August 20, To Whom It May Concern:

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1 August 20, 2003 Air Docket U.S. Environmental Protection Agency Mailcode: 6102 Attention Docket ID No. A Pennsylvania Avenue, NW Washington, DC To Whom It May Concern: On behalf of the State and Territorial Air Pollution Program Administrators (STAPPA) and the Association of Local Air Pollution Control Officials (ALAPCO), we submit the attached written comments on the U.S. Environmental Protection Agency s (EPA s) proposed rulemaking on the Control of Emissions of Air Pollution from Nonroad Diesel Engines and Fuel, as published in the Federal Register on May 23, 2003 (68 FR 28328). In the aggregate, emissions of oxides of nitrogen (NO x ) and particulate matter (PM) from nonroad diesels exceed those from the nation s highway diesels. STAPPA and ALAPCO commend EPA for taking on the significant challenge posed by nonroad diesel engines and fuel and are very pleased that the agency s proposal is largely consistent with the key objectives we have pursued with respect to regulating this enormous source of air pollution. Although there are several important aspects of the proposal with which we have concerns and on which we offer recommendations in the attached written comments we believe the framework of this proposal is solid and we support it. In addition to highlighting why reducing nonroad diesel emissions is critically important to states and localities, our written comments also provide an overview of the substantial public health and welfare benefits to accrue from EPA s proposal, noting that implementation of the final rule is expected to provide society with a very large net gain in social welfare based on economic efficiency criteria. Specifically, the total net present value in 2004 of the stream of net benefits (benefits minus costs) is $530 billion. With respect to some of the most critical policy elements of the proposal, STAPPA and ALAPCO strongly endorse establishing rigorous engine standards that will cut nonroad diesel emissions of NO x and PM by 90 and 95 percent, respectively, as well as the 15-parts-per-million (ppm) nationwide cap on sulfur in nonroad diesel fuel. We do, however, have concerns regarding several key aspects of the proposed engine and fuel programs, and also have specific comments and recommendations in strong support of establishing rigorous standards for diesel locomotive and marine engines and fuel.

2 With respect to the proposed diesel engine standards, as we detail in our written comments, we recommend that given the very large number of engines below 25 horsepower (hp), and the significant risk these engines pose due to individuals exposure to air toxics, the toxic hydrocarbon emissions from these small engines must be appropriately controlled. Further, state-of-the-art emission control technologies to achieve NO x and PM reductions on the order of 90 to 95 percent should be required of nonroad diesel engines of all sizes, including the very smallest those less than 75 hp and less than 25 hp and the very largest those greater than 750 hp. Finally, such standards should be completely phased in for all engine sizes by no later than the end of With respect to the diesel fuel program, although we would prefer a one-step approach to putting in place a 15-ppm national diesel sulfur cap by 2008, if the agency proceeds with a two-step approach, we urge that the 2007/2010 phase-in schedule for reaching the 15-ppm sulfur cap be the absolute latest the agency pursues. Further, we believe that for the nonroad diesel fuel program to be enforceable and verifiable, the baseline approach outlined by the agency is the only viable alternative. Moreover, with respect to the agency s request for comment on reducing sulfur in diesel fuel used in locomotive and marine engines, STAPPA and ALAPCO offer strong support for EPA adoption, in the final nonroad rule, of a 500-ppm interim sulfur cap in 2007 and a 15-ppm cap by 2010 for locomotive and marine diesel fuel, consistent with the level and timing of diesel fuel sulfur requirements for other nonroad applications. In addition, we urge that EPA commit in the final nonroad fuel to an additional rulemaking, and timely schedule, to tighten emission standards for diesel locomotive and marine engines. Other aspects of the proposal on which we offer comments and recommendations include various test procedures; not-to-exceed emission standards; in-use emissions testing and onboard diagnostic requirements; a technology review; retrofit credits; early introduction of clean engines and innovative technologies; averaging, banking and trading; and the alternative benefits analysis. Finally, we cannot overstate how firmly STAPPA and ALAPCO stand behind the 2007 highway diesel rule. Ensuring that this rule is implemented on schedule and completely intact is a top priority. Accordingly, while we fully support efforts to establish a rigorous and timely control program for nonroad diesel engines and fuel also a top priority we stress that the 2007 highway rule must not be reopened or in any way undermined, delayed or otherwise affected as a result of the nonroad rulemaking. STAPPA and ALAPCO thank EPA for this opportunity to provide these perspectives and the attached written comments on this very important proposed rulemaking and look forward to working closely with the agency to improve and refine this critical program. Toward that end, we offer to you our continued cooperation and partnership as you move ahead. Sincerely, Nancy L. Seidman STAPPA Chair Mobile Sources and Fuels Committee Eric P. Skelton ALAPCO Chair Mobile Sources and Fuels Committee 2

