EPA rule opens door for Navistar to sell remaining noncompliant engines

By Charlie Morasch, Land Line contributing writer | Friday, August 31, 2012

The U.S. Environmental Protection Agency issued a final rule on Aug. 30 to detail how companies can pay penalties if their heavy-duty truck engines don’t meet recent emissions standards. 

Navistar, a manufacturer that uses nonconformance penalties or NCPs for its engines, says it is pleased with the announcement. The ruling will allow Navistar to sell its non-compliant engines by paying a maximum fine of about $3,800 each, which is nearly twice the penalty they have been paying. While the exact rate of increase will depend on the number of engines for which NCPs are used, the penalty for engines at the upper limit could be more than $5,000 by 2015.

The rule formalizes a process that previously existed under an interim EPA rule. Truck engine manufacturers who can’t meet EPA’s NOx standard will pay thousands per engine. The final rule also caps the amount by which noncompliant engines can exceed the emissions limit, and escalates the penalty amounts the longer a company continues to use NCPs to sell engines.

The announcement is likely to affect few trucks in the future but will instead continue to provide Navistar a path to dig out of its recent emissions troubles.

“We expect relatively few engine families to be certified under these provisions,” EPA said in the rule’s summary. “Navistar, the only company that has requested certificates based on the use of NCPs, has publicly announced it will introduce new technology engines in 2013 which will meet the 0.20 g/hp-hr NOx standard without the need for NCPs.”

Since 2010, Navistar trucks have used engines that didn’t fully meet the 2010 EPA standard for NOx emissions. To continue selling its trucks, Navistar used emissions credits it had built up and paid NCPs all while fighting on multiple fronts for acceptance of its exhaust gas recirculation (EGR) technology. All of Navistar’s competitors had been using selective catalytic reduction (SCR) with urea-based diesel exhaust fluid.

While the EPA’s final rule was being examined by the White House, Navistar announced its plans to move forward with engines that used both EGR and SCR technologies, and said the engines would meet the EPA standard for NOx emissions beginning next year.

In a statement issued by the company, Navistar president and chief operating officer Troy Clarke said the company is “pleased that the U.S. Environmental Protection Agency has issued the Final Rule for nonconformance penalties (NCPs) for on-highway heavy-duty diesel engines.”

“We can now provide our dealers and customers with clarity and certainty as we transition to our clean engine technology and look forward to utilizing the Final Rule as needed,” Clarke said, according to the Navistar statement.

Clarke indicated owners of existing 2010-2012 Navistar trucks shouldn’t be affected by the EPA’s recent decision on the Final NCP Rule.

“Implementation of the Final NCP Rule will have no impact on our vehicles previously certified by the EPA under the Interim NCP Rule.”

More information is available at the EPA’s website.

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