1. Presentation to the Board November 15, 2018
Amendments to Heavy Duty On-Board Diagnostic (HD OBD) System Requirements and the Introduction of Real Emissions Assessment Logging (REAL)
Thank you, Mr. Corey. Good morning Chair Nichols and members of the Board. Today, I will present a proposal to amend CARB’s on-board diagnostic regulations, which includes the introduction of a program called Real Emissions Assessment Logging, or REAL.
Presentation to the Board
November 15, 2018

2. Presentation Overview
Context and Background
Proposed HD OBD Amendments
Costs and Benefits
Remaining Industry Concerns
Staff Recommendation
I will start today’s presentation by talking about the context and background of our proposal, then I will give an overview of the proposed amendments to the heavy-duty on-board diagnostic, or HD OBD, regulation. Then I will talk about the costs and benefits of the proposal and briefly discuss the remaining concerns industry has with our proposal. Lastly, I will present the staff recommendation.

3. Context and Background
The Big Picture
Looking at the big picture, as already presented by Mike McCarthy in the previous presentation, CARB staff will be bringing a number of different heavy duty measures to the Board over the next year and a half. These measures cover everything from adoption of new, lower emission standards, to changes to the in-use compliance program, and programs to incentivize the adoption of cleaner, zero emission vehicles.
Context and Background

4. The Big Picture Fleet Smoke Inspection Rules HD Warranty (Step 1)
May 2018
HD Warranty (Step 1)
June 2018
HD OBD and REAL
November 2018
HD Warranty (Step 2) &
Warranty Reporting
December 2019
HD Inspection & Maintenance
Proposed 2020
One element of the big picture, durable and working emissions controls, is intended to ensure that clean technologies actually achieve emissions reductions in the real world. It includes the items shown here. The fleet smoke inspection rules and step one of the heavy duty warranty item were adopted by the Board earlier this year. We are here today with the heavy duty OBD proposal and the introduction of REAL. Coming later in 2019 and 2020 are the second stage of the heavy duty warranty rules as well as a proposal to introduce a heavy duty inspection and maintenance program, which is similar to the light duty Smog Check program.
Context and Background

5. Context and Background
Reason for Changes
Program updates occur regularly
Technology forcing regulation
Periodic reviews to check progress
Last comprehensive HD OBD update in 2012
Proposal addresses:
Industry concerns regarding in-use testing burdens
Lack of clarity in portions of regulation
Issues discovered through certification and testing
Need to begin advancing mobile source program
So, why are we here today? OBD is very clearly a technology forcing regulation. Based on an assessment of technical feasibility and cost-effectiveness, we set requirements for an engine to be able to detect emissions-related malfunctions as soon as possible so that we can minimize the higher emissions that will occur before the malfunction is repaired. And, consistent with this effort, staff closely monitors developments in technology and manufacturers’ progress towards meeting the requirements, and reports back to the Board periodically if any changes are warranted. Our last comprehensive update to the heavy-duty OBD regulations was in 2012, so we are due for another update.
I would like to note that while the majority of the proposed changes apply to heavy-duty vehicles, some of the changes also apply to medium-duty vehicles. In many cases, the manufacturers that produce medium-duty engines also produce heavy-duty engines, and to the extent possible, we try to align the requirements so that these manufacturers can design one system to satisfy both heavy and medium-duty regulations. I will also add that while there are some gasoline engines in the heavy-duty class, the majority of the changes we will be talking about today apply to diesel engines.
Our proposal addresses a set of diverse issues. First, it takes big steps towards addressing industry concerns over the cost and difficulty of testing in-use engines. Second, it addresses areas of the regulations that need to be clarified. Third, it addresses issues that were discovered by CARB staff during the certification process and the testing of in-use vehicles. Last, as discussed in the previous presentation, our proposal addresses the need to begin advancing the mobile source program in a new direction.
Context and Background

6. Context and Background
What is OBD?
Established by CARB for light and medium duty (LD, MD) starting in 1994; added HD starting in 2010
A system in the engine’s on-board computer that monitors the performance of emission-related components for malfunctions
Notifies owner and pinpoints malfunctioning component(s)
Monitors emission systems in-use for the actual life of the vehicle/engine
Designed as an inspection and
maintenance (I/M) tool
Cause of check engine light subject to
emissions warranty
Let’s briefly take a step back and cover what OBD is. First off, OBD was established by CARB for light and medium duty vehicles starting in 1994, and implementation of heavy duty OBD started in OBD itself is a system in the engine’s on-board computer that monitors the performance of emission-related components and identifies malfunctions. These monitored components include catalysts, oxygen sensors, NOx sensors, and diesel particulate filters. When the OBD system detects a problem with one of these components, it notifies the vehicle owner by illuminating a “check engine light” on the dashboard that we refer to as the malfunction indicator light, or MIL. Anyone with a standard scan tool can get specific information about the malfunction by connecting the tool to the vehicle. CARB regulations require the OBD system to continue to perform all of these functions for the entire life of the vehicle and not some fixed number of miles.
One of the key roles played by the OBD system is that of a tool to support inspection and maintenance programs. OBD is currently used by California’s light duty Smog Check program to determine if vehicles are passing or failing. Along the same lines, CARB intends to incorporate OBD as part of a future inspection and maintenance program for heavy-duty vehicles.
Another key function of OBD relates to the emissions warranty required by CARB regulations. Emissions warranty regulations for light- and medium-duty vehicles have always linked warranted parts to the MIL. Specifically, faults that turn on the MIL are considered warrantable conditions. At the public hearing in June of this year, the Board extended this explicit linkage of OBD to the emissions warranty for heavy-duty vehicles and engines.
Context and Background

