Marine spark-ignition engine regulations technical guidance: chapter 7


7 Optional Fleet Averaging Regime

7.1 Introduction to fleet averaging

The fleet averaging option is available for many types of emissions from marine engines and off-road recreational vehicles, and is consistent with similar programs established under the corresponding EPA rules.

This option provides flexibility to allow companies to manufacture or import engines and vehicles that emit more than otherwise allowed by the standards, as long as the increased emissions are offset, on a fleet basis, by engines or vehicles that emit less than allowed by the standards. Overall, the fleet emits less pollution than what would be allowed by the regulations if every engine or vehicle of that fleet conformed directly to the emissions standard. If this cannot be achieved directly by the fleet, it may be achieved by the use of credits previously obtained by the company or by the use of credits that have been transferred to the company from another company.

7.2 For which emission types and classes of engines and vehicles is fleet averaging available?

Fleet averaging is available as summarized in Table 7.

Table 7: Emission types and engine and vehicle classes for which fleet averaging is available
Class Emission Types
Outboards and personal watercraft engines HC+NOx, CO
Conventional inboard engines HC+NOx, CO
Snowmobiles HC, CO, fuel tank permeation
Off-road motorcycles HC+NOx, COa, fuel tank permeation
ATVs and UVs HC+NOx, fuel tank permeation

a Fleet averaging is not available for CO emissions from motorcycles that have small displacement engines of 70 cm³ or less that conform to the standards under subsection 21(2) of the Regulations.

7.3 Who is required to comply with the fleet averaging requirements of the Regulations, including the requirements for end of model year reporting?

The fleet averaging regime is optional, and therefore the requirements only apply to a company who chooses to comply with the standards by using the option described in paragraph 11(1)(d) of the Regulations (i.e., the engines or vehicles conform to FELs in lieu of the standards and conform on the basis of fleet averaging). All companies must submit an end of model year report regardless of whether they choose to use fleet averaging. Environment Canada monitors compliance with fleet averaging of applicable marine engines and off-road recreational vehicles, and monitors the environmental performance of all engines, vessels and vehicles via the end of model year report, among other compliance monitoring methods.

7.4 What are the main steps for a company that uses fleet averaging?

If a company would like to use the fleet averaging provisions of the Regulations, it must:

  • select the fleet averaging option of conformity (paragraph 11(1)(d) of the Regulations);
  • establish fleets and emission families, and select appropriate FELs (paragraph 11(1)(d) and section 24 of the Regulations, and sections 7.5 to 7.10 of this document);
  • for marine engines, calculate the family emission credits/deficits and the sum of these credits/deficits, to determine the fleet average emission credits/deficits (section 26 of the Regulations, and section 7.14 of this document);
  • for recreational vehicles, calculate the fleet average emission values and fleet average emission credits/deficits (sections 29 and 30 of the Regulations, and section 7.15 of this document);
  • use fleet average emission credits to offset deficits, and bank or transfer excess fleet average emission credits (section 27 of the Regulations and section 7.14 of this document for marine engines, and section 31 of the Regulations and section 7.15 of this document for off-road recreational vehicles);
  • submit an end of model year report (section 33 of the Regulations, and section 8 of this document); and
  • retain various associated records (section 36 of the Regulations, and section 9 of this document).

7.5 What classes of engines and vehicles can be grouped into fleets for the purpose of fleet averaging?

The following classes of engines and vehicles are to be grouped into separate fleets for the purposes of fleet averaging:

  • outboards and personal watercraft engines;
  • conventional inboard engines;
  • snowmobiles;
  • off-road motorcycles;
  • UVs; and
  • ATVs.

Note that a company may choose to group UVs and ATVs into a single fleet.

7.6 What is a family emission limit (FEL)?

As outlined in subsection 1(1) of the Regulations, a FEL means "the maximum emission level established by a company for an emission family for the purpose of fleet averaging."

Under paragraph 11(1)(d) of the Regulations, an engine or vehicle that is part of a fleet must conform to a FEL, which may be below or above the applicable standard (subject to a maximum limit) instead of conforming directly to the standard. The fleet must conform on the basis of fleet averaging.

