EPA proposes making nonconformance penalties available for diesel engine builders

The Environmental Protection Agency (EPA) is proposing nonconformance penalties (NCPs) for manufacturers of heavy-duty diesel engines used in large trucks and buses if the manufacturer is unable to meet the 2004-model-year hydrocarbon plus nitrogen oxides emission standard. These penalties would be available for 2004 and later-model-year heavy-duty highway diesel engines, including engines used in urban buses.

NCPs provide flexibility that fosters long-term improvement in emissions without driving manufacturers out of the market. Under a penalty structure previously established by regulation, manufacturers may pay a monetary penalty on a per-engine basis rather than comply with the applicable standard. The penalty varies with the degree to which the engine family involved does not comply with the standard. The Clean Air Act requires that penalties increase with the degree of noncompliance with the standard, that they increase over time, and that emissions may not go above an upper limit established by regulation.

The EPA proposal contains specific parameters used to determine the potential 2004 NCPs. In 1998, the Department of Justice and EPA announced settlements with some manufacturers of heavy-duty diesel engines that resolved claims that these manufacturers installed illegal emissions control defeat devices. These consent decrees specify penalties, based on noncompliance with the terms of the decrees, that are to be based on 2004-model-year NCPs. Because the consent decrees refer to NCPs for the 2004 model year, this rule, when finalized, would have an impact on the penalties determined under the consent decrees.