“With our retrofit kits, we’re able to take existing marine, locomotive and offroad engines and make them much more efficient and reliable. Caterpillar is relied upon by both federal and state authorities to deliver effective solutions to complex environmental challenges.”
I work in global regulatory affairs, and focus on communicating corporate positions on regulation. We’re looking at how it relates to Caterpillar, both internally and externally.
Every day brings a new challenge. Something different always comes up.
Volkswagen is being required to pay to reduce NOx emissions to offset their vehicles' increased contributions. Fortunately, Caterpillar has a number of technologies that meet the requirements to reduce NOx.
It is unprecedented in sheer size of funding available – $2.9 billion. As far as Caterpillar’s involvement, we have participated in different grant programs quite a bit, both at the federal and state level, and have also worked with other private entities. We do have experience working with this type of emissions reduction project. Caterpillar can offer efficient, effective solutions to complex emissions challenges. That’s a key reason we’re relied upon in situations like this.
We are focusing primarily on marine upgrade kits, marine repowers and remanufactured locomotives. Remanufactured and repowered are considered the same to the EPA. We are also offering off-road machine repowers. Caterpillar has durable, reliable technologies that are ideal for projects of this nature.
The marine kits come in a few varieties. We have both certified and verified kits. The difference is the certified kits meet 1042 compliance. That means every time you overhaul a marine vessel, if it meets a certain criteria and the manufacturer has it available, then you have to use that kit. Verified kits obtain a broader range of emission reductions and are approved by the EPA.
We have EMD marine and Caterpillar kits that apply to each of the engine types. We can take unregulated engines up to Tier 1, Tier 2 and Tier 3 and a variety of kits in between that meet the rule that legislates a 25% PM reduction. And EMD has added an NOx reduction component to those kits, which makes them a better value to those owners.
When you’re talking about moving up a tier, one of the things that occurs on diesel engines is the requirement of additional cooling. If you have an old, unregulated mechanical engine, you’ll need to upgrade to a Tier 2 or Tier 3. You’ll need additional cooling and, depending on the type of vessel and cooling required, you may need to replace components. Push boats in the river have huge coolers – similar to exterior radiators under the vessel – that will need to need to multiply to increase the capacity. If you’re going from mechanical to electronic, there are new gauges that need to be run into the wheelhouse so the captain can see the engine performance.
But otherwise these kits are much more akin to completing an overhaul. When you go to accomplish your overhaul that you would normally perform, it is a change to components that you weren’t going to put on and new components to reach another level. Basically, it’s like having a short-block to start with and adding new accessories that takes a mechanical unregulated engine and brings it up to Tier 2.
The rules for locomotives are different than other non-road spaces. When you go to install these kinds of upgrades, usually it’s going to end up being a remanufacture. You are going to need to strip it down to just the frame and the cab, and will need to rebuild the entire locomotive. And depending on what tier you’re going to, that will drive what additional components may be needed.
For instance, if you’re going from an unregulated or a Tier 0 locomotive and you’re bringing it up to Tier 4, you’ll have to add an entirely new intake system. Plus, the after-treatment has a whole framework that sits above the engine, and there’s an air compressor and dynamic braking system that’s added.
A locomotive is more extensive than the others. What you start with and what you end up with may be different models entirely. You might start out with an old EMD SD40 and when you’re finished it’s a new EMD 24 Tier 4 locomotive.
Although Caterpillar does make a couple of upgrade kits that are similar to the ones we use in marine, we’ve gone to repowers for those off-road machines that take them up to Tier 2, 3 or 4. We offer over 50 engineered solutions that cover the most popular models of non-road equipment.
We have field representatives who can assist the dealer and the customer. We’re going through the process of training them on the products we have. For example, explaining what the application process should look like and how you apply because it will be the owner applying for the funding.
The mitigation effort to lower NOx is where Caterpillar products come in. Where we’re good in this space is with large non-road engines. With large engines come greater emissions. When you go from a non-regulated to a Tier 3 or Tier 4 emissions level, you end up with extensive emissions reductions. The whole key to these emissions funds is cost effectivity. It’s really about the amount of money you spend for how many tons of NOx you remove. That's how states are to select projects to fund – cost-effectivity.
These large engines are recognized by the EPA as having very long service lives. When you’re talking about spending money to reduce NOx over a long period of time, your costs go down that much more.