7.7 How would a company determine the FEL of an engine or vehicle?

The FEL for an emission family is indicated on the EPA's certificate of conformity and the emission control information label. The manufacturer of the engine or vehicle usually establishes the FEL for the emission family. If no EPA certificate of conformity is available for the engine or vehicle, the company must establish the appropriate FEL, keeping in mind that the FEL becomes the upper limit of emissions that are permitted by the Regulations from any of the engines or vehicles in the family.

If a company has chosen to use the fleet averaging regime and an engine or vehicle in the company's fleet is already certified by the EPA to an exhaust or evaporative emission standard and is not certified to a FEL, it is the company's responsibility to establish the FEL for that engine or vehicle. The company may choose to use the value of the applicable standard as the FEL, or it may choose to establish a different FEL using the procedure referred to in section 7.8 of this document. If a company chooses to establish a FEL that is different from the emission standard or FELlisted on the EPA certificate of conformity, the EPA certificate of conformity for the engine or vehicle would then no longer be valid, and the company would be required to perform all testing and obtain and submit all necessary evidence of conformity in accordance with section 9.7.1 of this document.

7.8 Is there a procedure that a company must follow to establish FELs?

The engine or vehicle that is expected to have the highest emissions in an emission family is selected, and a factor is added to or multiplied by the emission rate to determine the FEL for that emission family. The emission rate of the product must be determined from tests conducted in accordance with the appropriate sections of the CFR. The factor used is typically determined from durability testing, and is intended to allow for a margin of error, similar to a safety factor, to ensure actual emissions are below the FEL.

7.9 Are all of a company's marine engines and off-road recreational vehicles included in its fleets?

As indicated in section 24 of the Regulations, "fleet" refers to all of the marine engines and off-road recreational vehicles of a given model year that a company manufactures in Canada, or imports into Canada, for the purposes of sale in Canada to the first retail purchaser.

Also, subsection 24(4) of the Regulations specifies that a company has the option to exclude from its fleets its engines and vehicles that are covered by an EPA certificate and sold concurrently in Canada and the United States, if the total number of units sold in the United States exceeds the number of units sold in Canada. The consequences of this voluntary exclusion are set out in subsections 25(3) and 30(2) of the Regulations, and state that the company forfeits all previously obtained credits for that fleet and is not eligible to obtain any credits for that fleet in that model year.

7.10 Can engines and vehicles of the 2012 model year that were manufactured or assembled before the coming into force date of the Regulations be included in the fleets?

Yes. As stated in subsections 26(3) and 29(3) of the Regulations, a company may include, in the calculation of the family emission credits and deficits, all the engines of the 2012 model year that were manufactured and all the vehicles that had their main assembly completed prior to the coming into force date of the Regulations.

7.11 If a company's engines or vehicles are certified to a FEL that is better than the applicable standard, can the company choose to not calculate the fleet average emission values, credits and deficits?

As stated in subsections 25(4) and 28(3) of the Regulations, a company may elect not to determine the fleet average emission credits or deficits for engines or the fleet average emission value for vehicles, for a given emission type and fleet in a model year, if every engine or vehicle in that fleet conforms to a FEL that is better than the applicable standard. In the case of engines, the fleet average emission credits will be deemed to be zero. In the case of vehicles, the fleet average emission value will be deemed to be equal to the applicable standard.

7.12 What happens to outstanding credits and deficits when a company acquires another company or when companies merge?

Subsection 32(1) of the Regulations provides that a company that acquires another company, or that results from the merger of companies, is responsible for offsetting any outstanding deficits from the acquired or merged companies.

7.13 What happens to outstanding deficits for a company that ceases to manufacture, import or sell vehicles or engines?

As required under subsection 32(2) of the Regulations, the company must, before submitting its last end of model year report, offset any outstanding emissions deficits.

