Thank you Mr. Chairman. My name is Jason Grumet and I am the Executive Director of the Northeast States for Coordinated Air Use Management (NESCAUM). NESCAUM is an association of state air pollution control agencies representing Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. The Association provides technical assistance and policy guidance to our member states on regional air pollution issues of concern to the Northeast. We appreciate this opportunity to address the Committee regarding innovative efforts to reduce air pollution in our region.
As we approach the 30th anniversary of the passage of the Clean Air Act, it is appropriate to reflect upon the tremendous achievements government and industry have made in reducing air pollution and protecting public health and welfare. The interlocking federal and state authority and obligations set forth in the 1970 Clean Air Act are fairly understood to mark the modern era of environmental protection in our nation. The desire to provide all citizens with minimum standards of protection and to provide industry with consistent national obligations compelled Congress in 1970, and in every reauthorization since, to establish substantial federal oversight and enforcement of our nation's clean air strategy. At the same time, public health protection in our federal republic is appropriately vested within the obligations and police powers of state government. Through the creation of State Implementation Plans (SIPs), Congress recognized that states must bear the ultimate responsibility and represent the best hope to design and implement effective clean air laws. I believe that it is useful to reflect upon this most basic tension between the desires for national consistency and state autonomy when exploring how to promote and honor effective state innovation.
One of the central challenges of democracy is to communicate complex themes in simple and popular terms. In this discussion, the subtle complexities of federalism are often described as a choice between "command and control" federal prescription and "innovative and flexible" state efforts. This construction results from the frustration many of us maintain as we watch government erect seemingly nonsensical barriers to the creative, well intentioned efforts of business owners and local officials who have the courage and ingenuity to suggest a different approach or a better way to achieve a clean environment. Even worse, under the time honored theme "no good deed goes unpunished," every close observer of clean air policy can cite several examples where innovation is met not only with disinterest but is actually penalized by our regulatory system.
While my members live this frustration, we recognize that it is not borne of malice or incompetence at any level of government. Instead we recognize that these moments of apparent insanity flow inherently from a regulatory regime necessarily designed to protect the public in situations where private economic incentives and volunteerism are inadequate. While the "Command and Control vs. innovation" construct is rhetorically powerful, the polemic in this description suggests a false choice. I believe that a more productive inquiry follows from the premise that national standards, while essential, often fail to capture and channel the ingenuity of local government and industry. In this light, improving our environmental regulatory system is a pursuit to refine and not replace enforceable federal requirements. Congress' appreciation of the need for clear and enforceable national clean air requirements is evidenced by the fact that in every reauthorization since the first clean air public health statutes in the 1950's, Congress has consistently increased the Act's prescriptive national requirements and limited the discretion of both the EPA and the states. It is fruitful to reflect upon this history as we begin to contemplate the amendments that will guide the fourth decade of our nation's pursuit of clean air
Let me now transition from the abstract to the particular and describe two innovative efforts in the Northeast. These initiatives demonstrate that through creativity and collaboration, states, EPA and industry can identify mutual interests and opportunities that the current regulatory system would otherwise squander and direct these energies toward environmental improvement. The first area I will discuss is an exciting array of projects to reduce pollution by retrofitting heavy-duty diesel equipment. The second initiative I will describe is an innovative effort that goes by the acronym P4 which stands for Pollution Prevention in the Permitting Process. The essential wisdom of this effort is that there is no better way to reduce air pollution than to never create it. In both projects, the northeast states have partnered with regional and national EPA offices and industry to achieve considerable successes. However, let me stress at the outset that these successes have not come easy and we are far from finished. While we have created effective beachheads within EPA to launch these collaborative efforts, the EPA is a large institution with an array of corporate cultures. Suffice it to say that those offices charged with the obligation of enforcing the statute and EPA regulations are struggling, at times awkwardly, to maintain a coherent enforcement regime that rewards innovation.
