ARCHIVED - Reply to Comments Received on the Discussion Draft of the Off-Road Compression-Ignition Engine Emission Regulations

• 4.1   Interpretation
• 4.2   Application for authorization to apply the national emissions mark
• 4.3   Engine Standards
• 4.4   Replacement Engines
• 4.5   Transition Engines
• 4.6   Records/Labeling
• 4.7   Importation requirements and documents
• 4.8   Defect Information

4.1   Interpretation

Stevenson Equipment Limited:

• "Standards that are incorporated by reference in these Regulations from the CFR are those expressly set out in the CFR and shall be read as excluding
  1. references to the EPA or the Administrator of the EPA exercising discretion in any way;
  2. alternative standards related to the averaging, banking and trading of emission credits, to small volume manufacturers or to financial hardship; and
  3. standards or evidence of conformity of any jurisdiction or authority other than the EPA.
  In what manner will the CEPA handle the above issues in comparison to the EPA?"

Response:

The proposed Regulations set out technical standards respecting exhaust, crankcase and smoke emissions. The proposed Regulations establish emission standards and test procedures aligned with those of the U.S. EPA. While the overall objectives of the proposed Regulations are similar, the laws of both countries differ. Canadian legislation does not authorize the discretion allowed to the U.S. EPA administrator.

The proposed Regulations are structured such that U.S. EPA certificates of conformity are accepted whether or not the EPA administrator has exercised discretion and whether or not alternative standards are applied.

In the case of engines that are not certified by the EPA, a manufacturer or importer may produce evidence of conformity in a form and manner that is satisfactory to the Minister, which normally means the same evidence as would be provided to obtain an EPA certificate.

4.2   Application for authorization to apply the national emissions mark

Stevenson Equipment Ltd. submitted comments seeking clarification on the national emissions mark

• "Any company that intends to apply a national emissions mark in relation to an engine shall apply to the Minister to obtain an authorization.
  What are the criterion for authorization?"
• "information to show that the company is capable of verifying compliance with the standards set out in these Regulations.
  What type of information will be accepted?"

Response:

Companies are responsible for ensuring that their products comply with the proposed Regulations. Section 152 of CEPA 1999 prohibits a company from transporting prescribed engines between provinces or territories unless the engine has a national emissions mark applied to it. Subsection 153(1) of CEPA 1999 requires engines to conform to the requirements of the proposed Regulations as a condition of use of the mark. 153(1) also directly requires conformity as a condition of importation, such that the national emissions mark is not essential for imported engines. The proposed Regulations, therefore, exclude imported engines from requiring a national emissions mark.

Information that could satisfy the requirement of subsection 6(2)(d) of the discussion draft (also subsection 6(2)(d) of the proposed Regulations) to show that a company is capable of verifying compliance with the standards could include (refer to Guidance Document: Off-Road Small Spark-Ignition Engine Emission Regulations):

1. Recent experience in obtaining U.S. EPA emission certification for engines that would be covered under the proposed Off-Road Compression Ignition Engine Emission Regulations; or
2. Technical information to show that it is capable of verifying compliance with the standards set out in the proposed Regulations including, but not limited to, information describing the capabilities of the emission test facilities operated by, or on behalf of, the company to produce evidence that its engines conform to the standards set out in the Regulations. This may include evidence that the emission test facility used on behalf of the company has produced test results used in support of a successful application to the EPA for the issuance of a certificate of conformity.

4.3   Engine Standards

• EMA – "EC should delete or revise the provisions at subsection 8(1). Subsection 8(1) would prohibit the use of an emission control system that would release "a substance that causes air pollution and that would not have been released if the system were not installed". Virtually all emission control systems operate by altering the chemical composition of the exhaust and thus may create air pollutant species that are not otherwise present. [...] EMA recommends that EC delete this provision in its entirety or, at a minimum, restrict this prohibition to emission control systems that cause the emission of a substance that would create an unreasonable risk to the public."