7.14 Calculation of fleet average emission credits and deficits for marine engines

7.14.1 In general, how does a company use fleet averaging for marine engines?

Under the fleet averaging regime for marine engines, a company calculates its HC+NOx and CO exhaust "family emission credits or deficits" for each emission family in a given model year. Separate calculations are made in relation to the following fleets for the HC+NOx and CO exhaust emission types:

  • outboards and personal watercraft engines; and
  • conventional inboard engines.

The sum of these family emission credits or deficits within each fleet and emission type, referred to as "fleet average emission credits," must be greater than or equal to zero, otherwise the company incurs "fleet average emission deficits" that must be offset. The formula and methods of calculating the fleet average emission credits and deficits are set out in sections 26 and 27 of the Regulations, and are consistent with the methods set out in the corresponding EPA rule.

7.14.2 How are family emission credits and deficits for marine engines calculated?

The HC+NOx and CO exhaust family emission credits and deficits, in units of kg, are calculated using the following formula:

(S - L) × N × P × U × 0.207 × 10-3

where

S is the applicable exhaust emission standard, in g/kW-hr;

L is the FEL for the emission family, in g/kW-hr;

N is the number of engines in the emission family;

P is the maximum engine power for the emission family, in kW, determined in accordance with CFR 1045.140; and

U is the useful life for engines of that emission family, in hours.

A simple example calculation is presented in Appendix C.

7.14.3 Are there provisions respecting the procedures for rounding the calculated fleet average emission credits or deficits?

Yes. As specified in subsection 26(1) of the Regulations, the fleet average emission credits or deficits must be rounded to the nearest whole number of kg, and if the sum is equidistant between two whole numbers of kg, the sum is to be the higher of the two numbers.

7.14.4 When are fleet average emission credits obtained?

As specified in subsection 25(1) of the Regulations, fleet average emission credits for a specific model year are obtained when the result of the calculation for fleet average emission credits is a positive number and when the company reports credits in its end of model year report.

7.14.5 How can a company use fleet average emission credits?

Fleet average emission credits obtained by a company may generally4 be banked for use in subsequent model years by the company, or they may be transferred in subsequent model years to another company. Those credits can be used to offset deficits incurred in a future model year as long as the deficits being offset are for the same type of fleet, for the same emission type, and for the same standard expressed in the same units as the credits being used. Special exceptions exist for certain jet boat engines, as described below and in section 7.14.6 of this document.

If a company manufactures or imports a model of jet boat engine that is also used in its outboards or personal watercraft and that meets the criteria in CFR 1045.660(a) and (c), that company may bank excess family emission credits generated by outboards or personal watercraft engines in one of two ways: the excess credits may be banked separately from other emission families of outboards or personal watercraft engines, if they will be used against future deficits for the corresponding model of jet boat conventional inboard engines; or, the excess credits may be banked together with excess credits of other families of outboards and personal watercraft engines, if they will be used against future deficits for a fleet of outboards and personal watercraft engines. Credits banked in the latter manner will no longer be available for use against a future deficit for the corresponding jet boat engine model.

7.14.6 How can a company offset fleet average emission deficits?

As described in subsections 27(1) and 27(2) of the Regulations, fleet average emission deficits must be offset by using an equivalent number of fleet average emission credits earned by the company in previous model years, and/or by obtaining sufficient credits from another company by means of a transfer. Except as specified in subsection 27(4) of the Regulations, the credits being used must be for the same type of fleet, the same emission type, and the same standard, expressed in the same units as the deficits being offset.

The exception specified in subsection 27(4) of the Regulations is that, during a given model year, a company that manufactures or imports a model of jet boat engine that is also used in an outboard or personal watercraft and that meets the criteria in CFR1045.660(a) and (c) may offset fleet average emission deficits generated by the jet boat engine with fleet average emission credits generated by those outboards or personal watercraft engines. The fleet average emission credits generated by outboards or personal watercraft engines being used to offset a company's fleet average emission deficit for jet boats cannot be transferred from another company.

Also, subsection 27(5) of the Regulations specifies that any remaining CO exhaust fleet average emission credits for a fleet of outboards and personal watercraft engines are cancelled upon receipt of the end of model year report.

