Furthermore, the purchase of new vehicles or equipment to expand a fleet is not covered by the
guidance. To be considered a replacement, the purchase of new vehicles, engines, and equipment
would need to be accompanied by the scrappage of old vehicles, engines, and equipment and occur
before normal attrition.
To be able to use emission reductions from any replacements in a SIP or in a conformity
determination, the following statements would apply:
The vehicle, engine, or equipment being replaced would be scrapped (permanently disabled or
destroyed), or the replaced engine would be returned to the original engine manufacturer for
remanufacturing to a cleaner standard.
The replacement vehicle, engine, or equipment would perform the same function as the
vehicle, engine, or equipment that is being replaced (e.g., an excavator used to dig pipelines
would be replaced by an excavator that continues to dig pipelines).
The replacement vehicle, engine, or equipment would be of the same type and similar gross
vehicle weight rating or horsepower as the vehicle, engine, or equipment being replaced (e.g.,
a 300 horsepower bulldozer is replaced by a bulldozer of similar horsepower).
In addition, when emission reductions are calculated for replacements, note that:
The emission reductions are available only for the remaining useful life of the vehicle, engine,
or equipment being replaced (e.g., if the vehicle being replaced had a remaining useful life of
5 years, the additional emission reductions from the new vehicle are available for SIP or
conformity purposes under this guidance only for 5 years).
The emission reductions are available only for activity (e.g., travel or hours of use) of the
vehicle, engine, or equipment being replaced within the nonattainment or maintenance area.
Thus, if you replace an older, less used vehicle or piece of equipment with a piece of new
equipment, it is likely that the new equipment would be used more than the item it replaces.
However, emission reductions from the new equipment would need to be calculated based on
the activity level of the old equipment.
1.6 How does this guidance relate to the Voluntary Mobile Source Emission
Reduction Program SIP guidance?
In October 1997, EPA issued its "Guidance on Incorporating Voluntary Mobile Source
Emission Reduction Programs in State Implementation Plans (SIPs)" (the VMEP guidance).9 The
9This guidance is found at: http://www.epa.gov/otaq/stateresources/policv/general/vmep-gud.pdf EPA notes that the
VMEP guidance is related to SIP measures, rather than transportation or general conformity determinations. Control
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purpose of the 1997 VMEP guidance is to support innovative methods in achieving emission
reductions for SIPs. The VMEP guidance applies to SIP emission reduction measures that rely on
voluntary actions of individuals and other parties.
Many state or federally-funded retrofit projects may not be subject to the VMEP guidance if
they have well-defined requirements to ensure the full implementation of a SIP program. For
example, retrofit projects would not be subject to the VMEP guidance if a state or local regulation or
ordinance that required retrofit projects was included in the SIP. Another example of a project that
would not be subject to the VMEP guidance would be a state program that is described in the SIP
that requires state transportation construction contracts to be implemented with retrofitted
construction equipment. Please consult your EPA Region early in the development of a retrofit
project to determine the appropriate use of the VMEP guidance. Retrofit projects that are pre-
empted under applicable provisions of Clean Air Act section 209, as discussed in Section 1.7, may
not be included in the SIP.
Under the VMEP guidance, the amount of emission reductions allowed for voluntary mobile
measures in a SIP is presumed to be no greater than three percent of the total projected future year
emission reductions required to attain the applicable air quality standards. EPA acknowledges that it
may be possible to demonstrate that voluntary measures may achieve credible reductions higher than
the three percent cap. In that case, EPA will re-evaluate that cap on a case-by-case basis and allow
the cap to be exceeded if the cap hinders the implementation of effective voluntary control measures,
subject to notice and comment during SIP approval. Today's guidance relies on EPA's 1997 VMEP
guidance for voluntary retrofit projects. Interested parties should refer to that guidance at the time a
specific retrofit project is under development.
1.7 Can a state require retrofits ofon-road and nonroad vehicles, engines, or
equipment?
The answer to this question depends on the circumstances for an individual state. Clean Air
Act section 209 sets forth certain restrictions on the abilities of states and localities to adopt and
implement emission standards for certain on-road and nonroad vehicles, engines, and equipment.
The effect of Clean Air Act section 209 on a particular state's retrofit requirements can vary
depending on the specific provisions of those retrofit requirements. State and local agencies should
check with EPA before promulgating any state or local regulations or programs mandating retrofit
projects for SIP or conformity purposes. See Section 1.9 of this guidance for EPA contact
information.
measures for conformity determinations must meet the relevant criteria in the transportation and general conformity
regulations.
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1.8 Does this guidance create any new requirements?
This guidance does not create any new requirements, but explains to state and local air
agencies, transportation agencies, MPOs, and the general public how the air quality benefits of
commuter programs could be included in a SIP or in a transportation conformity determination. The
Clean Air Act (CAA) and implementing regulations contain legally binding requirements. SIP
requirements can be found in Clean Air Act sections 110(a)(2) and 172(c). Transportation and
general conformity requirements can be found in Clean Air Act section 176(c) and applicable
regulations (40 CFR Parts 51 and 93). This guidance document does not substitute for those
provisions or regulations, nor is it a regulation itself. Thus, it does not impose binding, enforceable
requirements on any party, and may not be applicable in all situations. EPA and State decision
makers retain the discretion to adopt approaches for approval of SIP measures that differ from this
guidance where appropriate and consistent with applicable law and regulations. Any final decisions
by EPA regarding a particular SIP measure will only be made based on the statute and regulations in
the context of EPA notice and comment rulemaking on a submitted SIP revision. This guidance may
be revised periodically without public notice.
1.9 Who should I contact for additional information ?
If this guidance document does not answer a specific question, please contact the appropriate
EPA regional office with responsibility for air quality planning and/or conformity in the area where
the retrofit project is located. A contact list of EPA Regions is available at the following web
address: www.epa.gov/epahome/locate2.htm. In addition, contact information for EPA regional
transportation conformity staff can be found at the following website:
www.epa.gov/otaq/stateresources/transconf/contacts.htm.
For general questions regarding retrofit projects or the application of verified retrofit
technologies for the existing fleet of on-road and nonroad vehicles, engines, and equipment, please
contact EPA's National Clean Diesel Campaign at cleandiesel@epa.gov.
For technical questions regarding the use of MOVES or NMIM/NONROAD for calculating
emission reductions from retrofit projects, please contact EPA's Office of Transportation and Air
Quality at mobile@epa.gov.
For general questions concerning the use of emission reductions from retrofit projects in SIPs
or in transportation conformity, please contact Astrid Larsen of EPA's Office of Transportation and
Air Quality at (734) 214-4812, larsen.astrid@epa.gov or Gary Dolce also at EPA's Office of
Transportation and Air Quality at (734) 214-4414, dolce.gary@epa.gov.
For general questions concerning the use of emission reductions from retrofit projects in
general conformity, please contact Tom Coda of EPA's Office of Air Quality Planning and
Standards at (919) 541-3037, coda.tom@epa.gov.
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SECTION 2: QUANTIFYING RETROFIT EMISSION
REDUCTIONS
2.1 How do you quantify emission reductions from retrofit projects?
To estimate emission reductions from retrofit projects for SIPs and for conformity analyses
in states other than California, EPA recommends the use of the following models:
The MOtor Vehicle Emissions Simulator (MOVES) for on-road vehicles10 and
The National Mobile Inventory Model (NMEVI) containing NONROAD2008 for nonroad
sources contained in the model.11
The most recent approved versions of these models should be used. Users should check
EPA's MOVES and NMEVI websites for the most current approved version of these models
(MOVES2010b and NMIM2008 as of the release date of this guidance document). EPA intends to
integrate nonroad capabilities into a future version of MOVES.
EPA is not providing a methodology at this time for the quantification of emission
reductions from retrofit projects in California. State and local agencies developing SIPs and
conformity analyses for California should consult with EPA Region 9 for information on the current
version of EMFAC approved for use in California and for information on how to quantify emission
reductions from retrofit projects.
2.2 What are MOVES and NMIM and why should they be used to quantify
emission reductions from retrofits?
MOVES is EPA's latest motor vehicle emissions model for state and local agencies to
estimate volatile organic compounds (VOCs), nitrogen oxides (NOx), particulate matter (PM),
carbon monoxide (CO), and other precursors from cars, trucks, buses, and motorcycles for SIP
purposes and conformity determinations outside of California. MOVES is available at
http://www.epa.gov/otaq/models/moves/index.htm.12 MOVES replaced MOBILE6.2, EPA's
previous emissions model. MOVES is required for SIPs begun after December 2009 and regional
transportation conformity analyses begun after March 2, 2013. See EPA's "Policy Guidance on the
This guidance is applicable to current and future versions of the MOVES model, unless EPA notes otherwise when
approving the model for conformity purposes. Modelers should follow the "Using MOVES to Prepare Emission
Inventories in State Implementation Plans and Transportation Conformity: Technical Guidance forMOVES2010, 2010a,
and 2010b," EPA-420-B-12-028 (April 2012); available online at www.epa.gov/otaq/models/moves/index.htm#sip. The
MOVES model, user guide, and supporting documentation are available online at
www.epa.gov/otaq/models/moves/index.htm.
11 NMIM2008 and supporting documentation are available online at www.epa.gov/otaq/nmim.htm. NONROAD2008
could also be used, but EPA does not recommend this because NONROAD2008 does not include the fleet specific
capabilities included in NMIM. NONROAD2008 also may not work with newer 64-bit operating systems.
12 Note that this guidance refers to "MOVES" generally rather than a particular MOVES version because EPA will
release updated versions of MOVES in the future.
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Use of MOVES2010 and Subsequent Minor Revisions for State Implementation Plan Development,
Transportation Conformity, and Other Purposes" (available at
www.epa.gov/otaq/models/moves/documents/420bl2010.pdf) for more details. MOVES includes
features that are specifically intended for modeling retrofit programs which are described in detail in
Sections 2.5 and 2.6 below.
NMEVI is a graphical user interface (GUI) that contains the NONROAD2008 and (the now
no longer used) MOBILE6.2 models and a database of county-level input information, called the
National County Database (NCD). NMEVI was created to simplify the process of developing
county-by-county emissions inventories for multi-county areas, states, or the entire nation. MOVES
has replaced NMEVI for on-road emissions estimation and, as a result, the use of on-road emissions
estimates from NMEVI is not currently acceptable for any regulatory purpose. However, the portion
of NMEVI that contains NONROAD2008 is the best option for modeling retrofit, rebuild, and
replacement programs that affect nonroad equipment. The use of NMEVI to model retrofit programs
for nonroad equipment is described in detail in Sections 2.7 and 2.8 below. NMEVI is available at
www. epa. gov/otaq/nmim .htm.
MOVES and NMEVI incorporate EPA's latest emissions data for on-road and nonroad
sources respectively, as well as the capabilities to apply retrofit benefits to emission factors or
inventories that are generated by MOVES and NONROAD under local conditions. The emissions of
retrofit highway and nonroad vehicles, engines, and equipment are subject to the same external
factors as are the emissions for all other vehicles, engines, and equipment. These external factors
include environmental factors (e.g., temperature, humidity), fleet characteristics (e.g., age
distribution of fleet, distribution of VMT by vehicle class, number and types of nonroad engines or
equipment), activity measures (e.g., speed distributions, distribution of VMT by roadway type,
distribution of hours of operation for nonroad equipment), and fuel characteristics (e.g., sulfur
content, Reid vapor pressure (RVP)). The majority of impacts of these external factors on the
emissions of vehicles, engines, and equipment meeting past, current, and future emission standards
are incorporated in EPA's MOVES and NONROAD emissions models which are used to develop
emissions inventories for SIPs and for regional transportation conformity analyses. Using MOVES
and NMEVI to generate retrofit emission reductions ensures that those reductions are based on the
same conditions used to generate the rest of the inventory used in the SIP or conformity analysis.
2.3 How should the data included in MOVES and NMIM be used when
quantifying emission reductions from retrofits?
As with any model, the quality of the inputs in MOVES and NMEVI affects the quality of the
model results. As required by Clean Air Act Section 172(c)(3) and EPA's regulations at 40 CFR
51.112(a), States must use the latest planning assumptions available at the time the SIP is developed,
including, but not limited to VMT, speeds, fleet mix and SIP control measures.
MOVES includes a national default database of fleet and activity information that is applied
at the county level. However, in most cases, local data should be used instead of default fleet and
activity data. Detailed guidance on the development of MOVES inputs for SIP and conformity
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analyses is included in "Using MOVES to Prepare Emission Inventories in State Implementation
Plans and Transportation Conformity: Technical Guidance for MOVES2010, 2010a, and 201 Ob"
(hereafter referred to as the MOVES Technical Guidance) available on the MOVES web page at
http://www.epa.gov/otaq/models/moves/index.htmtfsip. All inputs used in estimating retrofit
benefits for SIP or conformity purposes should be consistent with the MOVES Technical Guidance.
This retrofit guidance document addresses the specific inputs needed for on-road retrofit programs
which are not covered in the MOVES Technical Guidance.
As stated above, NMEVI should be used only for modeling retrofit, rebuild, and replacement
programs that affect nonroad equipment. NMEVI includes a database of county-level nonroad
information called the National County Database (NCD). States have provided some local
information for the National County Database (NCD) as part of the National Emissions Inventory
(NEI) development process. However, given the NEI cycle, this may not be the most recent or best
available information at the time a state initiates modeling. For SIPs and regional conformity
analyses, state and local agencies should review the information in the NCD to evaluate whether it
includes the latest and best information currently available. Where more current or better
information is available, the database must be modified to incorporate it to meet regulatory
requirements for the use of latest planning assumptions in SIPs and conformity determinations.13
The interagency consultation process should be used to evaluate what changes are needed in the
NMIM database for the area.
2.4 Can you use MOVES or NMIM to estimate emission reductions from retrofit
projects for uses other than SIPs or conformity determinations?
Yes. MOVES could be used to evaluate on-road retrofit projects and NMEVI could be used
to evaluate nonroad retrofit projects for other purposes, such as the development of proposals for
retrofit projects. For these purposes, MOVES and NMEVI users could rely more on default data in
MOVES and NMEVI or other more simplified methods for using MOVES and NMEVI than would
otherwise be necessary for SIP or conformity purposes. These simplified methods may result in
emission reduction estimates that are not completely consistent with emission reductions calculated
for SIP or conformity purposes using more rigorous methods. Consultation between organizations
developing project proposals and state and local air quality and transportation agencies about
appropriate methods and interpretation of results is important to ensure that retrofit projects are
properly evaluated.
2.5 How do you use MOVES2010b to quantify emission reductions from retrofit
projects?
Retrofit projects are modeled using the On-Road Retrofit option in the Control Strategies
panel to create an on-road retrofit input file in MOVES. The details of how to do this in
MOVES2010b are described in Section 2.2.9 and Appendix D of the MOVES2010b User Guide
13 EPA encourages states to separately submit updates to the NCD so that the most accurate database is available for both
national and local inventory development.
