emissions of each pollutant (either multiplicative or additive) or
include the effects in combined deterioration factors that include
exhaust and crankcase emissions together for each pollutant.
    (d) Collect emission data using measurements to one more decimal
place than the applicable standard. Apply the deterioration factor to
the official emission result, as described in paragraph (c) of this
section, then round the adjusted figure to the same number

of decimal places as the emission standard. Compare the rounded
emission levels to the emission standard for each emission-data engine.
In the case of NOX+HC standards, apply the deterioration
factor to each pollutant and then add the results before rounding.

Sec.  1042.245  Deterioration factors.

    For Category 1 and Category 2 engines, establish deterioration
factors, as described in Sec.  1042.240, to determine whether your
engines will meet emission standards for each pollutant throughout the
useful life. This section describes how to determine deterioration
factors, either with an engineering analysis, with pre-existing test
data, or with new emission measurements.
    (a) You may ask us to approve deterioration factors for an engine
family with established technology based on engineering analysis
instead of testing. Engines certified to a NOX+HC standard
or FEL greater than the Tier 3 NOX+HC standard are
considered to rely on established technology for gaseous emission
control, except that this does not include any engines that use
exhaust-gas recirculation or aftertreatment. In most cases,
technologies used to meet the Tier 1 and Tier 2 emission standards
would be considered to be established technology. We must approve your
plan to establish a deterioration factor under this paragraph (a)
before you submit your application for certification.
    (b) You may ask us to approve deterioration factors for an engine
family based on emission measurements from similar highway, stationary,
or nonroad engines (including locomotive engines or other marine
engines) if you have already given us these data for certifying the
other engines in the same or earlier model years. Use good engineering
judgment to decide whether the two engines are similar. We must approve
your plan to establish a deterioration factor under this paragraph (b)
before you submit your application for certification. We will approve
your request if you show us that the emission measurements from other
engines reasonably represent in-use deterioration for the engine family
for which you have not yet determined deterioration factors.
    (c) If you are unable to determine deterioration factors for an
engine family under paragraph (a) or (b) of this section, first get us
to approve a plan for determining deterioration factors based on
service accumulation and related testing. We will respond to your
proposed plan within 45 days of receiving your request. Your plan must
involve measuring emissions from an emission-data engine at least three
times, which are evenly spaced over the service-accumulation period
unless we specify otherwise, such that the resulting measurements and
calculations will represent the deterioration expected from in-use
engines over the full useful life. You may use extrapolation to
determine deterioration factors once you have established a trend of
changing emissions with age for each pollutant. You may use an engine
installed in a vessel to accumulate service hours instead of running
the engine only in the laboratory. You may perform maintenance on
emission-data engines as described in Sec.  1042.125 and 40 CFR part
1065, subpart E.
    (d) Include the following information in your application for
certification:
    (1) If you determine your deterioration factors based on test data
from a different engine family, explain why this is appropriate and
include all the emission measurements on which you base the
deterioration factor.
    (2) If you determine your deterioration factors based on
engineering analysis, explain why this is appropriate and include a
statement that all data, analyses, evaluations, and other information
you used are available for our review upon request.
    (3) If you do testing to determine deterioration factors, describe
the form and extent of service accumulation, including a rationale for
selecting the service-accumulation period and the method you use to
accumulate hours.

Sec.  1042.250  Recordkeeping and reporting.

    (a) If you produce engines under any provisions of this part that
are related to production volumes, send the Designated Compliance
Officer a report within 30 days after the end of the model year
describing the total number of engines you produced in each engine
family. For example, if you use special provisions intended for small-
volume engine manufacturers, report your U.S.-directed production
volumes to show that you do not exceed the applicable limits.
    (b) Organize and maintain the following records:
    (1) A copy of all applications and any summary information you send
us.
    (2) Any of the information we specify in Sec.  1042.205 that you
were not required to include in your application.
    (3) A detailed history of each emission-data engine. For each
engine, describe all of the following:
    (i) The emission-data engine's construction, including its origin
and buildup, steps you took to ensure that it represents production
engines, any components you built specially for it, and all the
components you include in your application for certification.
    (ii) How you accumulated engine operating hours (service
accumulation), including the dates and the number of hours accumulated.
    (iii) All maintenance, including modifications, parts changes, and
other service, and the dates and reasons for the maintenance.
    (iv) All your emission tests (valid and invalid), including
documentation on routine and standard tests, as specified in part 40
CFR part 1065, and the date and purpose of each test.
    (v) All tests to diagnose engine or emission control performance,
giving the date and time of each and the reasons for the test.
    (vi) Any other significant events.
    (4) Production figures for each engine family divided by assembly
plant.
    (5) Keep a list of engine identification numbers for all the
engines you produce under each certificate of conformity.
    (c) Keep data from routine emission tests (such as test cell
temperatures and relative humidity readings) for one year after we
issue the associated certificate of conformity. Keep all other
information specified in paragraph (a) of this section for eight years
after we issue your certificate.
    (d) Store these records in any format and on any media, as long as
you can promptly send us organized, written records in English if we
ask for them. You must keep these records readily available. We may
review them at any time.
    (e) Send us copies of any engine maintenance instructions or
explanations if we ask for them.

Sec.  1042.255  EPA decisions.

    (a) If we determine your application is complete and shows that the
engine family meets all the requirements of this part and the Clean Air
Act, we will issue a certificate of conformity for your engine family
for that model year. We may make the approval subject to additional
conditions.
    (b) We may deny your application for certification if we determine
that your engine family fails to comply with emission standards or
other requirements of this part or the Clean Air Act. Our decision may
be based on a review of all information available to us. If we deny
your application, we will explain why in writing.
    (c) In addition, we may deny your application or suspend or revoke
your certificate if you do any of the following:

    (1) Refuse to comply with any testing or reporting requirements.
    (2) Submit false or incomplete information (paragraph (e) of this
section applies if this is fraudulent).
    (3) Render inaccurate any test data.
    (4) Deny us from completing authorized activities (see 40 CFR
1068.20). This includes a failure to provide reasonable assistance.
    (5) Produce engines for importation into the United States at a
location where local law prohibits us from carrying out authorized
activities.
    (6) Fail to supply requested information or amend your application
to include all engines being produced.
    (7) Take any action that otherwise circumvents the intent of the
Clean Air Act or this part.
    (d) We may void your certificate if you do not keep the records we
require or do not give us information as required under this part or
the Clean Air Act.
    (e) We may void your certificate if we find that you intentionally
submitted false or incomplete information.
    (f) If we deny your application or suspend, revoke, or void your
certificate, you may ask for a hearing (see Sec.  1042.920).

Subpart D--Testing Production-line Engines

Sec.  1042.301  General provisions.

    (a) If you produce engines that are subject to the requirements of
this part, you must test them as described in this subpart, except as
follows:
    (1) Small-volume engine manufacturers may omit testing under this
subpart.
    (2) We may exempt Category 1 engine families with a projected U.S.-
directed production volume below 100 engines from routine testing under
this subpart. Request this exemption in your application for
certification and include your basis for projecting a production volume
below 100 units. You must promptly notify us if your actual production
exceeds 100 units during the model year. If you exceed the production
limit or if there is evidence of a nonconformity, we may require you to
test production-line engines under this subpart, or under 40 CFR part
1068, subpart D, even if we have approved an exemption under this
paragraph (a)(2).
    (3) [Reserved]
    (b) We may suspend or revoke your certificate of conformity for
certain engine families if your production-line engines do not meet the
requirements of this part or you do not fulfill your obligations under
this subpart (see Sec. Sec.  1042.325 and 1042.340).
    (c) Other requirements apply to engines that you produce. Other
regulatory provisions authorize us to suspend, revoke, or void your
certificate of conformity, or order recalls for engine families without
regard to whether they have passed these production-line testing
requirements. The requirements of this subpart do not affect our
ability to do selective enforcement audits, as described in 40 CFR part
1068. Individual engines in families that pass these production-line
testing requirements must also conform to all applicable regulations of
this part and 40 CFR part 1068.
    (d) You may use alternate programs or measurement methods for
testing production-line engines in the following circumstances:
    (1) [Reserved]
    (2) You may test your engines using the CumSum procedures specified
in 40 CFR part 1045 or 1051 instead of the procedures specified in this
subpart, except that the threshold for establishing quarterly or annual
test periods is based on U.S.-directed production volumes of 800
instead of 1600. This alternate program does not require prior
approval.
    (3) You may ask to use another alternate program or measurement
method for testing production-line engines. In your request, you must
show us that the alternate program gives equal assurance that your
engines meet the requirements of this part. We may waive some or all of
this subpart's requirements if we approve your alternate program.
    (e) If you certify an engine family with carryover emission data,
as described in Sec.  1042.235(d), and these equivalent engine families
consistently pass the production-line testing requirements over the
preceding two-year period, you may ask for a reduced testing rate for
further production-line testing for that family. The minimum testing
rate is one engine per engine family. If we reduce your testing rate,
we may limit our approval to any number of model years. In determining
whether to approve your request, we may consider the number of engines
that have failed the emission tests.
    (f) We may ask you to make a reasonable number of production-line
engines available for a reasonable time so we can test or inspect them
for compliance with the requirements of this part. See 40 CFR 1068.27.

Sec.  1042.305  Preparing and testing production-line engines.

    This section describes how to prepare and test production-line
engines. You must assemble the test engine in a way that represents the
assembly procedures for other engines in the engine family. You must
ask us to approve any deviations from your normal assembly procedures
for other production engines in the engine family.
    (a) Test procedures. Test your production-line engines using the
applicable testing procedures in subpart F of this part to show you
meet the duty-cycle emission standards in subpart B of this part. The
not-to-exceed standards apply for this testing, but you need not do
additional testing to show that production-line engines meet the not-
to-exceed standards.
    (b) Modifying a test engine. Once an engine is selected for testing
(see Sec.  1042.310), you may adjust, repair, prepare, or modify it or
check its emissions only if one of the following is true:
    (1) You document the need for doing so in your procedures for
assembling and inspecting all your production engines and make the
action routine for all the engines in the engine family.
    (2) This subpart otherwise specifically allows your action.
    (3) We approve your action in advance.
    (c) Engine malfunction. If an engine malfunction prevents further
emission testing, ask us to approve your decision to either repair the
engine or delete it from the test sequence.
    (d) Setting adjustable parameters. Before any test, we may require
you to adjust any adjustable parameter on a Category 1 engine to any
setting within its physically adjustable range. We may adjust or
require you to adjust any adjustable parameter on a Category 2 engine
to any setting within its specified adjustable range.
    (1) We may require you to adjust idle speed outside the physically
adjustable range as needed, but only until the engine has stabilized
emission levels (see paragraph (e) of this section). We may ask you for
information needed to establish an alternate minimum idle speed.
    (2) We may specify adjustments within the physically adjustable
range or the specified adjustable range by considering their effect on
emission levels, as well as how likely it is someone will make such an
adjustment with in-use engines.
    (e) Stabilizing emission levels. You may stabilize emission levels
(or establish a Green Engine Factor for Category 2 engines) before you
test production-line engines, as follows:
    (1) You may stabilize emission levels by operating the engine in a
way that represents the way production engines will be used, using good
engineering

judgment, for no more than the greater of two periods:
    (i) 300 hours.
    (ii) The number of hours you operated your emission-data engine for
certifying the engine family (see 40 CFR part 1065, subpart E, or the
applicable regulations governing how you should prepare your test
engine).
    (2) For Category 2 engines, you may ask us to approve a Green
Engine Factor for each regulated pollutant for each engine family. Use
the Green Engine Factor to adjust measured emission levels to establish
a stabilized low-hour emission level.
    (f) Damage during shipment. If shipping an engine to a remote
facility for production-line testing makes necessary an adjustment or
repair, you must wait until after the initial emission test to do this
work. We may waive this requirement if the test would be impossible or
unsafe, or if it would permanently damage the engine. Report to us in
your written report under Sec.  1042.345 all adjustments or repairs you
make on test engines before each test.
    (g) Retesting after invalid tests. You may retest an engine if you
determine an emission test is invalid under subpart F of this part.
Explain in your written report reasons for invalidating any test and
the emission results from all tests. If you retest an engine, you may
ask us to substitute results of the new tests for the original ones.
You must ask us within ten days of testing. We will generally answer
within ten days after we receive your information.

Sec.  1042.310  Engine selection.

