Non-Road Machine Importers Face Several Clean Air Act Challenges
The Environmental Protection Agency (EPA) has issued several regulations under the Clean Air Act establishing emissions standards and certification requirements for “non-road” machines, which include a wide variety of vehicles and equipment, such as lawn mowers, outboard marine engines and forklifts. Non-road emissions standards for pollutants like nitrous oxides and particulate matter are becoming more stringent each year, and deciding when a manufacturer can certify and sell a non-road machine, and for how long, can be complex. Recognizing the difficulty of meeting current emissions standards at all times and for all purposes, EPA allows for a number of exemptions from emissions certification requirements. All of these exemptions have their own particularities and pitfalls, however. Below is a short discussion of three exemptions that could allow for the sale or shipment of uncertified non-road machines in the United States.
Emissions Standards Basics
Under the Clean Air Act, no one can sell, offer for sale, import, introduce or deliver into commerce any new non-road machines unless the machines: (1) are covered by a valid certificate of conformity for their model year, i.e., are certified by EPA to meet emission standards currently in effect; and (2) have the required emissions label. Any manufacturer or importer of a machine that does not meet both of these requirements is in violation of the Clean Air Act unless the machine is covered by an exemption.
Some equipment manufacturers are eligible to participate in programs, sometimes called Transitional Programs for Equipment Manufacturers, or TPEM, that allow them to sell or import equipment containing engines that meet out-of-date emission standards for a limited time after new emission standards come into effect. Depending on the machine, program eligibility requirements will vary, and the calculation of how many pieces of equipment can be sold or imported under the program, and when, can be very complicated. Manufacturers must provide prior notice of their participation in the program. Without prior notice, sold or imported transitional equipment that otherwise meets the requirements is subject to seizure. In addition, equipment manufacturers need to coordinate their transitional engine requirements with engine suppliers carefully and ensure that they are not “stockpiling” engines in violation of the Clean Air Act solely to sell cheaper, out-of-date engines once new emission standards come into effect.
Depending on warranty or market conditions, manufacturers may want to produce or import new replacements for engines that have failed, been destroyed or are otherwise no longer in use by their customers. It is not enough that a manufacturer wants to provide a new replacement engine to a customer, however. Before providing a new replacement engine, manufacturers must be able to show that the engine cannot be repaired or rebuilt and that they do not produce a new engine that meets more stringent or current emission standards that could power the machine in which the engine is placed.
If manufacturers qualify to sell or import them, replacement engines must otherwise be identical in all material respects to the engines being replaced. Manufacturers may also be required to take possession of the old engine being replaced or ensure that it has been destroyed. These requirements implement EPA policy that manufacturers should not increase the number of pollution-emitting engines in the United States unnecessarily or else let the overall emissions profile of their products degrade unless they have a sound technical basis for doing so. EPA regulations are murky, however, on whether manufacturers may recover old parts from the engine being replaced in order to sell them as aftermarket parts or else use them in rebuilding or remanufacturing old engines, practices that are subject to somewhat less stringent regulations than those applicable to new replacement engines. As a result, manufacturers should carefully review their replacement, rebuild and remanufacturing programs to ensure compliance.
Export Only Engines
Many companies intend to export uncertified non-road machines from the United States for sale abroad. EPA regulations allow these machines to be manufactured in or imported to the United States as long as they remain temporarily in the United States under an “export only” exemption. If manufacturers intend to export the machines to a country with different or no emission standards, then in most cases the machines may be exported without prior request to EPA. The machines must meet all other exemption requirements, however, including labeling and recordkeeping requirements, among others. If the machines will be exported to countries that have emission standards identical to the United States, however, then the export only exemption will not apply. Indeed, in this situation, manufacturers would be required to have proof that the receiving country has certified the machine to its own emissions standards before being lawfully allowed to export the machines to that country.
Non-road emissions regulations have always been complicated. If machines you manufacture are not certified by EPA to the most current emission standards, there are several strategies for getting them on the market in the United States or abroad. But manufacturers should be sure to follow the exemption requirements to the letter or else risk being deemed in violation of the Clean Air Act.