Engine Makers Blast EPA Over Navistar Penalties

Heavy-duty engine manufacturers blasted the U.S. Environmental Protection Agency last week for allowing Navistar Inc. to pay penalties to sell engines that do not comply with 2010 emissions standards, saying the agency did not follow the law in determining the penalties.

Mack Trucks Inc., Volvo Trucks North America, Daimler Trucks North America, its subsidiary Detroit Diesel Corp. and Cummins Inc. filed a brief as part of their lawsuit to block EPA’s January regulation which allows Navistar to sell its noncompliant engines while paying a fee of up to $1,919 per engine (1-30, p. 1).

“This case is about EPA’s hasty bid to save Navistar from its own miscalculations,” the companies stated in their joint March 12 filing, in which they outlined their objections to EPA’s regulation.

EPA issued an “interim final rule” Jan. 30, meaning the rule took effect immediately and bypassed the usual public comment period. Margo Oge, director of EPA’s Office of Transportation and Air Quality, told Transport Topics that the rule’s timing was meant to allow Navistar to sell its engines past Feb. 29, when it expected to run out of the emissions credits it had used since 2010 to sell with exhaust emissions that exceed EPA’s limit for nitrogen oxides.

Bypassing the comment period meant that EPA did not receive comment from Navistar’s competitors — or anyone else — about how to set the penalties, the engine makers argued in their brief.

The group did not say that the penalties were too low, but spokesmen for Volvo and Cummins previously have told TT they believed the penalties to be too low (2-20, p. 49). Volvo spokesman John Mies previously has said Navistar should not be allowed to sell its noncompliant engines at all.

In the brief, the group wrote that EPA’s penalties allow Navistar to exceed 2010 nitrogen oxide levels by a magnitude of 2.5. When EPA most recently set penalties for a 2.5 magnitude violation, the penalty was $12,210 per engine.

EPA set that penalty in 2002 in advance of its 2004 standards for non-methane hydrocarbons and nitrogen oxides, agency records show.

“EPA calculated the [penalty] here by relying on a novel methodology that deviated from its long-standing practices,” the engine makers argued, adding that the agency did not explain the process by which it calculated the $1,919 number.

By bypassing the usual rulemaking process, EPA also violated the Clean Air Act, the engine makers argued.

EPA cited another law, the Administrative Procedure Act, which allows emergency rules in some cases. But APA does not allow emergency rules if other laws prohibit them, and the Clean Air Act, in fact, does prohibit them, the group said.

The Clean Air Act “unambiguously provides that if EPA is going to promulgate a [penalty] rule, it may do so only ‘after notice and opportunity for public hearing,’ ” the manufacturers said in their brief. Furthermore, the agency did not show that it met the standards to use the APA provision.

EPA also violated the standards it had set itself for engine penalties, the group said. The agency had decided previously that it would allow penalties only if the industry must develop new technology or make major modifications to existing technology to comply.

The engine makers filing the lawsuit all use selective catalytic reduction technology to comply with 2010 standards, which they said shows that the technology exists, the group said.

And EPA also did not show that Navistar is a “technological laggard,” another standard it had previously set. Instead, the agency concluded that because Navistar “had yet to comply, Navistar must lack the technological knowhow to comply.”

Navistar actively chose not to use SCR in its engines, the brief said. Navistar uses exhaust gas recirculation to reduce NOx and is the only heavy-duty engine manufacturer to do so.

Navistar “firmly believes that EPA acted within its mandate to issue the emergency rule,” company spokesman Karen Denning said, declining to comment further on the March 12 brief. The company is scheduled to file its own brief defending EPA on April 10, the same day EPA files its brief responding to the allegations.

The engine makers are asking a federal appeals court to prohibit EPA from allowing Navistar to use the penalties. The Court of Appeals for the District of Columbia Circuit has scheduled the case to be argued May 14 and has allowed Navistar to help defend EPA.

Navistar has submitted to EPA a 13-liter engine that it said complies with the 2010 standards on Jan. 31 (2-6, p. 3).

The company said this month it would pay the EPA penalties in order to continue to sell engines in most of the country. Navistar is using emissions credits to continue to sell engines in California and nine other states that use California Air Resources Board standards because those states do not allow penalties (3-12, p. 3).