States Urge EPA to Require Pollution Offsets By Navistar for Its Noncompliant Engines

A group of eight Northeastern state governments urged the U.S. Environmental Protection Agency to prohibit Navistar Inc. from selling engines that do not comply with federal emissions regulations unless the company offsets the additional pollutants its engines emit.

“They could look at existing on-highway engines, or even non-road engines, and evaluate various kinds of strategies that might have the effect of reducing” nitrogen oxides emissions, Eric Skelton, a senior policy analyst at the Northeast States for Coordinated Air Use Management, told Transport Topics.

Emissions of nitrogen oxides “will increase as a result of consumer purchases and subsequent operation of heavy-duty vehicles that are powered by these engines, compared to a scenario whereby this manufacturer would otherwise be compelled to meet the current NOx standard,” NSCAUM wrote in comments it filed April 4 with EPA.

The group represents the air pollution control agencies of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

Navistar would be responsible for outlining its own plan to offset NOx emissions under the states’ proposal, but cutting them from other engines is one example, Skelton said.

On Jan. 30, EPA issued an interim rule allowing Navistar to sell its heavy-duty engines but requiring the company to pay $1,919 for each noncompliant engine. At the time, Navistar was close to running out of existing emissions credits, and the existing regulations did not allow it to sell noncompliant engines without credits (1-30, p. 1).

Navistar’s 2010 MaxxForce 13 engine puts out more NOx than the regulation allows, but the truck and engine manufacturer has been able to comply by using credits it accumulated by selling other engines with NOx emissions below the standard.

EPA also proposed a permanent rule on Jan. 30, and the comments filed last week were for both the interim and permanent rule. As proposed, the permanent rule would keep the same $1,919 penalties.

Navistar said it has submitted to EPA for approval a new version of its MaxxForce 13 that it said complies with the NOx standard. EPA had not certified the engine as of last week, Navistar spokeswoman Karen Denning said.

Navistar planned to comment, she said, but its comments were not available in the docket when Transport Topics went to press.

In its own comments, New Jersey’s Department of Environmental Protection urged EPA either to block Navistar from selling the engines or to set penalties higher than the $1,919 per engine EPA plans to levy, to discourage noncompliance.

“It is not clear that the nonconformance penalty is large enough to incentivize the noncomplying manufacturer to spend the required money and resources to develop a compliant engine quickly,” New Jersey’s DEP wrote.

New Jersey and NSCAUM both endorsed the concept of requiring offsets, which EPA outlined in its proposed rule. The offset plan would have to cost Navistar at least as much as the monetary penalties would, Skelton said.

New Jersey would see about 300 tons of additional NOx emissions per year if Navistar is allowed to continue to sell its noncompliant engines, DEP estimated. The additional emissions would make it difficult for New Jersey to comply with the Ozone National Ambient Air Quality Standard, which will require the state to be below a certain amount of ozone in its air by 2015.

NOx creates ozone, so an increase would make it harder for New Jersey to comply with the standard.

The coalition estimated it would see an additional 2,590 tons of NOx emissions in 2012 if the engines were sold, or 45,500 tons throughout the useful lives of the engines.

The Manufacturers of Emission Controls Association did not take a position on EPA’s penalties. Instead, it urged the agency to set penalties that do not encourage violation.

“We strongly believe that the option of complying with emission standards via the use of [nonconformance penalties] may have unintended consequences if the financial penalties to pay for compliance are not substantial enough,” wrote MECA, which represents manufacturers of engine pollution catalysts.

The Clean Air Task Force filed a comment saying the penalties were too low. With the comment period ending April 4, EPA now will review all comments before deciding how to proceed.

Navistar has said it budgeted $25 million to pay the EPA penalties through 2012 and is using its remaining engine credits to sell engines in the states that follow California’s emissions laws. California does not allow manufacturers to pay penalties, so Navistar would not be able to sell its engines in those states without credits (3-12, p. 3).

Mack Trucks Inc., Volvo Trucks North America, Daimler Trucks North America, its subsidiary Detroit Diesel Corp. and Cummins Inc. sued to block the interim rule, while Navistar has joined the lawsuit to defend EPA against the engine makers (3-19, p. 5).