EPA provides more detailed guidance on aftermarket safe zones while continuing to drive forward enforcement initiatives.
In 2019, the US Environmental Protection Agency (EPA) released its "National Compliance Initiatives" (NCIs) for years 2020-2023. EPA sets NCIs for what the agency believes are "the most serious environmental violations."1 One of those NCIs is to eradicate aftermarket defeat devices on emissions control systems for vehicles and engines. In the last few years, EPA has dedicated increased enforcement resources to pursue those who violate the defeat device and tampering prohibitions found in Section 203(a)(3) of the Clean Air Act (CAA).2 Even with the pandemic, EPA has resolved more than twenty aftermarket "defeat device" and tampering enforcement cases.3 EPA personnel recently released a report that estimates emissions controls have been removed from more than 550,000 diesel pickup trucks in the last decade, resulting in more than a half-million excess tons of oxides of nitrogen (NOx).4 EPA's enforcement efforts are expected to continue.
While EPA has judiciously used its enforcement sword against violators, the agency also has strengthened the shield from enforcement for the aftermarket industry. Specifically, EPA's Enforcement Policy on Vehicle and Engine Tampering and Aftermarket Defeat Devices under the Clean Air Act, issued November 23, 2020, "supersedes and replaces" prior enforcement guidelines, including Mobile Source Enforcement Memorandum 1A in place since 1974.5 In doing so, the agency reaffirmed its longstanding policy not to pursue conduct that could constitute a violation if the company engaging in the manufacture, sale, or installation of an aftermarket part "has a documented, reasonable basis to conclude that the conduct does not adversely affect emissions."6
Although the central tenant remains unchanged, EPA's November 2020 update addresses current technologies and provides the industry much more guidance on what makes a "reasonable basis." Aftermarket manufacturers, sellers and installers now have a better gauge to measure their compliance efforts.
Defining a "Reasonable Basis"
First, the update provides manufacturers a non-exhaustive list of at least six ways a company may document a reasonable basis to conclude that its conduct does not adversely affect emissions, including the types of records a party must keep. These circumstances include:
- Identical Elements/Parts - repairing emissions-related elements or replacing certified parts with those that are identical to the certified configuration. Parts manufacturers should represent that the replacement will "perform identically with respect to emissions control" as the original part based on engineering documents or test results demonstrating same.
- After-treatment Replacement - replacing out-of-warranty systems with "the same kind of system" supported by testing that demonstrates the new, used, or restored replacement will be able to meet applicable standards for at least half the vehicle's or engine's regulatory useful life.
- Adding After-treatment - adding an aftermarket after-treatment system to a vehicle or engine with no such system to decrease emissions.
- Emissions Testing - making, selling, or installing parts that would alter a vehicle or engine, but emissions testing shows the altered vehicle or engine will comply with applicable standards for its full useful life (and where the part is marketed only to vehicles and engines "appropriately represented by the tested product").
- EPA Certification - making, selling, or installing parts certified by EPA (and used on a vehicle or engine for which the part is certified).
- CARB Certification - making, selling, or installing parts exempted by the California Air Resources Board (CARB), subject to the same terms CARB imposes on any such exemption. "Generally, the conduct must be legal in California."7
Second, EPA makes clear that a "reasonable basis" generally cannot be developed after the fact. According to the agency, "[t]he EPA typically considers the documentation of a reasonable basis to be relevant only if that documentation exists at or before the time the conduct that might be a potential violation of section 203(a)(3) occurs (including sale, installation, and service)."8 This temporal limitation also applies to any emissions testing that must be performed to document the "reasonable basis."
Third, when determining whether a "reasonable basis" exists, EPA provides that the proper comparison is "the element after the service to the element's fully-functioning certified configuration," not the condition prior to service.9 Any required emissions testing must be the same as testing required by regulation for original certification of the vehicle or engine. If the applicable certification regulations do not specify how to select test vehicles and engines, the company must choose the "worst case" product from all the products for which the aftermarket part is intended.10
A company must provide documentation to EPA on request.11 EPA will not provide pre-approvals for "reasonable bases." The policy does not apply to tampering or defeat device violations by original equipment manufacturers (OEMs). The policy also does not apply to conduct affecting a vehicle's or engine's onboard diagnostic (OBD) system, which according to EPA, "may be subject to enforcement regardless of effect on emissions."12 Finally, the policy does not affect a company's obligations to comply with state or local laws. California in particular has it owns set of aftermarket rules of which manufacturers and installers must be aware. Although all the rules are substantial, EPA's recent updated guidance sheds more light on what EPA will enforce moving forward.
1. Id. at 6 (emphasis added).
3. Id. at 10.
5. Id. at 6.
6. Id. at 7-9.
8. Section 203(a)(3) prohibits both tampering with emissions controls and also the manufacture and sale of any aftermarket part whose principal effect is to "defeat" any element of the emissions control system. 42 U.S.C. § 7522(a)(3).
10. See Tampered Diesel Pickup Trucks: A Review of Aggregated Evidence from EPA Civil Enforcement Investigations, https://int.nyt.com/data/documenttools/epa-on-tampered-diesel-pickups-11-20/6d70536b06182ad2/full.pdf.
12. Id. at 1 (emphasis added).
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