California is a very complicated state. It’s different from all the others. This grant funding is only to go to surplus emissions, which are emissions that go above and beyond emissions that are regulated. In California, everything is regulated, so it’s very challenging there.
For instance, there’s a harbor craft rule that any of the service craft vessels and harbor tugs all have to be Tier 3, so basically you have to have the most current emission level. In the non-road space, they don’t require Tier 4, but they control emissions by averaging horsepower and emissions across your fleet.
There isn’t a lot of room for grant money to be used there. But with locomotives, they’re pre-empted by federal law. California can’t regulate locomotives. So funding Tier 4 switcher locomotive remanufactures would be effective in lowering NOx in non-attainment and environmental justice areas.
California is currently leading the way with the most funding that’s going to electrification. But keep in mind, electrification may not be the answer here. As technologies mature, we may find that all that’s happening with electrification is that you are moving your emissions. Technically they’re not as inexpensive as they may appear to be. They’re charging overnight for what they’re using during the day. Those emissions, from charging, are only being moved to where the power plant is.
There are some studies right now that suggest that electric isn’t the cleanest, most efficient way to go and that clean diesel reduces NOx at a greater capacity and for lower costs. And, there is no change to the fueling infrastructure, as diesel fuel is readily available.
We have competition in this space, but third-party parts and repair facilities don’t have the dealer network we have. When an engine is rebuilt during an overhaul, what overhaul kit does an owner purchase? That’s where the Cat dealer network comes into play. An owner can be assured of the long-term reliability that is going into our parts, kits, repowers, remanufactures or the replacement of the entire machine. As long as you’re using OEM parts, you have the reliability and assurance to reduce emissions for a very long time.
If you perform an upgrade, Caterpillar has quality controls on parts used in overhauled engines. Those parts meet all NOx compliance requirements per international maritime regulations. We have certification from GL that those parts – even a reman part – will perform at the same level of NOx reduction/output of that engine. The quality control and performance is there throughout the life of the engine, be it new or reman.
Since this project falls into the retrofit of existing engines, that’s where we’re able to help our existing customers. The goal is to use less fuel, reduce emissions, lower their overall maintenance costs and make their business more productive. We appreciate that our customers rely on the Caterpillar name and we’re here to help them do that.
When customers perform these upgrades and move to a newer technology, they will get much better performance from the Caterpillar product. They'll get advanced electronics, enhanced reliability, higher interactivity and superior technology for either a locomotive or marine vessel. It makes the vehicle fully computerized, which is much better than trying to troubleshoot mechanical issues. It’s like looking under the hood at a carburetor of a 2017 versus a 1990 car. It’s completely different.
We’ve been doing a lot of consultative analysis on comparing our product to those of electrification in the existing engine space and we’re finding that the EPA in their last assessment report said that the first thing to do to lower emissions is to replace your older diesel engines with the new clean diesel.
Electrification and going to compressed natural gas – though it probably has a place in the on-highway space – the technology is not as mature as clean diesel, nor is it cost-effective. Electrification is a very expensive undertaking where there’s already an infrastructure for diesel that exists and by going to a new engine, the only change to the owner is better performance, lower emissions and lower maintenance. The enhancements to the engines to reduce emissions and the signed-off validation process of the marine vessel can be compared back to our engineering at the factory to ensure that our workmanship is accurate. It’s validated by an extra set of eyes.
Whenever we accomplish one of these upgrade kit installations, we have a way of validating the emissions performance by way of the engine performance. These are proven, effective technologies that follow EPA guidelines.
Large diesel engines in the locomotive and marine space have been in the field for up to 50 years at this point. And there’s nothing to make them change. They can continue overhauling those engines for decades and there’ll be no emissions reductions. The VW Mitigation Trust Funds are an incentive to raising the performance of those engines and lowering the emissions.
The number of hours that these engines run per year is very high; it’s not like a car that runs a few thousand miles. Your car only moves 5-7 passengers, where one push tug can be moving 60-70 jumbo barges. Those engines are moving an extraordinary amount of product, so it’s an exponentially larger effort. As long as the engines are running, they are emitting. Upgrading those engines will lower NOx and PM by very large amounts.
Overall the goal is to create a cleaner, safer environment for all of us. We’re happy that Caterpillar can play an important role in achieving this.