7.14.7 Is there a deadline by which a company is required to offset fleet average emission deficits?

As set out in subsection 27(3) of the Regulations, any fleet average emission deficits must be offset by a company within a certain timeline, as follows:

  • for a 2012 model year fleet, a company has to offset its deficits no later than the day on which its 2014 end of model year report is submitted; and
  • in the case of a fleet of 2013 and later model years, the company must offset any deficits no later than the day on which the end of model year report is submitted for that model year.

7.15 Calculation of fleet average emission values and fleet average emission credits and deficits for off-road recreational vehicles

7.15.1 In general, how does a company use fleet averaging for off-road recreational vehicles?

Under the fleet averaging regime for off-road recreational vehicles, a company calculates its "fleet average emission value" for each type of emission (i.e., HC, HC+NOx, and CO exhaust and fuel tank permeation emissions, as applicable) in each model year. Separate calculations are made for a company's fleets of snowmobiles, off-road motorcycles, ATVs and UVs. ATVs and UVs may be combined into one fleet at the option of the company. If the fleet average emission value is less than the applicable standard, the company generates credits; if not, it incurs deficits that must be offset. The formulas and methods of calculating the fleet average emission values and fleet average emission credits are set out in sections 29 and 30 of the Regulations, and are consistent with those set out in the corresponding EPA rule.

7.15.2 How is a fleet average emission value for off-road recreational vehicles calculated?

As outlined in section 29 of the Regulations, the fleet average emission value is calculated in accordance with the formula indicated below. As specified in subsection 29(1) of the Regulations, the fleet average emission value must be expressed to one decimal place and expressed in the same units as the applicable standard set out in sections 20 to 22. A simple example calculation is presented in Appendix C to show how to use the formula.

In the case of exhaust emissions, the fleet average emission value is calculated using the following:

equation for fleet average emission value

where

TOT is the number of emission families in the fleet;

i is the ith emission family in the fleet, where "i" goes from 1 to TOT;

Wi is the FEL corresponding to emission family "i";

Yi is the number of vehicles in emission family "i"; and

Zi is determined as follows for each individual fleet of vehicles:

  • for snowmobiles, Zi is the useful life (km) for emission family "i", multiplied by the maximum power output (kW) observed during the emissions test, divided by 30 km/h;
  • for off-road motorcycles, Zi is the useful life (km) for emission family "i"; and
  • for ATVs or UVs:
    • for those vehicles that must conform to a FEL expressed in g/km, Zi is the useful life (km) of emission family "i"; or
    • for those vehicles that must conform to a FEL expressed in g/kW-h, Zi is the useful life (km) for emission family "i", multiplied by the maximum power output (kW) observed during the test and divided by 30 km/h.

In the case of vehicles that conform to a FEL expressed in g/kW-h (i.e., those vehicles that conform to CFR 1051.145(b) or CFR 1051.615(a) or (b)), and vehicles of a class that have more than one applicable standard for a specific emission type, the company must determine a separate fleet average emission value for those vehicles in respect of each applicable standard and emission type.

In the case of evaporative emissions, the fleet average emission value is calculated using the following:

Equation for fleet average emission value

where

TOT is the number of emission families in the fleet;

i is the ith emission family in the fleet, where "i" goes from 1 to TOT;

Wi is the FEL corresponding to emission family "i";

Yi is the number of vehicles in emission family "i" multiplied by the average internal surface area of the vehicles' fuel tanks (); and

Zi is the useful life of the emission family "i" expressed in years, multiplied by 365.24 days/year.

7.15.3 What are fleet average emission credits and deficits?

A company's fleet average emission value may be at, below or above the applicable emission standard in any given model year for a specific fleet of vehicles. Fleet average emission credits are obtained when a company's fleet average emission value, in respect of a given emission type, for a given model year and a given fleet, is lower than the applicable emission standard. Similarly, fleet average emission deficits are obtained when the fleet average emission value is higher than the emission standard.