3 Comments of the State and Territorial Air Pollution Program Administrators and the Association of Local Air Pollution Control Officials on the U.S. Environmental Protection Agency s May 23, 2003 Proposed Rule to Control Emissions of Air Pollution from Nonroad Diesel Engines and Fuel (68 Federal Register 28328) Air Docket No. A August 20, 2003 Introduction The State and Territorial Air Pollution Program Administrators (STAPPA) and the Association of Local Air Pollution Control Officials (ALAPCO) are pleased to provide comments on the U.S. Environmental Protection Agency s (EPA s) proposed rule to control emissions of air pollution from nonroad diesel engines and fuel, as published in the Federal Register on May 23, 2003 (68 FR 28328). STAPPA and ALAPCO commend EPA for its continued leadership in reducing air pollution from the mobile source sector. The agency s final adoption in December 1999 of Tier 2 motor vehicle emission standards and a national low-sulfur gasoline program (published February 10, 2000, 65 Federal Register 6698), and in December 2000 of the 2007 highway diesel rule, establishing standards for onroad heavy-duty diesel engines and fuel sulfur levels (published January 18, 2001, 66 Federal Register 5002), were remarkable accomplishments that will yield tremendous environmental and public health benefits for the entire country. This proposal to further regulate nonroad diesel engines and cap sulfur in nonroad diesel fuel is further demonstration of the agency s continued commitment to efficiently and cost-effectively reduce emissions from the most significant mobile source sectors and to achieve truly meaningful improvements in air quality across the nation. STAPPA and ALAPCO welcome this proposal and commend EPA not only for designing a solid framework to form the basis of this important regulatory program, but also for engaging in a thorough and inclusive stakeholder process prior to proposal. STAPPA and ALAPCO believe EPA s proposal represents a serious response to a serious problem. We are especially pleased that the proposed nonroad diesel engine and fuel program reflects many of the overarching recommendations STAPPA and ALAPCO have made over the past several years, including capping sulfur in nonroad diesel fuel at 15 parts per million (ppm) and establishing rigorous engine standards that will cut nonroad diesel emissions of oxides of nitrogen (NO x ) and particulate matter (PM) by over 90 percent. The following comments detail why this rulemaking is so important to state and local air quality agencies and why STAPPA and ALAPCO support the framework of the proposal and many key elements of it. In addition, we highlight our concerns with several important aspects of the proposal and offer our recommendations for addressing these concerns and improving the rule.

4 1. Why Reducing Nonroad Diesel Emissions Is Critically Important to State and Local Air Agencies Achieving the greatest level of emission reductions possible from the nonroad diesel sector is of vital importance, and a top priority of state and local air pollution control agencies. As the officials with primary responsibility for achieving and sustaining clean, healthful air throughout the country, state and local air agencies are keenly aware of the need to aggressively pursue reductions in emissions from nonroad diesels, which contribute substantially to a variety of environmental and public health problems. Across the country, nonroad diesels are huge contributors to elevated levels of ozone and fine particulate matter (PM 2.5 ), representing a substantial and growing share of the national emissions inventories for NO x and PM. In fact, the aggregate NO x and PM emissions from nonroad diesels exceed those from all of the nation s highway diesel engines. Moreover, the public health risks associated with nonroad diesel emissions are severe, including premature mortality from exposure to PM 2.5, as well as aggravation of cardiovascular and respiratory diseases, exacerbation of asthma and acute and chronic respiratory ailments. Further, the Clean Air Scientific Advisory Committee has concluded that diesel exhaust is a likely human carcinogen at environmental levels of exposure, further heightening the need to take swift and aggressive action to control emissions from nonroad diesels. As EPA acknowledges in this proposal, nonroad diesels are responsible for approximately 10 percent of total national NO x emissions and 10 percent of total PM emissions, with even higher proportions close to 20 percent in some urban areas. Under the control strategy EPA has proposed, however, by 2030, nonroad heavy-duty vehicle NO x emissions would be reduced by 827,000 tons annually and PM emissions by approximately 127,000 tons annually. Unless emissions from nonroad diesels are sharply reduced, it is very likely that many areas of the country will be unable to attain and maintain health-based National Ambient Air Quality Standards (NAAQS) for ozone and PM. Accordingly, we cannot overstate the need for EPA to take full advantage of the opportunity to adopt and fully implement the most rigorous, comprehensive and timely nonroad diesel engine and fuel control program possible. Ozone and PM also cause significant harm to public welfare. Specifically, ozone causes damage to vegetation, which leads to economic crop and forestry losses, as well as harm to national parks, wilderness areas and other natural systems. PM causes damage to materials and soiling of commonly used building materials and culturally important items such as statues and works of art. NO x, SO x and direct emissions of PM contribute to substantial impairment in visibility in many parts of the U.S. where people live, work and recreate, including mandatory federal Class I areas. NO x emissions from nonroad diesel engines also contribute to the acidification, nitrification and eutrophication of water bodies. Unfortunately, millions of Americans live in areas with unhealthful air quality that may endanger public health and welfare (i.e., levels not requisite to protect public health with an adequate margin of safety). Based upon data for , there are 291 counties 2