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(available at http ://www. epa. gov/otaq/models/moves/documents/420b 1200 Ib .pdf.) This part of this
guidance document summarizes some of the key inputs for MOVES and discusses some of the
issues that users face when developing input data. Note that, unlike all other MOVES input files, the
retrofit parameter file uses abbreviated names rather than ID numbers for most of the input
parameters.
EPA has supplied a Retrofit Converter tool for simplifying the creation of an on-road retrofit
input file, which is available at www.epa.gov/otaq/models/moves/tools.htm under the heading
"Retrofit Converter". The Retrofit Converter allows the user to describe the retrofit project in terms
of the verified technology and vehicles to which it applies (type, number, model year), and creates
the appropriate input file for MOVES. The tool automatically accounts for chained pollutants (i.e.,
emissions for pollutants that are dependent in MOVES on the emissions of another pollutant),
creates input lines for each pollutant process, and uses the appropriate abbreviated name, among
other things. For SIP and conformity purposes, the Retrofit Converter tool should be used in a
manner consistent with the guidance in this document and the MOVES Technical Guidance. The
instructions that come with the tool do not provide all of the detail included in this guidance and are
not a substitute for it. The Retrofit Converter does have some limitations which are described in
Sections 2.5.2 and 2.5.7. Users of the Retrofit Converter should always check the output of the
converter to make sure it is consistent with the rest of this guidance.
The MOVES retrofit input file describes the details of the retrofit project. This includes
inputs that specify the pollutants and pollutant processes affected by the retrofit project, the fuel
types affected, the vehicle types affected, the calendar years during which the retrofits occur, the
model years of the vehicles that will be retrofitted, the percentage of the fleet VMT accounted for by
retrofit vehicles per year, and the percentage effectiveness of the retrofit technology applied to the
vehicles. Details on the use of these inputs are described in the Appendix D of the MOVES User
Guide. Specific guidance on these inputs, where applicable, is given below.
2.5.1 Pollutant
EPA and CARB have verified emission reductions from retrofit technologies only for NOx,
VOC, CO, PMio, and PM2.s emissions. Therefore, when estimating emission reductions from retrofit
projects for a SIP or conformity purposes, only these pollutants and any pollutants that are needed by
MOVES to calculate emissions of these pollutants should be selected (see Section 2.2.7.2 of the
MOVES User Guide for a list of base and dependent pollutants or use the Retrofit Converter tool to
automatically include any other pollutants are needed to calculate the emission of the pollutant you
are estimating). As discussed in Section 2.5.7 below, a retrofit evaluation for SIP or conformity
purposes should include all pollutants for which the project area is nonattainment or maintenance,
including any that increase as a result of the retrofit technology.
2.5.2 Pollutant Process
The retrofit parameter file will include a separate line for each pollutant process affected by
the retrofit technology. All retrofit parameter files must include start and running exhaust processes
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for each pollutant for which you are estimating reductions. Some retrofit technologies may also
reduce crankcase running and crankcase start emissions and will include lines for each of these
processes. There are no reductions associated with the extended idle process for retrofit
technologies included in the EPA and CARB verified technology lists. The Retrofit Converter tool
automatically creates the inputs for start and running exhaust processes, but not for crankcase start
and running exhaust processes, which must be entered separately. Section 2.5.7 of this document
provides additional guidance on selecting pollutant process inputs for technologies that reduce
crankcase emissions.
2.5.3 Fuel Type and Source Type
As discussed in Section 1.3, this guidance document addresses on-road retrofit projects only
for heavy-duty diesel vehicles. The retrofit input in MOVES allows you to enter the full range of
on-road source types (vehicle types) and fuel types, but only inputs for heavy-duty diesel vehicles
should be used for retrofit emission reductions in SIPs or conformity determinations. The Retrofit
Converter will convert fuel and source type names to the appropriate abbreviated names.
2.5.4 Initial Calendar Year and Final Calendar Year of Retrofit Implementation
The Initial Calendar Year and the Final Calendar Year of Retrofit Implementation should be
equal to the calendar year you are modeling. For example, if the calendar year of your analysis is
2012, the initial and final years of implementation should also be 2012. Using other years may
cause an incorrect result.
2.5.5 Initial Model and Final Model Year Retrofitted
This input allows you to define the vehicle model years covered by the retrofit project. Note
that the Retrofit Converter only has a single input line labeled "Vehicle Model Year". For projects
that cover multiple model years, simply create a new line in the converter for each year. Using this
approach will ensure that differences in fractions of the fleet retrofit by model year are accounted for
in the retrofit calculation.
2.5.6 Fraction of Fleet Retrofit
This input represents the fraction of activity (VMT for running emissions and vehicle
population for start emissions) associated with retrofitted vehicles for a particular model year and
source type. This number can be a value from 0.00 through 1.00. For example, if retrofitted 2010
model year school buses account for 40% of all 2010 model year school bus VMT in the calendar
year of analysis, you would enter 0.40 for the fraction of the school bus fleet retrofitted for the 2010
model year.
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2.5.7 Effectiveness of the Retrofit
This input is used to describe the effectiveness of the particular vehicle, engine, or equipment
technologies being used in the retrofit project. As mentioned in Section 1.4, EPA has verified the
emission reductions for certain retrofit technologies. A list of these EPA-verified retrofit
technologies, the vehicle types and model years they apply to, and the emission reductions
associated with them can be found at http://www.epa.gov/cleandiesel/verification/verif-list.htm.
Retrofit technologies that have been verified by the California Air Resources Board (CARB) can be
found at: http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm. You should use retrofit reductions from
these verified retrofit technology lists as inputs for MOVES. These reductions are entered in
MOVES as a fraction less than or equal to 1.00 (e.g., a 50% reduction is entered as 0.50). The same
value should be added for both running and start emissions processes.
Retrofit technologies that include closed crankcase systems will require some adjustments to
the values included given in the verified technology list to account for the way MOVES separates
crankcase start and running emissions as separate processes from tailpipe start and running
emissions. For closed crankcase technologies, add additional lines to the input file for crankcase
start emissions and crankcase running emissions with an effectiveness fraction of 1.00 (i.e., 100%
reduction in crankcase emissions) for PM emissions (do not add lines for crankcase emissions for
any other pollutants). In addition, the values for tailpipe start and running emissions benefits for PM
should be adjusted downward by 5%. For example, if the retrofit technology includes a closed
crankcase system and the verified technology list gives a PM reduction of 30%, you should have
four lines in the input file for PM:
1. Crankcase start with an effectiveness value of 1.00
2. Crankcase running with an effectiveness value of 1.00
3. Start exhaust with an effectiveness value of 0.25
4. Running exhaust with an effectiveness value of 0.25
The Retrofit Converter includes information from EPA's verified technology list in Column J
of the User Input tab under the heading "Default Removal Efficiency" based on the technology
selected in Column A, "Verified Technology." However, this information may change and the
Converter may not be up-to-date. You should always look up the benefit in the verified technology
list and enter that number in Column C, "User Specified Removal Efficiency." If you are relying on
a technology from CARB's verified technology list, you will have to look up those reductions on the
CARB website and enter them in Column C.
Note that the Converter only enters lines for the start exhaust and running exhaust processes.
You will have to manually enter lines for PM for crankcase start and running emissions for
technologies that include closed crankcase systems. The Retrofit Converter also does not
automatically adjust the start and running exhaust emissions downward as described above. The
user specified removal efficiency will have to be adjusted to reflect the decreased benefits for start
and running exhaust.
Note that the emission reductions for each verified technology in the EPA and CARB
verified technology lists are specific to certain categories of vehicles or engines and to certain model
years. The emission reductions in those lists should be applied only to the categories of vehicle or
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engines and model years for which they have been specifically verified. Also note that the Retrofit
Converter does not check that the vehicle types and model years given in the verified technology list
for a particular retrofit technology are consistent with the vehicle types and model years entered by
the user in the Converter. It is your responsibility to check and edit the input file created by the
Retrofit Converter as needed to ensure it is consistent with the information in the verified technology
list and this guidance.
Some verified retrofit technologies may result in emission reductions for one pollutant and
emissions increases for another. Any analysis of retrofit projects for SIPs or conformity purposes
should include all pollutants for which the project area is nonattainment or maintenance that are
affected by the retrofit project, including any that increase as a result of the retrofit technology used.
An emissions increase from a retrofit is entered in MOVES as a negative number (e.g., a retrofit that
results in a 50% increase in emissions would be entered as -0.50).
For most types of retrofit projects with the exception of replacements (discussed in Section
2.6), the emission reductions for the project are best determined by using two MOVES runs - one
with the percentage effectiveness of the retrofit set to zero (to represent the inventory without the
project) and one with it set to the appropriate level for the technology used (to represent the
inventory with the project). All other parameters in this section would be set identically to describe
the affected fleet of vehicles or equipment. The difference in emissions between these two runs is
the emission reduction associated with the retrofit project.
2.6 How do you use MOVES to quantify emission reductions from vehicle or
engine replacements?
Emission reductions from vehicle or engine replacements should not be modeled using the
On-Road Retrofit Strategy (or the retrofit input file) in MOVES. Instead, you will need to do two
runs, using the "Fueltype and Technologies" importer in the County Data Manager to define a base
case fleet and a control case fleet consisting of different model years. Use of the Fueltype and
Technologies importer is discussed in the MOVES User Guide and in Section 4.9 of the MOVES
Technical Guidance.
In this case, we strongly recommend that you set up the base case and control case MOVES
runs to include only the fleet of vehicles affected in the project. For example, if you are evaluating a
retrofit project in 2012 that involved replacing 2005 model year school buses with 2010 model year
buses, emission reductions should be calculated in the following way:
1. Set up a base case RunSpec for 2012, selecting only diesel school buses in the
Vehicles/Equipment panel.
2. Create the base case input files for the CDM that describe the expected activity of 2005
model year school bus in the analysis year, 2012.
3. Create an age distribution input file for the CDM which only includes 2005 model year
school buses.
4. Create a Fueltype and Technologies input file in which all the school buses are 2005 model
year diesel buses.
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5. Run MOVES to get the emissions of 2005 model year school buses in 2012.
6. Set up a control case RunSpec identical to the base case RunSpec.
7. Use the same input files as in step 2; i.e., assume that the control case buses have the same
activity as the base case buses.
8. Create a Fueltype and Technologies input file in which all the school buses are 2010 model
year diesel buses.
9. Run MOVES to get the emissions of 2010 model year school buses in 2012.
10. Take the difference between the base case and control case runs to get the benefits of the
replacement project.
Note that these reductions should not be used beyond the useful life of the vehicles, engines,
or equipment being replaced. In this example, if the useful life of these school buses is 10 years,
emission reductions could be applied under this guidance for calendar years 2010 through 2015.
However, after 2015, these reductions would be considered part of the normal fleet turnover for
these vehicles and would not be available for use in a SIP or in a conformity determination. See
Section 1.5 for further information.
2.7 How do you use NMIM to quantify emission reductions from nonroad retrofit
projects?
The details of how to use NMEVI to estimate the emissions impact of nonroad retrofit projects
are described in the NMEVI User Guide (available at www.epa.gov/otaq/nmim.htm). This part of
this guidance document summarizes some of the key inputs for NMIM and discusses some of the
issues that users face when developing input data.
2.7.1 Differences between "fleet specific" and "fleet wide" retrofit projects
NMIM divides retrofit projects into two different categories: "fleet specific" and "fleet wide."
A "fleet specific" retrofit project refers to those projects where a well-defined group of nonroad
vehicles or engines are the targets for retrofit. A construction company implementing a retrofit
project would be an example of a fleet specific project. A fleet specific project could include
multiple model years, or multiple equipment types. The key defining characteristic of a fleet
specific project is that the actual number of nonroad vehicles or engines, as well as their type, model
year, and activity is known.
A "fleet wide" retrofit project refers to situations where the actual nonroad vehicles or
engines that will be affected by the retrofit project are not known in advance. One example of a fleet
wide retrofit project would be the availability of a low emission diesel fuel that applies to the entire
nonattainment area rather than to specific fleets in the nonattainment area. In this case, the actual
number of nonroad vehicles or engines, or their type, model year, or activity is not precisely known.
There are important differences between fleet specific and fleet wide projects that affect the
kind of information that is needed to run NMIM. It is assumed that for fleet specific projects the
precise number of nonroad vehicles or engines in each model year of each class that are to be retrofit
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will be known. In addition, it is assumed that the annual average hours accumulated by each model
year of each class is also known. In general, retrofit projects that involve the addition of specific
equipment to nonroad engines or vehicles, or involve the replacement of nonroad engines, vehicles
or equipment, should be modeled as fleet specific projects because the entities involved with this
type of project should be able to keep the records of the nonroad vehicles or engines modified or
replaced and their average use.
In contrast, fleet wide projects are expected to have no precise information about the
individual nonroad vehicles or engines that will be retrofitted. In this case, the NMEVI model
assumes that the average hours accumulated by retrofit vehicles or engines is the same as for all
nonroad vehicles or engines of that model year and vehicle or engine class. Implementation is
expressed as a fraction of all nonroad vehicles or engines of that model year and vehicle class. In
general, retrofit projects based on fuels available to the general fleet will likely need to be modeled
using the fleet wide approach.
As discussed in detail in the NMEVI User Guide, the specifics of nonroad retrofit projects are
described in an input file called the "Nonroad Retrofit Parameters File." This file is used for both
fleet specific and fleet wide retrofit projects. For nonroad fleet specific projects, an additional input
file called the "Nonroad Fleet Information Parameters File" is required. This file describes in detail
the specific fleet affected by the retrofit project.
2.7.2 The retrofit parameters
The file for nonroad retrofit parameters describes the details of the retrofit project. This
includes inputs that specify the pollutants affected by the retrofit project, the nonroad vehicle or
engine types affected, the calendar years during which the retrofits occur, the model years of the
vehicles or engines that will be retrofitted, the percentage of the fleet retrofit per year, and the
percentage effectiveness of the retrofit technology applied to the vehicles or engines. Details on the
use of these inputs are described in the NMEVI User Guide. Specific guidance on these inputs, where
applicable, is given below.
2.7.2.1 Pollutants affected by the retrofit project
While NMEVI allows you to enter the entire range of pollutants for which NONROAD2008
provides emissions estimates, EPA and CARB have verified emission reductions from retrofit
technologies only for NOx, VOC, CO, PMio, and PM2.5 emissions. Therefore, when estimating
emission reductions from nonroad retrofit projects for a SIP or conformity determination, only these
pollutants should be evaluated. As discussed in Section 2.6.2.3 below, all pollutants for which the
project area is nonattainment or maintenance that are affected by the retrofit project, including any
that increase as a result of the retrofit technology, should be evaluated for SIP or conformity
purposes.
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2.7.2.2 Nonroad vehicle or engine types affected
As discussed in Section 1.3 above, this guidance document addresses nonroad retrofit
projects only for diesel nonroad vehicles, engines, and equipment. NMEVI allows you to enter the
full range of vehicle and engine types included NONROAD2008, but only inputs for nonroad diesel
vehicles or engines should be used for retrofit emission reductions in SIPs or conformity
determinations.
