254 F.3d 195 (D.C. Cir. 2001), 00-1270, Husqvarna AB v. Environmental Protection Agency

Docket Nº:00-1270
Citation:254 F.3d 195
Party Name:Husqvarna AB; Husqvarna Forest and Garden Company; Frigidaire Home Products-Specialty Power, Petitioners v. Environmental Protection Agency, Respondent John Deere Consumer Products, Inc., Intervenor
Case Date:June 29, 2001
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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254 F.3d 195 (D.C. Cir. 2001)

Husqvarna AB; Husqvarna Forest and Garden Company; Frigidaire Home Products-Specialty Power, Petitioners

v.

Environmental Protection Agency, Respondent

John Deere Consumer Products, Inc., Intervenor

No. 00-1270

United States Court of Appeals, District of Columbia Circuit

June 29, 2001

Argued May 17, 2001

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On Petition for Review of an Order of the Environmental Protection Agency

Nancy S. Bryson argued the cause for the petitioners.

Pamela S. Tonglao, Attorney, United States Department of Justice, argued the cause for the respondent. John C. Cruden, Acting Assistant Attorney General, United States Department of Justice, and John T. Hannon and Michael W. Thrift, Attorneys, United States Environmental Protection Agency, were on brief for the respondent.

Richard E. Ayres argued the cause for the intervenor.

Before: Henderson, Tatel and Garland, Circuit Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge:

The petitioners, Husqvarna AB et al. (Husqvarna), seek review of the Phase 2 Emission Standards for New Nonroad Spark-Ignition Handheld Engines promulgated by the respondent, the U.S. Environmental Protection Agency (EPA), under the authority of section 213 of the Clean Air Act (CAA), 42 U.S.C. § 7547. Husqvarna contends that the final rule is arbitrary and capricious because the EPA failed to select the emission standards that represent the best balance of the factors identified in CAA section 213. It also

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maintains that the regulatory alternative chosen by the EPA is not supported by substantial evidence in the record. Finally, Husqvarna alleges procedural error stemming from inadequate notice and opportunity to comment. Because each of these arguments lacks merit, we deny Husqvarna's petition.

I. Background

In 1990 the Congress amended the CAA and added section 213, which authorizes the EPA to set emissions standards for "nonroad engines and vehicles." Pub. L. No. 101-549, 104 Stat. 2399 (1990). Section 213 required the EPA to adopt emission standards by 1993 and to revise them as appropriate thereafter. The EPA missed the statutory deadline and a lawsuit to enforce the statute was filed, which has resulted in the district court's monitoring of the EPA's compliance. See Sierra Club v. Whitman, Civ. No. 93-0124 (D.D.C. filed Jan. 19, 1993).

In establishing emission standards, the EPA created two categories of small spark-ignition (SI) engines: nonhandheld and handheld.1 The EPA further divided handheld engines into three classes--Classes III, IV and V--based on engine size, with Class III encompassing the smallest and Class V the largest handheld engines. The domestic handheld engine industry includes 22 manufacturers, including Husqvarna, Stihl, John Deere, Shindaiwa, Kawasaski, Echo, Ryobi and Honda, which manufacture a total of 186 engine families.2 These manufacturers primarily use two-stroke engines in handheld products because of their high power-to-weight ratios and low cost. A two-stroke engine is an internal combustion engine that accomplishes the operations of intake, compression, expansion and exhaust in two piston strokes rather than four.

The EPA has regulated emissions from handheld engines in two phases. See 58 Fed. Reg. 55, 033, 55,034 (Oct. 25, 1993). In Phase 1, the EPA proposed short-term new engine standards based in part on standards California had adopted for similar engines. In January 1998 the EPA proposed Phase 2 emission standards for handheld engines that were slightly more stringent than those in Phase 1. 63 Fed. Reg. 3950, 3953-55, 3958-59, 3964-71, 4009-4013 (Jan. 27, 1998). The proposed Phase 2 standards were expected to reduce hydrocarbons (HC) and oxides of nitrogen (NOx) emissions by 30 per cent beyond Phase 1 standards by the year 2025.3 63 Fed. Reg. 4001. The proposal called for a reduction in emissions for Class III, IV and V engines to 210, 172 and 116 grams per kilowatt-hour (g/kWhr),4 respectively. In response to the proposal, the EPA received input from manufacturers indicating that lower emission levels were feasible. See 63 Fed. Reg. 66,

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081, 66,082-83 (Dec. 1, 1998).5 And in late 1998 a portion of the handheld engine industry suggested that it would support final HC+NOx standards of 72 g/kW-hr for Classes III and IV and 87 g/kW-hr for Class V (72-72-87).

On December 2, 1998 John Deere Consumer Products, Inc. (Deere), which appeared as an intervenor before this court, recommended that the EPA consider stricter Phase 2 standards in light of its recent development of "compression wave technology" (CWT), which promised to significantly reduce emissions from handheld engines. CWT uses compressed air to improve fuel injection in the combustion chamber of a twostroke engine, resulting in almost all of the fuel being combusted. Deere stated that CWT was adaptable to all sizes of two-stroke engines and could meet a 72 g/kW-hr HC+NOx standard in 2001.

On July 28, 1999 the EPA published a Supplemental Notice of Proposed Rulemaking (Supplemental Proposal), which proposed emission limits of 50 g/kW-hr for Classes III and IV with phase-in between 2002 and 2006 and an emission limit of 72 g/kW-hr for Class V with phase-in between 2004 and 2008. 64 Fed. Reg. 40,940 (July 28, 1999). In addition to CWT, the Supplemental Proposal identified three other technologies-stratified scavenging,6 miniature four-stroke engines7 and cat alysts8--that could be utilized by manufacturers to meet the Phase 2 standards. The Supplemental Proposal also contained an averaging, banking and trading (ABT)9 program to give handheld engine manufacturers flexibility in meeting the more stringent Phase 2 standards. 64 Fed. Reg. 40,951. Under the proposed program, manufacturers would declare a family emission limit (FEL) for each engine family. See supra note 2. Manufacturers need only ensure that average emissions from all of their engine families meet the emission standards for the given model year. They could also generate bankable emission credits based on the differences between the FEL and the Phase 2 standards for the applicable model year.

Many manufacturers, including Husqvarna, commented on the Supplemental Proposal. The public comment period closed on September 17, 1999, although the EPA agreed to consider additional comments filed within 30 days therefrom. It also continued to meet with interested manufacturers after the close of the comment period. The final Phase 2 emission standards for handheld SI engines were

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published on April 25, 2000. 65 Fed. Reg. 24,268. In the final rule, the EPA adopted the...

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