    (a) Determine minimum sample sizes as follows:
    (1) For Category 1 engines, the minimum sample size is one engine
or one percent of the projected U.S.-directed production volume for all
your Category 1 engine families, whichever is greater.
    (2) For Category 2 engines, the minimum sample size is one engine
or one percent of the projected U.S.-directed production volume for all
your Category 2 engine families, whichever is greater.
    (b) Randomly select one engine from each engine family early in the
model year. For further testing to reach the minimum sample size,
randomly select a proportional sample from each engine family, with
testing distributed evenly over the course of the model year, unless we
specify a different schedule for your tests. For example, we may
require you to disproportionately select engines from the early part of
a model year for a new engine model that has not previously been
subject to production-line testing.
    (c) For each engine that fails to meet emission standards, test two
engines from the same engine family from the next fifteen engines
produced or within seven days, whichever is later. If an engine fails
to meet emission standards for any pollutant, count it as a failing
engine under this paragraph (c).
    (d) Continue testing until one of the following things happens:
    (1) You test the number of engines specified in paragraphs (a) and
(c) of this section.
    (2) The engine family does not comply according to Sec.  1042.315
or you choose to declare that the engine family does not comply with
the requirements of this subpart.
    (3) You test 30 engines from the engine family.
    (e) You may elect to test more randomly chosen engines than we
require under this section.

Sec.  1042.315  Determining compliance.

    This section describes the pass-fail criteria for the production-
line testing requirements. We apply these criteria on an engine-family
basis. See Sec.  1042.320 for the requirements that apply to individual
engines that fail a production-line test.
    (a) Calculate your test results as follows:
    (1) Initial and final test results. Calculate the test results for
each engine. If you do several tests on an engine, calculate the
initial test results, then add them together and divide by the number
of tests for the final test results on that engine. Include the Green
Engine Factor to determine low-hour emission results, if applicable.
    (2) Final deteriorated test results. Apply the deterioration factor
for the engine family to the final test results (see Sec.
1042.240(c)).
    (3) Round deteriorated test results. Round the results to one more
decimal place than the applicable emission standard.
    (b) If a production-line engine fails to meet emission standards
and you test two additional engines as described in Sec.  1042.310,
calculate the average emission level for each pollutant for the three
engines. If the calculated average emission level for any pollutant
exceeds the applicable emission standard, the engine family fails the
production-line testing requirements of this subpart. Tell us within
ten working days if this happens. You may request to amend the
application for certification to raise the FEL of the engine family as
described in Sec.  1042.225(f).

Sec.  1042.320  What happens if one of my production-line engines fails
to meet emission standards?

    (a) If you have a production-line engine with final deteriorated
test results exceeding one or more emission standards (see Sec.
1042.315(a)), the certificate of conformity is automatically suspended
for that failing engine. You must take the following actions before
your certificate of conformity can cover that engine:
    (1) Correct the problem and retest the engine to show it complies
with all emission standards.
    (2) Include in your written report a description of the test
results and the remedy for each engine (see Sec.  1042.345).
    (b) You may request to amend the application for certification to
raise the FEL of the entire engine family at this point (see Sec.
1042.225).
    (c) For catalyst-equipped engines, you may ask us to allow you to
exclude an initial failed test if all of the following are true:
    (1) The catalyst was in a green condition when tested initially.
    (2) The engine met all emission standards when retested after
degreening the catalyst.
    (3) No additional emission-related maintenance or repair was
performed between the initial failed test and the subsequent passing
test.

Sec.  1042.325  What happens if an engine family fails the production-
line testing requirements?

    (a) We may suspend your certificate of conformity for an engine
family if it fails under Sec.  1042.315. The suspension may apply to
all facilities producing engines from an engine family, even if you
find noncompliant engines only at one facility.
    (b) We will tell you in writing if we suspend your certificate in
whole or in part. We will not suspend a certificate until at least 15
days after the engine family fails. The suspension is effective when
you receive our notice.
    (c) Up to 15 days after we suspend the certificate for an engine
family, you may ask for a hearing (see Sec.  1042.920). If we agree
before a hearing occurs that we used erroneous information in deciding
to suspend the certificate, we will reinstate the certificate.
    (d) Section 1042.335 specifies steps you must take to remedy the
cause of the engine family's production-line failure. All the engines
you have produced since the end of the last test period are presumed
noncompliant and should be addressed in your proposed remedy. We may
require you to apply the remedy to engines produced earlier if we
determine that the cause of the

failure is likely to have affected the earlier engines.
    (e) You may request to amend the application for certification to
raise the FEL of the entire engine family as described in Sec.
1051.225(f). We will approve your request if it is clear that you used
good engineering judgment in establishing the original FEL.

Sec.  1042.330  Selling engines from an engine family with a suspended
certificate of conformity.

    You may sell engines that you produce after we suspend the engine
family's certificate of conformity under Sec.  1042.315 only if one of
the following occurs:
    (a) You test each engine you produce and show it complies with
emission standards that apply.
    (b) We conditionally reinstate the certificate for the engine
family. We may do so if you agree to recall all the affected engines
and remedy any noncompliance at no expense to the owner if later
testing shows that the engine family still does not comply.

Sec.  1042.335  Reinstating suspended certificates.

    (a) Send us a written report asking us to reinstate your suspended
certificate. In your report, identify the reason for noncompliance,
propose a remedy for the engine family, and commit to a date for
carrying it out. In your proposed remedy include any quality control
measures you propose to keep the problem from happening again.
    (b) Give us data from production-line testing that shows the
remedied engine family complies with all the emission standards that
apply.

Sec.  1042.340  When may EPA revoke my certificate under this subpart
and how may I sell these engines again?

    (a) We may revoke your certificate for an engine family in the
following cases:
    (1) You do not meet the reporting requirements.
    (2) Your engine family fails to comply with the requirements of
this subpart and your proposed remedy to address a suspended
certificate under Sec.  1042.325 is inadequate to solve the problem or
requires you to change the engine's design or emission control system.
    (b) To sell engines from an engine family with a revoked
certificate of conformity, you must modify the engine family and then
show it complies with the requirements of this part.
    (1) If we determine your proposed design change may not control
emissions for the engine's full useful life, we will tell you within
five working days after receiving your report. In this case we will
decide whether production-line testing will be enough for us to
evaluate the change or whether you need to do more testing.
    (2) Unless we require more testing, you may show compliance by
testing production-line engines as described in this subpart.
    (3) We will issue a new or updated certificate of conformity when
you have met these requirements.

Sec.  1042.345  Reporting.

    (a) Within 45 days of the end of each quarter in which production-
line testing occurs, send us a report with the following information:
    (1) Describe any facility used to test production-line engines and
state its location.
    (2) State the total U.S.-directed production volume and number of
tests for each engine family.
    (3) Describe how you randomly selected engines.
    (4) Describe each test engine, including the engine family's
identification and the engine's model year, build date, model number,
identification number, and number of hours of operation before testing.
Also describe how you developed and applied the Green Engine Factor, if
applicable.
    (5) Identify how you accumulated hours of operation on the engines
and describe the procedure and schedule you used.
    (6) Provide the test number; the date, time and duration of
testing; test procedure; initial test results before and after
rounding; final test results; and final deteriorated test results for
all tests. Provide the emission results for all measured pollutants.
Include information for both valid and invalid tests and the reason for
any invalidation.
    (7) Describe completely and justify any nonroutine adjustment,
modification, repair, preparation, maintenance, or test for the test
engine if you did not report it separately under this subpart. Include
the results of any emission measurements, regardless of the procedure
or type of engine.
    (8) Report on each failed engine as described in Sec.  1042.320.
    (9) Identify when the model year ends for each engine family.
    (b) We may ask you to add information to your written report so we
can determine whether your new engines conform with the requirements of
this subpart.
    (c) An authorized representative of your company must sign the
following statement:
    We submit this report under sections 208 and 213 of the Clean Air
Act. Our production-line testing conformed completely with the
requirements of 40 CFR part 1042. We have not changed production
processes or quality-control procedures for test engines in a way that
might affect emission controls. All the information in this report is
true and accurate to the best of my knowledge. I know of the penalties
for violating the Clean Air Act and the regulations. (Authorized
Company Representative)
    (d) Send electronic reports of production-line testing to the
Designated Compliance Officer using an approved information format. If
you want to use a different format, send us a written request with
justification for a waiver.
    (e) We will send copies of your reports to anyone from the public
who asks for them. See Sec.  1042.915 for information on how we treat
information you consider confidential.

Sec.  1042.350  Recordkeeping.

    (a) Organize and maintain your records as described in this
section. We may review your records at any time.
    (b) Keep records of your production-line testing for eight years
after you complete all the testing required for an engine family in a
model year. You may use any appropriate storage formats or media.
    (c) Keep a copy of the written reports described in Sec.  1042.345.
    (d) Keep the following additional records:
    (1) A description of all test equipment for each test cell that you
can use to test production-line engines.
    (2) The names of supervisors involved in each test.
    (3) The name of anyone who authorizes adjusting, repairing,
preparing, or modifying a test engine and the names of all supervisors
who oversee this work.
    (4) If you shipped the engine for testing, the date you shipped it,
the associated storage or port facility, and the date the engine
arrived at the testing facility.
    (5) Any records related to your production-line tests that are not
in the written report.
    (6) A brief description of any significant events during testing
not otherwise described in the written report or in this section.
    (7) Any information specified in Sec.  1042.345 that you do not
include in your written reports.
    (e) If we ask, you must give us projected or actual production
figures for an engine family. We may ask you to divide your production
figures by maximum engine power, displacement, fuel type, or assembly
plant (if you

produce engines at more than one plant).
    (f) Keep a list of engine identification numbers for all the
engines you produce under each certificate of conformity. Give us this
list within 30 days if we ask for it.
    (g) We may ask you to keep or send other information necessary to
implement this subpart.

Subpart E--In-use Testing

Sec.  1042.401  General Provisions.

    We may perform in-use testing of any engine subject to the
standards of this part.

Subpart F--Test Procedures

Sec.  1042.501  How do I run a valid emission test?

    (a) Use the equipment and procedures for compression-ignition
engines in 40 CFR part 1065 to determine whether Category 1 and
Category 2 engines meet the duty-cycle emission standards in Sec.
1042.101(a). Measure the emissions of all regulated pollutants as
specified in 40 CFR part 1065. Use the applicable duty cycles specified
in Sec.  1042.505.
    (b) Section 1042.515 describes the supplemental test procedures for
evaluating whether engines meet the not-to-exceed emission standards in
Sec.  1042.101(c).
    (c) Use the fuels and lubricants specified in 40 CFR part 1065,
subpart H, for all the testing we require in this part, except as
specified in Sec.  1042.515.
    (1) For service accumulation, use the test fuel or any commercially
available fuel that is representative of the fuel that in-use engines
will use.
    (2) For diesel-fueled engines, use the appropriate diesel fuel
specified in 40 CFR part 1065, subpart H, for emission testing. Unless
we specify otherwise, the appropriate diesel test fuel is the ultra
low-sulfur diesel fuel. If we allow you to use a test fuel with higher
sulfur levels, identify the test fuel in your application for
certification and ensure that the emission control information label is
consistent with your selection of the test fuel (see Sec.
1042.135(c)(11)). For Category 2 engines, you may ask to use
commercially available diesel fuel similar but not necessarily
identical to the applicable fuel specified in 40 CFR part 1065, subpart
H; we will approve your request if you show us that it does not affect
your ability to demonstrate compliance with the applicable emission
standards.
    (3) For Category 1 and Category 2 engines that are expected to use
a type of fuel (or mixed fuel) other than diesel fuel (such as natural
gas, methanol, or residual fuel), use a commercially available fuel of
that type for emission testing. If an engine is designed to operate on
different fuels, we may (at our discretion) require testing on each
fuel. Propose test fuel specifications that take into account the
engine design and the properties of commercially available fuels.
Describe these test fuel specifications in the application for
certification.
    (4) [Reserved]
    (d) You may use special or alternate procedures to the extent we
allow them under 40 CFR 1065.10.
    (e) This subpart is addressed to you as a manufacturer, but it
applies equally to anyone who does testing for you, and to us when we
perform testing to determine if your engines meet emission standards.
    (f) Duty-cycle testing is limited to ambient temperatures of 20 to
30 [deg]C. Atmospheric pressure must be between 91.000 and 103.325 kPa,
and must be within 5 percent of the value recorded at the
time of the last engine map. Testing may be performed with any ambient
humidity level. Correct duty-cycle NOX emissions for
humidity as specified in 40 CFR part 1065.

Sec.  1042.505  Testing engines using discrete-mode or ramped-modal
duty cycles.

