1 August 2002

The US Environmental Protection Agency (EPA) has published the final legislation establishing so-called nonconformance penalties for model year 2004 and later heavy-duty highway engines. The penalties also apply to nonconforming “pull-ahead” engines from several manufacturers, who must meet 2004 emission standards effective October 1st, 2002, 15 months ahead of time, based on the 1998 consent decrees between manufacturers and the EPA and the Department of Justice (DOJ).

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In comparison with the January 2002 proposal, the final penalties have been increased for the light-heavy-duty engine category (GVWR < 19,500 lbs), and decreased for medium- and heavy-heavy-duty (HHD), as well as for urban bus engines. For example, the first year penalty for a HHD engine certified at 4 g/bhp-hr NOx+NMHC, originally proposed at $10,193, has been lowered to $7,999. The penalties increase with increasing certified emission level, as well as with subsequent years.

The nonconformance penalties, proposed by the EPA in January 2002, allow a manufacturer to produce and sell engines exceeding the 2004 standard of 2.5 g/bhp-hr NOx+NMHC upon payment of a penalty. Thus, manufacturers who, from technical reasons, are not able to develop 2004-compliant engines are not forced to leave the marketplace but may continue to sell their product; the penalty protects those manufacturers that have developed compliant engines and incurred the related costs.

The real severity of the penalties depends on the market price increase for 2004-compliant engines from competing manufacturers, a factor which at this time remains uncertain. Decreased penalties lessen the burden on manufacturers who will be late in meeting the October deadline. This group includes Caterpillar and likely other manufacturers, at least for certain engine ratings.

Source: US EPA