2.7.2.3 Percentage effectiveness of the retrofit
This input is used to describe the effectiveness of the particular vehicle, engine, or equipment
retrofit technologies being used in the retrofit project. As mentioned in Section 1.4, EPA has
verified the emission reductions for certain retrofit technologies. A list of these EPA-verified retrofit
technologies and the emission reductions associated with them can be found at
www.epa.gov/cleandiesel/verification/verif-list.htm. A link to retrofit technologies that have been
verified by CARB can be found at http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm. Retrofit
reductions from these verified retrofit technology lists should be used as inputs for NMEVI.
Note that the emission reductions for each verified technology in the EPA and CARB
verified technology lists are specific to certain categories of vehicles or engines. The emission
reductions in those lists should be applied only to the categories of vehicle or engines for which they
have been specifically verified.
Some verified retrofit technologies may result in emission reductions for one pollutant and
emissions increases for another. Any analysis of retrofit projects for SIPs or conformity purposes
should include all pollutants for which the project area is nonattainment or maintenance that are
affected by the retrofit project, including any that increase as a result of the retrofit technology used.
For most types of retrofit projects with the exception of replacements (discussed in Section
2.8), the emission reductions for the project are best determined by using two NMIM runs - one with
the percentage effectiveness of the retrofit set to zero (to represent the inventory without the project)
and one with it set to that appropriate level for the technology used (to represent the inventory with
the project). All other parameters in this section would be set identically to describe the affected
fleet of vehicles or equipment. The difference in emissions between these two runs is the emission
reduction associated with the retrofit project.
2.7.3 The fleet information parameters
The file for nonroad fleet information is used to provide details of specific fleets of vehicles
or engines for which more detailed information is known. Use this file, along with the retrofit
parameter file described above, when quantifying the emission reductions from fleet specific retrofit
projects. For nonroad equipment, this file includes three inputs needed to specify the engines in the
project - source category classification (SCC) code, horsepower bin, and technology type - as well
as model year, number of engines, activity in hours per year, and monthly activity allocation.
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Details on the use of these inputs are described in the NMIM User Guide. Specific guidance
on these inputs, where applicable, is given below. If you are modeling a fleet specific project, you
should be able to enter detailed information for all of these inputs. Note that these files only
describe characteristics of a fleet of vehicles or engines; they do not describe any details of a retrofit
project. When quantifying the reductions for a fleet specific retrofit project, the fleet information
parameters files are used to describe the specific fleet, while the retrofit parameter files are used to
describe the retrofit project applied to that fleet. When used without retrofit parameter files, the fleet
information files can be used to simply quantify the emissions for any specific fleet of vehicles or
engines.
2.7.3.1 Vehicle class or specific engine parameters
Because this function can be used to quantify the emissions from any specific fleet of
vehicles or engines, there is no restriction on the types of vehicles or engines that can be entered
here. However, retrofit emission reductions will be applied only to those vehicles or engines
specified in the retrofit parameters file, which, as described above, should include only diesel
vehicles and engines.
2.7.3.2 Number of vehicles or engines
The number of vehicles or engines entered for the specific fleet should be based on the
calendar year for which emission estimates are being calculated. When estimating emissions for a
specific fleet in the current year, this is the current size of the fleet. However, in future years the
fleet of affected vehicles or engines may become smaller as some vehicles or engines in the fleet are
scrapped while other newer, non-retrofit vehicles may be added to the fleet. NMTM includes the
effects of normal attrition when projecting future emissions for the entire fleet (e.g., the model
assumes that the number of 1998 model year vehicles or engines decreases in each future year).
However, these effects are not applied to the number of vehicles or engines entered in the fleet
information file for a specific fleet (e.g., if your input file indicates that you have twenty 1998 model
year vehicles or engines in your retrofit fleet in 2005, NMEVI will assume twenty 1998 model year
vehicles or engines in any future year that you model). If you have reason to believe that some of
the vehicles currently in the specific fleet may no longer be in the fleet by the calendar year that is
being evaluated, reduce the input for number of vehicles or engines appropriately.
2.7.3.3 Hours of use
The activity level (hours of use) entered for the specific fleet should be based on the activity
that actually occurs within the nonattainment or maintenance area that the SIP or conformity analysis
applies to. For example, in the case of a retrofit project applied to a fleet of construction equipment,
you must not include hours of use when that equipment is taken outside the nonattainment or
maintenance area.
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The activity level (hours of use) entered for the specific fleet should be based on the calendar
year for which emission estimates are being calculated. When estimating emissions for a specific
fleet in a current year, this is the current activity level of the fleet. However, in future years, the
activity level of the affected vehicles or engines in the fleet may change as older vehicles and
engines are often used less than newer ones. NMIM includes the effects of decreased activity with
age when projecting future emissions for the entire fleet (e.g., NMEVI assumes that the activity of
1998 model year vehicles or engines decreases in each future year). However, these effects are not
applied to the activity levels entered in the fleet information file for a specific fleet (e.g., if your
input file indicates that 1998 model year tractors are used 1000 hours in 2005, NMEVI will assume
that 1998 model year tractors are used 1000 hours in any future year that you model). If you have
reason to believe that activity levels of vehicles or engines currently in the specific fleet may be
lower by the calendar year that is being evaluated, this lowered activity should be accounted for by
reducing the input for hours of use appropriately.
Specific information on the hours of use of retrofit vehicles or engines may be available from
maintenance records, user logs, or fuel records. In the absence of this kind of information, the
interagency consultation process should be used to determine the best available information to
account for activity in the calculation of emission reductions from a retrofit project. In the absence
of better information, agencies could agree to use local average estimates of vehicle or equipment
activity for the class and model year of vehicles or engines included in the retrofit project.
2.8 How do you use NMIM to quantify emission reductions from vehicle, engine,
or equipment replacements?
In general, emission reductions from vehicle, engine, or equipment replacements should be
modeled using the fleet specific approach described in Section 2.7, with some modifications.
Vehicle, engine, or equipment replacement projects will need to run NMEVI twice. NMEVI should be
run once as a base case without the replacement data and then again with the control case that
accounts for the new replacement information. For a retrofit project that uses replacements, the
percentage effectiveness of the retrofit should be set to zero in both the base case (without the
retrofit project) and the control case (with the retrofit project). Instead, the model year of the
vehicles or engines affected are varied in the fleet information parameters. For example, if the
retrofit project involved replacing 2005 model year excavators with 2010 model year excavators,
emission reductions would be calculated as the difference between the following two NMEVI runs:
Base case - Engine model year14 set to 2005; all other parameters, including activity, set to
describe how the model year 2005 excavators are expected to be used in the analysis year;
retrofit effectiveness set to zero.
Control case - Engine model year set to 2010; all other parameters, including activity, set to
the same values as in the base case; retrofit effectiveness set to zero.
14 Engine model year and chassis model year can in some cases be different.
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Note that these reductions should not be used beyond the useful life of the vehicles, engines, or
equipment being replaced. In this example, if the useful life of these excavators is 10 years,
emission reductions could be applied under this guidance for calendar years 2010 through 2015.
However, after 2015, these reductions would be considered part of the normal fleet turnover for
these vehicles and would not be available for use in a SIP or in a conformity determination. See
Section 1.5 for further information.
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SECTION 3: USING EMISSION REDUCTIONS IN SIPS
3.1 What are the basic requirements for using emission reductions in SIPs?
In order to be approved as a control measure which provides additional emission reductions
in a SIP, a retrofit project would need to be consistent with SIP RFP, attainment, or maintenance
requirements and other requirements of the Clean Air Act, as appropriate. The retrofit project must
provide emission reductions that meet the basic SIP requirements described below. Information is
separated into "SIP Requirement" and "Specific Recommendations". The "SIP Requirement"
heading refers to mandatory requirements under Clean Air Act section 110. The "Specific
Recommendations" headings include our recommendations for implementing a retrofit project.
While these recommendations are not binding, they may provide appropriate safeguards and
considerations for a successful retrofit project.
3.1.1 Quantifiable-
SIP Requirement: The emission reductions from a retrofit project are quantifiable if they
are measured in a reliable manner and can be replicated (e.g., the assumptions, methods, and results
used to quantify emission reductions can be understood). Emission reductions must be calculated
for the time period during which the reductions will occur and will be used for SIP purposes.
Specific Recommendations:
In general, if you are retrofitting certified vehicles, engines, or equipment with EPA or CARB
verified emission control technologies or certified engine configurations, quantifying the
emission reductions is fairly straightforward. In these circumstances, you will need to
document the emission reductions and provide all relevant data to EPA for review.
Section 2 of this document provides you with a recommended method for quantifying
emission reductions.
3.1.2 Surplus-
SIP Requirement: Emission reductions are considered "surplus" if they are not otherwise
relied on to meet other applicable air quality attainment or maintenance requirements for that
particular NAAQS pollutant (i.e., there can be no double-counting of emission reductions). In the
event that the retrofit project is used to meet such air quality related program requirements, they are
no longer surplus and may not be used as additional emission reductions. Emissions from the
vehicles, engines, or equipment to be retrofitted must be in the applicable mobile source emissions
inventory before the emission reductions from a retrofit project can be used for RFP, attainment or
maintenance in a SIP.
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3.1.3 Federally Enforceable -
SIP Requirement: A SIP retrofit project must be enforceable. Depending on how the
emission reductions are to be used, control measures must be enforceable through a SIP. Where the
emission reductions are part of a rule or regulation for SIP purposes, they are considered federally
enforceable only if they meet all of the following criteria:
They are independently verifiable.
Violations are defined, as appropriate.
You and EPA have the ability to enforce the measure if violations occur.
Those liable for violations can be identified.
Citizens have access to all the emissions-related information obtained from the responsible
party.
Citizens can file lawsuits against the responsible party for violations.
Violations are practicably enforceable in accordance with EPA guidance on practicable
enforceability.
A complete schedule to implement and enforce the measure has been adopted by the
implementing agency or agencies.
The specific requirements for enforceability vary when submitting a SIP retrofit project as a
mandatory15 or voluntary measure. If your retrofit project is mandatory, then there is no cap on the
amount of emission reductions that can be claimed as long as such reductions are supported and
meet standard SIP enforceability requirements for mandatory measures and the baseline emissions
are in the inventory.
If a retrofit control measure is approved under EPA's VMEP guidance, the state is
responsible for assuring that the reductions quantified in the SIP occur. The state would need to
make an enforceable SIP commitment to monitor, assess, and report on the emission reductions
resulting from the voluntary measure and to remedy any shortfalls from forecasted emission
reductions in a timely manner. Under the VMEP guidance, the amount of emission reductions
allowed for voluntary mobile source measures, including commuter programs, in a SIP is not
expected to exceed three percent of the total reductions needed to meet any requirements for
reasonable further progress, attainment or maintenance, as applicable.16 EPA acknowledges that
some areas may be able to demonstrate that voluntary measures may achieve credible reductions
higher than the three percent cap provided by the VMEP guidance. In that case, EPA will re-
evaluate that cap on a case-by-case basis and allow the cap to be exceeded if the cap hinders the
implementation of effective voluntary control measures, subject to notice and comment during SIP
approval. If you wish to have a retrofit project approved as a voluntary measure, consult the 1997
15 As stated in Section 1.7 of this guidance, state and local agencies should check with EPA before promulgating any
state or local regulations or programs mandating retrofit projects, due to potential issues related to Clean Air Act section
209 requirements.
16 EPA acknowledges that it may be possible to demonstrate that voluntary measures may achieve credible reductions
higher than the three percent cap. In that case, EPA will re-evaluate that cap on a case-by-case basis and allow the cap to
be exceeded if the cap hinders the implementation of effective voluntary control measures, subject to notice and
comment during SIP approval. Interested parties should refer to the VMEP guidance for more information when a
specific commuter program is under development.
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VMEP guidance for further information.
3.1.4 Permanent-
SIP Requirement: The emission reduction produced by the retrofit project must be
permanent throughout the time period that the reduction is used in the applicable SIP. The time
period that the emission reductions from retrofit projects are used in the SIP can be no longer than
the remaining useful life of the retrofitted or replaced engine, vehicle, or equipment.
Specific Recommendations:
Emission reductions can be used from retrofitted vehicles, engines, and equipment that
operate exclusively within the nonattainment or maintenance area. Vehicles, engines, and
equipment that typically operate within a captive area may include, but are not limited to, the
following:
o School buses
o Transit buses
o Waste haulers
o State/local government owned vehicles and engines (e.g., department of
transportation)
o Nonroad construction and agricultural vehicles, engines, or equipment
Some fleets may travel or some equipment may be used only partially in the nonattainment
or maintenance area. Such fleets may be considered as part of a retrofit project for these
purposes, but the emission reductions claimed are limited to the activity (and the associated
emission reductions) that are expected to occur from such fleets within the nonattainment or
maintenance area.
For regulatory or voluntary retrofit projects, you should demonstrate that the retrofitted
vehicles, engines, or equipment remain in use within the nonattainment or maintenance area
or their remaining useful life, to the extent emission reductions are claimed.
EPA and CARB provide information on the durability of the verified retrofit technology
which allows you to determine the length of time the technology may perform at its verified
emission reduction capability. Consequently, you should select retrofit technologies that are
verified or certified by EPA, or CARB respectively. For a list of verified technologies, see
http://www.epa.gov/cleandiesel/verification/verif-list.htm
3.1.5 Adequately Supported -
SIP Requirement: The state must demonstrate that it has adequate funding, personnel,
implementation authority, and other resources to implement the retrofit project on schedule.
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Specific Recommendations:
The state should ensure it has allocated appropriate funds from a reliable funding source.
The state should ensure that the retrofit fleet operators correctly install, operate, and maintain
the retrofit technology according to the manufacturer's recommendations.
o Example: The city transit fleet has 50 buses retrofitted with PM filters. The state
should ensure that the fleet operators are properly trained to operate, maintain, and
detect problems with the PM filters.
The state should assess and verify the status of the retrofitted vehicles, engines, and/or
equipment and the associated emission reductions, as applicable.
3.2 How can the estimated emission reductions be used for SIP purposes?
For your RFP, attainment, or maintenance SIP strategy, you can use emission reductions
which are expected to be generated from the retrofit project by applying the following criteria:
Emission reductions would be calculated as required in the SIP process for a given pollutant
and NAAQS, either in tons per year, tons per pollutant season, or tons per day. For example,
NOx reductions from retrofit projects would be calculated in an ozone SIP for tons reduced
per day for a typical summer day. In contrast, PM2.5 reductions would be calculated on a tons
per year basis for SIP inventories for the annual PM2.5 NAAQS; state and local agencies
should consult their EPA Region and/or applicable guidance on what is appropriate for SIP
inventories for the 24-hour PM2.5 NAAQS. Any calculations would consider factors that may
affect emission reductions and their surplus status over time, including changing patterns of
operations or use, vehicle deterioration factors, equipment useful life, and government
emission standards.