5 that are violating the 8-hour ozone NAAQS; 111 million people live in these counties. In addition, at least 65 million people in 129 counties live in areas where annual design values of ambient PM 2.5 violate the PM 2.5 NAAQS. There are an additional 9 million people in 20 counties where PM 2.5 levels above the NAAQS are being measured, but the data are incomplete. Based on EPA modeling, it appears that without emission reductions from the proposed new standards for nonroad engines, there is a significant future risk that 32 counties with 47 million people across the country may violate the 8- hour ozone NAAQS in Similarly, modeled PM 2.5 concentrations in 107 counties where 85 million people live would be above healthy levels in An additional 64 million people are projected to live in counties within 10 percent of the PM 2.5 standard in 2030, and 44 million people are projected to live in counties within 10 percent of the level of the 8-hour standard in Thus, these counties face a significant risk of exceeding or failing to maintain the PM 2.5 and the 8-hour ozone NAAQS without significant additional controls between 2007 and The need for stringent control of nonroad sources was further reinforced by the interim results of an ongoing study in the Northeast states (NESCAUM, Evaluating the Occupational and Environmental Impacts of Nonroad Diesel Equipment in the Northeast, Interim Report, June 9, 2003). The interim findings were as follows: 1. In all locations, diesel equipment activity substantially increased fine particulate matter exposures for workers and nearby residents, in some cases by as much as 16 times. 2. Individual workers estimated 24-hour exposures could exceed current air quality standards by nearly 2 to 3.5 times substantially increasing workers health risk. 3. The most potent portion of PM 2.5 diesel particulate matter was estimated to exist at levels that pose risk of chronic inflammation and lung damage in exposed individuals. 4. As many as 200,000 workers may be exposed to these harmful concentration levels of nonroad equipment emissions in the Northeast region alone. 5. Measured concentrations of acetaldehyde, benzene and formaldehyde around the tested nonroad equipment operations were as much as 140 times the federally established screening threshold for cancer risk. 6. Concentrations of metals, such as iron, nickel and vanadium, are elevated in samples collected around nonroad equipment. These metals are known to cause inflammatory responses and damage in pulmonary cells. 2. The Proposal Will Provide Substantial Benefits A year ago, STAPPA and ALAPCO conducted a study to quantify the potential health and welfare impacts, and associated economic benefits, of implementing a federal nonroad diesel program consistent with our recommendations. Our findings were striking, showing that by 2030 a substantial number of serious health consequences could be avoided each year, including over 8,500 premature deaths, 180,000 asthma attacks, 5,600 cases of adult chronic bronchitis, 18,000 cases of acute bronchitis in children, nearly 200,000 cases of lower respiratory symptoms in children, 6,000 hospital admissions and 1.5 million work days lost. The annual monetary benefits associated with these avoided health incidences would total over $67 billion. The more recent analysis by EPA underscores the tremendous health impacts associated with controlling nonroad diesel engines and fuel. 3

6 Table A presents EPA s primary estimate, for the years 2020 and 2030, of reduced incidence of PM-related health effects associated with the emission reductions from the proposed nonroad rule. In 2030, EPA estimates that there will be 9,600 fewer fatalities per year associated with the lower levels of fine PM, and the rule will result in about 5,700 fewer cases of chronic bronchitis, 8,300 fewer hospitalizations (for respiratory and cardiovascular disease combined) and significant reductions in days of restricted activity due to respiratory illness (with an estimated 5.7 million fewer cases). EPA also estimates substantial health improvements for children from reduced upper and lower respiratory illness, acute bronchitis and asthma attacks. TABLE A -- REDUCTIONS IN INCIDENCE OF PM-RELATED ADVERSE HEALTH EFFECTS ASSOCIATED WITH THE PROPOSED NONROAD DIESEL ENGINE AND FUEL STANDARDS Endpoint Avoided Incidence a (Cases/year) Premature mortality b - Base estimate: Long-term exposure (adults, 30 and over) 5,200 9,600 Chronic bronchitis (adults, 26 and over) 3,600 5,700 Non-fatal myocardial infarctions (adults, 18 and older) 9,200 16,000 Hospital admissions Respiratory (adults, 20 and older) c 2,400 4,500 Hospital admissions Cardiovascular (adults, 20 and1,900 3,800 older) d Emergency room visits for asthma (18 and younger) 3,600 5,700 Acute bronchitis (children, 8-12) 8,400 14,000 Lower respiratory symptoms (children, 7-14) 92, ,000 Upper respiratory symptoms (asthmatic children, 9-11) 77, ,000 Work loss days (adults, 18-65) 650, ,000 Minor restricted activity days (adults, 18-65) 3,900,000 5,700,000 Notes: a Incidences are rounded to two significant digits. b Premature mortality associated with ozone is not separately included in this analysis. c Respiratory hospital admissions for PM include admissions for COPD, pneumonia, and asthma. d Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and heart failure. STAPPA and ALAPCO agree with these estimates and note that they do not account for many significant benefits that are difficult to quantify, although clearly very important; Table B, below, presents EPA s identification of such benefits. 4

7 TABLE B -- ADDITIONAL, NON-MONETIZED BENEFITS OF THE PROPOSED NONROAD DIESEL ENGINE AND FUEL STANDARDS Pollutant Ozone Health Ozone Welfare PM Health PM Welfare Nitrogen Sulfate Deposition Welfare CO Health and Unquantified Effects Premature mortality a Increased airway responsiveness to stimuli Inflammation in the lung Chronic respiratory damage Premature aging of the lungs Acute inflammation and respiratory cell damage Increased susceptibility to respiratory infection Non-asthma respiratory emergency room visits Increased school absence rates Decreased yields for commercial forests (for example, eastern US) Decreased yields for fruits and vegetables Decreased yields for non-commercial crops Damage to urban ornamental plants Impacts on recreational demand from damaged forest aesthetics Damage to ecosystem functions Infant mortality Low birth weight Changes in pulmonary function Chronic respiratory diseases other than chronic bronchitis Morphological changes Altered host defense mechanisms Cancer Non-asthma respiratory emergency room visits Visibility in many Class I areas Residential and recreational visibility in non-class I areas Soiling and materials damage Damage to ecosystem functions Impacts of acidic sulfate and nitrate deposition on commercial forests Impacts of acidic deposition to commercial freshwater fishing Impacts of acidic deposition to recreation in terrestrial ecosystems Reduced existence values for currently healthy ecosystems Impacts of nitrogen deposition on commercial fishing, agriculture, and forests Impacts of nitrogen deposition on recreation in estuarine ecosystems Damage to ecosystem functions Premature mortality a Behavioral effects 5