Diesel Retrofits
Overview of the Diesel Pollution Problem
Diesel engine pollution is one of the prime concerns of air quality regulators in the U.S. The 10 million heavy duty diesel engines operating in the U.S. emit millions of tons of soot and ozone-forming pollutants annually. Heavy duty diesel emissions comprise 33% of total NOx (from all sources) and 80% of mobile source particulate pollution in the northeast states. In addition, diesels contribute substantially to the nation's inventory of toxic pollution such as formaldehyde. The relative contribution from diesels to our nation's air pollution is rising annually. Several factors contribute to this trend of increasing heavy-duty diesel pollution. First, the use of diesel engines to power the nation's fleets of buses and trucks is becoming more pervasive due to the durability of these engines. Second, growth in annual truck miles traveled continues to increase steadily. Third, diesel engines pollute at a higher rate than do gasoline engines and thus replacing gasoline engines with diesels will cause continued increases in air pollution from mobile sources.
Technologies Exist to Reduce Diesel Engine Emissions
The good news is that there are commercialized technologies to reduce diesel PM, NOx, and toxic pollution such as formaldehyde. New technologies used in the New York City bus fleet and in Europe have proven that diesel engine NOx and PM pollution can be reduced by 90 percent. The federal Urban Bus program (begun in 1993) has established the potential of rebuild/retrofit programs to significantly reduce emissions from heavy duty diesels. In 1993, the U.S. EPA began regulating engine retrofit/rebuilds in heavy duty urban buses in cities of over 750,000 population. The regulations require that newly overhauled transit bus engines meet more stringent particulate standards than required by the original engine certification. As part of this program, EPA has certified over ten products to reduce emissions from urban buses. Certified products have the potential to reduce particulate emissions by up to 80%. Over 40 urban areas have benefited from reduced urban bus emissions due to this program. Urban bus certified products can also be retrofitted onto most existing truck engines. California and New Jersey have established guidelines and methodologies for implementing retrofit/rebuild programs in non-urban buses.
Diesel Standards Lag Behind Gasoline Engine Standards
While new technologies exist, diesel engine exhaust standards currently lag behind standards for gasoline engines by 10 years or more. The federal government must close this gap by adopting strict new engine standards for future diesel vehicles. Implementation of protective diesel emission standards is contingent upon dramatically reducing the level of sulfur in diesel fuel. Like lead, sulfur can poison many of the after-treatment emission control strategies that must be employed to reduce diesel pollution. We understand that EPA is on the verge of proposing regulations that will cap diesel sulfur levels at 15 ppm by 2007. Once enacted, this proposal and the resulting emission controls that it enables will dramatically improve public health across the nation. Ensuring the timely implementation of a 15 ppm sulfur cap on all diesel fuel is the most important single action Congress could undertake to promote innovative diesel reduction strategies.
Slow Diesel Fleet Turnover Requires a Control Program for Existing Engines
While there is good news in the potential for cleaner new diesel engines, the problem of the existing, highly polluting fleet of 10 million diesel vehicles must also be addressed. Diesel engines last as long as 25 years and travel more than a million miles in many applications. Older engines pollute at a much higher rate than new engines due to 1) engine deterioration and 2) less stringent emission levels in older model year engines. Thus, targeting emissions from older diesel engines is essential to reducing the pollution from the nation's diesel fleets in the near term.
Legal Barriers Prevent Traditional Regulatory Programs
Unfortunately, while cost-effective retrofit technologies exist to significantly reduce diesel emissions from existing engines, and while federal action has been taken to reduce emissions from a small subset of diesels, states are substantially pre-empted by the Clean Air Act from taking large steps to reduce pollution from existing diesel vehicles. Historically, states have been given authority under the Clean Air Act to regulate in-use engine emissions from mobile sources, but are largely pre-empted from adopting independent requirements affecting new vehicles. However, a 1996 lawsuit brought by the Engine Manufacturers Association (EMA) resulted in a change to the nonroad engine rule which preempts states from requiring the retrofit of in-use nonroad engines (such as those found in construction equipment) to control emissions. Similarly, states face legal hurdles to the establishment of mandatory retrofit programs for highway vehicles. As an example, a state cannot pass a regulation requiring construction companies to install pollution control devices on construction equipment even though cost effective products are available. Similarly, a state cannot pass a law to require school buses to be retrofitted to reduce childrens' exposure to carcinogenic elements in diesel exhaust.