Emission reductions would be commensurate with the level of activity from retrofitted
vehicles, engines, or equipment within a given nonattainment or maintenance area as
described in Section 3.1.4. For example, if retrofitted vehicles are operated exclusively within
the nonattainment or maintenance area, the associated reductions from retrofit technology
would also be assumed to occur within such an area. However, some fleets may leave the
nonattainment or maintenance area for some portion of their operation. Such fleets may be
considered as part of a retrofit project, but the emission reductions claimed are limited to the
activity that is expected to occur from such vehicles within the nonattainment or maintenance
area, as well as those accounted for in the inventory.
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3.3 What would a state submit to EPA to meet the requirements for incorporating
a retrofit project in a SIP?
A state would submit to EPA a written document which does the following:
Identifies and describes the retrofit project and its implementation schedule to reduce
emissions within a specific time period;
Contains estimates of emission reductions attributable to the project, including the
methodology and other technical support documentation used. EPA requires MOVES for on-
road vehicles17 and recommends NMIM for nonroad vehicles and equipment for assessing the
emission reductions from retrofit projects for SIP purposes;
Either contains federally enforceable requirements for you to implement, track, and monitor
the measure; or if the measure is developed under the VMEP guidance, the state includes an
enforceable commitment to monitor, assess and report the resulting emission reductions;
If the measure is developed under the VMEP guidance, includes an enforceable commitment
to remedy any SIP emission shortfall in a timely manner in the event that the measure does
not achieve the estimated emission reductions; and
Meets all other requirements for SIPs under Clean Air Act sections 110 and 172.
3.4 Are there any other types of SIPs that could include emission reductions from
retrofit projects ?
Yes. As indicated in Section 3.2, state air quality agencies can include retrofit projects in
RFP SIPs, attainment demonstrations, and maintenance plans. However, if a state wants to
encourage adoption of retrofit projects prior to developing one of these kinds of SIPs, the state could
create a SIP submission that contains only retrofit projects, which would be relied upon in a future
SIP. The advantage of creating such a SIP submission now is that a state could secure retrofit
projects with adequate federal, state, and/or local funding for a future RFP SIP, attainment
demonstration, or maintenance plan.
A state air agency that is interested in creating such a SIP submission specifically for a
retrofit project or projects must consult with MPOs, the state DOT, and any other state or local
transportation agencies in its development. The conformity regulation at 40 CFR 93.105 requires
consultation on the development of SIPs.
17 See 75 FR 9411, Official Release of the MOVES2010 Motor Vehicle Emissions Model for Emissions Inventories in
SIPs and Transportation Conformity at http://www.gpo.gov/fdsvs/pkg/FR-2010-03-02/html/2010-4312.htm.
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Note that a SIP submission that contains only retrofit projects would still have to meet the
requirements discussed in this Section. State or local agencies that are interested in this option
should consult their EPA Region as well as the MPOs and others involved in the interagency
consultation process.
3.5 What monitoring and record keeping should occur to document retrofit
emission reductions?
3.5.1 What should the state air agency monitor and record?
Clean Air Act section 110(a)(2)(C) requires that submitted SIPs "include a program to
provide for the enforcement of the measures" that the state adopts to reduce emissions. A state's
decision about how a measure needs to be enforced will depend on the state's knowledge of the
emission reductions achieved by the measure. Therefore, this Clean Air Act requirement for a
program that provides for enforcement makes it necessary for states to monitor measures that they
include in their SIPs, such as diesel retrofits.
EPA recommends that for each retrofitted vehicle, engine, or piece of equipment generating
emission reductions, the state air agency or another responsible party should monitor and record the
following information, where applicable, for each time period for which an emission reduction is
generated:
Actual use and operation and maintenance of the retrofitted or repowered
vehicles/engines/equipment and retrofit technology
Proper installation of retrofit technology or repowered engine at project initiation
Proper training of vehicle operators and technicians at project initiation
For replacements, document the permanent destruction, disabling, or rebuilding of the engine
to meet current emissions standards
Monitoring and recording these data are ways to ensure that the statute is met. A state can propose
other methods of monitoring and recording data in its SIP submission, and EPA would consider
whether or not it would be sufficient to meet Clean Air Act requirements.
3.5.2 How long should the state air agency maintain records?
Under 28 U.S.C. 2462, the government has five years to bring an enforcement action or suit
for the failure to implement a measure in a SIP. Based on this statute of limitations, all information
to be monitored and recorded in accordance with this guidance for existing SIP requirements should
be maintained by the state air agency or another responsible party for a period of no less than five
years, or longer where appropriate.
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3.6 What validation and reconciliation should occur for emission reductions in
SIPs approved under the VMEP guidance?
The SIP submission for a voluntary measure should contain a description of the evaluation
procedures and time frame(s) in which the evaluation of SIP reductions will take place. Once the
voluntary control measure is in place, emission reductions should be evaluated by the state or local
agency as required to validate the actual emission reductions. The state or local agency should
submit the results of the evaluation to EPA in accordance with the schedule contained in the SIP. If
the review indicates that the actual emission reductions are not consistent with the estimated
emission reductions in the SIP, then the amount of emission reductions in the SIP should be adjusted
appropriately or applicable remedial measures should be taken under the VMEP guidance. See
EPA's VMEP guidance for further information regarding validation and reconciliation requirements
for such measures.
3.7 What penalties can EPA impose for not complying with Clean Air Act
requirements?
Use of this guidance does not relieve you of any obligation to comply with all otherwise
applicable CAA requirements, including those pertaining to the crediting of emission reductions for
your SIP, such as for your attainment demonstration or maintenance plan. Violations of CAA
requirements are subject to administrative, civil, and/or criminal enforcement under Section 113 of
the CAA, as well as to citizen suits under Section 304 of the CAA. The full range of penalty and
injunctive relief options would be available to the federal or state government (or citizens) bringing
the enforcement action.
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SECTION 4: USING EMISSION REDUCTIONS IN
TRANSPORTATION CONFORMITY DETERMINATIONS
4. 1 What is transportation conformity?
Transportation conformity is required under Clean Air Act section 176(c) (42 U.S.C.
7506(c)) to ensure that federally supported highway and transit project activities are consistent with
("conform to") the purpose of the SIP. Conformity to the purpose of the SIP means that
transportation activities will not cause new air quality violations, worsen existing violations, or delay
timely attainment of the relevant NAAQS and interim milestones. EPA's transportation conformity
rule (40 CFR Parts 51 and 93) establishes the criteria and procedures for determining whether
transportation plans, TIPs or projects conform to the SIP. Transportation conformity applies to areas
that are designated nonattainment, and those redesignated to attainment after 1990 ("maintenance
areas") for transportation-related criteria pollutants. Some areas that are currently doing
transportation conformity could benefit from retrofit project reductions, including ozone, PM2.5, and
nonattainment and maintenance areas.
In urban areas, transportation planning and conformity determinations are the responsibility
of the MPO. MPOs are responsible for updating and revising the transportation plan and TIP on a
periodic basis, as well as making transportation plan and TIP conformity determinations. Such a
determination includes a regional emissions analysis that shows that the emissions expected from the
area's planned transportation system do not exceed the motor vehicle emissions budget ("budget")
set by the SIP for meeting RFP, attainment, or maintenance requirements. In cases where an area
__ 1 8
does not yet have a SIP in place, a different type of emissions test is used for conformity. After an
MPO's conformity determination, the U.S. DOT must also determine conformity of the
transportation plan and/or TIP. The interagency consultation process is required to be used when
developing transportation plans, TIPs, conformity determinations, and SIPs, and the process includes
MPOs, state departments of transportation, public transit agencies, other transportation agencies,
state and local air quality agencies, EPA, and DOT (40 CFR 93.105).
4.2 What kinds of retrofit projects can be used in transportation conformity
determinations ?
MPOs may use emission reductions in transportation plan and TIP conformity determinations
that result from either:
18 In areas without SIP budgets, an interim emissions test(s) must be met. These tests are the "baseline year test" and the
"build/no-build test." See 40 CFR 93.119 for more on these requirements. In areas with SIP budgets, a budget test must
be met, pursuant to 40 CFR 93.118.
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On-road vehicle and engine retrofit projects, or
Nonroad vehicle, engine, and equipment retrofit projects.
On-road vehicle retrofit projects can be used in regional emissions analyses for transportation
conformity determinations, since transportation conformity includes emissions and reductions from
on-road sources. Requirements are discussed in Section 4.3.
Although the emissions from nonroad sources are separate from on-road vehicles in a SIP
inventory, the emission reductions that result from nonroad retrofits can still be applied in
transportation conformity. When appropriate and desired, the transportation conformity rule allows
options for including reductions from nonroad retrofit projects, such as the retrofitting of highway
construction equipment, in a transportation conformity determination. See Sections 4.4 through the
end of this section for further information on options for including the emission reductions from
nonroad retrofit projects in transportation conformity determinations.
EPA also notes that reductions from retrofits can be applied as a mitigation or control
measure in quantitative PM2.5 or PMio hot-spot analyses for project level conformity determinations.
See EPA's Transportation Conformity Guidance for Quantitative Hot-spot Analyses in PM2.5 and
PMio Nonattainment and Maintenance Areas at
www.epa.gov/otaq/stateresources/transconf/projectlevel-hotspot.htmtfpm-hotspot. For further
background on PM hot-spot analyses, the methodology in Section 2 of this guidance can be used for
such analyses. The remainder of Section 4 and the Appendices focus on applying retrofit reductions
in transportation plan and TIP transportation conformity determinations (and regional emissions
analyses).
4.3 How can the emission reductions from on-road retrofit projects be included in
transportation conformity determinations?
The transportation conformity rule describes the specific requirements for including emission
reductions from on-road retrofit projects in a transportation conformity determination. If the
emission reductions from the retrofit project have been accounted for in the SIP's motor vehicle
emissions budget, the MPO would also include the emission reductions from the retrofit project, to
the extent it is being implemented, when estimating regional emissions for a transportation
conformity determination. Including the emission reductions in both the SIP's budget and in a
conformity determination in this way is not "double-counting," but correctly accounting for all the
control measures that are in place.
To include the emission reductions from retrofit projects in a conformity analysis, the
appropriate jurisdictions must be committed to the measure.20 The appropriate level of commitment
19 See 40 CFR 93.122(a) for the requirements regarding what must be included when estimating regional emissions in a
conformity determination.
20 As stated in Section 1.7 of this guidance, state and local agencies should check with EPA before promulgating any
state or local regulations or programs mandating retrofit projects, due to potential issues related to Clean Air Act section
209 requirements.
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varies according to the requirements outlined in 40 CFR 93.122(a) which are described as follows:
If the retrofit project does not require a regulatory action to be implemented and it is included
in the transportation plan and TIP with sufficient funding and other resources for its full
implementation, it can be included in a transportation conformity determination.
If the retrofit project requires a regulatory action to be implemented, it can be included in a
conformity determination if one of the following has occurred:
o The regulatory action for the retrofit project is already adopted by the enforcing
jurisdiction (e.g., a state has adopted a rule to require such a project);
o The retrofit project has been included in an approved SIP; or
o There is a written commitment to implement the retrofit project in a submitted SIP
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with a motor vehicle emissions budget that EPA has found adequate.
If the retrofit project is not included in the transportation plan and TIP or the SIP, and it does
not require a regulatory action to be implemented, then it can be included in the transportation
conformity determination's regional emissions analysis if the determination contains a written
commitment from the appropriate entities to implement the retrofit project.
Whatever the case, any emission reductions can only be applied in a transportation
conformity determination for the time period or years in which the retrofit project will be
implemented. Written commitments must come from the agency with the authority to implement the
retrofit project. The latest emissions model and planning assumptions must also be used when
calculating emission reductions, according to 40 CFR 93.110 and 93.111.
The interagency consultation process must be utilized (as required by 40 CFR 93.105) to
discuss the methods and assumptions used to quantify the reductions from the retrofit project.
Section 2 of this document describes how to quantify emission reductions.
4.4 How can the emission reductions from nonroad retrofit projects be included
in transportation conformity determinations?
There are two options that may be used to reflect reductions from nonroad retrofit projects in
transportation conformity determinations. The two options are:
Apply nonroad retrofit emission reductions as a "safety margin" to the SIP's motor vehicle
emissions budgets; or
21 40 CFR 93.118 describes the process and criteria that EPA considers when determining whether submitted SIP
budgets are appropriate for transportation conformity purposes prior to EPA's SIP approval action.
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Establish a trading mechanism in the SIP to allow emissions to be traded from one emissions
sector to another.
Both of these options are allowed by the current transportation conformity rule and are completed
through the SIP process with consultation among federal, state, and local air quality and
transportation agencies. An area may decide to pursue one of these options if it is anticipated that
emission reductions from nonroad retrofit projects may be needed to assure future transportation
conformity determinations. Note that nonroad retrofit projects that are reflected in a transportation
conformity determination under either option must meet the conformity rule requirements articulated
in Section 4.3, in addition to other requirements described below.
4.5 How is EPA supporting the use of emission reductions from nonroad retrofit
projects in transportation conformity?
EPA recognizes the importance of nonroad retrofit projects in reducing emissions and wants
to support the process for state and local air and transportation agencies to implement them when
desired. The remainder of Section 4 and Appendices A through C include additional information for
including the emission reductions from nonroad retrofit projects in transportation conformity:
Safety margins. EPA has provided the following:
Questions and answers about safety margins, beginning with Section 4.6;
Step-by-step process instructions, including a flowchart, for adopting a safety margin - see
Appendix A;
An example of how a safety margin is applied - see Appendix A;
A list of areas that have adopted safety margins in the past - see Appendix A;
Trading mechanisms. EPA has provided the following:
Questions and answers about trading mechanisms, beginning with Section 4.11;
Step-by-step process instructions, including a flowchart, for adopting a trading mechanism -
see Appendix B;
An example of how a trading mechanism would work - see Appendix B;
A model trading rule that interested states could adopt through the SIP - see Appendix C.
4.6 What is a safety margin ?
Section 93.101 of the transportation conformity rule defines a "safety margin" as
"the amount by which the total projected emissions from all sources of a given pollutant are
less than the total emissions that would satisfy the applicable requirement for reasonable
further progress, attainment, or maintenance."
That is, if an area has a safety margin, it has more emission reductions than necessary to meet the
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Clean Air Act goal of RFP, attainment, or maintenance. It can meet the goal with room to spare - a
margin of safety. Safety margins are calculated for a specific year in the SIP for which a budget is
established (e.g., the last year of a maintenance plan).
The conformity rule allows a safety margin to be allocated to the transportation sector, if the
SIP explicitly states so (see 40 CFR 93.124(a)). The SIP must state that a specified portion or the
entire safety margin is available to the MPO and DOT for conformity purposes. Therefore, the
nonroad retrofit project that creates the safety margin allows the motor vehicle emissions budget to
increase.
4.7 When can a safety margin be established in a SIP?
An area may include a safety margin from the point at which they develop their SIP
submission for RFP, attainment, or maintenance, or it may be developed later as a stand-alone SIP
submission. For example, if an area has more emission reductions from the control measures
contained in its attainment demonstration than needed to achieve the applicable NAAQS, it could
establish a safety margin in that attainment demonstration.