    This section describes how to test engines under steady-state
conditions. In some cases, we allow you to choose the appropriate
steady-state duty cycle for an engine. In these cases, you must use the
duty cycle you select in your application for certification for all
testing you perform for that engine family. If we test your engines to
confirm that they meet emission standards, we will use the duty cycles
you select for your own testing. We may also perform other testing as
allowed by the Clean Air Act.
    (a) You may perform steady-state testing with either discrete-mode
or ramped-modal cycles, as follows:
    (1) For discrete-mode testing, sample emissions separately for each
mode, then calculate an average emission level for the whole cycle
using the weighting factors specified for each mode. Calculate cycle
statistics and compare with the established criteria as specified in 40
CFR 1065.514 to confirm that the test is valid. Operate the engine and
sampling system as follows:
    (i) Engines with NOX aftertreatment. For engines that
depend on aftertreatment to meet the NOX emission standard,
operate the engine for 5-6 minutes, then sample emissions for 1-3
minutes in each mode. You may extend the sampling time to improve
measurement accuracy of PM emissions, using good engineering judgment.
If you have a longer sampling time for PM emissions, calculate and
validate cycle statistics separately for the gaseous and PM sampling
periods.
    (ii) Engines without NOX aftertreatment. For other
engines, operate the engine for at least 5 minutes, then sample
emissions for at least 1 minute in each mode.
    (2) For ramped-modal testing, start sampling at the beginning of
the first mode and continue sampling until the end of the last mode.
Calculate emissions and cycle statistics the same as for transient
testing as specified in 40 CFR part 1065, subpart G.
    (b) Measure emissions by testing the engine on a dynamometer with
one of the following duty cycles (as specified) to determine whether it
meets the emission standards in Sec.  1042.101(a):
    (1) General cycle. Use the 4-mode duty cycle or the corresponding
ramped-modal cycle described in paragraph (a) of Appendix II of this
part for commercial propulsion marine engines that are used with (or
intended to be used with) fixed-pitch propellers, propeller-law
auxiliary engines, and any other engines for which the other duty
cycles of this section do not apply. Use this duty cycle also for
commercial variable-speed propulsion marine engines that are used with
(or intended to be used with) controllable-pitch propellers or with
electrically coupled propellers, unless these engines are not intended
for sustained operation (e.g., for at least 30 minutes) at all four
modes when installed in the vessel.
    (2) Recreational marine engines. Except as specified in paragraph
(b)(3) of this section, use the 5-mode duty cycle or the corresponding
ramped-modal cycle described in paragraph (b) of Appendix II of this
part for recreational marine engines with maximum engine power at or
above 37 kW.
    (3) Controllable-pitch and electrically coupled propellers. Use the
4-mode duty cycle or the corresponding ramped-modal cycle described in
paragraph (c) of Appendix II of this part for constant-speed propulsion
marine engines that are used with (or intended to be used with)
controllable-pitch propellers or with electrically coupled propellers.
Use this duty cycle also for variable-speed propulsion marine engines
that are used with (or intended to be used with) controllable-pitch
propellers or with electrically coupled propellers if the duty cycles
in paragraph (b)(1) and (b)(2) of this section do not apply.
    (4) Constant-speed auxiliary engines. Use the 5-mode duty cycle or
the corresponding ramped-modal cycle

described in 40 CFR part 1039, Appendix II, paragraph (a) for constant-
speed auxiliary engines.
    (5) Variable-speed auxiliary engines. (i) Use the duty cycle
specified in paragraph (b)(1) of this section for propeller-law
auxiliary engines.
    (ii) Use the 6-mode duty cycle or the corresponding ramped-modal
cycle described in 40 CFR part 1039, Appendix II, paragraph (b) for
variable-speed auxiliary engines with maximum engine power below 19 kW
that are not propeller-law engines.
    (iii) Use the 8-mode duty cycle or the corresponding ramped-modal
cycle described in 40 CFR part 1039, Appendix III, paragraph (c) for
variable-speed auxiliary engines with maximum engine power at or above
19 kW that are not propeller-law engines.
    (c) During idle mode, operate the engine at its warm idle speed as
described in 40 CFR part 1065.
    (d) For constant-speed engines whose design prevents full-load
operation for extended periods, you may ask for approval under 40 CFR
1065.10(c) to replace full-load operation with the maximum load for
which the engine is designed to operate for extended periods.
    (e) See 40 CFR part 1065 for detailed specifications of tolerances
and calculations.

Sec.  1042.515  Test procedures related to not-to-exceed standards.

    (a) This section describes the procedures to determine whether your
engines meet the not-to-exceed emission standards in Sec.  1042.101(c).
These procedures may include any normal engine operation and ambient
conditions that the engines may experience in use. Paragraphs (c)
through (e) of this section define the limits of what we will consider
normal engine operation and ambient conditions.
    (b) Measure emissions with one of the following procedures:
    (1) Remove the selected engines for testing in a laboratory. You
may use an engine dynamometer to simulate normal operation, as
described in this section. Use the equipment and procedures specified
in 40 CFR part 1065 to conduct laboratory testing.
    (2) Test the selected engines while they remain installed in a
vessel. Use the equipment and procedures specified in 40 CFR part 1065
subpart J, to conduct field testing. Use fuel meeting the
specifications of 40 CFR part 1065, subpart H, or a fuel typical of
what you would expect the engine to use in service.
    (c) Engine testing may occur under the following ranges of ambient
conditions without correcting measured emission levels:
    (1) Atmospheric pressure must be between 96.000 and 103.325 kPa,
except that manufacturers may test at lower atmospheric pressures if
their test facility is located at an altitude that makes it impractical
to stay within this range. This pressure range is intended to allow
testing under most weather conditions at all altitudes up to 1,100 feet
above sea level.
    (2) Ambient air temperature must be between 13 and 35 [deg]C (or
between 13 [deg]C and 30 [deg]C for engines not drawing intake air
directly from a space that could be heated by the engine).
    (3) Ambient water temperature must be between 5 and 27 [deg]C.
    (4) Ambient humidity must be between 7.1 and 10.7 grams of moisture
per kilogram of dry air.
    (d) Engine testing may occur at any conditions expected during
normal operation but that are outside the conditions described in
paragraph (b) of this section, as long as measured values are corrected
to be equivalent to the nearest end of the specified range, using good
engineering judgment. Correct NOX emissions for humidity as
specified in 40 CFR part 1065, subpart G.
    (e) The sampling period may not begin until the engine has reached
stable operating temperatures. For example, this would include only
engine operation after starting and after the engine thermostat starts
modulating the engine's coolant temperature. The sampling period may
not include engine starting.
    (f) Apply the NTE standards specified in Sec.  1042.101(c) to an
engine family based on the zones and subzones corresponding to specific
duty cycles and engine types as defined in Appendix III of this part.
For an engine family certified to multiple duty cycles, the broadest
applicable NTE zone applies for that family at the time of
certification. Whenever an engine family is certified to multiple duty
cycles and a specific engine from that family is tested for NTE
compliance in use, determine the applicable NTE zone for that engine
according to its in-use application. An engine family's NTE zone may be
modified as follows:
    (1) You may ask us to approve a narrower NTE zone for an engine
family at the time of certification, based on information such as how
that engine family is expected to normally operate in use. For example,
if an engine family is always coupled to a pump or jet drive, the
engine might be able to operate only within a narrow range of engine
speed and power.
    (2) You may ask us to approve a Limited Testing Region (LTR). An
LTR is a region of engine operation, within the applicable NTE zone,
where you have demonstrated that your engine family operates for no
more than 5.0 percent of its normal in-use operation, on a time-
weighted basis. You must specify an LTR using boundaries based on
engine speed and power (or torque), where the LTR boundaries must
coincide with some portion of the boundary defining the overall NTE
zone. Any emission data collected within an LTR for a time duration
that exceeds 5.0 percent of the duration of its respective NTE sampling
period (as defined in paragraph (c)(3) of this section) will be
excluded when determining compliance with the applicable NTE standards.
Any emission data collected within an LTR for a time duration of 5.0
percent or less of the duration of the respective NTE sampling period
will be included when determining compliance with the NTE standards.
    (3) You must notify us if you design your engines for normal in-use
operation outside the applicable NTE zone. If we learn that normal in-
use operation for your engines includes other speeds and loads, we may
specify a broader NTE zone, as long as the modified zone is limited to
normal in-use operation for speeds greater than 70 percent of maximum
test speed and loads greater than 30 percent of maximum power at
maximum test speed (or 30 percent of maximum test torque for constant-
speed engines).
    (4) You may exclude emission data based on ambient or engine
parameter limit values as follows:
    (i) NOX catalytic aftertreatment minimum temperature. For an engine
equipped with a catalytic NOX aftertreatment system, exclude
NOX emission data that is collected when the exhaust
temperature is less than 250 [deg]C, as measured within 30 cm
downstream of the last NOX aftertreatment device. Where
there are parallel paths, measure the temperature 30 cm downstream of
the last NOX aftertreatment device in the path with the
greatest exhaust flow.
    (ii) Oxidizing aftertreatment minimum temperature. For an engine
equipped with an oxidizing catalytic aftertreatment system, exclude HC,
CO, and PM emission data that is collected when the exhaust temperature
is less than 250 [deg]C, as measured within 30 cm downstream of the
last oxidizing aftertreatment device. Where there are parallel paths,
measure the temperature 30 cm downstream of the last oxidizing

aftertreatment device in the path with the greatest exhaust flow.
    (iii) Other parameters. You may request our approval for other
minimum or maximum ambient or engine parameter limit values at the time
of certification.
    (g) For engines equipped with emission controls that include
discrete regeneration events, if a regeneration event occurs during the
NTE test, the averaging period must be at least as long as the time
between the events multiplied by the number of full regeneration events
within the sampling period. This requirement applies only for engines
that send an electronic signal indicating the start of the regeneration
event.

Sec.  1042.520  What testing must I perform to establish deterioration
factors?

    Sections 1042.240 and 1042.245 describe the required methods for
testing to establish deterioration factors for an engine family.

Sec.  1042.525  How do I adjust emission levels to account for
infrequently regenerating aftertreatment devices?

    This section describes how to adjust emission results from engines
using aftertreatment technology with infrequent regeneration events.
See paragraph (e) of this section for how to adjust ramped-modal
testing. See paragraph (f) of this section for how to adjust discrete-
mode testing. For this section, ``regeneration'' means an intended
event during which emission levels change while the system restores
aftertreatment performance. For example, exhaust gas temperatures may
increase temporarily to remove sulfur from adsorbers or to oxidize
accumulated particulate matter in a trap. For this section,
``infrequent'' refers to regeneration events that are expected to occur
on average less than once over the applicable transient duty cycle or
ramped-modal cycle, or on average less than once per typical mode in a
discrete-mode test.
    (a) Developing adjustment factors. Develop an upward adjustment
factor and a downward adjustment factor for each pollutant based on
measured emission data and observed regeneration frequency. Adjustment
factors should generally apply to an entire engine family, but you may
develop separate adjustment factors for different engine configurations
within an engine family. If you use adjustment factors for
certification, you must identify the frequency factor, F, from
paragraph (b) of this section in your application for certification and
use the adjustment factors in all testing for that engine family. You
may use carryover or carry-across data to establish adjustment factors
for an engine family, as described in Sec.  1042.235(d), consistent
with good engineering judgment. All adjustment factors for regeneration
are additive. Determine adjustment factors separately for different
test segments. For example, determine separate adjustment factors for
different modes of a discrete-mode steady-state test. You may use
either of the following different approaches for engines that use
aftertreatment with infrequent regeneration events:
    (1) You may disregard this section if regeneration does not
significantly affect emission levels for an engine family (or
configuration) or if it is not practical to identify when regeneration
occurs. If you do not use adjustment factors under this section, your
engines must meet emission standards for all testing, without regard to
regeneration.
    (2) If your engines use aftertreatment technology with extremely
infrequent regeneration and you are unable to apply the provisions of
this section, you may ask us to approve an alternate methodology to
account for regeneration events.
    (b) Calculating average adjustment factors. Calculate the average
adjustment factor (EFA) based on the following equation:

EFA = (F)(EFH) + (1-F)(EFL)

Where:
F = the frequency of the regeneration event during normal in-use
operation, expressed in terms of the fraction of equivalent tests
during which the regeneration occurs. You may determine F from in-
use operating data or running replicate tests. For example, if you
observe that the regeneration occurs 125 times during 1000 MW-hrs of
operation, and your engine typically accumulates 1 MW-hr per test, F
would be (125) / (1000) / (1) = 0.125.
EFH = Measured emissions from a test segment in which the
regeneration occurs.
EFL = Measured emissions from a test segment in which the
regeneration does not occur.

