(a) The provisions of this section apply separately for calculating emission credits for each pollutant.

(b) For each participating family, calculate positive or negative emission credits relative to the otherwise applicable emission standard based on the engine family's FCL for greenhouse gases. If your engine family is certified to both the vocational and tractor engine standards, calculate credits separately for the vocational engines and the tractor engines (as specified in paragraph (b)(3) of this section). Calculate positive emission credits for a family that has an FCL below the standard. Calculate negative emission credits for a family that has an FCL above the standard. Sum your positive and negative credits for the model year before rounding. Round the sum of emission credits to the nearest megagram (Mg), using consistent units throughout the following equations:

(1) For vocational engines:

Emission credits (Mg) = (Std−FCL) · (CF) · (Volume) · (UL) · (10−6)

(2) For tractor engines:

Emission credits (Mg) = (Std−FCL) · (CF) · (Volume) · (UL) · (10−6)

(3) For engine families certified to both the vocational and tractor engine standards, we may allow you to use statistical methods to estimate the total production volumes where a small fraction of the engines cannot be tracked precisely.

(4) You may not generate emission credits for tractor engines (i.e., engines not certified to the transient cycle for CO2) installed in vocational vehicles (including vocational tractors certified under 40 CFR 1037.630 or exempted under 40 CFR 1037.631). We will waive this provision where you demonstrate that less than five percent of the engines in your tractor family were installed in vocational vehicles. For example, if you know that 96 percent of your tractor engines were installed in non-vocational tractors, but cannot determine the vehicle type for the remaining four percent, you may generate credits for all the engines in the family.

(5) You may generate CO2 emission credits from a model year 2021 or later medium heavy-duty engine family subject to spark-ignition standards for exchanging with other engine families only if the engines in the family are gasoline-fueled. You may generate CO2 credits from these engine families only for the purpose of offsetting CH4 and/or N2O emissions within the same engine family as described in paragraph (d) of this section.

(c) As described in §1036.730, compliance with the requirements of this subpart is determined at the end of the model year based on actual U.S.-directed production volumes. Keep appropriate records to document these production volumes. Do not include any of the following engines to calculate emission credits:

(1) Engines that you do not certify to the CO2 standards of this part because they are permanently exempted under subpart G of this part or under 40 CFR part 1068.

(2) Exported engines.

(3) Engines not subject to the requirements of this part, such as those excluded under §1036.5. For example, do not include engines used in vehicles certified to the greenhouse gas standards of 40 CFR 86.1819.

(4) Any other engines if we indicate elsewhere in this part 1036 that they are not to be included in the calculations of this subpart.

(d) You may use CO2 emission credits to show compliance with CH4 and/or N2O FELs instead of the otherwise applicable emission standards. To do this, calculate the CH4 and/or N2O emission credits needed (negative credits) using the equation in paragraph (b) of this section, using the FEL(s) you specify for your engines during certification instead of the FCL. You must use 34 Mg of positive CO2 credits to offset 1 Mg of negative CH4 credits for model year 2021 and later engines, and you must use 25 Mg of positive CO2 credits to offset 1 Mg of negative CH4 credits for earlier engines. You must use 298 Mg of positive CO2 credits to offset 1 Mg of negative N2O credits.