8 Pollutant HC Health b HC Welfare Unquantified Effects Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde) Anemia (benzene) Disruption of production of blood components (benzene) Reduction in the number of blood platelets (benzene) Excessive bone marrow formation (benzene) Depression of lymphocyte counts (benzene) Reproductive and developmental effects (1,3-butadiene) Irritation of eyes and mucus membranes (formaldehyde) Respiratory irritation (formaldehyde) Asthma attacks in asthmatics (formaldehyde) Asthma-like symptoms in non-asthmatics (formaldehyde) Irritation of the eyes, skin, and respiratory tract (acetaldehyde) Upper respiratory tract irritation and congestion (acrolein) Direct toxic effects to animals Bioaccumulation in the food chain Damage to ecosystem function Odor Notes: a Premature mortality associated with ozone and carbon monoxide is not separately included in this analysis. In this analysis, EPA assumes that the ACS/Krewski, et al. concentrationresponse function for premature mortality captures both PM mortality benefits and any mortality benefits associated with other air pollutants. b Many of the key hydrocarbons related to this rule are also hazardous air pollutants listed in the Clean Air Act. 6

9 Table C presents EPA s primary estimate of the total national monetized benefits for the years 2020 and This table also indicates with a B those additional health and environmental effects which EPA was unable to quantify or monetize. These effects are additive to estimates of total benefits, and EPA believes there is considerable value to the public of the benefits that could not be monetized. TABLE C -- EPA PRIMARY ESTIMATE OF THE ANNUAL QUANTIFIED AND MONETIZED BENEFITS ASSOCIATED WITH IMPROVED PM AIR QUALITY RESULTING FROM THE PROPOSED NONROAD DIESEL ENGINE AND FUEL STANDARDS Endpoint Monetary Benefits a,b (Millions 2000$, Adjusted for Income Growth) Premature mortality c long-term exposure, (adults, 30 and$39,000 $74,000 over) Chronic bronchitis (WTP valuation; adults, 26 and over) $1,600 $2,600 Non-fatal myocardial infarctions $750 $1,300 Hospital admissions from respiratory causes d $38 $74 Hospital admissions from cardiovascular causes e $40 $80 Emergency room visits for asthma $1 $2 Acute bronchitis (children, 8-12) $3 $5 Lower respiratory symptoms (children, 7-14) $2 $3 Upper respiratory symptoms (asthmatic children, 9-11) $2 $3 Work loss days (adults, 18-65) $90 $130 Minor restricted activity days (adults, age 18-65) $210 $320 Recreational visibility (86 Class I Areas) $1,200 $1,900 Total Monetized Benefits f $43,000 + B $81,000 + B Notes: a Monetary benefits are rounded to two significant digits. b Monetary benefits are adjusted to account for growth in real GDP per capita between 1990 and the analysis year (2020 or 2030). c Valuation assumes the five-year distributed lag structure described in EPA s draft Regulatory Impact Analysis. Results reflect the use of two different discount rates; a 3% rate, which is recommended by EPA s Guidelines for Preparing Economic Analyses (US EPA, 2000a), and 7%, which is recommended by OMB Circular A-94 (OMB, 1992). d Respiratory hospital admissions for PM include admissions for COPD, pneumonia, and asthma. e Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and heart failure. f B represents the monetary value of the unmonetized health and welfare benefits. A detailed listing of unquantified PM, ozone, CO, and NMHC related health effects is provided in Table B. 7

10 In summary, EPA's primary estimate of the benefits of the rule is approximately $81+B billion in In 2020, total monetized benefits are approximately $43+B billion. These estimates account for growth in real gross domestic product (GDP) per capita between the present and the years 2020 and As the table indicates, total benefits are driven primarily by the reduction in premature fatalities each year, which account for over 90 percent of total benefits. The estimated social cost (measured as changes in consumer and producer surplus) in 2030 to implement the final rule is $1.5 billion (2000$). Thus, the net benefit (social benefits minus social costs) of the program at full implementation is approximately $79+B billion. In 2020, partial implementation of the program yields net benefits of $42+B billion. Therefore, implementation of the final rule is expected to provide society with a net gain in social welfare based on economic efficiency criteria. The total net present value in 2004 of the stream of net benefits (benefits minus costs) is $530 billion. Although EPA expects economic benefits to exist, the agency was unable to quantify or to value specific changes in ozone, CO or air toxics because it did not perform additional air quality modeling. STAPPA and ALAPCO believe that these unquantified benefits would be quite significant. 3. Engine Standards and Implementation Schedules A. Areas of Agreement With respect to the engine standards, STAPPA and ALAPCO strongly endorse the levels EPA has proposed for most engine categories: a NO x standard of 0.3 grams per brake horsepower-hour (g/bhp-hr) and a particulate matter standard of 0.01 g/bhp-hr, which are 90 and 95 percent cleaner than today s standards, respectively. B. Further Tightening of Requirements Is Needed However, although we are pleased with these standards, we are disappointed that the agency has proposed to limit their applicability to engines of 75 horsepower (hp) and above. Likewise, we are concerned that the agency proposes to postpone ultimate compliance with these standards until as late as December 31, And we are further troubled by the far less rigorous requirements proposed for engines of less than 25 hp. Given the very large number of these engines and the significant risk they pose due to individuals exposure to air toxics, we believe that toxic hydrocarbon emissions from these small engines must be appropriately controlled. STAPPA and ALAPCO, therefore, urge that state-of-the-art emission control technologies to achieve 90- to 95-percent reductions in NO x and PM be required of nonroad diesel engines of all sizes, including the very smallest and largest ones, and that such standards be completely phased in for all engine sizes by the end of Many nonroad engines last for many years, even decades, and therefore it is critically important that stringent standards be introduced as quickly as possible every year lost means more new, but still dirty, engines that will stay in use a long time. 8