Collaborative Action to Overcome Regulatory Barriers
In the face of these legal barriers, Northeast state environmental staff have worked with the EPA, the Engine Manufacturers Association, the Manufacturers of Emission Controls Association, and many others to develop opportunities to integrate voluntary diesel-retrofit mechanisms into the existing regulatory regime. Through this collaborative effort we have encouraged the use of commercially available technologies by developing a standardized method for states to calculate State Implementation Plan ("SIP") credits for retrofit projects. To enable timely, cost-effective action and diminish administrative burden we have developed a third party verification system to review new technologies. Last we have developed a menu of recommendations on technology matches between retrofit equipment and heavy-duty engine applications.
EPA has provided an overarching forum for this collaborative effort by creating the Voluntary Measures Retrofit Program (VMEP). VMEP is a quintessential example of creating a space within the existing regulatory framework where innovation can flourish. The premise behind VMEP is to trust but verify. Through this program states are empowered to take credit for non-traditional measures to reduce mobile source pollution in their SIPs. Prior to VMEP, states often had to wait years for EPA to even consider new approaches before they could proceed with implementation. The VMEP pilot program inspires innovation by allowing states to credit innovative measures for a de minimis portion of a state's total SIP inventory so long as states commit to verify that these programs actually achieve their projected benefit in practice. As part of the VMEP retrofit program, EPA announced the establishment of a coalition to achieve the retrofit of 10,000 heavy-duty diesel vehicles within the next year. The program is also providing technical support to public agencies and state and local regulators that are implementing retrofit programs. Due in large part to this effort, a highly successful retrofit program has developed in the Northeast.
Specific Examples of Retrofit Projects
The specific examples that follow are each inspired to varying degrees by three main themes: 1) Compliance with regulatory requirements (SIP obligations, conformity requirements etc.); 2) Addressing community concerns over growth and new construction; and 3) The selfless desire to reduce air pollution.
New York Urban Bus Retrofit Project
New York City has just attained the existing PM 10 standards and recognizes that further regulatory efforts will be necessary to address levels of fine particle pollution in the coming years. In light of the City's recent non-attainment status and the overwhelming evidence of fine particle health consequences, New York State is devoting considerable energy to reducing in-use diesel emissions. In 1999, the New York City Transit Authority along with the New York Department of Environmental Conservation, fuel producers, and retrofit technology developers established a program to retrofit 50 urban buses with continuously regenerating particulate traps. To date, 30 buses have been retrofitted and testing results show that PM pollution is reduced 90 percent in the retrofitted buses. Because of the success of the program, Governor Pataki recently announced a significant expansion of the program. Under this breakthrough agreement, the New York City Transit Authority (NYCTA) will purchase low sulfur fuel and traps for the entire fleet of 3,700 hundred buses. Through the VMEP program, New York State will now be able to take credit for this substantial achievement in future PM attainment plans.
Big Dig Retrofit Project
In Boston, over 100 pieces of construction equipment are being retrofitted as part of the "Big Dig" retrofit project. The multi-billion dollar Big Dig project has concentrated hundreds of pieces of construction equipment in the City of Boston, many of them operating next to apartment and office buildings and hospitals. The retrofit program was initiated when residents living adjacent to the Big Dig complained about diesel exhaust from construction equipment. NESCAUM worked with Massachusetts transportation and environmental officials to fund and implement the retrofitting of nearly ¼ of the permanent diesel construction equipment on the project. The project has evolved to include a strictly voluntary component and a mandatory component. The voluntary retrofits are being undertaken and paid for by the highway department and contractors. There is also a contractual requirement stipulating that machines operating near hospitals, apartment and office buildings be retrofitted. Massachusetts is pursuing similar requirements in a host of major construction initiatives in the state. Here, the need to reconcile the needs of the community with the need to accommodate development in Boston spurred meaningful innovation.
