How much did Navistar’s competitors think should be paid for non-EPA 2010 compliant engines?

Christopher Goodfellow - 5 September 2012

The U.S. Environmental Protection Agency (EPA) has published its responses to manufacturers' comments on Nonconformance Penalties (NCPs) for heavy-duty diesel engines which do not meet 2010 emissions standards.

Highlights from the EPA's Response to Comments document, published in August, are included below:

PACCAR commented that in order to eliminate the competitive advantage Navistar gains under the current NCP, EPA should add the value of Navistar's fuel economy advantage to the SCR hardware, research and development, and warranty component costs, and increase the NCP for 2012 to a minimum of $14,378.

Cummins also commented that a correct analysis would recognize the first cost and operating cost benefits of operating at higher NOx levels up to 0.50 g/hp-hr and would incorporate a more appropriate Diesel Exhaust Fluid (DEF)/diesel price ratio which would result in a much higher NCP level of $8,100 for a heavy-duty diesel engine.

Mack said that by comparison, the maximum penalty established for meeting the upper limit of 0.50 g/bhp-hr in the NCP under the Proposed NCP Rule of $1,919 is lower than all previously established NCPs for NOX emission noncompliance from heavy-duty diesel engines, even if not adjusted for inflation. Mack concluded that this is despite the fact that the rule was the most expensive emissions mandate the industry had ever faced.

Navistar commented that EPA set the NCP penalties too high in the proposal and Interim Final Rule. Navistar believes that EPA overestimated DEF costs and underestimated investment.

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