    (c) Applying adjustment factors. Apply adjustment factors based on
whether regeneration occurs during the test run. You must be able to
identify regeneration in a way that is readily apparent during all
testing.
    (1) If regeneration does not occur during a test segment, add an
upward adjustment factor to the measured emission rate. Determine the
upward adjustment factor (UAF) using the following equation:

UAF = EFA-EFL

    (2) If regeneration occurs or starts to occur during a test
segment, subtract a downward adjustment factor from the measured
emission rate. Determine the downward adjustment factor (DAF) using the
following equation:

DAF = EFH-EFA

    (d) Sample calculation. If EFL is 0.10 g/kW-hr,
EFH is 0.50 g/kW-hr, and F is 0.1 (the regeneration occurs
once for each ten tests), then:

EFA = (0.1)(0.5 g/kW-hr) + (1.0-0.1)(0.1 g/kW-hr) = 0.14 g/
kW-hr.
UAF = 0.14 g/kW-hr-0.10 g/kW-hr = 0.04 g/kW-hr.
DAF = 0.50 g/kW-hr-0.14 g/kW-hr = 0.36 g/kW-hr.

    (e) Ramped-modal testing. Develop a single sets of adjustment
factors for the entire test. If a regeneration has started but has not
been completed when you reach the end of a test, use good engineering
judgment to reduce your downward adjustments to be proportional to the
emission impact that occurred in the test.
    (f) Discrete-mode testing. Develop separate adjustment factors for
each test mode. If a regeneration has started but has not been
completed when you reach the end of the sampling time for a test mode
extend the sampling period for that mode until the regeneration is
completed.

Subpart G--Special Compliance Provisions

Sec.  1042.601  General compliance provisions for marine engines and
vessels.

    Engine and vessel manufacturers, as well as owners, operators, and
rebuilders of engines and vessels subject to the requirements of this
part, and all other persons, must observe the provisions of this part,
the requirements and prohibitions in 40 CFR part 1068, and the
provisions of the Clean Air Act. The provisions of 40 CFR part 1068
apply for compression-ignition marine engines as specified in that
part, subject to the following provisions:
    (a) The following prohibitions apply with respect to recreational
marine engines and recreational vessels:
    (1) Installing a recreational marine engine in a vessel that is not
a recreational vessel is a violation of 40 CFR 1068.101(a)(1).
    (2) For a vessel with an engine that is certified and labeled as a
recreational marine engine, using it in a manner inconsistent with its
intended use as a recreational vessel violates 40 CFR 1068.101(a)(1),
except as allowed by this chapter.
    (b) Subpart I of this part describes how the prohibitions of 40 CFR
1068.101(a)(1) apply for remanufactured engines. The provisions of 40
CFR

1068.105 do not allow the installation of a new remanufactured engine
in a vessel that is defined as a ``new vessel'' unless the
remanufactured engine is subject to the same standards as the standards
applicable to freshly manufactured engines of the required model year.
    (c) The provisions of 40 CFR 1068.120 apply when rebuilding marine
engines, except as specified in subpart I of this part. The following
additional requirements also apply when rebuilding marine engines
equipped with exhaust aftertreatment:
    (1) Follow all instructions from the engine manufacturer and
aftertreatment manufacturer for checking, repairing, and replacing
aftertreatment components. For example, you must replace the catalyst
if the catalyst assembly is stamped with a build date more than ten
years ago and the manufacturer's instructions state that catalysts over
ten years old must be replaced when the engine is rebuilt.
    (2) Measure pressure drop across the catalyst assembly to ensure
that it is neither higher nor lower than the manufacturer's
specifications and repair or replace exhaust-system components as
needed to bring the pressure drop within the manufacturer's
specifications.
    (3) For engines equipped with exhaust sensors, verify that sensor
outputs are within the manufacturer's recommended range and repair or
replace any malfunctioning components (sensors, catalysts, or other
components).
    (d) The provisions of Sec.  1042.635 for the national security
exemption apply instead of 40 CFR 1068.225.
    (e) For replacement engines, apply the provisions of 40 CFR
1068.240 as described in Sec.  1042.615.
    (f) For the purpose of meeting the defect-reporting requirements in
40 CFR 1068.501, if you manufacture other nonroad engines that are
substantially similar to your marine engines, you may consider defects
using combined marine and non-marine families.
    (g) For a marine engine labeled as requiring the use of ultra low-
sulfur diesel fuel, is a violation of 40 CFR 1068.101(b)(1) to operate
it with higher-sulfur fuel. It is also a violation of 40 CFR
1068.101(b)(1) if an engine installer or vessel manufacturer fails to
follow the engine manufacturer's emission-related installation
instructions when installing a certified engine in a marine vessel.

Sec.  1042.605  Dressing engines already certified to other standards
for nonroad or heavy-duty highway engines for marine use.

    (a) General provisions. If you are an engine manufacturer
(including someone who marinizes a land-based engine), this section
allows you to introduce new marine engines into U.S. commerce if they
are already certified to the requirements that apply to compression-
ignition engines under 40 CFR parts 85 and 86 or 40 CFR part 89, 92,
1033, or 1039 for the appropriate model year. If you comply with all
the provisions of this section, we consider the certificate issued
under 40 CFR part 86, 89, 92, 1033, or 1039 for each engine to also be
a valid certificate of conformity under this part 1042 for its model
year, without a separate application for certification under the
requirements of this part 1042.
    (b) Vessel-manufacturer provisions. If you are not an engine
manufacturer, you may install an engine certified for the appropriate
model year under 40 CFR part 86, 89, 92, 1033, or 1039 in a marine
vessel as long as you do not make any of the changes described in
paragraph (d)(3) of this section and you meet the requirements of
paragraph (e) of this section. If you modify the non-marine engine in
any of the ways described in paragraph (d)(3) of this section, we will
consider you a manufacturer of a new marine engine. Such engine
modifications prevent you from using the provisions of this section.
    (c) Liability. Engines for which you meet the requirements of this
section are exempt from all the requirements and prohibitions of this
part, except for those specified in this section. Engines exempted
under this section must meet all the applicable requirements from 40
CFR parts 85 and 86 or 40 CFR part 89, 92, 1033, or 1039. This
paragraph (c) applies to engine manufacturers, vessel manufacturers
that use such an engine, and all other persons as if the engine were
used in its originally intended application. The prohibited acts of 40
CFR 1068.101(a)(1) apply to these new engines and vessels; however, we
consider the certificate issued under 40 CFR part 86, 89, 92, 1033, or
1039 for each engine to also be a valid certificate of conformity under
this part 1042 for its model year. If we make a determination that
these engines do not conform to the regulations during their useful
life, we may require you to recall them under 40 CFR part 85, 89, 92,
or 1068.
    (d) Specific criteria and requirements. If you are an engine
manufacturer and meet all the following criteria and requirements
regarding your new marine engine, the engine is eligible for an
exemption under this section:
    (1) You must produce it by marinizing an engine covered by a valid
certificate of conformity from one of the following programs:
    (i) Heavy-duty highway engines (40 CFR part 86).
    (ii) Land-based compression-ignition nonroad engines (40 CFR part
89 or 1039).
    (iii) Locomotives (40 CFR part 92 or 1033). To be eligible for
dressing under this section, the engine must be from a locomotive
certified to standards that are at least as stringent as either the
standards applicable to new marine engines or freshly manufactured
locomotives in the model year that the engine is being dressed.
    (2) The engine must have the label required under 40 CFR part 86,
89, 92, 1033, or 1039.
    (3) You must not make any changes to the certified engine that
could reasonably be expected to increase its emissions. For example, if
you make any of the following changes to one of these engines, you do
not qualify for the engine dressing exemption:
    (i) Change any fuel system parameters from the certified
configuration, or change, remove, or fail to properly install any other
component, element of design, or calibration specified in the engine
manufacturer's application for certification. This includes
aftertreatment devices and all related components.
    (ii) Replacing an original turbocharger, except that small-volume
engine manufacturers may replace an original turbocharger on a
recreational engine with one that matches the performance of the
original turbocharger.
    (iii) Modify or design the marine engine cooling or aftercooling
system so that temperatures or heat rejection rates are outside the
original engine manufacturer's specified ranges.
    (4) You must show that fewer than 10 percent of the engine family's
total sales in the United States are used in marine applications. This
includes engines used in any application, without regard to which
company manufactures the vessel or equipment. Show this as follows:
    (i) If you are the original manufacturer of the engine, base this
showing on your sales information.
    (ii) In all other cases, you must confirm this based on your best
estimate of the original manufacturer's sales information.
    (e) Labeling and documentation. If you are an engine manufacturer
or

vessel manufacturer using this exemption, you must do all of the
following:
    (1) Make sure the original engine label will remain clearly visible
after installation in the vessel.
    (2) Add a permanent supplemental label to the engine in a position
where it will remain clearly visible after installation in the vessel.
In your engine label, do the following:
    (i) Include the heading: ``Marine Engine Emission Control
Information''.
    (ii) Include your full corporate name and trademark.
    (iii) State: ``This engine was marinized without affecting its
emission controls.''.
    (iv) State the date you finished marinizing the engine (month and
year).
    (3) Send the Designated Compliance Officer a signed letter by the
end of each calendar year (or less often if we tell you) with all the
following information:
    (i) Identify your full corporate name, address, and telephone
number.
    (ii) List the engine models for which you expect to use this
exemption in the coming year and describe your basis for meeting the
sales restrictions of paragraph (d)(4) of this section.
    (iii) State: ``We prepare each listed engine model for marine
application without making any changes that could increase its
certified emission levels, as described in 40 CFR 1042.605.''.
    (f) Failure to comply. If your engines do not meet the criteria
listed in paragraph (d) of this section, they will be subject to the
standards, requirements, and prohibitions of this part 1042 and the
certificate issued under 40 CFR part(s) 86, 89, 92, 1033, or 1039 will
not be deemed to also be a certificate issued under this part 1042.
Introducing these engines into U.S. commerce as marine engines without
a valid exemption or certificate of conformity under this part violates
the prohibitions in 40 CFR 1068.101(a)(1).
    (g) Data submission. (1) If you are both the original manufacturer
and marinizer of an exempted engine, you must send us emission test
data on the appropriate marine duty cycles. You can include the data in
your application for certification or in the letter described in
paragraph (e)(3) of this section.
    (2) If you are the original manufacturer of an exempted engine that
is marinized by a post-manufacture marinizer, you may be required to
send us emission test data on the appropriate marine duty cycles. If
such data are requested you will be allowed a reasonable amount of time
to collect the data.
    (h) Participation in averaging, banking and trading. Engines
adapted for marine use under this section may not generate or use
emission credits under this part 1042. These engines may generate
credits under the ABT provisions in 40 CFR part(s) 86, 89, 92, 1033, or
1039, as applicable. These engines must use emission credits under 40
CFR part(s) 86, 89, 92, 1033, or 1039 as applicable if they are
certified to an FEL that exceeds an emission standard.
    (i) Operator requirements. The requirements specified for vessel
manufacturers, owners, and operators in this subpart (including
requirements in 40 CFR part 1068) apply to these engines whether they
are certified under this part 1042 or another part as allowed by this
section.

Sec.  1042.610  Certifying auxiliary marine engines to land-based
standards.

