(a) You may average, bank, and trade (ABT) emission credits for purposes of certification as described in this subpart to show compliance with the standards of this part. This applies for engines with respect to exhaust emissions and for vessels with respect to evaporative emissions. Participation in this program is voluntary.

(b) The definitions of subpart I of this part apply to this subpart. The following definitions also apply:

(1) Actual emission credits means emission credits you have generated that we have verified by reviewing your final report.

(2) Averaging set means a set of engines (or vessels) in which emission credits may be exchanged only with other engines (or vessels) in the same averaging set.

(3) Broker means any entity that facilitates a trade of emission credits between a buyer and seller.

(4) Buyer means the entity that receives emission credits as a result of a trade.

(5) Family means engine family for exhaust credits or emission family for evaporative credits.

(6) Reserved emission credits means emission credits you have generated that we have not yet verified by reviewing your final report.

(7) Seller means the entity that provides emission credits during a trade.

(8) Standard means the emission standard that applies under subpart B of this part for engines or fuel-system components not participating in the ABT program of this subpart.

(9) Trade means to exchange emission credits, either as a buyer or seller.

(c) You may not average or exchange banked or traded exhaust credits with evaporative credits, or vice versa. Evaporative credits generated by any vessels under this part may be used by any vessels under this part. Exhaust credits may be exchanged only within an averaging set. Except as specified in paragraph (d) of this section, the following criteria define the applicable exhaust averaging sets:

(1) Sterndrive/inboard engines.

(2) Outboard and personal watercraft engines.

(d) Sterndrive/inboard engines certified under §1045.660 for jet boats may use HC + NOX and CO exhaust credits generated from outboard and personal watercraft engines, as long as the credit-using engine is the same model as an engine model from an outboard or personal watercraft family. Such emission credits that you generate under this part 1045 may be used for averaging, but not for banking or trading. The FEL caps for such jet boat families are the HC + NOX and CO standard for outboard and personal watercraft engines. U.S.-directed sales from jet boat engines using the provisions of this paragraph (d) may not be greater than the U.S.-directed sales of the same engine model for outboard or personal watercraft engines.

(e) You may not generate evaporative credits based on permeation measurements from metal fuel tanks or portable marine fuel tanks.

(f) You may not use emission credits generated under this subpart to offset any emissions that exceed an FEL or standard. This applies for all testing, including certification testing, in-use testing, selective enforcement audits, and other production-line testing. However, if exhaust emissions from an engine exceed an exhaust FEL or standard (for example, during a selective enforcement audit), you may use emission credits to recertify the family with a higher FEL that applies only to future production.

(g) Emission credits may be used for averaging in the model year they are generated or banked for averaging in future model years, except that CO emission credits for outboard and personal watercraft engines may not be banked or traded.

(h) You may increase or decrease an exhaust FEL during the model year by amending your application for certification under §1045.225.

(i) Engine and vessel manufacturers certifying with respect to evaporative emissions may use emission credits to demonstrate compliance under this subpart. Component manufacturers may establish FELs for their certified products, but they may not generate or use emission credits under this subpart.

(j) In your application for certification, base your showing of compliance on projected production volumes for engines or vessels intended for sale in the United States. As described in §1045.730, compliance with the requirements of this subpart is determined at the end of the model year based on actual production volumes for engines or vessels intended for sale in the United States. Do not include any of the following engines or vessels to calculate emission credits:

(1) Engines or vessels exempted under subpart G of this part or under 40 CFR part 1068.

(2) Engines or vessels intended for export.

(3) Engines or vessels that are subject to state emission standards for that model year. However, this restriction does not apply if we determine that the state standards and requirements are equivalent to those of this part and that products sold in such a state will not generate credits under the state program. For example, you may not include engines or vessels certified for California if California has more stringent emission standards for these products or if your products generate or use emission credits under the California program.

(4) Engines or vessels not subject to the requirements of this part, such as those excluded under §1045.5.

(5) Any other engines or vessels where we indicate elsewhere in this part 1045 that they are not to be included in the calculations of this subpart.

[73 FR 59194, Oct. 8, 2008, as amended at 75 FR 23020, Apr. 30, 2010]