11 C. The Standards Are Technically Feasible STAPPA and ALAPCO believe the exhaust and crankcase emission standards proposed for nonroad diesel engines can be achieved in a cost-effective manner within the leadtime provided, so long as very-low-sulfur diesel fuel (15 ppm maximum sulfur) is available. Indeed, we anticipate that emission control technologies will be available on some models of nonroad engines in advance of the effective dates of the standards for use in those areas where 15-ppm sulfur diesel fuel is available. According to the Manufacturers of Emission Controls Association, technologies to reduce diesel PM, such as diesel particulate filters (DPFs) and diesel oxidation catalysts (DOCs), are commercially available today. In fact, the use of exhaust emission control technology for nonroad diesel engines is not new but has been used for many years in the construction, mining and materials handling industries. DOCs, and more recently DPFs, have been installed on vehicles and equipment both as original equipment and as retrofit technology on over 250,000 nonroad engines worldwide. Technologies such as DPFs and NO x adsorbers, as well as the integration strategies being developed to meet the 2007 and 2010 heavy-duty onroad diesel engine standards, generally can be applied to many nonroad diesel engines and vehicles. Exhaust gas recirculation (EGR) technology, which is being used on highway heavy-duty engines (HDEs) and is being evaluated on nonroad engines as a retrofit option, will also be an available option to help meet the proposed standards. Finally, lean-no x catalyst technology, which has been utilized in passenger car applications in Europe and is an available retrofit technology for onroad HDEs, is a strategy that could be used to help meet the possible less stringent NO x standards being contemplated for several of the smaller engine categories of nonroad diesel engines. 4. Diesel Fuel Sulfur Cap and Phase-In Schedule A. Areas of Agreement Inextricably linked to compliance with the nonroad diesel engine standards endorsed by STAPPA and ALAPCO is the timely, nationwide availability of nonroad diesel fuel with ultra-low levels of sulfur. Without such fuel, the technologies capable of achieving tight emission standards will be rendered inoperable. For this reason, STAPPA and ALAPCO vigorously support the proposed 15-ppm cap on sulfur in nonroad diesel fuel. B. Two-Step Approach With respect to timing, EPA proposes to phase in this sulfur cap in two steps, beginning with a 500-ppm cap in 2007 and moving to the 15-ppm limit in Although our associations would much prefer that the 15-ppm sulfur cap be put in place in one step by no later than 2008, as we conveyed to EPA during development of the proposal, the agency has chosen to pursue the two-step approach. Accordingly, we urge that the 2007/2010 phase-in schedule be the absolute latest that the agency pursues for the interim 500-ppm cap and the final 15-ppm cap. We note that some states, such as California, are requiring 15-ppm nonroad diesel fuel in 2006, since this will be helpful for attainment of the PM NAAQS. 9

12 C. Baseline Is Necessary STAPPA and ALAPCO believe that it is absolutely critical that the nonroad fuels program be enforceable and clearly verifiable. Based upon our review of the alternatives EPA evaluated relative to the fuel program structure, we believe that the only viable approach is the baseline approach, which would meet these objectives and ensure against ramifications for the highway diesel fuel program. D. Desulphurisation Technology Is Available and Advancing Much like the accelerating pace of developments in vehicle emissions controls, a great deal of recent progress has been made within the refining industry to develop more active catalysts and novel processes to reduce capital and operating costs associated with sulfur removal from gasoline and diesel fuel. At the same time, examples throughout the world demonstrate that low-sulfur fuels can be, and have been for several years, affordably achieved with current technology. For example, due to incentives and regulations 10-ppm sulfur diesel has been commercially available in Sweden for several years and has recently taken over the market in Germany. Hydrotreating is the most common technology used by refineries to remove sulfur from diesel feedstocks. Hydrotreating involves the addition of hydrogen to assist in the removal of sulfur. This process tends to improve diesel quality by raising the cetane number. While production of low-sulfur diesel can be accomplished with conventional hydrotreating technology, the challenge is to make the process cost effective. More active catalysts and recent developments in fixed-bed hydrotreater technology have demonstrated the ability to reduce the time spent in the reactor, thus reducing the required reactor volume and operating costs. More active catalysts are currently being developed which may also alleviate the need for larger reactor volumes for some refiners. Catalyst technology has improved in recent years, primarily through better dispersion of the active metal on the substrate and increased activity of the reaction sites. As cited by EPA, new catalysts from Akzo Nobel, Haldor-Topsoe and Criterion Catalyst increase activity over previous generations of catalysts by 25 to over 80 percent. Developers of the new NEBULA catalyst, ExxonMobile and Akzo Nobel, claim a factor of two increase in catalyst activity at moderate pressure. Many additional changes can improve sulfur removal performance of current distillate hydrotreaters: a 3- to 6-percent reduction in hydrogen sulfide concentrations by chemical scrubbing of recycled hydrogen can reduce final sulfur levels by 60 percent, an improved vapor-liquid distributor to increase contact between the hydrogen and feedstock can reduce the final sulfur level by 50 percent, increasing hydrogen purity, which is preferable to the more energy-intensive increase of hydrogen partial pressure, can increase the amount of sulfur removed by approximately 40 percent and increasing reactor temperature can also lead to lower sulfur endpoints, but can significantly reduce catalyst lifetimes. 10