    This section applies to auxiliary marine engines that are identical
to certified land-based engines. See Sec.  1042.605 for provisions that
apply to propulsion marine engines or auxiliary marine engines that are
modified for marine applications.
    (a) General provisions. If you are an engine manufacturer, this
section allows you to introduce new marine engines into U.S. commerce
if they are already certified to the requirements that apply to
compression-ignition engines under 40 CFR part 89 or 1039 for the
appropriate model year. If you comply with all the provisions of this
section, we consider the certificate issued under 40 CFR part 89 or
1039 for each engine to also be a valid certificate of conformity under
this part 1042 for its model year, without a separate application for
certification under the requirements of this part 1042.
    (b) Vessel-manufacturer provisions. If you are not an engine
manufacturer, you may install an engine certified for land-based
applications in a marine vessel as long as you meet all the qualifying
criteria and requirements specified in paragraphs (d) and (e) of this
section. If you modify the non-marine engine, we will consider you a
manufacturer of a new marine engine. Such engine modifications prevent
you from using the provisions of this section.
    (c) Liability. Engines for which you meet the requirements of this
section are exempt from all the requirements and prohibitions of this
part, except for those specified in this section. Engines exempted
under this section must meet all the applicable requirements from 40
CFR part 89 or 1039. This paragraph (c) applies to engine
manufacturers, vessel manufacturers that use such an engine, and all
other persons as if the engine were used in its originally intended
application. The prohibited acts of 40 CFR 1068.101(a)(1) apply to
these new engines and vessels; however, we consider the certificate
issued under 40 CFR part 89 or 1039 for each engine to also be a valid
certificate of conformity under this part 1042 for its model year. If
we make a determination that these engines do not conform to the
regulations during their useful life, we may require you to recall them
under 40 CFR part 89 or 1068.
    (d) Qualifying criteria. If you are an engine manufacturer and meet
all the following criteria and requirements regarding your new marine
engine, the engine is eligible for an exemption under this section:
    (1) The marine engine must be identical in all material respects to
a land-based engine covered by a valid certificate of conformity for
the appropriate model year showing that it meets emission standards for
engines of that power rating under 40 CFR part 89 or 1039.
    (2) The engines may not be used as propulsion marine engines.
    (3) You must show that the number of auxiliary marine engines from
the engine family must be smaller than the number of land-based engines
from the engine family sold in the United States, as follows:
    (i) If you are the original manufacturer of the engine, base this
showing on your sales information.
    (ii) In all other cases, you must get the original manufacturer of
the engine to confirm this based on its sales information.
    (e) Specific requirements. If you are an engine manufacturer or
vessel manufacturer using this exemption, you must do all of the
following:
    (1) Make sure the original engine label will remain clearly visible
after installation in the vessel. This label or a supplemental label
must identify that the original certification is valid for auxiliary
marine applications.
    (2) Send a signed letter to the Designated Compliance Officer by
the end of each calendar year (or less often if we tell you) with all
the following information:
    (i) Identify your full corporate name, address, and telephone
number.
    (ii) List the engine models you expect to produce under this
exemption in the coming year and describe your basis for meeting the
sales restrictions of paragraph (d)(3) of this section.
    (iii) State: ``We produce each listed engine model for marine
application without making any changes that could increase its
certified emission levels, as described in 40 CFR 1042.610.''.
    (3) If you are the certificate holder, you must describe in your
application

for certification how you plan to produce engines for both land-based
and auxiliary marine applications, including projected sales of
auxiliary marine engines to the extent this can be determined. If the
projected marine sales are substantial, we may ask for the year-end
report of production volumes to include actual auxiliary marine engine
sales.
    (f) Failure to comply. If your engines do not meet the criteria
listed in paragraph (d) of this section, they will be subject to the
standards, requirements, and prohibitions of this part 1042 and the
certificate issued under 40 CFR part 89 or 1039 will not be deemed to
also be a certificate issued under this part 1042. Introducing these
engines into U.S. commerce as marine engines without a valid exemption
or certificate of conformity under this part 1042 violates the
prohibitions in 40 CFR 1068.101(a)(1).
    (g) Participation in averaging, banking and trading. Engines using
this exemption may not generate or use emission credits under this part
1042. These engines may generate credits under the ABT provisions in 40
CFR part 89 or 1039, as applicable. These engines must use emission
credits under 40 CFR part 89 or 1039 as applicable if they are
certified to an FEL that exceeds an emission standard.
    (h) Operator requirements. The requirements specified for vessel
manufacturers, owners, and operators in this subpart (including
requirements in 40 CFR part 1068) apply to these engines whether they
are certified under this part 1042 or another part as allowed by this
section.

Sec.  1042.615  Replacement engine exemption.

    For replacement engines, apply the provisions of 40 CFR 1068.240 as
described in this section.
    (a) This paragraph (a) applies instead of the provisions of 40 CFR
1068.240(b)(3). The prohibitions in 40 CFR 1068.101(a)(1) do not apply
for a new replacement engine meeting Tier 3 standards if the engine
being replaced is a Tier 3 or earlier engine (this applies where new
engines would otherwise be subject to Tier 4 or later standards). For
other cases, the prohibitions in 40 CFR 1068.101(a)(1) do not apply to
a new replacement engine if all the following conditions are met:
    (1) You use good engineering judgment to determine that no engine
certified to the current requirements of this part is produced by any
manufacturer with the appropriate physical or performance
characteristics to repower the vessel.
    (2) You make a record of your determination for each replacement
engine with the following information and keep these records for eight
years:
    (i) If you determine that no engine certified to the current
requirements of this part is available with the appropriate performance
characteristics, explain why certified engines produced by you and
other manufacturers cannot be used as a replacement because they are
not similar to the engine being replaced in terms of power or speed.
    (ii) You may determine that all engines certified to the current
requirements of this part that have appropriate performance
characteristics are not available because they do not have the
appropriate physical characteristics. If this is the case, explain why
these certified engines produced by you and other manufacturers cannot
be used as a replacement because their weight or dimensions are
substantially different than those of the engine being replaced, or
because they will not fit within the vessel's engine compartment or
engine room.
    (iii) In evaluating appropriate physical or performance
characteristics, you may account for compatibility with vessel
components you would not otherwise replace when installing a new
engine, including transmissions or reduction gears, drive shafts or
propeller shafts, propellers, cooling systems, operator controls, or
electrical systems for generators or indirect-drive configurations. If
you make your determination on this basis, you must identify the vessel
components that are incompatible with engines certified to current
standards and explain how they are incompatible and why it would be
unreasonable to replace them.
    (iv) In evaluating appropriate physical or performance
characteristics, you may account for compatibility in a set of two or
more propulsion engines on a vessel where only one of the engines needs
replacement, but only if each engine not needing replacement has
operated for less than 75 percent of its applicable useful life in
hours or years (see Sec.  1042.101). If any engine not otherwise
needing replacement exceeds this 75 percent threshold, your
determination must consider replacement of all the propulsion engines.
    (v) In addition to the determination specified in paragraph (a)(1)
of this section, you must make a separate determination for your own
product line addressing every tier of emission standards that is more
stringent than the emission standards for the engine being replaced.
For example, if the engine being replaced was built before the Tier 1
standards started to apply and engines of that size are currently
subject to Tier 3 standards, you must consider whether any Tier 1 or
Tier 2 engines that you produce have the appropriate physical and
performance characteristics for replacing the old engine; if you can
produce a Tier 2 engine with the appropriate physical and performance
characteristics, you must use it as the replacement engine.
    (3) You must notify us within 30 days after you ship each
replacement engine under this section. Your notification must include
all the following things and be signed by an authorized representative
of your company:
    (i) A copy of your records describing how you made the
determination described in paragraph (a)(2) of this section for this
particular engine.
    (ii) The total number of replacement engines you have shipped in
the applicable calendar year, from all your marine engine models.
    (iii) The following statement:
    I certify that the statements and information in the enclosed
document are true, accurate, and complete to the best of my knowledge.
I am aware that there are significant civil and criminal penalties for
submitting false statements and information, or omitting required
statements and information.
    (4) We may reduce the reporting and recordkeeping requirements in
this section.
    (b) Modifying a vessel to significantly increase its value within
six months after installing a replacement engine produced under this
section is a violation of 40 CFR 1068.101(a)(1).
    (c) We may void an exemption for an engine if we determine that any
of the conditions described in paragraph (a) of this section are not
met.

Sec.  1042.620  Engines used solely for competition.

    The provisions of this section apply for new engines and vessels
built on or after January 1, 2009.
    (a) We may grant you an exemption from the standards and
requirements of this part for a new engine on the grounds that it is to
be used solely for competition. The requirements of this part, other
than those in this section, do not apply to engines that we exempt for
use solely for competition. The prohibitions in Sec.  1068.101(a)(1) do
not apply to engines exempted under this section.
    (b) We will exempt engines that we determine will be used solely
for competition. The basis of our determination is described in
paragraphs (c) and (d) of this section. Exemptions granted under this
section

are good for only one model year and you must request renewal for each
subsequent model year. We will not approve your renewal request if we
determine the engine will not be used solely for competition.
    (c) Engines meeting all the following criteria are considered to be
used solely for competition:
    (1) Neither the engine nor any vessels containing the engine may be
displayed for sale in any public dealership or otherwise offered for
sale to the general public.
    (2) Sale of the vessel in which the engine is installed must be
limited to professional racing teams, professional racers, or other
qualified racers. Keep records documenting this, such as a letter
requesting an exempted engine.
    (3) The engine and the vessel in which it is installed must have
performance characteristics that are substantially superior to
noncompetitive models.
    (4) The engines are intended for use only as specified in paragraph
(e) of this section.
    (d) You may ask us to approve an exemption for engines not meeting
the applicable criteria listed in paragraph (c) of this section as long
as you have clear and convincing evidence that the engines will be used
solely for competition.
    (e) Engines will not be considered to be used solely for
competition if they are ever used for any recreational or other
noncompetitive purpose. This means that their use must be limited to
competition events sanctioned by the U.S. Coast Guard or another public
organization with authorizing permits for participating competitors.
Operation for such engines may include only racing events or trials to
qualify for racing events. Authorized attempts to set speed records
(and the associated official trials) are also considered racing events.
Any use of exempt engines in recreational events, such as poker runs
and lobsterboat races, is a violation of 40 CFR 1068.101(b)(4).
    (f) You must permanently label engines exempted under this section
to clearly indicate that they are to be used only for competition.
Failure to properly label an engine will void the exemption for that
engine.
    (g) If we request it, you must provide us any information we need
to determine whether the engines or vessels are used solely for
competition. This would include documentation regarding the number of
engines and the ultimate purchaser of each engine. Keep these records
for five years.

Sec.  1042.625  Special provisions for engines used in emergency
applications.

    (a) Except as specified in paragraph (d) of this section, the
prohibitions in Sec.  1068.101(a)(1) do not apply to a new engine that
is subject to Tier 4 standards if the following conditions are met:
    (1) The engine is intended for installation in one of the following
vessels or applications:
    (i) A lifeboat approved by the U.S. Coast Guard under approval
series 160.135 (see for example 46 CFR 199.201(a)(1)), as long as such
a vessel is not also used as a launch or tender.
    (ii) A rescue boat approved by the U.S. Coast Guard under approval
series 160.156 (see for example 46 CFR 199.202(a)).
    (iii) Generator sets or other auxiliary equipment that qualify as
final emergency power sources under 46 CFR part 112.
    (2) The engine meets the Tier 3 emission standards specified in
Sec.  1042.101 as specified in 40 CFR 1068.265.
    (3) The engine is used only for its intended purpose, as specified
on the emission control information label.
    (b) Except as specified in paragraph (d) of this section, the
prohibitions in Sec.  1068.101(a)(1) do not apply to a new engine that
is subject to Tier 3 standards according to the following provisions:
    (1) The engine must be intended for installation in a lifeboat or a
rescue boat as specified in paragraph (a)(1)(i) or (ii) of this
section.
    (2) This exemption is available from the initial effective date for
the Tier 3 standards until the engine model (or one of comparable size,
weight, and performance) has been certified as complying with the Tier
3 standards and Coast Guard requirements.
    (3) The engine must meet the Tier 2 emission standards specified in
Appendix I of this part as specified in 40 CFR 1068.265.
    (c) If you introduce an engine into U.S. commerce under this
section, you must meet the labeling requirements in Sec.  1042.135, but
add one of the following statements instead of the compliance statement
in Sec.  1042.135(c)(10):
    (1) For lifeboats and rescue boats, add the following statement:
    THIS ENGINE DOES NOT COMPLY WITH CURRENT U.S. EPA EMISSION
STANDARDS UNDER 40 CFR 1042.625 AND IS FOR USE SOLELY IN LIFEBOATS OR
RESCUE BOATS (COAST GUARD APPROVAL SERIES 160.135 OR 160.156).
INSTALLATION OR USE OF THIS ENGINE IN ANY OTHER APPLICATION MAY BE A
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (2) For engines serving as final emergency power sources, add the
following statement:
    THIS ENGINE DOES NOT COMPLY WITH CURRENT U.S. EPA EMISSION
STANDARDS UNDER 40 CFR 1042.625 AND IS FOR USE SOLELY IN EMERGENCY
EQUIPMENT REGULATED BY 46 CFR 112. INSTALLATION OR USE OF THIS ENGINE
IN ANY OTHER APPLICATION MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO
CIVIL PENALTY.
    (d) Introducing into commerce a vessel containing an engine
exempted under this section violates the prohibitions in 40 CFR
1068.101(a)(1) where the vessel is not covered by paragraph (a) or (b)
of this section, unless it is exempt under a different provision.
Similarly, using such an engine or vessel as something other than a
lifeboat, rescue boat, or emergency engine as specified in paragraph
(a)(1) of this section violates the prohibitions in 40 CFR
1068.101(a)(1), unless it is exempt under a different provision.