An area could also develop a safety margin after the SIP has been established. For example,
if an area's attainment demonstration contains control measures that are sufficient to attain, then any
other measures that reduce emissions adopted later, such as nonroad retrofit projects, would
potentially create a safety margin. Alternatively, an area that already has a safety margin in its SIP
could add to it by adopting a new nonroad retrofit project.
Whatever the case, any SIP that incorporates a safety margin must meet all applicable SIP
requirements, including being based on the most recent emissions estimates available at the time the
SIP safety margin is developed. For example, an existing safety margin in an ozone maintenance
plan could be increased to account for new retrofit projects in a given year, assuming the existing
safety margin is still applicable. Under this example, EPA's approval would be required before the
increased SIP safety margin could apply for transportation conformity purposes, since revisions to
existing approved SIPs cannot apply until EPA approves them (40 CFR 93.118(e)(l)).
4.8 What are the benefits of establishing a safety margin at the time that an RFP
SIP, attainment demonstration, or maintenance plan is initially submitted?
While a safety margin can be developed after a SIP is established, it makes sense for areas
that are currently developing a SIP to include a safety margin in that SIP, if possible, instead of
adding it later. A safety margin that is included in an initial control strategy SIP (e.g., an RFP SIP or
attainment demonstration) or maintenance plan could be used for conformity on the effective date of
EPA's adequacy finding. But if a safety margin is developed later, the state would need to revise the
SIP. If EPA has already approved the initial SIP, the revised SIP that includes the safety margin
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could not be used in conformity until it is approved, as noted above. Including a safety margin in a
SIP submission as it is developed saves time and effort throughout the process.
4.9 Why should an area start developing a safety margin now?
Areas that are currently developing attainment demonstrations or maintenance plans should
consider whether they want to adopt programs to retrofit nonroad vehicles, engines, and equipment
and include them in these SIP submissions, because doing so now can save time and may allow their
use in conformity sooner. The conformity rule requires that consultation occur during the
development of a SIP (40 CFR 93.105(a)(l)). State air agencies should consult with the relevant
MPOs, DOT, and other agencies as appropriate in order to determine whether a safety margin might
be needed for conformity.
Several nonattainment areas have already established safety margins through the SIP process
to assist in making future transportation conformity determinations. See Appendix A for further
information.
4.10 What are the features of a safety margin ?
In order for EPA to approve the allocation of a safety margin to a motor vehicle emissions
budget(s), the following SIP and transportation conformity requirements would have to be met:
The entire SIP must continue to demonstrate its Clean Air Act purpose, pursuant to the statute
and 40 CFR 93.124(a). Before the emissions level of a motor vehicle emissions budget is
increased, the state air agency would need to determine that there is a safety margin, including
any surplus emission reductions from any nonroad retrofit projects. The agency would also
need to ensure that emissions inventories of on-road, nonroad and other sources are consistent
with the SIP's demonstration.
The calculation for the nonroad retrofit projects and any safety margin would be based on the
latest information and models available at the time the SIP is developed. The method for
calculating a safety margin may vary depending upon whether new air quality modeling is
performed or if a less rigorous demonstration is adequate (e.g., maintenance areas that are
establishing a safety margin based on staying below the emissions level(s) for a previous year
of clean monitoring data for the maintenance demonstration).
The SIP must clearly allocate the safety margin to the motor vehicle emissions budget(s) for
use in transportation conformity determinations, pursuant to 40 CFR 93.124(a);
Retrofit projects reflected in a safety margin must be assured, permanent, and enforceable,
have adequate funding and resource commitments, and be on schedule; and
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The safety margin must meet Clean Air Act section 110(1) and any other applicable SIP
statutory and regulatory requirements.
See Section 3 for more information about including a retrofit project in a SIP. See Appendix A for
more detailed information on establishing and implementing a safety margin.
EPA notes that the allocation of a safety margin to the on-road transportation sector may
limit that area's ability to allow future growth in emissions from other source sectors (e.g., stationary
sources). State and local transportation and air quality agencies and other affected parties should
always consult on whether a safety margin is appropriate for transportation conformity in a given
area.
4.11 What is a trading mechanism?
A trading mechanism is a process established through the SIP that allows emission reductions
achieved in another source sector - such as the nonroad sector - to be used for demonstrating
transportation conformity. Before emission reductions can be traded from one sector to another, the
SIP must include a trading mechanism to allow the trading to occur.
This option is supported by 40 CFR 93.124(b) as well as preamble language. Section
93.124(b) states:
"A conformity demonstration shall not trade emissions among budgets which the
applicable implementation plan (or implementation plan submission) allocates for
different pollutants or precursors, or among budgets allocated to motor vehicles and
other sources, unless the implementation plan establishes appropriate mechanisms for
such trades."
In the preamble of the November 24, 1993 transportation conformity rule, EPA stated that
"[t]he state may choose to revise its SIP emissions budgets in order to reallocate emissions among
sources or among pollutants and precursors. For example, if the SIP is revised to provide for greater
control of stationary source emissions, the State may choose to increase the motor vehicle emissions
budget to allow corresponding growth in motor vehicle emissions (provided the resulting total
emissions are still adequate to provide for attainment/maintenance of the NAAQS..." (58 FR 62196).
EPA believes that this preamble and 40 CFR 93.124(b) clearly allow trading mechanisms to be
established to ensure future transportation conformity determinations, when desired.
EPA's Economic Incentive Program (EIP) guidance also discusses trading among different
sources.22 The primary concerns articulated in that guidance are: 1) to ensure that emission
reductions are only used in transportation conformity if they are truly reductions to overall air
EPA's January 2001 guidance entitled, "Improving Air Quality with Economic Incentive Programs," provides
additional information on developing and implementing economic incentive based control strategies. This guidance is
available at: www.epa.gov/ttn/oarpg/tl/memoranda/eipfin.pdf. See Appendix 16.10 of the 2001 guidance for further
information regarding the transportation conformity requirements that need to be met by an EIP trading program.
40
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quality (i.e., are not offset by emissions increases in other emission sources); and 2) to ensure that
double-counting does not occur among source categories in the SIP or in transportation conformity.
EPA must approve a SIP that creates a trading mechanism before emission reductions can be traded
for transportation conformity determinations.
4.12 When can a trading mechanism be established in a SIP?
A trading mechanism can be established by a state and approved by EPA into the SIP for a
nonattainment or maintenance area at any time.
A trading mechanism that would allow trading of emission reductions from nonroad retrofit
projects for transportation conformity purposes could be submitted by a state and approved by
EPA prior to the submission of an area's RFP SIP, attainment demonstration, or maintenance
plan.
Alternatively, a state could decide to submit a trading mechanism as part of an RFP SIP,
attainment demonstration, or maintenance plan for a given area.
4.13 Why develop a trading mechanism as a stand-alone SIP revision ?
The advantage of developing a trading mechanism as a stand-alone SIP instead of including it
in a required ozone or a PM2.5 SIP is that doing so allows trading to happen sooner than if the
trading mechanism was combined with a larger SIP such as an RFP plan, an attainment
demonstration, or a maintenance plan. Where developed as a stand-alone SIP, a trading mechanism
allows emission reductions from a nonroad retrofit project to be applied in conformity during the
time period before one of these larger SIPs is submitted and found adequate. For example, assuming
it has a SIP trading mechanism in place, if an ozone area could not pass a NOx budget contained in
its ozone attainment demonstration, the area could program funds for a nonroad retrofit project and
apply the emission reductions in a conformity determination. A stand-alone SIP based on the model
trading rule provided in this guidance document can be developed and approved by EPA through
parallel processing23 the SIP.
4.14 What would a SIP with a trading mechanism look like?
EPA developed a model trading rule to allow states to use nonroad emission reductions in
23 The term "parallel processing" means that EPA, at the request of the state, begins to process a SIP submission (either
to approve it or find its budgets adequate) before the state has finalized it. EPA's process and the state's process are
occurring "in parallel." Specifically, EPA would begin to review the SIP trading mechanism while the state's public
comment period is running, but must wait until the state submits its final SIP trading mechanism before taking a final
SIP action. See Appendices A and B for more detail on how parallel processing works.
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transportation conformity. States that are interested in establishing a trading mechanism merely
need to copy the model rule and fill in the blanks as appropriate (e.g., the state would insert the
appropriate names of state air quality agencies and MPOs), and can adopt it into their SIPs. The
model rule is found in Appendix C of this guidance document. EPA developed this model rule in
consultation with DOT and state and local air quality and transportation organizations. States that
adopt the model rule can expect a streamlined SIP approval because the model rule meets Clean Air
Act requirements. The model rule is just one way to write a regulation for a trading mechanism for
conformity. A state could deviate from this model rule, but the more the state deviates from the
model rule language, the more time it may take for EPA's final SIP action.
4.15 What are the features of a trading mechanism?
In order for EPA to approve a trading mechanism, the following SIP and transportation
conformity requirements would have to be met:
The entire SIP must continue to demonstrate its Clean Air Act purpose when trades are
allowed, pursuant to the statute and 40 CFR 93.124(b). When the trading mechanism is
developed, the state air agency would need to ensure that trades can occur, while ensuring that
emissions inventories from all sources continue to be consistent with the SIP's demonstration.
A state regulation must be developed that describes in adequate detail the scope and process
for making trades so that the trading mechanism can be implemented as intended. Such a
regulation would also provide that all trades become enforceable through the trading
mechanism approved into the SIP in the event that reductions are not otherwise enforceable.
Trades must be based on nonroad retrofit projects that result in a net emission reduction,
which must consider the emissions produced by the vehicles, engines, and equipment and the
impact of any retrofit technology. Individual trades cannot exceed the net emission
reductions of a retrofit project.
The trading mechanism would ensure that individual trades must be made only when surplus
emission reductions exist. Trading cannot result in "double-counting" of reductions already
accounted for in the SIP and conformity determinations, .
Reductions can be taken only for years of the regional emissions analysis where reductions
are achieved.
The trading mechanism must meet any other applicable SIP and conformity requirements (for
example, control programs that produce emission reductions relied on in a conformity
determination must be assured and enforceable, have adequate funding and resource
commitments, and be on schedule - see 40 CFR 93.122(a)).24
24 EPA notes that SIPs that establish a trading mechanism are required to meet Clean Air Act section 110(1)
requirements, similar to all other SIPs for other purposes. However, by definition, the trading mechanisms described in
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See Appendix B for more information on implementing a trading mechanism and Appendix C for a
model trading rule that could be incorporated into the SIP.
4.16 Does the public have the opportunity to comment on trading?
Yes, the public does have the opportunity to comment at two distinct points in the process:
First, the public can comment on the trading mechanism itself at the point when it is
incorporated into the SIP. Any time a state prepares a SIP, it must give the public an
opportunity to comment on it before the final submission is sent to EPA. In a situation where
a state adopts a regulation separately from an RFP or attainment SIP or a maintenance plan,
the public will also have the opportunity to comment on the state's regulation. In addition,
when EPA proposes to approve the SIP in the Federal Register, the public again has the
opportunity to comment to EPA. The approval process, including these public comment
periods, is covered in further detail in Appendix B.
Second, the public has the opportunity to comment on individual trades that employ the SIP
trading mechanism during the public comment period on a transportation plan or TIP
conformity determination. The conformity regulation at 40 CFR 93.105(e) requires that the
public be given access to technical and policy information considered in a conformity
determination at the beginning of the public comment period and prior to taking formal action
on a transportation plan/TIP conformity determination. If an MPO relies on nonroad retrofit
emission reductions that are the result of a trade, information about that trade would belong in
such technical and policy information that is made available for public review. Under the
model trading rule in Appendix C of this document, the MPO would be required to document
the description of the retrofit project; its enforceability, funding sources, and implementation
schedule; and details regarding emission reduction calculations. In addition, the model rule
would require that the state air agency document its concurrence (e.g., through a letter), which
the MPO could then reference in its transportation plan/TIP conformity determination. If a
state adopts any trading mechanism, all of the information described above would be made
available to the public as part of any transportation plan/TIP conformity determination.25
4.17 Are there any examples of transportation conformity-related trading
mechanisms that were approved into the SIP?
this guidance document should meet section 110(1) requirements since emissions increases would not occur as a result of
trades for transportation conformity purposes.
25
Note that if a state decides to substantially alter the model rule or create a different one, the trading mechanism would
still need to provide the public with access to information via the conformity determination to meet 40 CFR 93.105(e).
EPA would examine any trading mechanism with regard to this point during the SIP process.
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Yes, a couple of areas adopted another type of trading mechanism for conformity purposes.
The provision of the transportation conformity rule that allows trading among source sectors also
allows trading among motor vehicle emissions budgets of pollutants and precursors. Both the San
Joaquin Valley and Salt Lake City adopted trading mechanisms that established trading between
budgets for directly-emitted PMio and NOx.26
Though these trading mechanisms applied to the trading of on-road mobile precursors and
pollutants rather than among source sectors, they have provided EPA with valuable experience in
developing a trading mechanism through the SIP process. EPA has applied this experience to the
development of the model trading rule found in Appendix C. In addition, Salt Lake City's trading
mechanism was needed as soon as it could be approved, so EPA and the State of Utah worked
together to expedite its approval into the SIP.
4.18 Are there any other ways to establish a trading mechanism for a nonroad
retrofit project?
Yes. Sections 4.11 through 4.17 and Appendices B and C address establishing a trading
mechanism that, once adopted into a SIP, would allow emission reductions from any nonroad retrofit
project to be traded to the transportation sector. However, another possibility is for a state to adopt a
SIP that allows trading of emission reductions from only a specific project (or projects). This type of
SIP would look similar to the type of SIP submission described in Section 3.4 in that it would
contain the description of, and emission reductions from, a specific project (or projects). It would
also explicitly state the portion of the retrofit emission reductions that are available to be used in
transportation conformity determinations. The advantage of creating such a SIP submission now is
that a state could secure specific retrofit projects with adequate federal, state, local, or private
funding for a future conformity determination. Where a SIP specifically states that a certain number
of tons of retrofit reductions are to be preserved for use in future conformity determinations, such
reductions would not be available for use in any other SIP demonstrations such as RFP or attainment
demonstrations.
State or local agencies that are interested in this option should consult with their EPA Region
as well as the MPOs and others involved in the interagency consultation process.
4.19 How can I get additional technical assistance in using the emission
reductions from a nonroad retrofit project in transportation conformity?
26 These trading mechanisms differed according to the atmospheric conditions in each area. An interpollutant trading
mechanism must include a scientific rationale, as well as comply with Clean Air Act section 110(1) by showing that the
trading mechanism will not interfere with any applicable Clean Air Act requirement. See 67 FR 44065 for EPA's
approval of Salt Lake City's trading mechanism; 69 FR 30006 for EPA's approval of San Joaquin Valley's PM10 SIP
that includes the trading mechanism.
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State and local agencies are strongly encouraged to consult early with their respective EPA
Region if they are considering applying a safety margin or developing a trading mechanism in the
SIP for transportation conformity purposes. EPA is available to provide such technical assistance so
that SIP submissions can be processed efficiently. See Section 1.9 for more information regarding
EPA contact information.