Manchester Airport Retrofit Project
At the Manchester Airport in New Hampshire, airport operators, the New Hampshire Department of Environmental Services, and NESCAUM are collaborating in an effort to retrofit a majority of diesel ground service equipment. Like many airports, the Manchester airport is currently undergoing a major expansion in order to increase aircraft service and vehicle access for airport users. This expansion is likely to increase air pollution associated with airport operations. In part to offset this increase in emissions, the airport is moving ahead with a project to retrofit 60 airport owned nonroad vehicles such as de-icers and snow removal machines. The Manchester project is a combination of a program that aims to do environmental good combined with the need to comply with regulatory (conformity) requirements.
School Bus Retrofit Project
Another project under active consideration by Northeast air quality regulators is a school bus retrofit project. As part of the program, school districts in Northeast states will be encouraged to devote resources necessary to implement an varying array of diesel fuel quality improvements and emission control retrofits. In this case, the major impetus for the project will be to improve environmental quality and to reduce childrens' exposure to toxins.
Diesel Retrofit Conclusion
All told, we anticipate that up to 15,000 vehicles in the Northeast will be retrofitted in the first phase of this incentive driven initiative. As a result, thousands of tons of PM, hydrocarbon, and toxic emissions will be reduced in the Northeast. In all of these projects, a combination of regulatory requirements and voluntary measures have been combined to result in a highly successful program. Our model is presently being replicated in several cities in California and in Chicago. Based on the broad interest we have received from programs across the country, we are optimistic that similar retrofit efforts will be commonplace in the next several years.
Pollution Prevention in Permitting Programs (P4)
Overview of P4 Projects
Efforts to encourage pollution prevention within the existing regulatory structure reveal many of the barriers to innovation that I identified earlier. While the traditional federal/state regulatory regime has achieved great success, the traditional focus on technology based control strategies presents several shortcomings:
Ø Overly prescriptive compliance approaches foster a focus on actions rather than results.
Ø The focus on pollution control rather than pollution prevention discourages industry from investing in less toxic and more efficient technologies.
Ø The emphasis on single media technology requirements tolerates the shifting of pollution from one media to another rather than eliminating it at the source.
EPA and the states have developed several innovative programs to address these shortcomings without jeopardizing the environmental gains that have been achieved through traditional regulatory efforts. One such program is the Pollution Prevention in Permitting Project (P4).
The logic of pollution prevention is unassailable. Rather than spending millions of dollars to manufacture, handle, and ultimately control the pollutant emissions of hazardous substances used in the creation of desirable goods and services, pollution prevention enables the creation of these same goods using comparably benign methods. By changing manufacturing processes, many industries have determined that they can reduce air pollution considerably and cost-effectively. Under this approach, facilities are given maximum flexibility to operate their business while still maintaining adequate measures to ensure compliance with environmental regulations. Ultimately, these permits create a regulatory incentive to design waste out of the process and increase production efficiency.
P4 Permits
In 1995, Intel and the Oregon DEQ wrote the first P4 permit. This permit had two goals; (1) to increase operational flexibility at Intel's Aloha facility and (2) create a regulatory program that creates incentives for facilities to use pollution prevention to meet regulatory requirements. To meet these goals, the permit contained pre-approvals for specific operational and pollutant-specific, plant-wide emission caps. Speed and flexibility to expand the facility were key factors for Intel wishing to seek a P4 permit. As a result of the P4 permit, both the goals of flexibility and pollution prevention were realized. In the first two years of the P4 permit, VOC emissions per product unit fell 47 percent, while production increased 70 percent. In addition, the facility was reconfigured without re-opening their Title V permit. Finally, the use of pollution prevention to reduce per-unit emissions and to keep emissions under regulatory thresholds resulted in Intel saving two million dollars in avoided control costs. This innovative effort brought considerable benefit to the environment and the company.
NESCAUM P4 Pilot Project
Seeking to replicate this success in our region, NESCAUM has embarked on a multi-state effort to incorporate pollution prevention into the next generation of environmental permits. The basic tenet of our effort is to set stringent environmental outcomes while providing companies with optimum flexibility to design their compliance strategy. To date, EPA's efforts to support P4 initiatives nation-wide have resulted in several important achievements:
· Development of six enforceable Title V permits that meet all substantive and procedural requirements;
· Creation of permit terms which encourage pollution prevention to achieve compliance; and
· Integration of "living" Title V permits which include flexibility conditions that support rapid, cost-effective operational change and creates lower administrative burdens for both sources and permitting authorities.
