Why EPA’s NOx Rule Needs NCPs

Key Insights

• Nonconformance penalties, or NCPs, would allow manufacturers to sell certain engines above EPA's proposed NOx standard by paying a penalty that removes any competitive advantage from doing so.
• NCPs are not exemptions from emissions standards. They are temporary compliance tools designed to preserve engine availability while manufacturers finish testing new emissions-control technologies.
• A rule proposed by EPA would allow NCPs only for model years 2027 through 2029, with penalties increasing over time to encourage full compliance.
• Preserving NCPs would help protect truck availability, fleet reliability and supply chain stability while supporting the transition to lower-emission engines.
• ATA supports finalizing EPA's proposed NOx rule with its NCP provisions intact.

Trucking reaches virtually every corner of America. The 8.5 million men and women employed by our industry live and work in the communities they serve, giving trucking a direct stake in cleaner and healthier air.

Trucking's record reflects that commitment to the environment. Together with EPA, our industry has ensured that modern trucks meet stringent standards that produce 99% less NOx emissions than previous generations.

In July, EPA proposed a new rule that gives our industry the opportunity to build on that progress. It lays out a responsible path forward, maintaining ambitious NOx emissions reduction targets while recognizing that manufacturers need sufficient time to test new technologies under real-world operating conditions.

The ability to strike this appropriate balance hinges on the nonconformance penalties embedded in EPA's proposed rule. NCPs preserve the incentive for manufacturers to meet the new standard as quickly as possible while preventing reliable engine models from becoming unavailable in the market. As EPA prepares to finalize its rulemaking, the NCP provisions must remain intact. Without them, the rule would lose a critical safeguard for truck availability, fleet reliability, and an orderly transition to the next generation of emissions technology.

What are NCPs?

Congress directed EPA to provide NCPs when technology-forcing heavy-duty engine standards could otherwise push manufacturers out of the market and restrict the supply of engines for customers.

To issue NCPs, EPA must determine that a manufacturer is unlikely to be able to comply for technological reasons. The agency is required to make NCPs available prospectively when they are likely to be needed; it cannot wait until failures appear in the marketplace.

How Would NCPs Work in EPA's NOx Rule?

EPA's proposed NOx rule would allow a manufacturer to sell an engine that does not meet its 35 mg/hp-hr. standard by paying an NCP. This is neither an exemption from the standard nor a free pass for noncompliance. Instead, the penalty simply removes any competitive advantage from selling an engine above the standard.

The closer an engine is to compliance, the lower the penalty. For example, under EPA's proposal, a model year 2027 heavy heavy-duty engine certified at 100 mg/hp-hr. would incur a $5,875 penalty, while an engine certified at 45 mg/hp-hr. would incur a $904 penalty.

By design, NCPs are intended to be temporary. The penalty increases each year to reinforce the requirement that every manufacturer ultimately comply, and EPA has proposed making NCPs available only for model years 2027 through 2029.

EPA Can and Should Issue NCPs.

NCPs are important, because they can help alleviate reliability problems with first-generation trucks equipped with new emissions-control technologies. EPA has a history of exercising its NCP authority when standards were raised in 1985, 2004, and 2012.

EPA's new NOx standards are precisely the type of scenario NCPs were created for. The compressed implementation timeline of the rule, the engineering challenge of wringing out residual NOx emissions, and manufacturers' ongoing testing efforts indicate that some engines will not initially be ready to meet the standards.

Certainty and Stability Matter.

EPA should finalize its NOx rule as close to the agency's original proposal as possible. With the January 1 compliance deadline approaching and order books for model year 2027 trucks currently open, the industry has little room to absorb unexpected changes.

Manufacturers' strategies to meet the 2027 requirements are fully underway. Although some engines certified at 35 mg/hp-hr. are expected to be available, every heavy-duty manufacturer has outlined plans to use previously acquired NOx credits, NCPs, or both as part of its compliance strategy. Removing or weakening NCPs now would disrupt the plans already built around EPA's proposal.

EPA also should not increase the proposed NCP cost levels. In fact, data that some manufacturers have shared with EPA supports an NCP cost reduction. Penalties should eliminate any competitive advantage without becoming so punitive that they undermine the market-stabilizing purpose Congress intended.

The Path Forward.

When EPA proposed its NOx rule in July, it incorporated recommendations made by ATA to fix a previous, unworkable rule issued by the agency in 2023. The revised rule, which ATA strongly supports, would save the trucking industry $12 billion, including up to $6,000 per truck, while preserving nearly 90% of the NOx reductions projected under the original rule.

Those benefits depend in part on retaining NCPs. They are a critical component of the final rule because they preserve access to reliable, proven emissions-control technologies while manufacturers validate the new systems needed to drive down NOx emissions.

Trucks move three-quarters of the nation's freight, so it is vital that we get this transition right. Standards that outpace technological readiness can undermine environmental progress, constrain truck availability, and disrupt the supply chain. Preserving NCPs in the final rule will provide the certainty needed to achieve cleaner air without sacrificing the reliability of the freight transportation system.