7.15.4 How are fleet average emission credits and deficits calculated for off-road recreational vehicles?

As set out in subsection 30(3) of the Regulations, the formula indicated below, expressed in grams and rounded to one decimal place, is used to calculate emission credits and deficits. If, for a given model year, the number obtained from the formula is positive, the company will be eligible to obtain emission credits, whereas a negative number indicates emission deficits. A zero value indicates that the company will obtain neither credits nor deficits.

In the case of exhaust emissions, the fleet average emission credits and deficits are calculated using the following:

equation for the fleet average emission credits and deficits

where

A is the applicable standard in relation to that emission type and for that model year;

B is the fleet average emission value in relation to that emission type and for that model year as calculated in section 29 of the Regulations;

TOT represents the total number of emission families in the fleet;

i is the ith emission family in the fleet, where "i" goes from 1 to TOT;

Yi is the number of vehicles in emission family "i"; and

Zi is the useful life applicable to emission family "i" as described for Zi in the formula set out in subsection 29(1) of the Regulations.

As with the calculation of fleet average emission values, for those vehicles that conform to a FEL expressed in g/kW-h, calculations are to be performed separately from vehicles that conform to a FEL expressed in g/km. Similarly, calculations are to be performed separately for vehicles of a class that have more than one applicable standard for a specific emission type.

In the case of evaporative emissions, the fleet average emission credits and deficits are calculated using the following:

Equation for the fleet average emission credits and deficits

where

A is the applicable standard in relation to that emission type and for that model year;

B is the fleet average emission value in relation to that emission type and for that model year as calculated in section 29 of the Regulations;

TOT represents the total number of emission families in the fleet;

i is the ith emission family in the fleet, where "i" goes from 1 to TOT;

Yi is the number of vehicles in emission family "i" multiplied by the average internal surface area () of the vehicles' fuel tanks; and

Zi is the useful life applicable to emission family "i" as described for Zi in the formula set out in subsection 29(1) of the Regulations.

7.15.5 Are there provisions respecting the procedures for rounding the calculated fleet average emission credits or deficits?

Yes. As specified in subsection 30(4) of the Regulations, if the calculation of fleet average emission credits or deficits results in a fraction, the fraction is to be expressed in decimal form and rounded to one decimal place. The digit in the first decimal place must be increased by one if the digit in the second decimal place is 5 or more.

7.15.6 When are fleet average emission credits obtained?

As specified in subsection 30(1) of the Regulations, fleet average emission credits for a specific model year are obtained when the fleet average emission value is less than the applicable standard and when the company reports credits in its end of model year report.

7.15.7 How can a company use fleet average emission credits?

Fleet average emission credits obtained by a company may be banked for use in subsequent model years by the company or may be transferred to another company. Those credits can be used to offset deficits incurred in a future model year, if the deficits being offset are for the same type of fleet, the same emission type and the same standard, expressed in the same units as the credits being used.

7.15.8 How can a company offset fleet average emission deficits?

Subsection 31(2) of the Regulations provides that deficits can be offset with an equivalent number of fleet average emission credits obtained by the company in previous model years, or by obtaining sufficient credits from another company by means of a transfer. The credits must be in respect of the same type of fleet, the same emission type and the same standard, expressed in the same units.

7.15.9 Is there a deadline by which a company is required to offset fleet average emission deficits?

Yes. As set out in subsection 31(4) of the Regulations for off-road vehicles, any fleet average emission deficits must be offset by a company within a certain timeline, as follows:

  • In the case of a fleet of the 2012 model year and in relation to exhaust and fuel tank permeation emissions, the company must offset its deficits no later than the day on which the company submits its 2014 end of model year report.
  • In the case of a fleet of 2013 and later model years, the company must offset its deficits in relation to exhaust and fuel tank permeation emissions no later than the day on which the company submits its end of model year report for that model year.

4 As described in subsection 27(5) of the Regulations, fleet average emission credits calculated for CO emissions from a fleet of outboards or personal watercraft engines may not be banked for use in a subsequent model year. Such credits are immediately cancelled upon receipt of the end of model year report.

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