13 More extensive changes include increased reactor volume and addition of a reactor. An additional reactor could be used as a second, high-pressure stage with the addition of a hydrogen sulfide scrubber in between the first and second rector. Rather than making the listed modifications to existing units, refiners can choose to either revamp an existing diesel hydrotreating unit or build a new grassroots unit. A revamp is less capital intensive, but may be less flexible with respect to feedstock and end product properties. The decision is generally based on the age of the existing reactor, the quality of the feedstock being used and the end-product properties desired. In addition, many refiners choosing to install a grassroots system may do so because they wish to use the old hydrotreater elsewhere in the refinery or to expand diesel production capacity. Therefore, refiners have a variety of technical options for reducing sulfur concentrations down to the necessary levels and can choose the best option for their particular configuration and needs. 5. Diesel Locomotive and Marine Engines and Fuel A. Need for 15-ppm Sulfur Cap for Diesel Locomotive and Marine Fuel EPA has also proposed to reduce sulfur in diesel fuel used in locomotive and marine engines to 500 ppm. According to EPA s estimates, by 2020, locomotive and marine engines will account for about 50 percent of the mobile source diesel PM inventory and 30 percent of the mobile source NO x inventory, with areas with busy railways and ports experiencing even higher levels. STAPPA and ALAPCO endorse the agency s intent to clean up locomotive and marine diesel fuel, but believe a 500-ppm sulfur cap for these applications is inadequate. We strongly urge that in the final nonroad rule EPA adopt consistent fuel sulfur requirements for all nonroad, locomotive and marine diesel fuel, including a 500-ppm interim sulfur cap in 2007 and a 15-ppm cap by EPA noted that this alternative would provide important sulfate PM and SO 2 emission reductions and the estimated benefits from these reductions would outweigh the costs by a considerable margin. Further, it would simplify the fuel distribution system and the design of the fuel program, while reducing the potential opportunity for misfueling of 2007 and later model year highway vehicles and 2011 and later model year nonroad equipment with higher sulfur fuel. Finally, it would allow refiners to coordinate plans to reduce the sulfur content of all of their nonroad diesel fuel at one time. STAPPA and ALAPCO believe the public health and welfare benefits associated with a ppm cap on sulfur in diesel locomotive and marine fuel would far outweigh the costs. B. Need for Locomotive and Marine Standards EPA further notes that it is the agency s intention to propose action in the near future to set new emission standards for locomotive and marine engines that could require the use of high-efficiency exhaust emission control technology and, thus, also require the use of 15-ppm sulfur diesel fuel. EPA anticipates that such engine standards would 11

14 likely take effect in the timeframe, requiring 15-ppm locomotive and marine diesel fuel in the timeframe. EPA intends to publish an advance notice of proposed rulemaking for such standards by the spring of 2004 and finalize those standards by STAPPA and ALAPCO urge EPA to commit in the final nonroad rule to an additional rulemaking, and timely schedule, to tighten emission standards for diesel locomotive and marine engines and, as stated above, we urge the agency to adopt a 15- ppm fuel sulfur standard for these engines, to take effect in 2010, in the final nonroad rule. 6. Critical Technical Issues A. Test Procedures EPA is proposing a number of changes to the certification test procedures by which compliance with emission standards is determined. Two of these are particularly significant: the addition of a supplemental transient emissions test and the addition of a cold-start testing component to the proposed transient emissions test. Other proposed changes include: adoption of an improved smoke testing procedure, with associated standards, levels and exemptions, addition of a steady-state test cycle for transportation refrigeration units, test procedure changes intended to improve testing precision, especially with regard to sampling methods and clarification of existing EPA defeat device regulations. STAPPA and ALAPCO strongly support these revisions as critically necessary to ensure that the desired emissions reductions are actually achieved in use. i. Supplemental Transient Test Transient test development has progressed steadily since the 1998 rule was adopted, and has resulted in the creation of a Nonroad Transient Composite (NRTC) test cycle, which EPA is now proposing to adopt in the nonroad diesel program, to supplement the existing steady-state tests. The proposed NRTC cycle will capture transient emissions over much of the typical nonroad engine operating range, and thus help ensure effective control of all regulated pollutants. STAPPA and ALAPCO support the principle of test procedures reflecting, as much as possible, actual vehicle or engine operation; therefore, we strongly support the addition of this new test. Furthermore, STAPPA and ALAPCO support the goal of harmonization of emissions control programs, as long as such harmonization is not used to delay or weaken necessary controls. Therefore, we are pleased that EPA has developed this cycle over the past several years, in collaboration with nonroad engine manufacturers and regulatory bodies in the United States, Europe and Japan. EPA is proposing that emission standards be met on both the current steady-state duty cycles and the new transient duty cycles. The transient testing would begin in the model year that the trap-based Tier 4 PM standards and/or adsorber-based Tier 4 NO x standards first apply. In addition, any engines for which a manufacturer claims credit 12