NESCAUM seeks to build upon these successes by leading an effort to fully integrate P4 approaches into traditional air permitting activities. Through this effort NESCAUM is working with our member states and EPA to identify and overcome regulatory barriers that stand in the way of integrating P4 into the traditional regulatory regime. In addition, NESCAUM will be working in targeted sectors to develop flexible Title V permits. Targeted sector includes chemical manufacturing, semiconductor (chip manufacturing), pharmaceutical manufacturing, metals manufacturing (coating, anodizing), and pulp and paper operations.
Our focus on these target sectors is premised on the recognition that P4 is not equally appropriate in all sectors or for all companies. P4 permits require considerable effort and resources to develop. Therefore, we have opted to focus our energies on those sectors with the greatest need for flexibility in order to evolve with dynamic market demands. In addition, P4 permits should only be written for those specific facilities that have demonstrated and credible environmental management systems. Facilities with poor compliance records tend to have poor process controls. Establishing flexible permits with such facilities could render the public open to unacceptable risks. By the end of our two-year effort, NESCAUM expects to have identified a host of sources that are appropriate candidates for P4 and develop consistent approaches among our member states in crafting these permits.
Barriers to P4 Permits
A current barrier to promoting P4 permits is the overarching deadline for states to complete issuance of all Title V permits. Permitting agencies are under intense pressure to issue all their Title V permits by January 1. 2001. Permitting programs in the Northeast were among the last to receive interim approval and therefore have had the least time to write these permits. This situation puts the states at odds with P4. Working flexibility into permits requires significantly more time than writing a traditional permit. Given this pressure to issue permits, states are reluctant to devote significant resources to programs that will slow down the permit process.
Furthermore, barriers created in existing regulations and policies can often hamper innovative efforts. One such barrier is the "once in, always in" policy developed for MACT standards. Under Title III of the Clean Air Act, EPA regulates hazardous air pollutants or HAPs. Generally, these regulations require significant amounts of monitoring, record keeping, and reporting activities. The "once in always in" policy creates a perverse disincentive to reduce the use of hazardous substances because even the elimination of hazardous production materials does not alleviate the unique regulatory burdens that were explicitly designed for HAP sources. Given this situation, facilities have little inducement to investigate alternative technologies that are less polluting.
P4 Conclusion
The NESCAUM project has been underway for nearly six months. Work to date has found that many facilities and permitting agencies are eager to engage in this process. Critics within the government and environmental communities however, continue to express the anxiety that flexible programs, such as P4, do not provide adequate protections for the public. The result of these fears has been to hold P4 permits to a far higher standard than that of traditional permitting activities. Our hope is that the scrutiny and transparency provided by our collaborative regional effort will help to overcome these fears and enable P4 permits to proceed efficiently.
Conclusion
While the focus of my remarks has reflected upon state and EPA efforts there are two fundamental roles that Congress must fulfill for this evolution to succeed. First, in the short term, innovation costs money. While our society will save billions of dollars each year by honing the regulatory system to appreciate the heterogeneity of our states and businesses, designing and administering flexible yet credible approaches is a far more complex and costly undertaking than the "one size fits all" schemes that many appropriately deride. EPA and the states must be provided the necessary resources and flexibility to use them if we hope to navigate this transition. Without increased resources, well intentioned efforts toward flexibility will ultimately be undermined by a small minority of interests who will seek to exploit this flexibility for private gain. Since change is always held to a higher standard than the status quo, Congress, EPA and the States must work together to ensure that we are collectively up to the test.
