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Statement of Need: There is a need to reduce emissions from Category 3 marine diesel engines to achieve significant public health benefits and help states and localities attain and maintain PM and ozone National Ambient Air Quality Standards. These large diesel engines generate significant emissions of fine particulate matter (PM2.5), Nitrogen oxides (NOx) and sulfur oxides (SOx), as well as hydrocarbons (HC), carbon monoxide (CO), and hazardous air pollutants or air toxics that are associated with adverse health effects. Without further action, by 2030, NOx emissions from ships are projected to more than double, growing to 2.1 million tons a year, while annual PM2.5 emissions are expected to almost triple to 170,000 tons. By 2030, the coordinated strategy described in this rule is expected to reduce annual emissions of NOx in the United States by about 1.2 million tons and particulate matter (PM) emissions by about 143,000 tons, and prevent between 13,000 and 32,000 premature deaths annually.

Summary of the Legal Basis: Authority for this regulatory action is granted to the Environmental Protections Agency by sections 114, 203, 205, 206, 207, 208, 211, 213, 216, and 301(a) of the Clean Air Act as amended in 1990 (42 U.S.C. 7414, 7522, 7524, 7525, 7541, 7542, 7545, 7547, 7550 and 7601(a)), and by sections 1901-1915 of the Act to Prevent Pollution from Ships (33 USC 1909 et seq.). The authority for the fuel requirements is provided in section 211 (c) of the Clean Air Act, which allow EPA to regulate fuels that contribute to air pollution which endangers public health or welfare (42 U.S.C. 7545 (c)). Additional support for the procedural and enforcement-related aspects of the fuel controls in the proposed rule, including the record keeping requirements, comes from sections 114 (a) and 301 (a) of the CAA (42 U.S.C. Sections 7414 (a) and 7601 (a)). The authority for the engine requirements is provided in section 213(a)(3) of the Clean Air Act, which directs the Administrator to set standards regulating emissions of NOx, volatile organic compounds (VOCs), or CO for classes or categories of engines, like marine diesel engines, that contribute to ozone or carbon monoxide concentrations in more than one nonattainment area. Section 208, which requires manufacturers and other persons subject to Title II requirements to “provide information the Administrator may reasonably require … to otherwise carry out the provisions of this part…” provides authority for a PM measurement requirement. The authority to implement and enforce the Category 3 marine diesel emission standard is provided in Section 213(d) which specifies that the standards EPA adopts for marine diesel engines “shall be subject to Sections 206, 207, 208, and 209 of the Clean Air Act, with such modifications that the Administrator deems appropriate to the regulations implementing these sections.” In addition, the marine standards “shall be enforced in the same manner as [motor vehicle] standards prescribed under section 202” of the Act. Section 213 (d) also grants EPA authority to promulgate or revise regulations as necessary to determine compliance with and enforce standards adopted under section 213. Authority to implement MARPOL Annex VI is provided in section 1903 of the Act to Prevent Pollution from Ships (APPS). Section 1903 gives the Administrator the authority to prescribe any necessary or desired regulations to carry out the provisions of Regulations 12 through 19 of Annex VI.

Alternatives: Several alternatives were considered as part of this rulemaking, including a mandatory cold ironing requirement; earlier adoption of the Tier 3 NOx limits; and standards for existing engines, including a mandatory remanufacture program, the MARPOL Annex VI program for existing engines, and a Voluntary Marine Verification Program.

Anticipated Costs and Benefits: A benefit-cost analysis was performed for the entire coordinated strategy that involves this rulemaking and the international agreements described above. Specifically, the estimated annual benefits of the coordinated strategy range between $110 and $280 billion annually in 2030 using a three percent discount rate, or between $100 and $260 billion assuming a 7 percent discount rate, compared to estimated social costs of approximately $3.1 billion in that same year. Though there are a number of health and environmental effects associated with the coordinated strategy that we are unable to quantify or monetize, the projected benefits of the coordinated strategy far outweigh the projected costs. Using a conservative benefits estimate, the 2030 benefits are expected to outweigh the costs by at least a factor of 32 and could be as much as a factor of 90.

Risks: The failure to set new tiers of standards for Category 3 marine diesel engines risks continued increases in exposure to elevated levels of ambient ozone and particulate matter emissions, particularly for populations in port areas and along coastal waterways but also for populations located well inland. These elevated levels risk additional premature mortality and other health and environmental impacts that could otherwise be avoided.