Sec.  1042.630  Personal-use exemption.

    This section applies to individuals who manufacture vessels for
personal use. If you and your vessel meet all the conditions of this
section, the vessel and its engine are considered to be exempt from the
standards and requirements of this part that apply to new engines and
new vessels. The prohibitions in Sec.  1068.101(a)(1) do not apply to
engines exempted under this section. For example, you may install an
engine that was not certified as a marine engine.
    (a) The vessel may not be manufactured from a previously certified
vessel, nor may it be manufactured from a partially complete vessel
that is equivalent to a certified vessel. The vessel must be
manufactured primarily from unassembled components, but may incorporate
some preassembled components. For example, fully preassembled steering
assemblies may be used. You may also power the vessel with an engine
that was previously used in a highway or land-based nonroad
application.
    (b) The vessel may not be sold within five years after the date of
final assembly.
    (c) No individual may manufacture more than one vessel in any ten-
year period under this exemption.
    (d) You may not use the vessel in any revenue-generating service or
for any other commercial purpose, except that you may use a vessel
exempt under this section for commercial fishing that you personally
do.

    (e) This exemption may not be used to circumvent the requirements
of this part or the requirements of the Clean Air Act. For example,
this exemption would not cover a case in which a person sells an almost
completely assembled vessel to another person, who would then complete
the assembly. This would be considered equivalent to the sale of the
complete new vessel. This section also does not allow engine
manufacturers to produce new engines that are exempt from emission
standards and it does not provide an exemption from the prohibition
against tampering with certified engines.
    (f) The vessel must be a vessel that is not classed or subject to
Coast Guard inspections or surveys.

Sec.  1042.635  National security exemption.

    The standards and requirements of this part and prohibitions in
Sec.  1068.101(a)(1) do not apply to engines exempted under this
section.
    (a) You are eligible for the exemption for national security only
if you are a manufacturer.
    (b) Your engine is exempt without a request if it will be used or
owned by an agency of the federal government responsible for national
defense, where the vessel has armor, permanently attached weaponry,
specialized electronic warfare systems, unique stealth performance
requirements, and/or unique combat maneuverability requirements.
    (c) You may request a national security exemption for engines not
meeting the conditions of paragraph (b) of this section, as long as
your request is endorsed by an agency of the federal government
responsible for national defense. In your request, explain why you need
the exemption.
    (d) Add a legible label, written in English, to all engines
exempted under this section. The label must be permanently secured to a
readily visible part of the engine needed for normal operation and not
normally requiring replacement, such as the engine block. This label
must include at least the following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement, family identification, and model year of
the engine (as applicable), or whom to contact for further information.
    (4) The statement ``THIS ENGINE HAS AN EXEMPTION FOR NATIONAL
SECURITY UNDER 40 CFR 1042.635.''.

Sec.  1042.640  Special provisions for branded engines.

    The following provisions apply if you identify the name and
trademark of another company instead of your own on your emission
control information label, as provided by Sec.  1042.135(c)(2):
    (a) You must have a contractual agreement with the other company
that obligates that company to take the following steps:
    (1) Meet the emission warranty requirements that apply under Sec.
1042.120. This may involve a separate agreement involving reimbursement
of warranty-related expenses.
    (2) Report all warranty-related information to the certificate
holder.
    (b) In your application for certification, identify the company
whose trademark you will use.
    (c) You remain responsible for meeting all the requirements of this
chapter, including warranty and defect-reporting provisions.

Sec.  1042.650  Migratory vessels.

    The provisions of this section address concerns for vessel owners
related to extended use of vessels with Tier 4 engines outside the
United States where ultra low-sulfur diesel fuel is not available.
    (a) Temporary exemption. A vessel owner may ask us for a temporary
exemption from the tampering prohibition in 40 CFR 1068.101(b)(1) for a
vessel if it will operate only in areas outside the United States where
ULSD is not available. In your request, describe where the vessel will
operate, how long it will operate there, why ULSD will be unavailable,
and how you will modify the engine, including its emission controls. If
we approve your request, you may modify the engine, but only as needed
to disable or remove the emission controls needed for meeting the Tier
4 standards. You must return the engine to its original certified
configuration before the vessel returns to the United States to avoid
violating the tampering prohibition in 40 CFR 1068.101(b)(1). We may
set additional conditions to prevent circumvention of the provisions of
this part.
    (b) SOLAS exemption. We may approve a permanent exemption from the
prohibitions in 40 CFR 1068.101(a)(1) for an engine that is subject to
Tier 4 standards as described in this paragraph (b).
    (1) Vessel owners may ask for a permanent exemption from the Tier 4
standards for an engine that will be installed on vessels that will
operate for extended periods outside the United States, provided they
demonstrate all of the following are true:
    (i) Prior to introduction into service, the vessel will comply with
applicable certification requirements for international safety pursuant
to the U.S. Coast Guard and the International Convention for the
Protection of Life at Sea (SOLAS). The vessel owner must maintain
compliance with these requirements for the life of the exempted engine.
    (ii) The vessel will be used in areas outside of the United States
where ULSD will not be available.
    (iii) The mix of vessels with engines certified to Tier 3 or
earlier standards in the owner's current fleet and the owner's current
business operation of those vessels makes the exemption necessary. Note
that because of the large fraction of pre-Tier 4 engines in the fleet
prior to 2021, a request for a Tier 4 exemption prior to that year must
clearly demonstrate that unusual circumstances apply.
    (2) An engine exempted under this paragraph (b) must meet the Tier
3 emission standards described in Sec.  1402.101, subject to the
procedural requirements of 40 CFR 1068.265.
    (3) If you introduce an engine into U.S. commerce under this
section, you must meet the labeling requirements in Sec.  1042.135, but
add the following statement instead of the compliance statement in
Sec.  1042.135(c)(10):
    THIS ENGINE DOES NOT COMPLY WITH CURRENT U.S. EPA EMISSION
STANDARDS UNDER 40 CFR 1042.650 AND IS FOR USE SOLELY IN SOLAS VESSELS.
INSTALLATION OR USE OF THIS ENGINE IN ANY OTHER APPLICATION MAY BE A
VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.
    (4) Operating a vessel containing an engine exempted under this
paragraph (b) violates the prohibitions in 40 CFR 1068.101(a)(1) if the
vessel in not in full compliance with applicable requirements for
international safety specified in paragraph (b)(1)(i) of this section.
    (c) Vessels less than 500 gross tons. In unusual circumstances for
vessels less than 500 gross tons, we may approve a vessel owner's
request for a permanent exemption from the prohibitions in 40 CFR
1068.101(a)(1) for an engine that is subject to Tier 4 standards that
will operate for extended periods outside the United States without it
being in compliance with applicable certification requirements for
international safety. We may set appropriate additional conditions on
such exemptions, and may void the exemption if those conditions are not
met.

Sec.  1042.660  Requirements for vessel manufacturers, owners, and
operators.

    (a) The provisions of 40 CFR part 94, subpart K, apply to
manufacturers, owners, and operators of marine vessels that contain
Category 3 engines subject to the provisions of 40 CFR part 94, subpart
A.
    (b) For vessels equipped with emission controls requiring the use
of specific fuels, lubricants, or other fluids, owners and operators
must comply with the manufacturer/remanufacturer's specifications for
such fluids when operating the vessels. Failure to comply with the
requirements of this paragraph is a violation of 40 CFR 1068.101(b)(1).
    (c) For vessels equipped with SCR systems requiring the use of urea
or other reductants, owners and operators must report to us within 30
days any operation of such vessels without the appropriate reductant.
Failure to comply with the requirements of this paragraph is a
violation of 40 CFR 1068.101(a)(2).

Subpart H--Averaging, Banking, and Trading for Certification

Sec.  1042.701  General provisions.

    (a) You may average, bank, and trade (ABT) emission credits for
purposes of certification as described in this subpart to show
compliance with the standards of this part. Participation in this
program is voluntary.
    (b) The definitions of subpart J of this part apply to this
subpart. The following definitions also apply:
    (1) Actual emission credits means emission credits you have
generated that we have verified by reviewing your final report.
    (2) Applicable emission standard means an emission standard that is
specified in subpart B of this part. Note that for other subparts,
``applicable emission standard'' is defined to also include FELs.
    (3) Averaging set means a set of engines in which emission credits
may be exchanged only with other engines in the same averaging set.
    (4) Broker means any entity that facilitates a trade of emission
credits between a buyer and seller.
    (5) Buyer means the entity that receives emission credits as a
result of a trade.
    (6) Reserved emission credits means emission credits you have
generated that we have not yet verified by reviewing your final report.
    (7) Seller means the entity that provides emission credits during a
trade.
    (8) Standard means the emission standard that applies under subpart
B of this part for engines not participating in the ABT program of this
subpart.
    (9) Trade means to exchange emission credits, either as a buyer or
seller.
    (c) Emission credits may be exchanged only within an averaging set.
Except as specified in paragraph (d) of this section, the following
criteria define the applicable averaging sets:
    (1) Recreational engines.
    (2) Commercial Category 1 engines.
    (3) Category 2 engines.
    (d) Emission credits generated by commercial Category 1 engine
families may be used for compliance by Category 2 engine families. Such
credits must be discounted by 25 percent.
    (e) You may not use emission credits generated under this subpart
to offset any emissions that exceed an FEL or standard. This applies
for all testing, including certification testing, in-use testing,
selective enforcement audits, and other production-line testing.
However, if emissions from an engine exceed an FEL or standard (for
example, during a selective enforcement audit), you may use emission
credits to recertify the engine family with a higher FEL that applies
only to future production.
    (f) Engine families that use emission credits for one or more
pollutants may not generate positive emission credits for another
pollutant.
    (g) Emission credits may be used in the model year they are
generated or in future model years. Emission credits may not be used
for past model years.
    (h) You may increase or decrease an FEL during the model year by
amending your application for certification under Sec.  1042.225.
    (i) You may use NOX+HC credits to show compliance with a
NOX emission standard or use NOX credits to show
compliance with a NOX+HC emission standard.

Sec.  1042.705  Generating and calculating emission credits.

    The provisions of this section apply separately for calculating
emission credits for NOX, NOX+HC, or PM.
    (a) For each participating family, calculate positive or negative
emission credits relative to the otherwise applicable emission
standard. Calculate positive emission credits for a family that has an
FEL below the standard. Calculate negative emission credits for a
family that has an FEL above the standard. Sum your positive and
negative credits for the model year before rounding. Round calculated
emission credits to the nearest kilogram (kg), using consistent units
throughout the following equation:

Emission credits (kg) = (Std - FEL) x (Volume) x (Power) x (LF) x (UL)
x (10-3)

Where:

Std = The emission standard, in g/kW-hr.
FEL = The family emission limit for the engine family, in g/kW-hr.
Volume = The number of engines eligible to participate in the
averaging, banking, and trading program within the given engine
family during the model year, as described in paragraph (c) of this
section.
Power = The average value of maximum engine power of all the engine
configurations within an engine family, calculated on a production-
weighted basis, in kilowatts.
LF = Load factor. Use 0.69 for propulsion marine engines and 0.51
for auxiliary marine engines. We may specify a different load factor
if we approve the use of special test procedures for an engine
family under 40 CFR 1065.10(c)(2), consistent with good engineering
judgment.
UL = The useful life for the given engine family, in hours.

    (b) [Reserved]
    (c) In your application for certification, base your showing of
compliance on projected production volumes for engines whose point of
first retail sale is in the United States. As described in Sec.
1042.730, compliance with the requirements of this subpart is
determined at the end of the model year based on actual production
volumes for engines whose point of first retail sale is in the United
States. Do not include any of the following engines to calculate
emission credits:
    (1) Engines permanently exempted under subpart G of this part or
under 40 CFR part 1068.
    (2) Exported engines.
    (3) Engines not subject to the requirements of this part, such as
those excluded under Sec.  1042.5.
    (4) [Reserved]
    (5) Any other engines, where we indicate elsewhere in this part
1042 that they are not to be included in the calculations of this
subpart.

Sec.  1042.710  Averaging emission credits.