Second, even more than financial resources, successful innovation requires trust. Trust is ample when innovation succeeds. However, innovation will not occur unless trust isn't also dependable when well-intentioned, credible efforts fail. Sources must trust state agencies to provide constructive havens to remedy the creative control approaches that will inevitably fall short of expectations. States must trust the EPA to acknowledge and not penalize innovative state programs both when they succeed and when they do not. EPA must trust Environmental organizations to recognize that some efforts will not succeed and environmental organizations must trust that failed efforts will be remedied when critiquing perceived inadequacies. Of course in all cases, trust must be earned through dialogue, access, and transparency of data. Congress, as the creator of laws and overseer of EPA plays a vital role in setting the tone for this evolution toward innovation and trust. I would like to thank Senator Smith for initiating this dialogue and look forward to working with the Committee in the months ahead.
The purpose of this document is to expand the use of retrofit pollution control technologies in heavy-duty engines through the development of consistent guidelines for voluntary retrofit programs. Such programs would be targeted to heavy-duty vehicles not affected by the federal Urban Bus Program and would include control technologies not certified under that program as well as Urban Bus Program certified technologies. Specifically, this document recommends 1) a protocol for calculating state implementation plan (SIP) credits for voluntary retrofit projects; 2) the structure of a third party retrofit verification system for retrofit technologies; and 3) an in-use testing program to ensure that emission reduction credits claimed are achieved in the field. The last chapter of this document outlines model state policies to reduce heavy-duty engine pollution through retrofit initiatives.
This effort builds on the above mentioned United States Environmental Protection Agency (EPA) initiative begun in 1993 to reduce urban residents' exposure to diesel exhaust, the Urban Bus Retrofit/Rebuild program. The program requires that urban buses operating in metropolitan areas with populations over 750,000 be equipped with EPA certified retrofit pollution control devices such as oxidation catalysts or be rebuilt using certified low emission components at the time of engine overhaul. To date, approximately 10,000 of 42,000 eligible urban buses have been retrofitted or rebuilt as a result of the program. Two states, New Jersey and California, have undertaken retrofit programs or guidelines as well. These efforts are intended to expand the significant emission reductions gained through the federal Urban Bus Program by promoting the use of pollution reducing technologies on the existing heavy-duty fleets in those states.
The need for reducing emissions from the nation's in-use heavy-duty diesel fleets is clear. Current inventories estimate that heavy duty engine emissions comprise 33% of all nitrogen oxides (NOx) pollution and 80% of all particulates (PM) from mobile sources in the Northeast states. Emissions from these engines contribute to serious air pollution problems in the region. NOx causes eutrophication of lakes and streams, acid rain, and is a precursor to ozone which aggravates lung disease. Hydrocarbon (HC) emissions are also ozone precursors and are made up, in part, of toxic substances such as benzene, toluene, and 1,3 butadiene, some of which are known carcinogens. PM emissions are very high from diesel engines and are known to aggravate lung diseases such as asthma, emphysema, and bronchitis. In addition, PM has been labeled a probable human carcinogen by EPA and a toxic air contaminant by the California Air Resources Board. In order for states to achieve air quality goals, significant reductions in heavy-duty diesel emissions will need to be made.
The recommendations contained in this document are based on discussions of a workgroup organized by the Northeast States for Coordinated Air Use Management (NESCAUM). The workgroup was created to provide guidance to state and local agencies, as well as to private organizations that plan to retrofit heavy-duty diesel vehicles with pollution control devices. It included input from state and federal agency staff, testing laboratories, and control equipment manufacturers. In addition, a draft of these guidelines was distributed to EPA regional offices and the heavy-duty engine manufacturers. Their comments and suggestions were reviewed and incorporated by the workgroup into the recommendations contained in this report.
Primary Recommendations
All of the recommendations detailed below represent the views of the Retrofit/Rebuild workgroup and NESCAUM.
1. Use of Urban Bus Program Certified Technologies
Oxidation catalysts certified with the Urban Bus Program should be eligible without administrative or peer review for use in any highway heavy-duty engine, with states being allowed to claim a 20 percent reduction for PM, a 40 percent reduction for carbon monoxide (CO), and a 50 percent reduction for HC. These credits may be claimed before a project is implemented. Verification of emission reductions should be conducted during or after project implementation by 1) a review of retrofitting records and 2) through in-use emissions testing. These recommendations are detailed in Chapter I, section D and Chapter III.