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SECTION 5: USING EMISSION REDUCTIONS IN GENERAL
CONFORMITY DETERMINATIONS
5.1 How can the estimated emission reductions be used for general conformity
determinations ?
General conformity applies in nonattainment and maintenance areas to emissions from all
federal actions or activities not covered by the transportation conformity program, such as military
base expansions or approval of airport expansion projects. The general conformity regulation (40
CFR 51.851 and 93.150-165) prohibits federal agencies from taking, or supporting in any way,
actions in areas that are designated nonattainment or maintenance for any criteria pollutant without
demonstrating that the action will not 1) cause or contribute to any new violation of any NAAQS in
any area; 2) increase the frequency or severity of any existing violation of any NAAQS in any area;
or 3) delay timely attainment of any NAAQS or any required interim emission reductions or other
milestones in any area. The general conformity regulation applies to the total foreseeable direct and
indirect emissions increases from the action or activity including both construction and operational
emissions. Indirect emissions can include those from vehicles servicing a federal facility or
activities supported by federal funds.
To reduce the regulatory burden on insignificant actions, the regulation establishes a number
of exemptions for categories of actions or activities known to have insignificant emissions increases
or whose emissions fall below certain de minimis levels. The general conformity rule establishes de
minimis emission levels based on the severity of the nonattainment problem. If the net increase in
total direct and indirect emissions from a federal action is below the de minimis levels, the federal
agency does not have to make a conformity determination for the action.
If the net increase in emissions is above the de minimis levels and the project is not otherwise
exempt, the federal agency must determine that the action or activity will conform to the SIP.
Because the general conformity regulation applies to a wide variety of actions or activities, the rule
provides a number of methods to demonstrate conformity. Two methods, mitigation and offsetting
of emissions increases, require emission reductions from sources which may, or may not be directly
connected to the federal action or activity.
5.2 How can retrofit projects be used to meet the general conformity
requirements?
There are some fleets of vehicles that are not considered in transportation conformity
determinations, and instead considered in general conformity determinations. Some examples
include a fleet of trucks at a military base, or vehicles that operate only within the boundary of a
commercial airport. Since a retrofit project for such a fleet would not be increasing emissions, the
implementation of a retrofit project would not be subject to general conformity requirements.
Additionally, in many cases, a federal action would not be needed to implement such a project.
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However, emission reductions generated by diesel retrofit projects could be used in a number of
ways in general conformity determinations, such as:
Diesel engine retrofits could be used to mitigate or offset emissions increases caused by a
federal action. For example, the retrofitting of diesel airplane tugs at a military air station
could be used to mitigate a portion of the emissions increases associated with an expansion
project at the military base or the retrofitting of package delivery vehicles could be used to
offset the emissions increases caused by a base expansion.
The Vision 100-Century of Aviation Reauthorization Act of 2003 (P.L. 108-176), directed the
FAA to establish a national program to reduce airport ground emissions at commercial service
airports located in air quality nonattainment and maintenance areas. The Voluntary Airport
Low Emissions (VALE) program allows airport sponsors to use certain funds to finance low
emission vehicles, refueling and recharging stations, gate electrification, and other airport air
quality improvements (including retrofit projects). The emission reductions generated by
these measures are kept by the airport sponsor and may only be used for current or future
general conformity determinations. To be used in a general conformity determination,
emission reductions must be voluntary and cannot otherwise be used to meet other applicable
air quality attainment and maintenance requirements. Emission reductions must also be
"permanent" in that they continue to occur at the estimated level throughout the lifetime of the
vehicles and infrastructure.
A federal or federally permitted facility which is subject to the general conformity
regulation, such as a military base or a commercial airport, could institute an agreement with a
state to operate the facility within a facility-wide emissions budget. Emission reductions from
a fleet retrofitting project could ensure emissions increases generated by future actions would
not exceed the facility-wide budget and thus would conform to the SIP. A demonstration that
emissions from a new action do not exceed the facility-wide emissions budget could be used
in a general conformity determination.
5.3 Is a SIP revision required if a source with a facility-wide emissions budget
wants to implement a retrofit project at the facility?
No, a SIP revision would not be required, if a source with a facility-wide emissions budget
established for general conformity purposes decided to retrofit vehicles or equipment used at the
facility. The facility's emissions budget would have included emissions of all relevant pollutants
and/or precursors from all sources on the facility including the pre-retrofit emissions from the
vehicles and/or equipment that are included in the retrofit project. Therefore, the emission
reductions from a retrofit project can be used to show that the facility remains within its budget
without a SIP revision.
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5.4 What requirements would potentially limit the use of retrofit projects in the
general conformity program?
Emission reductions used as part of the (1) project design, (2) mitigation measures, (3) offset,
or (4) in future conformity determinations, must be surplus, permanent, quantifiable and enforceable
as described in the General Conformity rule and Section 3 of this document. In addition, the
emission reductions must be reviewed by EPA, state, tribes and local air quality agencies and the
public as part of the review of the general conformity determination and meet the following criteria:
The retrofit project must be identified and the process for implementation and enforcement
must be explicitly described.
Prior to determining conformity, the federal agency making the determination must obtain
written commitments from the appropriate entities (e.g., fleet operator, state or city official,
private company official or MPO) to implement the retrofit project as a mitigation measure.
The reductions from the retrofit project must be contemporaneous with the project emissions
increases, specifically, the reductions must occur in the same calendar year as the increases.
The implementing entity/official responsible for implementing the retrofit project and any
persons or agencies voluntarily committing to mitigation measures must comply with the
obligations of such commitments.
If the federal action involves licensing, permitting or approving an action of another
governmental or private entity, the federal agency must condition its approval action on the
other entity meeting all mitigation commitments.
If the retrofit project is modified resulting in an increase in emissions, the new mitigation
measures must continue to support the initial general conformity determination and must
undergo public review.
5.5 Why are SIPs required for use ofnonroad retrofits in transportation
conformity but not required for general conformity?
With regard to nonroad retrofit projects, a SIP establishing either a trading rule or safety
margin is required in order for emission reductions from such projects to be used in transportation
conformity determinations because nonroad emissions are not included in an area's on-road motor
vehicle emissions budget (40 CFR 93.124(a) and (b)). The SIP provides the authority to use nonroad
emission reductions as part of a demonstration that an area is meeting its on-road emissions budgets.
In contrast, a facility-wide emissions budget established for general conformity purposes would
include emissions from all sources at the facility including the pre-retrofit emissions from the
vehicles and/or equipment that are included the retrofit project and the facility budget is within the
SIP's allowable emission budget. Therefore, the emission reductions from the retrofit project can be
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used to show that the facility remains within its budget without a SIP revision.
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APPENDIX A:
ESTABLISHING AND USING A SAFETY MARGIN TO
ALLOW EMISSION REDUCTIONS FROM NONROAD
RETROFITS TO BE USED IN TRANSPORTATION
CONFORMITY DETERMINATIONS
This appendix provides detail about how a state could apply the emission reductions from a
nonroad retrofit project or projects in a conformity determination via a safety margin.
A. 1 What is an example of establishing and using a safety margin ?
Suppose a 1997 PM2.5 nonattainment area develops a draft maintenance plan that shows the
area could emit 400 tons per day of NOx from all sources, and still maintain the NAAQS in the last
year of the maintenance plan, 2025. The area's total NOx SIP inventory for 2025 is:
Nonroad: 100 tons per day
On-road: 100 tons per day
Stationary sources: 100 tons per day
Area sources: 100 tons per day
Initial total maintenance SIP inventory: 400 tons per day
If the area submitted this draft SIP without a safety margin, this SIP would have a 2025 NOx motor
vehicle emissions budget of 100 tons per day, which is the on-road portion of the 2025 NOx
inventory.
However, the MPO, in consultation with others, decides to spend some of its CMAQ and
other funding to retrofit nonroad transportation construction equipment. The MPO consults with the
state air agency, who agrees that the retrofits could be used to create a safety margin, since the area
can demonstrate maintenance without these additional reductions. The MPO decides to retrofit a
number of bulldozers, front loaders, and backhoes and estimates that the total emission reductions
from these retrofits will be 5 tons per day in 2025. The state air agency reviews these calculations
and concurs that these reductions are surplus. Therefore, after consultation, it adjusts the NOx
inventory in its draft maintenance plan for 2025 as follows:
Nonroad: 95 tons per day (i.e., 100 minus 5 tons for new
retrofit)
On-road: 105 tons per day (i.e., 100 plus 5 tons for new
retrofit)
Stationary sources: 100 tons per day
Area sources: 100 tons per day
Final total maintenance SIP inventory: 400 tons per day
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The state submits a final SIP that includes a 5 ton per day safety margin and specifically states
in the SIP that it is allocated to the motor vehicle emissions budget. Therefore, the final budget is
105 tons per day:
On-road: 100 tons per day
Safety margin: 5 tons per day
Total available for transportation: 105 tons per day (the final budget)
Once the SIP has been submitted and found adequate by EPA, the MPO uses the new 2025 NOx
budget of 105 tons per day. This new budget would apply to all conformity determinations for all
analysis years 2025 and later, for as long as this motor vehicle emission budget is in place without
other future budgets. If the MPO later wanted to fund additional nonroad retrofit projects and use
the additional reductions for conformity determinations, they would either have to work with the
state to revise the safety margin in the SIP or implement a SIP trading mechanism (as discussed in
Section 4 and Appendix B).
A. 2 What is the most expeditious process for establishing a safety margin that
results from a nonroad retrofit project?
An area that wants to include a safety margin in its SIP from a retrofit project or projects
would follow the following steps. (See Figure 1 at the end of this appendix for a flowchart that
depicts these steps.) These steps assume that EPA has not yet approved a SIP submission that
establishes budgets that the safety margin amends, that is, the safety margin is included in the initial
RFP SIP, attainment demonstration, or maintenance plan that the state submits. Therefore, the
budgets that include the safety margin can be used as soon as EPA finds them adequate. However, if
the area has an approved SIP with a motor vehicle emissions budget and the state submits a SIP with
a safety margin that would change the budget, the revised budget could not be used until EPA
approves the SIP.
Agencies consult and decide on the project. The process would begin with the MPO and
state air agency discussing the ability to create a safety margin by retrofitting nonroad
vehicles, engines, and equipment and the scope of the retrofit project(s) that could contribute
to the safety margin. There may be some areas where a safety margin cannot be created; in
these cases nonroad retrofit projects may be even more important for the area's SIP.
Assuming that the nonroad retrofit project is funded at least in part with CMAQ dollars, the
MPO (or state DOT) would need to determine the timing of the project, number of vehicles,
engines, or equipment to be retrofitted, and the retrofit technology that would be applied
because the MPO (or state DOT) determines how CMAQ money is spent. The state air
agency also must be involved because that agency prepares the SIP.
Agencies quantify the project. The state air agency, in consultation with the MPO,27 would
27Note that either the state air agency or the MPO could take the lead role in this step.
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quantify emission reductions from the retrofit project in the year(s) for which the budgets are
established. (See Section 2 of this guidance for further direction in how a retrofit project can
be quantified.)
State air agency assures SIP criteria are met. The state air agency would determine and
document that the emission reductions meet all of the criteria necessary for a SIP to include
emission reductions from a project, specifically, that emission reductions are surplus,
quantifiable, enforceable, permanent, and adequately supported. (See Section 3 of this
guidance for further discussion of these criteria.)
State air agency prepares the safety margin section of the SIP. The state air agency would
prepare an initial draft of the safety margin section of the SIP; share it with the other parties in
the interagency consultation process, including the MPO, DOT, and EPA; and revise it as
necessary once it receives comments from the other agencies. This step could take anywhere
from one to three months, depending on the nature of the comments that arise through
interagency consultation. However, if the nonroad retrofit project is well thought-out and
accurately quantified in the initial draft, it is likely that fewer issues would have to be resolved
in the consultation process. We believe that the state air agency and the MPO could complete
the first four steps in one to three months.
State requests that EPA parallel process the SIP. The state air agency would send the EPA
region the proposed SIP and in its transmittal letter, request that EPA use parallel processing
to approve the revision and find the budgets adequate.
State publishes proposal. The state must publish its proposal in accordance with its own
state's procedures, which would begin a public comment period. In most cases, a state would
give the public one month to comment, but depending on the circumstances, the public
comment period could be shortened to 15 days.28
EPA begins the adequacy process. Once EPA receives an initial SIP submission for parallel
processing, EPA must review it for adequacy, regardless of whether the safety margin is part
of a larger SIP demonstration or whether it is a stand-alone submission. EPA uses the criteria
in 40 CFR 93.118(e) to judge whether a SIP submission is adequate, and follows the process
described in 40 CFR 93.118(f). EPA begins the adequacy process by notifying the public that
we have received a SIP submission and beginning a 30-day public comment period.
State revises its proposal. The state would revise its proposal as necessary, based on the
comments it receives during the public comment period. This step may take the state about a
month. At this point, the state air agency finalizes the SIP and submits it to EPA for approval
and completion of the adequacy process.
EPA completes the adequacy process. After the comment period, EPA must inform the
28Requirements for public hearings on SIPs can be found at 40 CFR 51.102. Section 51.102(g) allows a state to shorten
its public comment period if it submits a written application to EPA in advance.
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state of its decision on adequacy and respond to any comments it has received. EPA also
must publish a notice in the Federal Register. Usually, EPA completes the adequacy process
within three months, but can expedite it if necessary to a month and a half.
EPA adequacy finding effective. The adequacy finding is effective 15 days from the date
the Federal Register notice is published. At this point, the MPO can use the motor vehicle
emissions budgets in the SIP submission for conformity.
A. 3 Have any areas included safety margins in their SIPs?
Yes. Many areas have included safety margins in their SIPs that have been used in
conformity. Below we have listed areas with a safety margin as of the date of this guidance
document, as well as the pollutant and the type of SIP that included the safety margin. These safety
margins have resulted from a variety of control measures, rather than nonroad retrofit projects.
However, the list demonstrates that safety margins have been done with some frequency in the past,
and that many states have experience with including safety margins in their SIPs.
Area
Syracuse, NY
TN portion of the Clarksville-Hopkinsville
Greene and Jackson Counties, IN
Evansville, IN
Terre Haute, IN
Muncie, IN
Colorado Springs, CO
Denver, CO
Fort Collins, CO
Greeley, CO
Longmont, CO
Ogden, UT
Provo, UT
Salt Lake City, UT
San Diego, CA
Bakersfield, CA
Chico, CA
Fresno, CA
Lake Tahoe North Shore, CA
Lake Tahoe South Shore, CA
Modesto, CA
Sacramento, CA
Pollutant
CO
ozone
ozone
ozone
ozone
ozone
CO
CO,
CO
CO
CO
CO
CO
CO
ozone, CO
CO
CO
CO
CO
CO
CO
CO
Type of SIP
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
maintenance
plan
plan
plan
plan
plan
plan
plan
plans
plan
plan
plan
plan
plan
plan
plans
plan
plan
plan
plan
plan
plan
plan
EPA notes that safety margins were also included in maintenance plans for the 1-hour ozone NAAQS by 14 areas.