    (a) Averaging is the exchange of emission credits among your engine
families.
    (b) You may certify one or more engine families to an FEL above the
emission standard, subject to the FEL caps and other provisions in
subpart B of this part, if you show in your application for
certification that your projected balance of all emission-credit
transactions in that model year is greater than or equal to zero.
    (c) If you certify an engine family to an FEL that exceeds the
otherwise applicable emission standard, you must

obtain enough emission credits to offset the engine family's deficit by
the due date for the final report required in Sec.  1042.730. The
emission credits used to address the deficit may come from your other
engine families that generate emission credits in the same model year,
from emission credits you have banked, or from emission credits you
obtain through trading.

Sec.  1042.715  Banking emission credits.

    (a) Banking is the retention of emission credits by the
manufacturer generating the emission credits for use in averaging or
trading in future model years.
    (b) You may use banked emission credits from the previous model
year for averaging or trading before we verify them, but we may revoke
these emission credits if we are unable to verify them after reviewing
your reports or auditing your records.
    (c) Reserved credits become actual emission credits only when we
verify them in reviewing your final report.

Sec.  1042.720  Trading emission credits.

    (a) Trading is the exchange of emission credits between
manufacturers. You may use traded emission credits for averaging,
banking, or further trading transactions.
    (b) You may trade actual emission credits as described in this
subpart. You may also trade reserved emission credits, but we may
revoke these emission credits based on our review of your records or
reports or those of the company with which you traded emission credits.
You may trade banked credits to any certifying manufacturer.
    (c) If a negative emission credit balance results from a
transaction, both the buyer and seller are liable, except in cases we
deem to involve fraud. See Sec.  1042.255(e) for cases involving fraud.
We may void the certificates of all engine families participating in a
trade that results in a manufacturer having a negative balance of
emission credits. See Sec.  1042.745.

Sec.  1042.725  Information required for the application for
certification.

    (a) You must declare in your application for certification your
intent to use the provisions of this subpart for each engine family
that will be certified using the ABT program. You must also declare the
FELs you select for the engine family for each pollutant for which you
are using the ABT program. Your FELs must comply with the
specifications of subpart B of this part, including the FEL caps. FELs
must be expressed to the same number of decimal places as the emission
standards.
    (b) Include the following in your application for certification:
    (1) A statement that, to the best of your belief, you will not have
a negative balance of emission credits for any averaging set when all
emission credits are calculated at the end of the year.
    (2) Detailed calculations of projected emission credits (positive
or negative) based on projected production volumes.

Sec.  1042.730  ABT reports.

    (a) If any of your engine families are certified using the ABT
provisions of this subpart, you must send an end-of-year report within
90 days after the end of the model year and a final report within 270
days after the end of the model year. We may waive the requirement to
send the end-of-year report, as long as you send the final report on
time.
    (b) Your end-of-year and final reports must include the following
information for each engine family participating in the ABT program:
    (1) Engine-family designation.
    (2) The emission standards that would otherwise apply to the engine
family.
    (3) The FEL for each pollutant. If you changed an FEL during the
model year, identify each FEL you used and calculate the positive or
negative emission credits under each FEL. Also, describe how the FEL
can be identified for each engine you produced. For example, you might
keep a list of engine identification numbers that correspond with
certain FEL values.
    (4) The projected and actual production volumes for the model year
with a point of first retail sale in the United States, as described in
Sec.  1042.705(c). If you changed an FEL during the model year,
identify the actual production volume associated with each FEL.
    (5) Maximum engine power for each engine configuration, and the
production-weighted average engine power for the engine family.
    (6) Useful life.
    (7) Calculated positive or negative emission credits for the whole
engine family. Identify any emission credits that you traded, as
described in paragraph (d)(1) of this section.
    (c) Your end-of-year and final reports must include the following
additional information:
    (1) Show that your net balance of emission credits from all your
participating engine families in each averaging set in the applicable
model year is not negative.
    (2) State whether you will retain any emission credits for banking.
    (3) State that the report's contents are accurate.
    (d) If you trade emission credits, you must send us a report within
90 days after the transaction, as follows:
    (1) Sellers must include the following information in their report:
    (i) The corporate names of the buyer and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) The engine families that generated emission credits for the
trade, including the number of emission credits from each family.
    (2) Buyers must include the following information in their report:
    (i) The corporate names of the seller and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) How you intend to use the emission credits, including the
number of emission credits you intend to apply to each engine family
(if known).
    (e) Send your reports electronically to the Designated Compliance
Officer using an approved information format. If you want to use a
different format, send us a written request with justification for a
waiver.
    (f) Correct errors in your end-of-year report or final report as
follows:
    (1) You may correct any errors in your end-of-year report when you
prepare the final report, as long as you send us the final report by
the time it is due.
    (2) If you or we determine within 270 days after the end of the
model year that errors mistakenly decreased your balance of emission
credits, you may correct the errors and recalculate the balance of
emission credits. You may not make these corrections for errors that
are determined more than 270 days after the end of the model year. If
you report a negative balance of emission credits, we may disallow
corrections under this paragraph (f)(2).
    (3) If you or we determine anytime that errors mistakenly increased
your balance of emission credits, you must correct the errors and
recalculate the balance of emission credits.

Sec.  1042.735  Recordkeeping.

    (a) You must organize and maintain your records as described in
this section. We may review your records at any time.
    (b) Keep the records required by this section for eight years after
the due date for the end-of-year report. You may not use emission
credits on any engines if you do not keep all the records required
under this section. You must therefore keep these records to continue
to bank valid credits. Store these records in any format and on any
media, as long as you can promptly send us organized, written records
in English if we ask for them.

You must keep these records readily available. We may review them at
any time.
    (c) Keep a copy of the reports we require in Sec.  1042.730.
    (d) Keep the following additional records for each engine you
produce that generates or uses emission credits under the ABT program:
    (1) Engine family designation.
    (2) Engine identification number. You may identify these numbers as
a range.
    (3) FEL and useful life. If you change the FEL after the start of
production, identify the date that you started using the new FEL and
give the engine identification number for the first engine covered by
the new FEL.
    (4) Maximum engine power.
    (5) Purchaser and destination.
    (e) We may require you to keep additional records or to send us
relevant information not required by this section, as allowed under the
Clean Air Act.

Sec.  1042.745  Noncompliance.

    (a) For each engine family participating in the ABT program, the
certificate of conformity is conditional upon full compliance with the
provisions of this subpart during and after the model year. You are
responsible to establish to our satisfaction that you fully comply with
applicable requirements. We may void the certificate of conformity for
an engine family if you fail to comply with any provisions of this
subpart.
    (b) You may certify your engine family to an FEL above an emission
standard based on a projection that you will have enough emission
credits to offset the deficit for the engine family. However, we may
void the certificate of conformity if you cannot show in your final
report that you have enough actual emission credits to offset a deficit
for any pollutant in an engine family.
    (c) We may void the certificate of conformity for an engine family
if you fail to keep records, send reports, or give us information we
request.
    (d) You may ask for a hearing if we void your certificate under
this section (see Sec.  1042.920).

Subpart I--Special Provisions for Remanufactured Marine Engines

Sec.  1042.801  General provisions.

    This section describes how the provisions of this part 1042 apply
for certain remanufactured marine engines.
    (a) The requirements of this subpart apply for remanufactured Tier
2 and earlier commercial marine engines at or above 600 kW, excluding
those engines originally manufactured before 1973. Note that the
requirements of this subpart do not apply for engines below 600 kW,
engines installed on recreational vessels, or Tier 3 and later engines.
    (b) Any person meeting the definition of ``remanufacturer'' in
Sec.  1042.901 may apply for a certificate of conformity for a
remanufactured engine family.
    (c) The rebuilding requirements of 40 CFR 1068.120 do not apply to
remanufacturing of engines using a certified remanufacturing system
under this subpart. However, the requirements of 40 CFR 1068.120 do
apply to all other remanufacturing of engines.
    (d) Unless specified otherwise, engines certified under this
subpart are also subject to the other requirements of this part.
    (e) For remanufactured engines required to have a valid certificate
of conformity, placing a new marine engine back into service following
remanufacturing is a violation of 40 CFR 1068.101(a)(1), unless it has
a valid certificate of conformity for its model year and the required
label.
    (f) Remanufacturing systems that require a fuel change or use of a
fuel additive may be certified under this part. However, they are not
considered to be ``available'' with respect to triggering the
requirement for an engine to be covered by a certificate of conformity
under Sec.  1042.815. The following provisions apply:
    (i) Only fuels and additives registered under 40 CFR part 79 may be
used under this paragraph.
    (ii) You must demonstrate in your application that the fuel or
additive will actually be used by operators, including a description of
how the vessels and dispensing tanks will be labeled. We may require
you to provide the labels to the operators.
    (iii) You must also describe analytical methods that can be used by
EPA or others to verify that fuel meets your specifications.
    (iv) You must provide clear instructions to the operators
specifying that they may only use the specified fuel/additive, label
their vessels and fuel dispensing tanks, and keep records of their use
of the fuel/additive in order for their engine to be covered by your
certificate. Use of the incorrect fuel (or fuel without the specified
additive) or any other failure to comply with the requirements of this
paragraph is a violation of 40 CFR 1068.101(b)(1).
    (g) Vessels equipped with emission controls as part of a state or
local retrofit program prior to January 1, 2017 are exempt from the
requirements of this subpart, as specified in this paragraph (g).
    (1) This exemption only applies for retrofit programs sponsored by
a state government (or one of its political subdivisions) for the
purpose of reducing emissions. The exemption does not apply where the
sponsoring government specifies that inclusion in the retrofit program
is not intended to provide an exemption from the requirements of this
subpart.
    (2) The prohibitions against tampering and defeat devices in 40 CFR
1068.101(b) and the rebuilding requirements in 40 CFR 1068.120 apply
for the exempt engines in the same manner as if they were covered by a
certificate.
    (3) Vessel owners must request an exemption prior to
remanufacturing the engine. Your request must include documentation
that your vessel has been retrofitted consistent with the
specifications of paragraph (g)(1) of this section, and a signed
statement declaring that to be true. Except for the initial request for
a specific vessel and a specific retrofit, you may consider your
request to be approved unless we notify you otherwise within 30 days of
the date that we receive your request.

Sec.  1042.810   Requirements for owner/operators and installers during
remanufacture.

    This section describes how the remanufacturing regulations affect
owner/operators and installers for engines subject to this subpart.
    (a) See the definition of ``remanufacture'' in Sec.  1042.901 to
determine if you are remanufacturing your engine. (Note: Replacing
cylinders one at a time may qualify as remanufacturing, depending on
the interval between replacement.)
    (b) See the definition of ``new marine engine'' in Sec.  1042.901
to determine if remanufacturing your engine makes it subject to the
requirements of this part. If the engine is considered to be new, it is
subject to the certification requirements of this subpart, unless it is
exempt under subpart G of this part.
    (c) Your engine is not subject to the standards of this part if we
determine that no certified remanufacturing system is available for
your engine as described in Sec.  1042.815. For engines that are
remanufactured during multiple events within a five-year period, you
are not required to use a certified system until all of your engine's
cylinders have been replaced after the system became available. For
example, if you remanufacture your 16-cylinder engine by replacing four
cylinders each January and a system becomes available for your engine
June 1, 2010, your engine must be in a certified configuration when you

replace four cylinders in January of 2014. At that point, all 16
cylinders would have been replaced after June 1, 2010.
    (d) You may comply with the certification requirements of this part
for your remanufactured engine by either obtaining your own certificate
of conformity as specified in subpart C of this part or by having a
certifying remanufacturer include your engine under its certificate of
conformity. In either case, your remanufactured engine must be covered
by a certificate before it is reintroduced into service.
    (e) Contact a certifying remanufacturer to have your engine
included under its certificate of conformity. You must comply with the
certificate holder's emission-related installation instructions.

Sec.  1042.815   Demonstrating availability.