15 under the incentive program for early-introduction engines would have to be certified to that program s standards under the NRTC cycle. STAPPA and ALAPCO agree. Although EPA intends that transient emissions control be an integral part of Tier 4 design considerations, EPA does not believe it appropriate to mandate compliance with the transient test for engines under 75 hp subject to proposed PM standards in With respect to the subset of engines below 25 hp, there is an additional consideration for timing of the transient test requirement because EPA is not proposing PM-filter-based standards for them. EPA proposes that testing on the NRTC cycle not be required for these engines until the 2013 model year, the last year in which engines in higher power categories are required to use this test. EPA bases this delay on concerns that transient emissions testing, though routine in highway engine programs, involves a fair amount of new laboratory equipment and expertise in the nonroad engine certification process. However, STAPPA and ALAPCO believe that the overriding principle should be how well the test reflects actual vehicle or engine operation, as noted above, and further believe that five years is more than adequate time to purchase engines and become knowledgeable regarding transient tests. Therefore, for engines below 75 hp, including those below 25 hp, we urge EPA to reconsider this proposed delay and impose the test requirements in 2008, or as soon as Tier 4 requirements are introduced for a given engine category. EPA is proposing that engine manufacturers may certify constant-speed engines using the agency s Constant Speed Variable Load (CSVL) transient duty cycle as an alternative to testing these engines under the NRTC provisions. The CSVL transient cycle more closely matches the speed and load operating characteristics of many constant-speed nonroad diesel applications than EPA s proposed NRTC cycle. However, the manufacturer would be obligated to ensure that such engines would be used only in constant-speed applications. STAPPA and ALAPCO support this proposal as well. ii. Cold-Start Testing EPA believes that the proposed move to supplemental transient testing, combined with the proposed Tier 4 standards that will bring about the use of catalytic devices in nonroad diesel engines, makes it imperative that the agency also include a cold-start test as part of the transient test procedure requirement. EPA proposes to weight the cold-start emission test results as one-tenth of the total emissions level, with hot-start emissions accounting for the other nine-tenths of the emissions level. The one-tenth weighting factor is derived from a review of the present nonroad equipment population. STAPPA and ALAPCO support this proposal. iii. Smoke Testing Manufacturers are currently responsible for testing and reporting results for nonroad peak acceleration and lugging smoke emissions. This proposed rulemaking, however, would replace the present Federal Smoke Procedure for nonroad engines with the ISO 8178 Part 9 nonroad smoke procedure as the method and standards by which engine manufacturers will certify their nonroad engines. This new smoke testing procedure with its related smoke standards will become effective for a particular engine when that engine is certified to EPA s proposed Tier 4 or transition PM and NO x -NMHC standards. 13

16 The ISO-TC70/SC8/WG1 committee developed the nonroad smoke test procedure, ISO , and finalized it on October 15, Recognizing the value of harmonized test procedures and limit standards, EPA has proposed through this rulemaking to use ISO for smoke testing of nonroad diesel engines. Some states have expressed a desire for a federal smoke regulatory program that would enable them to test in-use nonroad engines in a manner that would permit states to take action against gross emitters of smoke. In a like manner EPA could propose additional smoke testing regulations as part of any future rulemaking which would address manufacturers in-use smoke test requirements. The main elements of any in-use smoke program would be a new federal smoke standard(s) and test procedure for new engines, guidance from EPA for state in-use smoke control programs (including a full smoke test procedure and accompanying state limit values) and a means by which the data from the two programs could be related. The current smoke test procedure from Part 86, Subpart I does not provide data comparable to the most practical in-use smoke test procedure, a snap-idle acceleration test with measured opacity. However, EPA believes data from an ISO certification smoke test could provide the desired link. In this context, STAPPA and ALAPCO support the new smoke test, but also request that EPA carry out the necessary testing to establish the desired link. iv. Units Steady-State Test Cycle For Transportation Refrigeration EPA has proposed an optional test cycle specifically for engines used in transport refrigeration units (TRUs). These engines would be certified to a four-mode steady-state duty cycle, developed by the California Air Resources Board (CARB) in conjunction with engine manufacturers. Two modes would be run at the engine s maximum test speed, one mode at 50 percent of observed engine torque and the other mode at 75 percent of observed engine torque. The third and fourth modes would be run at the engine s intermediate test speed and, again, one mode would be run at 50 percent of observed engine torque and the other mode at 75 percent of observed engine torque. All four modes would be weighted equally in determining an operating mode s contribution to the engine s emissions. STAPPA and ALAPCO strongly support the use of this optional cycle, but we are concerned that the proposal contains some usage restrictions that may inadvertently exclude most TRU engines from qualifying to use the cycle. We urge EPA to closely collaborate with the CARB, which developed the cycle, to prevent this from occurring. v. Improvements to the Test Procedures EPA is proposing changes to the test procedures to improve the precision of emission measurements. These changes address the potential effect of measurement precision on the feasibility of the standards. If finalized, manufacturers would be allowed to use the new procedures immediately for all certifications of all engines (i.e., to certify any nonroad engine, not just Tier 4 engines), and manufacturers would also be able to use their current procedures up to a certain transition date to allow for a gradual transition to the new procedures. The reason for this is that some of these changes may not be convenient or cost-effective in the short term, and manufacturers may be willing to live with some slightly lower measurement precision in order to lower short-term testing 14