53
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San Francisco-Oakland-San Jose, CA CO
Stockton, CA CO
maintenance plan
maintenance plan
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55
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APPENDIX B:
Establishing and Using a Trading Mechanism to Allow Emission
Reductions from Nonroad Retrofits to Be Used in Transportation
Conformity Determinations
This appendix provides detail about how a state could apply the emission reductions from a
nonroad retrofit project or projects in a conformity determination via a trading mechanism.
B. 1 What is an example of establishing and using a trading mechanism?
Suppose a 2008 ozone nonattainment area develops a draft attainment demonstration that
shows the area could emit from all sources 400 tons of NOx per day, and still meet the NAAQS in
2015. The area's total NOx SIP inventory for 2015 is as follows:
Nonroad: 100 tons per day
On-road: 100 tons per day
Stationary sources: 100 tons per day
Area sources: 100 tons per day
Total final attainment SIP NOx inventory: 400 tons per day
This SIP would have a 2015 NOx motor vehicle emissions budget of 100 tons per day, which
is the on-road portion of the NOx inventory. The area also includes a trading mechanism in its SIP,
and EPA has approved it.
During the development of the SIP, the MPO implements a nonroad retrofit project that will
reduce NOx by 5 tons per day in 2015 and 2 tons per day in 2020. The state air agency and MPO
concur that these reductions will not be applied to the nonroad inventory used in the SIP, in order to
use it in a future transportation plan/TIP conformity determination. The state air agency concurs
through a letter to the MPO that the reductions in 2015 and 2020 are surplus.
In this case, the on-road motor vehicle emission budget does not change. In subsequent
conformity determinations for 2015, the MPO could offset as much as 5 additional tons of on-road
emissions using the reductions from the nonroad retrofit project in 2015 and as much as 2 tons per in
2020, based on the latest information available for the retrofit project's reductions when
transportation plan/TIP conformity is determined. Retrofit reductions from a trade would be
estimated based on the latest assumptions and emissions model available at the time of a
transportation plan/TIP determination (40 CFR 93.110 and 93.111).
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B.2 Does a trading mechanism have to be included in a SIP?
Yes, a state must adopt the trading mechanism (such as the model rule found in Appendix C)
into its SIP. A state may choose to develop this type of trading mechanism either as a stand-alone
SIP or as part of a larger SIP submission.
EPA believes that the most expeditious process for developing and approving a trading
mechanism is for a state to use the model trading rule provided in this guidance document in
Appendix C to develop the mechanism as a stand-alone SIP and for EPA to parallel process its
approval. As discussed below, it is possible that a trading mechanism based on the model rule may
be developed by a state and approved by EPA in as little as eight months if it is submitted as a stand-
alone SIP and if EPA parallel processes its approval. The model rule should be used as the basis for
a state's trading rule whether the state submits its rule as a stand-alone SIP or includes it in an RFP
SIP, attainment demonstration, or maintenance plan to expedite the development, review and
approval of the trading mechanism.
B. 3 What is the most expeditious process for establishing a trading mechanism in
a SIP, and how long will it take?
To minimize the time needed for the state air agency to develop and EPA to review a SIP
addressing a trading rule, EPA developed a model rule that is discussed in detail in Appendix C of
this document. States that want to minimize the time necessary to adopt a trading mechanism into
their SIP should use EPA's model rule. If a state decides to draft its own trading rule, it will likely
take more time to complete the steps outlined below.
The following paragraphs and the flowchart at the end of this appendix (Figure 2) describe a
process that can be used to expedite the approval of a trading rule into a SIP. If a state adopts the
model trading rule and EPA approves the rule in parallel with the state's adoption of the rule, we
believe that many states could put a trading rule in place for use in transportation conformity
determinations in as little as eight months. °
State prepares proposed SIP. The first step in developing a SIP for a trading rule to allow
emission reductions from nonroad retrofit projects to be used in transportation conformity
determinations is for the state air agency to prepare the proposed SIP. To expedite this step,
the air agency should start with the model trading rule and modify it only to the extent
necessary. The air agency would need to fill in the information pertinent to the nonattainment
and maintenance areas in its state where the rule would apply. It is also likely that the state
air agency would have to format the rule so that it conforms to the state's requirements for
30Some states may be able to further reduce the time needed if state law allows them to establish a SIP trading
mechanism through a memorandum of agreement (MOA) or memorandum of understanding (MOU). EPA believes that
use of an MOA or MOU could save time because an MOA or MOU may require less time for state reviews than a
regulation. However, EPA notes that this route may not be available to all states primarily because individual state law
may not allow MO As or MOUs to be binding on future administrations.
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regulatory text. The state would also develop language to be included in the preamble of its
notice of proposed rulemaking. In drafting its preamble language the state may find it useful
to incorporate as much relevant language as possible from the explanatory text in Appendix C
that accompanies the model rule.
Once the air agency has drafted its regulation it would share the draft with the interagency
consultation partners as required by 40 CFR 93.105(b)(l). The interagency consultation
partners include representatives of the MPO(s), state and local air quality and transportation
agencies, and the local or regional offices of EPA, FHWA, and FTA. After the interagency
consultation partners have reviewed and commented on the draft, the state air agency would
make any needed revisions. We believe that a state air agency could accomplish these tasks
in about two months, or perhaps even less, if it closely follows the model rule in Appendix C.
However, if a state air agency decided to make significant changes or to ignore the model
rule, these initial steps could take up to eight months.
State submits proposed SIP to EPA and requests parallel processing. At this point the air
agency would transmit the SIP to the EPA Region and request in the transmittal letter that the
submission be parallel processed in order to expedite its incorporation into the SIP.
State proposes trading rule and solicits public comment. The air agency would also move
forward with publishing its notice of proposed rulemaking, consistent with the state's
requirements. Once published, a public comment period would begin. A typical public
comment period is 30 days; however, it may be possible to reduce the comment period to as
little as 15 days under some circumstances.31 We believe that a state air agency could
complete these steps in about one month.
EPA reviews proposed trading rule. The EPA Region would begin its formal review of the
trading rule as soon as it receives the state's SIP submission. EPA's review and the
subsequent publication of a notice of proposed rulemaking in the Federal Register would
occur while the state was accepting public comments on its notice of proposed rulemaking
and addressing any comments received. Because the EPA Region would have reviewed the
draft through the interagency consultation process, the EPA Region should be able to
complete its review of the submission quickly and prepare its notice of proposed rulemaking.
We believe that an EPA Region could complete these steps in as little as one month if the
state's rule closely follows the model rule and if the air agency thoroughly addressed
comments offered by the Region during the interagency consultation process. If, however,
the submission does not closely follow the model rule or if the Region's comments were not
thoroughly addressed, these steps could take three months or more.
EPA proposes approval of the trading rule. The EPA Region would then publish the
notice of proposed rulemaking in the Federal Register. The publication of the notice would
start a public comment period. A typical public comment period is 30 days; however, it may
be possible to reduce the comment period to as little as 15 days under some circumstances.
The EPA Region could complete these steps in about one month.
^Requirements for public hearings on SIPs can be found at 40 CFR 51.102. Section 51.102(g) allows a state to shorten
its public comment period if it submits a written application to EPA in advance.
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EPA addresses comments and prepares final approval. At the close of the comment
period on EPA's notice of proposed rulemaking, the EPA Region would address any
comments received and could draft the Federal Register notice finalizing the approval of the
trading rule; however, EPA cannot publish this final rulemaking notice until the state
completes its rulemaking process and submits the adopted rule to EPA. We believe that the
EPA Region could respond to any comments and draft the final rulemaking notice in about
one month.
State prepares final rulemaking package. By this time the state's public comment period
would have closed. The state air agency would address any comments received and prepare
its final rulemaking package, making any changes in the rule that are necessary to address any
comments that are received. These actions would take about one month. It must be noted that
if the state needs to make a significant revision to its trading rule, the EPA Region would not
be able to complete its rulemaking through parallel processing because the state's final rule
would not be consistent with the rule that EPA had proposed for approval.
State review, if required. At this point some states may be required to submit the final rule
for review within the state before submission to EPA for final approval. These reviews may
be carried out by the state legislature, the Governor's office or other body established by the
state. The length of these reviews varies greatly. In most cases these reviews either are not
required or last less than six months. However, in some states the review can add up to 18
months to the process, particularly in cases where review is required by the state legislature
and the rule is completed just after the end of one legislative session.
State submits adopted rule for EPA approval. After any required state-level review is
completed, the air agency would address any comments that resulted from this review
process. The air agency would also complete the state rulemaking process which may involve
steps such as publishing a final rulemaking notice. The state would then submit the final SIP
package to the EPA Region for final approval. We believe that these tasks can be completed
in about one month.
EPA finalizes approval. The EPA Region would then complete its final rulemaking notice
and have the notice published in the Federal Register. This step could take one month or
perhaps less. EPA's final action would be effective 30 days after publication. If EPA
approves the SIP and once EPA's rulemaking action is effective, the MPO(s) may use the
trading rule in conformity determinations. No further rulemaking by the state or EPA would
be necessary to allow trades to occur.
B.4 Has any state adopted a trading mechanism into its SIP this quickly?
Yes. The following timeline from Utah's experience illustrates how quickly a trading
mechanism can be adopted into a SIP. In this case, the trade was between pollutants rather than
between emissions sectors. The fact that the trading mechanism was critical for the area to
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demonstrate conformity meant that all of the involved agencies worked quickly to reach resolution:
In early January 2002, the MPO for Salt Lake City, Utah, recognized that it would not be able
to pass the NOx budget in its PMio SIP in its next conformity determination that was required
in July 2002. The MPO knew that it would be able to easily pass the PMio budget in the SIP.
Through interagency consultation, it was decided that the state and EPA would work together
to quickly develop and approve a SIP trading mechanism that would allow the area to trade
emission reductions from its PMio budget to its NOx budget as allowed by 40 CFR 93.124(b).
In early January, Utah and EPA began drafting the trading rule and supporting information.
By early February, the initial language for the trading rule and supporting information had
been completed. In early March, the regulatory language and supporting information was
finalized.
On March 15, the Governor of Utah submitted the proposed trading rule to EPA Region 8 and
asked that parallel processing be used to approve the rule.
On April 1, the Utah Air Quality Board (UAQB) proposed the trading rule and started a 30-
day public comment period.
On May 1, EPA Region 8 published a Federal Register notice proposing approval of the
trading rule that started a 30-day public comment period.
On May 13, the UAQB adopted the trading rule and submitted the adopted rule to EPA
Region 8 for final approval.
On July 1, EPA Region 8 published a Federal Register notice approving the trading rule into
Utah's SIP.
On July 31, EPA's approval became effective and the MPO was then able to use the trading
rule in its pending conformity determination.
The entire process from the time that it was recognized that a trading rule was needed to the
time that EPA's approval of the rule became effective was just under seven months. While the
specifics of the trading rule developed for Salt Lake City are different than a trading mechanism for
nonroad retrofit projects, EPA believes that it would be possible to develop and approve such a
trading mechanism in a similar amount of time.
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Flowchart lor the
Development and
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Rule Thai Allows
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Nonroad Retrofits to he
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's Oil ice
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(2) Af.iiiJit'etiany cilaaiBsis arentineir sicl wauld ncii cause T!PAki le pjcineise a|ipKival.
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APPENDIX C:
Model Rule for Trading Emission Reductions from Nonroad
Retrofit Projects for Transportation Conformity
Introduction
In recognition of the importance of nonroad diesel retrofit projects and other mobile source
emission reduction strategies, MAP-21 continues to direct states and MPOs to give priority to
funding diesel retrofits and other cost-effective mobile strategies under CMAQ. The law also notes
that states and MPOs continue to have final CMAQ project selection authority. Furthermore, any
state that has a PM2.5 nonattainment or maintenance is required to invest a portion of its CMAQ
funding on projects that reduce PM2.5 emissions and precursor emissions.
This model rule establishes a trading mechanism that would allow emission reductions from
nonroad retrofit projects that are eligible to be funded with CMAQ (23 U.S.C. 149(b)) to be used in
transportation conformity. The model rule is intended to facilitate states' adoption of this type of
trading mechanism into their SIPs. States would need to modify this model rule to account for any
new issues raised by including projects that may not be eligible for CMAQ dollars, as described
further below.
Once a trading mechanism is adopted by a state into its SIP, the state air agency, MPO, and
other agencies as appropriate would follow its provisions each time the MPO wants to include the
emission reductions from a new nonroad retrofit project (or set of projects) in a transportation
conformity determination.
Appendix C is divided into two parts that follow a parallel structure. Part 1 provides
background information for state and local agencies to consider for each section of the model trading
rule. Part 2 provides the model rule itself that states can include in their SIPs. EPA developed the
model rule based on existing laws and regulations.
Part 1: Explanatory Notes for Using Model Trading Rule Language
Section 1. Purpose
The purpose of the model rule is to establish a trading mechanism that allows certain nonroad
retrofit emission reductions to be used in transportation plan and TIP conformity determinations.
Section 2. Definitions
Examples of definitions that may be needed are listed, but all of them do not need to be
included if they are defined elsewhere in the state's regulations or if they do not apply (e.g.,
does not need to be defined if a state has no PMio nonattainment or maintenance areas). At a
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minimum, the definitions of "CARS," "CMAQ," "EPA," "nonroad retrofit project," and "surplus"
must be included. If you include a definition for a word or phrase that is defined in the conformity
rule (40 CFR 93.101), your definition must be consistent with the definition found in that rule.
Section 3. Applicability
(a) This model rule could be tailored to establish individual trading mechanisms for more than
one nonattainment or maintenance area within a state. Section 3(a) is intended to ensure that
the exchange of emission reductions occurs within the geographic area that the regional
emissions analysis covers, rather than between areas covered by separate regional emissions
analyses. We believe that this language will cover all possible jurisdictional cases, e.g., where
there is one MPO in a nonattainment area, an MPO that has a donut area, multiple MPOs in an
^7
area, or a multi-state area.
States can apply this model rule to one or more MPOs, simply by including the names of the
MPOs within the model rule. However, states could also list the MPOs to which the model
rule applies and refer to this list in subsequent sections of the model rule. A state may want to
choose this approach to be consistent with other parts of its SIP, or simply because doing so
avoids repetition of the list in multiple places throughout the trading rule.
(b) As noted above, the model trading rule is intended to target retrofit projects that are eligible
for CMAQ dollars. States would need to modify this model rule to account for any new
issues raised by including projects that may not be eligible for CMAQ dollars. For example, a
trading mechanism could also account for other retrofit projects that are funded or operated by
a state or local transportation agency that may not be eligible for CMAQ dollars (e.g.,
retrofitting diesel mowing tractors that cut vegetation within the rights-of-way of roadway
facilities).
(c) This section allows agencies to specify which pollutants and/or precursors are covered by
their trading rule (e.g. the rule for an ozone area could specify that it applies to NOx, VOC, or
both).
This section also states that the rule applies only to trades of the same pollutant or precursor.