Response:

Section 8(1) of the discussion draft (section 9(1) of the proposed Regulations) is designed to reflect U.S. EPA standards (section 106, subpart B, part 89 of the Code of Federal Regulations).

Section 8(1) of the discussion draft includes a restriction on design parameters of an emission control system. Environment Canada believes it is important that the proposed Regulations include a design restriction on emission control systems. It is not Environment Canada's intention to prevent the use of emission control systems that are expected to be used to meet emission standards in the U.S.

4.4   Replacement Engines

• EMA – "EC should adopt provisions to allow the importation into Canada, of engines identified as replacement engines in accordance with EPA regulations and minimize the burden of additional labeling requirements."

Response:

The proposed Regulations are in accord with the comment.

The replacement engine provision in section 11 of the discussion draft (section 12 of the proposed Regulations) was modified to make it clearer. Also, subsection 12(3) has been added, requiring a label on a replacement engine to facilitate the administration of the Regulations. This can be either a bilingual label identifying the engine as a replacement engine or the replacement engine label set out by the U.S. EPA in section 1003(b)(7), Subpart K, part 89 of the Code of Federal Regulations.

4.5   Transition Engines

• EMA – "EC should not limit the meaning of "transition engine" and should align the periods when these engines can be used with the U.S. EPA."

Response:

The proposed Regulations are in accord with the comment.

The transition engine provisions in section 12 of the discussion draft (section 13 of the proposed Regulations) were modified. The definition of a transition engine has been expanded to correspond to the flexibility provisions set out by the U.S. EPA for machine manufacturers under section 102(d), subpart B, part 89 of the Code of Federal Regulations. Additionally, subsection 13(5) has been added to enable a company to import transition engines for installation into machines that would qualify.

Eligible periods for transition engines have been modified to align with the U.S. standards.

To facilitate administration of the proposed Regulations, labeling requirements for transition engines have been maintained. Labeling requirements have been broadened, in recognition of current voluntary industry practice to label flexibility engines (named transition engine in Canada) in the U.S.

4.6   Records/Labeling

4.6.1   Evidence of Conformity

• Stevenson Equipment Ltd. has a concern with respect to the requirements of Section 15 – "Requests to the OEM's for a copy of the EPA certificate under current regulation are typically very difficult to acquire. [...] If an OEM's has the ability to "decertify" emissions status of any given engine, any requests made by an independent equipment dealer will be met with a decertified reply."
• Stevenson Equipment Ltd. is unclear on section 17 – "[...] "any engine manufactured in the eight years preceding the request" Should it no relate to the engines imported by the importer of record and the applicable engines as per the phase in starting in 2006? Are you requesting we acquire engine letters of conformity for every machine (engine) we are considering for purchase including domestically?"
• Stevenson Equipment Ltd. – "the manufacturer's statement regarding EPA certification status may change after we have submitted our declaration, confirmed proper labeling, etc. [...] we anticipate the OEM / Engine Manufacturer to decertify the engine and claim the labeling is fraudulent. [...] there is no way to confirm or prove they have flip flopped on the certification status. [...] Our machine (engine) will potentially be seized [...] we will be fined and prosecuted by CEPA."

Response:

These issues are a commercial matter between engine manufacturers and distributors. The requirements of the proposed Regulations regarding documents required to demonstrate conformity with the regulatory standards were not modified. However, Environment Canada is willing to revisit this matter if evidence is brought forward that the proposed Regulations may have a significant negative impact on the normal course of business for distributors.

Companies are responsible for ensuring that engines they import comply with the proposed Regulations and for providing such evidence of conformity upon request by the Minister. The proposed Regulations enable a company to provide evidence of conformity in the form of a valid U.S. EPA certificate of conformity and demonstration of concurrent sale in the U.S. (section 16 of the proposed Regulations). Evidence of conformity can also be provided in a form and manner satisfactory to the Minister (section 17 of the proposed Regulations).

