Appendix 1: Scenario Analysis: Fleet Average NOx Emissions in Canada - Introduction

The On-Road Vehicle and Engine Emission Regulations are designed to incorporate the U.S. fleet averaging NO_x standards. They include the associated provision for banking and trading of NO_x emission credits and appropriate flexibility to address market differences between Canada and the U.S. Some comments on the March 30, 2002 proposed Regulations suggested that the exact U.S. fleet averaging program needs to be applied in Canada to ensure that the emission performance of the Canadian fleet is comparable to that of the U.S. fleet. This report describes an analysis that supports the position that the Regulations can achieve the desired overall emission performance of the Canadian fleet while providing sufficient flexibility to accommodate legitimate market differences.