That is, the model trading rule does not provide for trading between pollutants or
precursors.33'34
32Please refer to EPA's guidance, Guidance for Transportation Conformity Implementation in Multi-jurisdictional
Nonattainment and Maintenance Areas (EPA-420-B-12-046), for more information regarding how the conformity rule's
requirements for conformity determinations apply in areas that contain more than one MPO, a donut area, parts of more
than one state, or any combination. See www.epa.gov/otaq/stateresources/transconf/regs/420bl2046.pdf.
33 If your SIP allows trading between pollutants and/or precursors that will be included in the retrofit trading rule, you
will need to delete the sentence in Section 3(c) that says, "This rule applies only to trades of the same pollutant or
precursor" and add a sentence similar to the following: "This rule does not interfere with [name of state regulation]
which provides for trading between [insertpollutants/precursors]."
34 If you are interested in allowing inter-pollutant or precursor trading for conformity purposes, you will need to do so
within the SIP. Note that you would need to develop an appropriate trading ratio based on a technical justification and
consider other factors as appropriate. Please consult your EPA Region if you intend to add inter-pollutant/precursor
trading to your SIP.
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Section 4. Applying Emission Reductions from Nonroad Retrofit Projects in Transportation
Conformity Determinations
(a)(i) The interagency consultation process in the transportation conformity (40 CFR 93.105) would
be followed for each nonroad retrofit trade. This part of the model trading rule would require
the MPO, state department of transportation, other state and local transportation agencies
(when appropriate), and the state air agency to consult on trades. Individual states can further
clarify which agencies should be involved in their consultation process, and make any further
modifications as appropriate.
(a)(ii) This section specifies that the MPO and the state air quality agency must agree on the quantity
of emission reductions from a nonroad retrofit project, or set of projects, that can be used in
conformity. The MPO and state air quality agency must work together for a trade to occur
because each agency is responsible for part of the process. MAP-21 directs states and MPOs
to give priority to projects that reduce PM2.5 emissions, including diesel retrofits, in areas
designated nonattainment or maintenance for PM2.s (23 US.C. 149(g)(3)). These projects may
include both nonroad and on-road diesel equipment that are operated on highway construction
projects within PM2.5 nonattainment and maintenance areas (23 U.S.C. 149(k)(2)).
Ultimately, the state DOTs and MPOs decide how to spend the CMAQ money they receive, in
accordance with the CMAQ provisions of MAP-21. On the other hand, the state air agency is
responsible for determining which emission control programs an area needs to meet its Clean
Air Act obligations. The MPO and the state air quality agency must decide together how
much of the emission reductions from a nonroad retrofit project or set of projects are
appropriate to use in conformity. These two agencies would make a decision for each project
or set of projects being considered for transportation plan and TIP conformity determinations.
State air quality agencies and MPOs need to consider the area's air quality needs when
deciding how much of the emission reductions from a nonroad retrofit project is appropriate
to use in conformity. For example, in the time period before a nonattainment area has an
attainment demonstration, it may be appropriate to reserve some of the emission reductions
generated by a nonroad retrofit project to help demonstrate attainment. Or, a state may decide
to reserve some of the emission reductions for improving air quality, regardless of whether or
not the attainment demonstration is in place. The state air agency and MPO could also decide
that all of the emission reductions from a nonroad retrofit project can be used in the
conformity determination. Whatever the case, the state air agency would document its
concurrence in a letter to the MPO, which would describe the surplus reductions that are
available for transportation conformity.
(b)(i) In order for emission reductions from a nonroad retrofit project to be estimated,
NONROAD/NMEVI would need the number of vehicles/engines/equipment being retrofitted,
the vehicle/engine/equipment type and class being retrofitted, vehicle/engine/equipment
model years, the retrofit technology being applied, the activity level of the
vehicles/engines/equipment that are used (e.g., hours of usage), and when the retrofits will be
implemented. This section requires an MPO to describe the details of the project. While an
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MPO may not know all of this information with complete certainty, it should know enough
about the project to make reasonable assumptions.
(b)(ii) The model rule relies upon the transportation conformity rule's requirements for ensuring that
emission reductions from retrofit projects have sufficient commitments before they are
accounted for in a regional emissions analysis. For example, retrofit projects that result from
a state or local regulation or ordinance could be included in a conformity analysis once such
a regulation or ordinance is adopted (40 CFR 93.122(a)(3)(i)). Conversely, a retrofit project
that does not require a regulatory action to be implemented would meet this requirement if it
is included in the transportation plan and TIP with sufficient funding and other resources for
its full implementation. See Section 4.3 of this guidance for further information on what
level of commitment is necessary to include retrofit reductions in a transportation conformity
determination.
Whatever the case, once an entity (e.g., an owner or operator of nonroad equipment or
vehicles) provides a commitment for implementing a nonroad retrofit project and the MPO
relies on it in a conformity determination, it is an enforceable obligation. That is, under the
existing provisions of the transportation conformity rule, an entity that makes a written
commitment is subject to civil action if the entity does not fulfill its commitment.
(b)(iii) - (b)(v) These paragraphs are similar to the conformity rule's requirements for any control
measures that are relied upon in a conformity determination.
(c) Emission reductions must be quantified using the latest assumptions available at the start of
the regional emissions analysis (40 CFR 93.110). The consultation process would be used to
evaluate and choose the model(s) and associated methods and assumptions to be used (40
CFR 93.105(c)(l)(i)). If the emission reductions are calculated using a method that relies on
inputs such as temperature that were also used for developing the budgets in a SIP, these
factors must be consistent with those used to establish the SIP as required in 40 CFR
93.122(a)(6). Quantification methods and information on the efficacy of retrofit technologies
are addressed in more detail in Section 2 of this guidance document.
(d) This requirement for documentation is similar to the conformity rule's requirements for
documenting the transportation plan, the TIP, and any control measures that are included in
the regional emissions analysis of a conformity determination. The MPO would document in
its conformity determination that the state air agency has concurred on the traded nonroad
retrofit emission reductions. This documentation could be completed by referencing the state
air agency's concurrence letter in the transportation plan/TIP conformity determination.
(e) In subsequent determinations, the MPO and state air agency would follow the consultation
procedures in 40 CFR 93.105, but would not have to renegotiate the amount of available
emission reductions from a nonroad retrofit project that has already been traded for a given
year of the regional transportation conformity analysis. However, the MPO must recalculate
the emission reductions that result from the project in subsequent conformity determinations.
The MPO would also cite and/or include the previous air agency concurrence letter in its new
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conformity determination.
For example, suppose an area that is nonattainment for the 2008 ozone NAAQS has a trading
mechanism in place, and the MPO is determining transportation plan/TIP conformity in the
year 2015. The MPO determines that a new nonroad retrofit project reduces NOx by 5 tons
per day in 2015 and 2 tons per day in 2020. After discussion in the interagency consultation
process, the MPO and state air agency agree that these reductions are surplus, and the MPO
can use some of the reductions in the years 2015 and 2020 of the regional emissions analysis
for the transportation plan/TIP conformity determination. Specifically, in this example, the
MPO and state air agency agree that the following reductions can be used for conformity
purposes: 3 of the 5 tons per day of NOx reductions for the 2015 conformity analysis year
and all 2 tons per day of NOx reductions for the 2020 conformity analysis year.
The next time the MPO does transportation plan/TIP conformity, the MPO re-calculates the
retrofit project's reductions based on the latest models and assumptions, and it is found that
the project reduces emissions by 6 tons per day in 2015, and 3 tons per day in 2020. In this
example, the MPO can continue to use up to 3 tons per day of reductions in 2015 and up to 2
tons of reductions in 2020, based on the previous trade for this nonroad retrofit project. If
additional reductions are needed from this project for any years, then the trading mechanism
would need to be used to conduct a new trade.
As with any control measure that an MPO includes in its conformity determination, the MPO
can only use the emission reductions from the project, or part of the project that is actually
occurring. If the nonroad project's implementation is delayed, the MPO cannot include
emission reductions from the project until its implementation is assured.
Section 5. Prohibition on Double-Counting
This section is intended to ensure that there is no double-counting of emission reductions that have
already been used in a transportation conformity determination or in meeting any other Clean Air
Act purpose. The best way to ensure this is to require that the impact of any trades be accounted for
in any subsequent inventory analyses that are done. For example, if the application of this rule
results in a decrease in the nonroad emissions inventory and an increase in the allowable on-road
emissions, future SIP inventories or regional transportation conformity analyses should reflect those
changes as appropriate.
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Part 2: Model Trading Rule
Section 1. Purpose
This rule establishes the procedures that may be used to trade emission reductions from
nonroad retrofit projects, as defined below, to the transportation sector for the purpose of
determining conformity of a transportation plan or transportation improvement program.
Section 2. Definitions
The following definitions apply to this rule:
CARB means the California Air Resources Board.
CMAQ means the Congestion Mitigation and Air Quality Improvement Program, as defined in
title 23, U.S.C.
EPA means the U.S. Environmental Protection Agency.
Nonroad retrofit project, for the purpose of this rule, means an undertaking to reduce
emissions from nonroad vehicles or engines as described by 23 U.S.C. 149(b), below the
emissions level which is currently required by EPA regulations at the time of vehicle or
engine certification. For the purposes of this rule, such an undertaking must apply a
technology verified by EPA, CARB, or other entity recognized by EPA for verifying retrofit
technology, use an EPA-certified engine replacement or early replacement of older vehicles
or equipment with cleaner vehicles or equipment; and it must be eligible for funding under
CMAQ.
NOx means oxides of nitrogen.
PMjo means particulate matter that is less than or equal to 10 microns in aerodynamic
diameter.
PM2.5 means particulate matter that is less than or equal to 2.5 microns in aerodynamic
diameter.
Surplus means that emission reductions are not otherwise relied on to meet any Clean Air Act
air quality related purpose including but not limited to reasonable further progress,
attainment, maintenance, or requirements adopted to satisfy Clean Air Act section
110(a)(2)(D). In the event that a nonroad retrofit project is relied on to meet such an air
quality requirement, emission reductions are no longer surplus and may not be used in
transportation conformity determinations.
VOC means volatile organic compounds.
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Section 3. Applicability
(a) Geographic applicability: This trading rule applies to the geographic area covered by the
regional emissions analysis done for a transportation conformity determination for a transportation
plan or transportation improvement program in [insert name of nonattainment or maintenance area].
(b) Project applicability: This trading rule applies to nonroad retrofit projects as defined in
Section 2 of this rule.
(c) Pollutant applicability: This trading rule applies to the following pollutants/precursors:
[insert pollutants/precursors; for precursors indicate for which pollutant and standard(s)]. This
rule applies only to trades of the same pollutant or precursor.
Section 4. Applying Emission Reductions from Nonroad Retrofit Projects in Transportation
Conformity Determinations
Before [insert name ofMPO] can include emission reductions from a nonroad retrofit project(s) in a
transportation conformity determination, the steps in paragraphs (a) - (d) must be completed.
(a) Interagency Consultation.
(i) [Insert name ofMPO], [insert name of state department of'transportation]', [insert names of
other state and local transportation agencies, when appropriate] and [insert name of state air
agency] shall follow consultation procedures in [insert "40 CFR 93.105" or state transportation
conformity SIP if one has been approved by EPA] throughout the implementation of this rule.
(ii) [Insert name ofMPO(s)] and [insert name of state air agency] must concur on the amount of
emission reductions from a nonroad retrofit project(s) that can be used in the transportation
conformity determination. [Insert name of state air agency] will document this concurrence in a
letter to [insert name ofMPO]. Concurrence of [insert name of state air agency] also affirms
that the emission reductions are surplus and therefore available for the transportation conformity
determination.
(b) Description of the Nonroad Retrofit Proj ect(s).
(i) [Insert name ofMPO] must fully describe each nonroad retrofit project being relied upon in a
conformity determination, including the number of vehicles/engines/equipment being retrofitted,
the vehicle/engine/equipment type and class, vehicle/engine/equipment model years, the retrofit
technology being applied, the activity level of the vehicles/engines/equipment, and the
implementation schedule of the nonroad retrofit project.
(ii) [Insert name ofMPO] must provide assurance that the nonroad retrofit project is enforceable
by ensuring that any nonroad retrofit project under this rule meets the requirements of 40 CFR
93.122(a);
(iii) [Insert name ofMPO] must provide assurance that the nonroad retrofit project has adequate
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funding and resource commitments to ensure that emission reductions from the nonroad retrofit
project will occur in the years of the regional emissions analysis when emission reductions will
be used;
(iv) [Insert name ofMPO] must provide assurance that the nonroad retrofit project is on
schedule and that the retrofitted vehicles, engines, or equipment will remain in use within the
nonattainment or maintenance area in the years of the regional emissions analysis when the
emission reductions will be used; and
(v) [Insert name ofMPO] must provide assurance that emission reductions will be based only on
activity that occurs within the geographic area covered by the regional emissions analyses.
(c) Calculation of Emission Reductions. For each year of the regional emissions analysis in which
emission reductions from the nonroad retrofit project(s) will be applied, [insert name ofMPO] and
[insert name of state air agency] must calculate emission reductions from the nonroad retrofit
project(s) using:
(i) the latest EPA-approved emissions model or other method as determined through the
interagency consultation process required by 40 CFR 93.105;
(ii) data and assumptions consistent with requirements for use of latest planning assumptions
under 40 CFR 93.110, including, but not limited to current data or future projections of numbers
and types of nonroad vehicles/engines/equipment being retrofitted, and current data or future
projections of hours of use for those vehicles/engines/equipment within the nonattainment or
maintenance area;
(iii) the latest verified information available regarding the efficacy of the nonroad retrofit project
as provided by EPA and/or CARB; and
(iv) ambient temperatures and other relevant factors consistent with those used to establish the
motor vehicle emissions budgets (if they exist) in the applicable implementation plan, as required
by 40 CFR 93.122(a)(6), if a method is used that requires such factors as inputs.
Once total emission reductions from the nonroad retrofit project(s) are calculated, [insert name of
MPO] can use no more than the amount of emission reductions determined in Section 4(a)(ii) to be
available for the conformity determination.
(d) Documentation. [Insert name ofMPO] must document in the transportation conformity
determination how steps (a) through (c) of this section have been satisfied, consistent with the
transportation conformity regulations at 40 CFR Parts 51 and 93.
(e) Subsequent conformity determinations. Once emission reductions from a nonroad retrofit
project(s) have been used in a conformity determination, [insert name ofMPO] can include emission
reductions from those projects for the same analysis years in a subsequent conformity determination
without repeating paragraph (a)(ii), provided [insert name ofMPO] meets all other requirements of
Section 4 of this rule.
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Section 5. Prohibition on Double-Counting
Once the emission reductions of the nonroad retrofit project(s) are included in a transportation
conformity determination, those specific reductions are no longer surplus and therefore no longer
available as new reductions for meeting any Clean Air Act air quality related purpose, including but
not limited to, reasonable further progress, attainment, maintenance, or requirements in Clean Air
Act section 110(a)(2)(D). Any emissions inventory created after a trade must properly account for
the emission impact of the trade.
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