17 costs. EPA believes, though, that manufacturers should be able to individually optimize their test facilities in this manner. In addition, it is important for manufacturers to understand that EPA will conduct its confirmatory testing in the manner specified in these regulations. As standards are tightened, STAPPA and ALAPCO recognize the need to improve the precision of tests and strongly endorse the EPA approach. vi. Auxiliary Emission Control Devices and Defeat Devices Existing nonroad regulations prohibit the use of a defeat device in nonroad diesel engines. The defeat device prohibition is intended to ensure that engine manufacturers do not use auxiliary emission control devices (AECD) that sense engine operation in a regulatory test procedure and as a result reduce the emission control effectiveness of that procedure. EPA is proposing to supplement existing nonroad test procedures with a transient engine test cycle and not-to-exceed (NTE) emission standards with associated test requirements. As such, the agency believes that a clarification of the existing nonroad diesel engine regulations regarding defeat devices is required in light of these proposed additional emission test requirements. The defeat device prohibition makes it clear that, unless one of several conditions is met, AECDs that reduce the effectiveness of the emission control system are defeat devices and, therefore, prohibited. One of these conditions is that an AECD that operates under conditions included in the test procedure is not a defeat device. While the existing defeat device definition does contain the term test procedure, and therefore should be interpreted as including the supplemental testing requirements, EPA wanted to make it clear that both the supplemental transient test cycle and NTE emission test procedures are included within the defeat device regulations as conditions under which an operational AECD will not be considered a defeat device. Therefore, EPA is proposing to clarify the defeat device regulations by specifying the appropriate test procedures (i.e., the existing steady-state procedures and the supplemental tests). STAPPA and ALAPCO agree that it is useful to clarify this meaning of test procedure. EPA is also proposing to provide clarification regarding the engine manufacturers certification reporting requirements with respect to the description of AECDs. The proposed clarification will aid engine manufacturers in preparing a complete application for certification that will allow EPA to review the application in a timely manner. Under the existing nonroad engine regulations, manufacturers are required to provide a generalized description of how the emissions control system operates and a detailed description of each AECD installed on the engine. In this proposal, EPA seeks to clarify what is meant by detailed. We support this change. Under the nonroad diesel Tier 1 standards there was limited use of AECDs. AECDs have begun to be much more common with the Tier 2 standards, and EPA expects this trend to continue. Engines designed to meet the significantly more stringent Tier 4 standards will certainly rely on sophisticated technologies that will likely employ very complex AECDs. A thorough disclosure of the presence and purpose of AECDs is essential in allowing EPA to evaluate the AECD and determine whether it represents a defeat device. Clearly, any AECD that is not fully identified in the manufacturer s application for certification cannot be appropriately evaluated by EPA and therefore cannot be determined to be acceptable by EPA. The proposed clarifications to the certification application requirements include additional detail specific to those AECDs which the manufacturer believes are necessary to protect the engine or the equipment in which it is installed against damage or accident ( engine protection AECDs). While the 15

18 definition of a defeat device allows as an exception strategies needed to protect the engine and equipment against damage or accident, EPA intends to continue the policy of closely reviewing the use of this exception. In evaluating whether a reduction in emissions control effectiveness is needed for engine protection, EPA will closely evaluate the actual technology employed on the engine family, as well as the use and availability of other emission control technologies across the industry, taking into consideration how widespread the use is, including its use in similar engines and similar equipment. STAPPA and ALAPCO also support this clarification. Finally, EPA emphasizes that the information submitted must be specific to each engine family. The practice of describing AECDs in a common section, wherein the strategies are described in general for all the manufacturer s engines, is acceptable as long as each engine family s application contains specific references to the AECDs in the common section, clearly indicating which AECDs are present on that engine family, and specific calibration information for that engine family s AECDs. STAPPA and ALAPCO believe that all these clarifications should also be applied to the current Tier 2/Tier 3 compliance program. B. NTE EPA proposes to adopt NTE emission standards for all new nonroad diesel engines subject to the Tier 4 emissions standards beginning in EPA has already set similar NTE standards for highway heavy-duty diesel engines, compression-ignition marine engines and nonroad spark-ignition engines. The NTE approach establishes an area (the "NTE zone") under the torque curve of an engine where emissions must not exceed a specified value for any of the regulated pollutants. The NTE standard would apply under any conditions that could reasonably be expected to be seen by that engine in normal vehicle operation and use, within certain broad ranges of real ambient conditions. STAPPA and ALAPCO strongly believe that basing the emissions standards on a set of distinct steady-state and transient cycles and using the NTE zone to help ensure in-use control creates a comprehensive program. In addition, the NTE requirements would also be an effective element of an inuse testing program. EPA s nonroad NTE proposal contains the same basic provisions as the highway NTE. The NTE standard would apply under any engine operating conditions that could reasonably be expected to be seen by that engine in normal vehicle/equipment operation and use which occurs within the NTE control zone and which also occurs during the wide range of real ambient conditions specified for the NTE. The NTE standard applies to emissions sampled during a time duration as short as 30 seconds. STAPPA and ALAPCO strongly support this approach and believe it should be introduced at the same time that the new standards are introduced for the individual engine categories. In addition, as with the 2007 highway NTE standard, EPA is proposing a transition period during which a manufacturer could apply for an NTE deficiency for a nonroad diesel engine family. The NTE deficiency provisions would allow the Administrator to accept a nonroad diesel engine as compliant with the NTE standards even though some specific requirements are not fully met. STAPPA and ALAPCO recognize the need for 16