    (a) A certified remanufacturing system is considered to be
available for a specific engine only if EPA has certified the
remanufacturing system as being in compliance with the provisions of
this part and the certificate holder has demonstrated during
certification that the system meets the criteria of this paragraph (a).
We may issue a certificate for a remanufacturing system that does not
meet these criteria, but such systems would not be considered
available.
    (1) The engine configuration must be included in the engine family
for the remanufacturing system.
    (2) The total marginal cost of the remanufacturing system, as
calculated under paragraph (c) of this section, must be less than
$45,000 per ton of PM reduction.
    (3) It must be possible to obtain and install the remanufacturing
system in a timely manner consistent with normal remanufacturing
procedures. For example, a remanufacturing system would generally not
be considered to be available if it required that the engine be removed
from the vessel and shipped to a factory to be remanufactured.
    (4) The remanufacturing system may result in increased maintenance
costs, provided the incremental maintenance costs are included in the
total costs. The remanufacturing system may not adversely affect engine
reliability or power. Note that owner/operators may ask us to determine
that a remanufacturing system is not considered available for their
vessels because of excessive costs under Sec.  1042.850.
    (b) We will maintain a list of available remanufacturing systems. A
new remanufacturing system is considered to be available 120 days after
we first issue a certificate of conformity for it. Where we issue a
certificate of conformity based on carryover data for a system that is
already considered to be available for the configuration, the 120-day
delay does not apply and the new system is considered to be available
when we issue the certificate.
    (c) For the purpose of paragraph (a)(2) of this section, marginal
cost means the difference in costs between remanufacturing the engine
using the remanufacturing system and remanufacturing the engine
conventionally, divided by the projected amount that PM emissions will
be reduced over the engine's useful life.
    (1) Total costs include:
    (i) Incremental hardware costs.
    (ii) Incremental labor costs.
    (iii) Incremental operating costs over one useful life period.
    (iv) Other costs (such as shipping).
    (2) Calculate the projected amount that PM emissions will be
reduced over the engine's useful life using the following equation:

PM tons = (EFbase - EFcont) x (PR) x (UL) x (LF)
x (10-6)

Where:

EFbase = deteriorated baseline PM emission rate (g/kW-hr).
EFcont = deteriorated controlled PM emission rate (g/kW-hr).
PR = maximum engine power for the engine (kW).
UL = useful life (hr).
LF = the load factor that would apply for your engine under Sec.
1042.705.

Sec.  1042.820   Emission standards and required emission reductions
for remanufactured engines.

    (a) The requirements of this section apply with respect to
emissions as measured according to subpart F of this part. See
paragraph (g) of this section for special provisions related to
remanufacturing systems certified for both locomotive and marine
engines. Remanufactured Tier 2 and earlier engines may be certified
under this subpart only if they have NOX emissions
equivalent to or less than baseline NOX levels and PM
emissions at least 25.0 percent less than baseline PM emission levels.
See Sec.  1042.825 for provisions for determining baseline
NOX and PM emissions. See Sec.  1042.835 for provisions
related to demonstrating compliance with these requirements.
    (b) The NTE and ABT provisions of this part do not apply for
remanufactured engines.
    (c) The exhaust emission standards in this section apply for
engines using the fuel type on which the engines in the engine family
are designed to operate. Engines designed to operate using residual
fuel must comply with the standards and requirements of this part when
operated using residual fuel.
    (d) Your engines must meet the exhaust emission standards of this
section over their full useful life, as defined in Sec.  1042.101(e).
    (e) The duty-cycle emission standards in this subpart apply to all
testing performed according to the procedures in Sec.  1042.505,
including certification, production-line, and in-use testing.
    (f) Sections 1042.120, 1042.125, 1042.130, 1042.140 apply for
remanufactured engines as written. Section 1042.115 applies for
remanufactured engines as written, except for the requirement that
electronically controlled engines broadcast their speed and output
shaft torque.
    (g) A remanufacturing system certified for locomotive engines under
40 CFR part 1033 may be deemed to also meet the requirements of this
section, as specified in Sec.  1042.836.

Sec.  1042.825   Baseline determination.

    (a) For the purpose of this subpart, the term ``baseline
emissions'' means the average measured emission rate specified by this
section. Baseline emissions are specific to a given certificate holder
and a given engine configuration.
    (b) Select a used engine to be the emission-data engine for the
engine family for testing. Using good engineering judgment, select the
engine configuration expected to represent the most common
configuration in the family.
    (c) Remanufacture the engine according to OEM specifications (or
equivalent). The engine is considered ``the baseline engine'' at this
point. If the OEM specifications include a range of adjustment for any
parameter, set the parameter to the midpoint of the range. You may ask
us to allow you to adjust it differently, consistent with good
engineering judgment.
    (d) Test the baseline engine four times according to the test
procedures in subpart F of this part. The baseline emissions are the
average of those four tests.
    (e) We may require you to test a second engine of the same or
different configuration in addition to the engine tested under this
section. If we require you to test the same configuration, average the
results of the testing with previous results, unless we determine that
your previous results are not valid.
    (f) Use good engineering judgment for all aspects of the baseline
determination. We may reject your baseline if we determine that you did
not use good engineering judgment,

consistent with the provisions of 40 CFR 1068.5.

Sec.  1042.830   Labeling.

    (a) At the time of remanufacture, affix a permanent and legible
label identifying each engine. The label must be--
    (1) Attached in one piece so it is not removable without being
destroyed or defaced.
    (2) Secured to a part of the engine needed for normal operation and
not normally requiring replacement.
    (3) Durable and readable for the engine's entire useful life.
    (4) Written in English.
    (b) The label must--
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark.
    (3) Include EPA's standardized designation for the engine family.
    (4) State the engine's category, displacement (in liters or L/cyl),
maximum engine power (in kW), and power density (in kW/L) as needed to
determine the emission standards for the engine family. You may specify
displacement, maximum engine power, and power density as ranges
consistent with the ranges listed in Sec.  1042.101. See Sec.  1042.140
for descriptions of how to specify per-cylinder displacement, maximum
engine power, and power density.
    (5) State: ``THIS MARINE ENGINE COMPLIES WITH 40 CFR 1042, SUBPART
I, FOR [CALENDAR YEAR OF REMANUFACTURE].''.
    (c) You may add information to the emission control information
label to identify other emission standards that the engine meets or
does not meet (such as international standards). You may also add other
information to ensure that the engine will be properly maintained and
used.
    (d) You may ask us to approve modified labeling requirements in
this section if you show that it is necessary or appropriate. We will
approve your request if your alternate label is consistent with the
intent of the labeling requirements of this section.

Sec.  1042.835  Certification of remanufactured engines.

    (a) General requirements. See Sec. Sec.  1042.201, 1042.210,
1042.220, 1042.225, 1042.250, and 1042.255 for the general requirements
related to obtaining a certificate of conformity. See Sec.  1042.836
for special certification provisions for remanufacturing systems
certified for locomotive engines under 40 CFR 1033.936.
    (b) Applications. See Sec.  1042.840 for a description of what you
must include in your application.
    (c) Engine families. See Sec.  1042.845 for instruction about
dividing your engines into engine families.
    (d) Test data. (1) Measure baseline emissions for the test
configuration as specified in Sec.  1042.825.
    (2) Measure emissions from the test engine for your remanufacturing
system according to the procedures of subpart F of this part.
    (3) We may measure emissions from any of your test engines or other
engines from the engine family, as follows:
    (i) We may decide to do the testing at your plant or any other
facility. If we do this, you must deliver the test engine to a test
facility we designate. The test engine you provide must include
appropriate manifolds, aftertreatment devices, electronic control
units, and other emission-related components not normally attached
directly to the engine block. If we do the testing at your plant, you
must schedule it as soon as possible and make available the
instruments, personnel, and equipment we need.
    (ii) If we measure emissions from one of your test engines, the
results of that testing become the official emission results for the
engine. Unless we later invalidate these data, we may decide not to
consider your data in determining if your engine family meets
applicable requirements.
    (iii) Before we test one of your engines, we may set its adjustable
parameters to any point within the specified adjustable ranges (see
Sec.  1042.115(d)).
    (iv) Before we test one of your engines, we may calibrate it within
normal production tolerances for anything we do not consider an
adjustable parameter.
    (4) You may ask to use emission data from a previous model year
instead of doing new tests, but only if all the following are true:
    (i) The engine family from the previous model year differs from the
current engine family only with respect to model year or other
characteristics unrelated to emissions. You may also ask to add a
configuration subject to Sec.  1042.225.
    (ii) The emission-data engine from the previous model year remains
the appropriate emission-data engine.
    (iii) The data show that the emission-data engine would meet all
the requirements that apply to the engine family covered by the
application for certification.
    (5) We may require you to test a second engine of the same or
different configuration in addition to the engine tested under this
section.
    (6) If you use an alternate test procedure under 40 CFR 1065.10 and
later testing shows that such testing does not produce results that are
equivalent to the procedures specified in subpart F of this part, we
may reject data you generated using the alternate procedure.
    (e) Demonstrating compliance. (1) For purposes of certification,
your engine family is considered in compliance with the emission
standards in Sec.  1042.820 if all emission-data engines representing
that family have test results showing compliance with the standards and
percent reductions required by that section. To compare emission levels
from the emission-data engine with the applicable emission standards,
apply an additive deterioration factor of 0.015 g/kW-hr to the measured
emission levels for PM. Alternatively, you may test your engine as
specified in Sec.  1042.245 to develop deterioration factors that
represent the deterioration expected in emissions over your engines'
full useful life.
    (2) Collect emission data using measurements to one more decimal
place than the applicable standard. Apply the deterioration factor to
the official emission result, then round the adjusted figure to the
same number of decimal places as the emission standard. Compare the
rounded emission levels to the emission standard for each emission-data
engine.
    (3) Your applicable NOX standard for each configuration
is the baseline NOX emission rate for that configuration
plus 5.0 percent (to account for test-to-test and engine-to-engine
variability). Your applicable PM standard for each configuration is the
baseline PM emission rate for that configuration multiplied by 0.750
plus the deterioration factor. If you choose to include configurations
in your engine family for which you do not measure baseline emissions,
you must demonstrate through engineering analysis that your
remanufacturing system will reduce PM emissions by at least 25.0
percent for those configurations and not increase NOX
emissions.
    (4) Your engine family is deemed not to comply if any emission-data
engine representing that family for certification has test results
showing a deteriorated emission level above an applicable emission
standard for any pollutant.
    (f) Safety Evaluation. You must exercise due diligence in ensuring
that your system will not adversely affect safety or otherwise violate
the prohibition of Sec.  1042.115(e).

    (g) Compatibility Evaluation. If you are not the original
manufacturer of the engine, you must contact the original manufacturer
of the engine to verify that your system is compatible with the engine.
Keep records of your contact with the original manufacturer.

Sec.  1042.836  Marine certification of locomotive remanufacturing
systems.

    If you certify a Tier 0, Tier 1, or Tier 2 remanufacturing system
for locomotives under 40 CFR part 92 or part 1033, you may also certify
the system under this part 1042, according to the provisions of this
section.
    (a) Include the following with your application for certification
under 40 CFR part 1033:
    (1) A statement of your intent to use your remanufacturing system
for marine engines. Include a list of marine engine models for which
your system may be used.
    (2) If there are significant differences in how your remanufacture
system will be applied to marine engines relative to locomotives, in an
engineering analysis demonstrating that your system will achieve
emission reductions from marine engines similar to those from
locomotives.
    (3) A description of modifications needed for marine applications.
    (4) A demonstration of availability as described in Sec.  1042.815,
except that the total marginal cost threshold does not apply.
    (5) An unconditional statement that all the engines in the engine
family comply with the requirements of this part, other referenced
parts of the CFR, and the Clean Air Act.
    (b) Sections 1042.835 and 1042.840 do not apply for engines
certified under this section.
    (c) Systems certified under 40 CFR part 92 are subject to the
following restrictions:
    (1) Tier 0 locomotives systems may not be used for any Category 1
engines or Tier 1 or later Category 2 engines.
    (2) Where systems certified under 40 CFR part 1033 are also
available for an engine, you may not use a system certified under 40
CFR part 92.

Sec.  1042.840  Application requirements for remanufactured engines.

    This section specifies the information that must be in your
application, unless we ask you to include less information under Sec.
1042.201(c). We may require you to provide additional information to
evaluate your application.
    (a) Describe the engine family's specifications and other basic
parameters of the engine's design and emission controls. List the fuel
type on which your engines are designed to operate (for example, ultra
low-sulfur diesel fuel). List each distinguishable engine configuration
in the engine family. For each engine configuration, list the maximum
engine power and the range of values for maximum engine power resulting
from production tolerances, as described in Sec.  1042.140.
    (b) Explain how the emission control system operates. Describe in
detail all system components for controlling exhaust emissions,
including any auxiliary emission control devices (AECDs) you add to the
engine. Identify the part number of each component you describe.
    (c) Summarize your cost effectiveness analysis used to demonstrate
your system will meet the availability criteria of Sec.  1042.815.
Identify the maximum allowable costs for vessel modifications to meet