For use of technologies certified with the Urban Bus Program that are engine specific such as rebuild kits, the workgroup recommends that a PM emission reduction credit of 20 percent be granted automatically when the rebuild kits are used in engines that the technologies are certified for under the Urban Bus Program. Chapter I, section B describes the credit allowed for ".1" technologies. As with the use of oxidation catalysts, reporting and in-use testing recommendations for rebuild kits are detailed in Chapters I.D and III.
2. Use of Technologies Not Certified with the Urban Bus Program
For all products that have not been certified with the Urban Bus Program, emissions testing should be conducted by the manufacturer to determine the emission reductions potential (percent reductions) of the retrofit/rebuild product. Similar data should be required for the voluntary program as are required for certification with the Urban Bus Program (see Chapter III, section A for a detailed description). An engineering analysis should be conducted by the manufacturer to determine which engines the retrofit/rebuild equipment may be used on. These data and analysis will be reviewed by the third party verifier to establish the emission reduction level and applicability for engine families for the voluntary retrofit program.
3. Third Party Verification System
A third party verification system should be established which consists of an administrator and a peer review committee. The workgroup recommends that Environment Canada be the administrator for this program. The administrator will process all applications to the retrofit/rebuild program, review data for thoroughness, organize the work of the peer review group, make decisions on the level of in-use testing required, and communicate with EPA. The peer review committee should consist of temporary volunteer members from industry, laboratories, and trade organizations (such as the Society of Automotive Engineers) with expertise in heavy-duty engines and retrofit equipment. The committee will make determinations for emission control devices on the level of in-use testing, completion of the in-use testing requirement, acceptability of in-use testing method, emission reduction potential of emission control products, and engine families that control equipment can be used with.
4. In-use Testing Requirement
In order to verify the emission reductions claimed from retrofit projects and to assess control equipment durability a percentage of all emission control products installed as part of a retrofit/rebuild program should be tested in-use. The procedure for establishing the number of units to be tested in the field is outlined in Chapter III and is adapted from EPA's in-use compliance testing requirements for new pleasure craft marine engines. An in-use testing trigger should be established for different types of technologies based on unit sales. A 70% pass rate on tested units will be needed in order for devices to "test out" of the in-use requirement.
5. Calculating SIP Credits
In order to calculate SIP credits from retrofit projects, baseline emission factors for heavy-duty engines to be retrofitted needs to be established. The workgroup recommends that Federal Test Procedure (FTP) certification data for engine families be used as baseline emission rates for retrofitted engines. Emission reduction percentages (as recommended in this document for devices certified with the Urban Bus Program and as established by the third party verifier for devices not certified with the Urban Bus Program) can be applied to these baseline rates. Mass emissions reductions can be calculated for individual fleets using the formulas detailed in Chapter IV and information available to fleet operators such as vehicle mileage, hours in operation, or fuel consumption. In some cases, states may choose to develop baseline emission rates through testing of heavy-duty engines in-use. The states will need to develop a testing plan in coordination with EPA to determine these baseline levels.
6. Retrofit/Rebuild Program Information/Website
The workgroup recommends that if possible all retrofit/rebuild devices certified with the Urban Bus Program and all devices "verified" through third party review be listed on a retrofit/rebuild website which states and others interested in undertaking retrofit projects can easily access. The retrofit website could provide SIP credit calculation formulas, information on emission control products, applicable engines, and EPA certification data for engine families.
7. Model State Retrofit Policies
States have policy and funding options to increase the use of retrofit devices to reduce heavy-duty diesel pollution. Retrofitting heavy-duty vehicles and machines to reduce PM, HC, CO, toxics, and in some cases NOx, can assist states in reaching air quality standards. Executive orders, contract requirements, and agency policies represent potential methods to increase the use of retrofit devices. Funding from federal sources such as the Congestion Mitigation Air Quality Improvement program (CMAQ), state funding in the form of bond issues and agency budgets, and supplemental environmental monies can provide financial support for retrofit projects. The last section of this report outlines model retrofit policies that have been used in the region, funding sources, and example strategies to increase the use of pollution control equipment.