The Minister can request evidence of conformity for engines subject to the proposed Regulations for a period of up to 8 years following their manufacture. This period corresponds to the record retention time frame under the current EPA standards.

4.6.2   Labeling

• EMA – "EC should minimize the burden of additional labeling requirements for Canada. [...] Labeling requirements that are not harmonized with the EPA are problematic because of the cost of implementing new labels, the complexity of the labeling process and space constraints."
• CAED – "We believe that all equipment should carry an appropriate EPA decal from the time of manufacture."
• Cummins – "All equipment should have the appropriate EPA decal or sticker that applied at the time of manufacture."
• Stevenson Equipment Ltd. "many of the plastic sticker type labels being used by Caterpillar and Volvo are easily peeled off [...]. If we import an engine and it is properly labeled at time of import, how long does our responsibility last?"

Response:

The engine identification labels are intended to facilitate the administration of the proposed Regulations. Engines covered by an EPA certificate of conformity are required to be identified with the U.S. EPA engine information label. Replacement (section 12 of the proposed Regulations) and transition engines (section 13), require appropriate labeling.

With regard to label durability, it is the practical expectation of Environment Canada that a label remain affixed to the engine. Environment Canada intends to address any instances of "missing" labels on a case by case basis.

4.7   Importation requirements and documents

• EMA – "EMA supports EC's approach which minimizes additional importation documentation reporting, and offers the option of bulk reporting. [...] we urge EC to work with Canada Customs to ensure that the Canadian regulations, when implemented, are fully understood. [...] remanufactured engines are not subject to EPA labeling requirements and are currently imported into Canada without undue delay, and this should not change. Specific guidance may be needed to address these engines to avoid delays due to the absence of a label."

Response:

The importation documentation requirements are similar to those under the Off-Road Small-Spark-Ignition Engine Emission Regulations and reflect information that should be readily available on documents already being submitted to the Canada Border Service Agency (previously called Canada Customs and Revenue Agency). This should reduce the administrative burden on both importers and the government by eliminating the need to create and submit additional forms. To assist with the transition, the Department plans to prepare a guidance document to assist importers with regard to importation requirements as they relate to these Regulations (refer to Guidance Document: Off-Road Small Spark-Ignition Engine Emission Regulations).

4.8   Defect Information

• EMA – "EC should administer the Defect Information section of the proposed rule in a manner that parallels the U.S. EPA's defect reporting requirements. [...] we would ask that in the administration of the defect information provisions, the Minister utilize the discretion provided in CEPA as follows:
  1. Generally interpret the "becoming aware" threshold of 157(1) as meaning determining the defect to be present on 25 engines. [...]
  2. Align the contents of the "notice of defect" with the contents of the Emission Defect Information Report (EDIR) as defined by EPA at 40 CFR Part 85 Subpart T 85.1903(c).
  3. [...] In cases where it is determined that corrective action is not required, the Minister should use his discretion and exempt the manufacturer from having to send notices to individual owners and from requirements to submit an initial and quarterly reports regarding the defect. [...] necessary to avoid additional reporting and unnecessary expense [...]
  4. Align the contents of the "initial report" referred to in subsection 157(7) of the CEPA with the contents of the Voluntary Emission Recall Report [...] EPA requirements meet or exceed the CEPA requirements [...]
  5. Align the contents of the quarterly report referred to in subsection 157(7) of the CEPA with the contents of the quarterly report as defined by EPA at 40CFR Part 85 Subpart T 85.1904(b)."

Response:

While Environment Canada intends to administer notice of defect requests in a manner compatible with U.S. practice, the Canadian legislation is different and the regulations will not align exactly.

Section 157 of CEPA 1999 outlines the obligations of a company on "becoming aware of a defect in the design, construction or functioning of the engine that affects or is likely to affect its compliance with the prescribed standard". This includes an initial notice and follow-up reports for a period of two years unless the Minister directs otherwise. Environment Canada expects to be given a report similar to that described by the EPA under subsection 85.1903 of the CFR.