Navistar Challenges EPA

This story appears in the June 8 print edition of Transport Topics.

Truck and engine manufacturer Navistar Inc. has challenged the Environmental Protection Agency’s authority to certify heavy-duty diesel engines using selective catalytic reduction to meet the agency’s 2010 emission standards, saying EPA skipped an important regulatory step.

Navistar, in a lawsuit filed in a federal appeals court, said EPA’s February memorandum giving guidance on SCR certification was a “dramatic change” — it ignored the requirements of the federal Clean Air Act by failing to issue a rule properly documenting EPA’s shift from 2001, when it questioned the feasibility of SCR. Navistar is the only engine maker not planning to use SCR in its new models.

Rival truck and engine makers that plan to use SCR fired back at Navistar last week with a joint legal filing, backing EPA and opposing Navistar’s petition.

Navistar is the only manufacturer planning to use exhaust gas recirculation to meet the 2010 EPA NOx emissions standard, first spelled out in EPA’s 2001 heavy-duty truck rule.

In a June 1 filing, SCR proponents warned of “significant consequences” that could arise from “any ruling by this court that would undermine EPA’s 2001 standard. . . .”

Included in the joint filing were independent engine manufacturer Cummins Inc.; Daimler Trucks North America and its engine subsidiary Detroit Diesel Corp.; Volvo Group North America and Volvo subsidiary Mack Trucks.

Truck maker Paccar Inc., which is due to begin building SCR-equipped engines next year, did not join the other manufacturers in the filing.

In its lawsuit, Navistar said that “at the time the 2001 rule was promulgated, EPA decided that urea SCR technology would not be available to meet the 0.20 g NOx standard for applicable model year — i.e., EPA made an express ‘infeasibility’ determination for SCR technology.”

If the appeals court were to require EPA to go back and issue a new rule before certifying SCR — a process that could take several months or longer — the resulting delay could have a significant effect on Navistar’s competitors, said Glen Kedzie, environmental affairs counsel for American Trucking Associations.

With manufacturers preparing their engines for 2010, the lawsuit could put a “kink in the whole process,” Kedzie said. “This is quite serious. It could seriously alter what qualifies to be a compliant engine to meet the 2010 standards.”

In its 2001 rule, EPA questioned whether there would be an adequate distribution infrastructure to meet trucking industry needs. EPA also said truckers could skip filling urea tanks to save money. Although engines will run without urea, the emissions benefits are lost without it.

But in February 2009, EPA issued its SCR certification requirements in a memorandum to manufacturers clarifying such issues as tank size for diesel exhaust fluid, driver warning systems, tamper-resistant designs and freeze protection.

EPA declined comment on the lawsuit.

Navistar, the largest U.S. manufacturer of medium-duty engines, entered the Class 8 market only recently. In March, the company introduced a 15-liter engine, which combines the fuel-induction technology of its 11-liter and 13-liter models with the block and other basic components of a Caterpillar C15 power plant (click here for previous story).

The new 15-liter model, introduced at the Mid-America Trucking Show, was a continuation of Navistar’s strategy to combine its expertise with that of other companies— such as its cooperation with MAN AG of Germany — to develop its first Class 8 engines, the 11-liter and 13-liter models that went into production late last year.

Navistar had planned to supplement its own engines with models from Cummins, but Cummins decided last year to use SCR and the two companies canceled their supply agreement. Navistar said it planned to offer only EGR-based engines in 2010 (click here for previous story).

Late last year, Navistar said it planned to take a “leadership role” in calling for a delay of full implementation of the 2010 emissions mandates (click here for previous story). The engine maker said it would back the Owner-Operator Independent Drivers Association in a “push for a restructured timeline, phasing in the tougher standard to allow ample breathing room and to build confidence within the trucking industry.”

But an EPA official said the agency had “absolutely no intention” of granting Navistar’s request.

“Changing the timeline at this point would not only be bad for the environment and unfair for companies that have invested millions of dollars to do the right thing in meeting the environmental standards but is something that, based on the input and discussions that I have had, cannot be justified,” said Margo Oge, director of EPA’s Office of Transportation and Air Quality (click here for previous story).

Rob Moseley, a transportation lawyer with appeals court experience as a member of the law firm of Smith Moore Leatherwood, Greenville, S.C., said that regulatory challenges typically come down to, “Did the agency do the things it should have done?”

“Generally you’ve got a three-judge panel, and you’ve got to convince two of them that you’re right,” Moseley told TT. “That’s always an uphill battle to defeat the agency.”

“But the ultimate goal here may not be victory; it may be delay,” Moseley added.

Though EPA did question the feasibility of SCR in 2001, it has shifted its position over the years, culminating in the February 2009 guidance. In 2006, EPA published an item in the Federal Register asking for public comment on draft SCR guidance and in 2007 outlined the SCR certification procedure for manufacturers.

In March, Byron Bunker, a division director in EPA’s Office of Transportation and Air Quality, said that guidance memos were issued after truck and engine makers had convinced his agency to abandon its “historical hesitancy” on that approach to emissions control.

“We at EPA remain neutral on technology,” Bunker said at an event at the Mid-America Trucking Show in Louisville, Ky. The industry had “done a fantastic job in convincing us,” he said. “This is an integrated, clean and straightforward solution.”