(a) Except as specified in the exhaust standard-setting part and paragraph (b) of this section, equipment using an engine that is exempt from exhaust emission standards under the provisions in 40 CFR part 1068, subpart C or D, is also exempt from the requirements of this part 1060. For example, engines or equipment exempted from exhaust emission standards for purposes of national security do not need to meet evaporative emission standards. Also, any engine that is exempt from emission standards because it will be used solely for competition does not need to meet evaporative emission standards. Equipment that is exempt from all exhaust emission standards under the standard-setting part are also exempt from the requirements of this part 1060; however, this does not apply for engines that must meet a less stringent exhaust emission standard as a condition of the exemption.

(b) Engines produced under the replacement-engine exemption in 40 CFR 1068.240 must use fuel-system components that meet the evaporative emission standards based on the model year of the engine being replaced subject to the provisions of 40 CFR 1068.265. If no evaporative emission standards applied at that time, no requirements related to evaporative emissions apply to the new engine. Installing a replacement engine does not change the applicability of requirements for the equipment into which the replacement engine is installed.

(c) Engines or equipment that are temporarily exempt from EPA exhaust emission standards are also exempt from the requirements of this part 1060 for the same period as the exhaust exemption.

(d) For equipment powered by more than one engine, all the engines installed in the equipment must be exempt from all applicable EPA exhaust emission standards for the equipment to also be exempt under paragraph (a) or (b) of this section.

(e) In unusual circumstances, we may exempt components or equipment from the requirements of this part 1060 even if the equipment is powered by one or more engines that are subject to EPA exhaust emission standards. See 40 CFR part 1068. Such exemptions will be limited to:

(1) Testing. See 40 CFR 1068.210.

(2) National security. See 40 CFR 1068.225.

(3) Economic hardship. See 40 CFR 1068.245 and 1068.250.

(f) Evaporative emission standards generally apply based on the model year of the equipment, which is determined by the equipment's date of final assembly. However, in the first year of new emission standards, equipment manufacturers may apply evaporative emission standards based on the model year of the engine as shown on the engine's emission control information label. For example, for fuel tank permeation standards starting in 2012, equipment manufacturers may order a batch of 2011 model year engines for installation in 2012 model year equipment, subject to the anti-stockpiling provisions of 40 CFR 1068.105(a). The equipment with the 2011 model year engines would not need to meet fuel tank permeation standards as long as the equipment is fully assembled by December 31, 2012.