7. Proposed HD OBD Amendments
Monitoring
Testing
I’ll now shift gears and start going through the amendments to the OBD regulations that we are proposing today. At a high level, the proposed changes fit into four basic categories: changes to the monitoring requirements, the testing requirements, the data that the engine’s computer is required to report, and the compliance and enforcement provisions. <CLICK> I will first discuss the proposed amendments to the monitoring requirements.
Data
Compliance &
Enforcement
Proposed Amendments

8. Monitoring Requirements
Monitor = Signals entering onboard computer evaluated against malfunction criteria under specified conditions
Proposal:
Require monitoring to occur more frequently
Require detection of more crankcase ventilation malfunctions
Make it easier to exclude specific components from monitoring
So what exactly does an OBD monitor do? An OBD monitor makes sure that an emissions-related component is working properly while the vehicle is being used in the real world. It consists of signals that enter the onboard computer, which are then evaluated against specific malfunction criteria under specific conditions. For example, the diesel particulate filter monitor makes sure that the filter is not damaged and leaking particles out into the air while the vehicle is being driven around.
Some of the key monitoring related amendments that we are proposing are shown here. First, because of the need to detect and repair malfunctions as soon as possible, staff is proposing to require that monitors look for malfunctions more frequently. Specifically, most monitors would need to run on at least 3 out of every 10 trips that a truck is driven. Staff is also proposing amendments that would improve the monitoring of the hoses that carry gases from the engine’s crankcase. Failures in crankcase hoses are important to identify because they result in emissions coming straight from the engine which are not cleaned by the emission controls in the exhaust system.
In addition to these amendments which increase the stringency of the OBD regulation, staff is also proposing to relax a few requirements to address manufacturers’ concerns about the feasibility of certain monitors. These include making it easier for manufacturers to be exempt from monitoring the feedgas generation of oxidation catalysts and the performance of ammonia slip catalysts.
Proposed Amendments

9. Proposed HD OBD Amendments
Monitoring
Testing
Next, I will move on to discussing the proposed amendments which relate to OBD system testing requirements.
Data
Compliance &
Enforcement
Proposed Amendments

10. Certification Testing Requirements
Conducted by the manufacturer and may take place before and after certification
Proposal:
Engine demonstrations more
representative of real-world aging
More data to evaluate
compliance
Improved on-road verification of
production OBD systems
Before receiving OBD certification, manufacturers are required to conduct OBD demonstration testing in which they test all the major monitors on an engine which has been aged to full useful life. These are the so-called emission threshold monitors that must detect malfunctions before emissions exceed specified levels. After being certified, manufacturers have additional test requirements: they must test production vehicles to make sure that finished commercial products, and not just lab engines, meet OBD requirements.
Several of staff’s proposed changes apply to the OBD demonstration testing which takes place before certification. These include enhancements to the engine aging procedure that will make the test engine better represent the performance and behavior of a full useful life engine. Staff is also proposing that the manufacturer collect and report additional data during this demonstration testing to get a better understanding of the conditions under which monitors are running in the test cell environment as well as how the engine behaves in the test cell environment. Having such data would serve as a valuable point of reference for analyzing real-world test data gathered from various in-use compliance programs.
Lastly, staff is proposing a few requirements that apply to production vehicle testing that occurs after certification. The proposed changes include testing a few major monitors on the road to ensure that they work properly on trucks when put into commercial service.
Proposed Amendments

11. Proposed HD OBD Amendments
Monitoring
Testing
Data
Compliance &
Enforcement
Ensuring good performance in the real world is a major theme for us, and it is at the heart of the next proposed amendments I will cover, which have to do with data requirements.
Proposed Amendments

12. “Real Emissions Assessment Logging” (REAL)
Large scope of recent diesel emissions issues
Example 1 VW – cheating scandal
Need to monitor actual real world emission performance
Example 2 Cummins – SCR durability issue
Need to identify and resolve emissions problems sooner
New tool on every new HD on-road engine for monitoring real world emission performance
Staff’s proposed amendments to the data requirements of the OBD regulation are tied to the introduction of a new CARB initiative called Real Emissions Assessment Logging, or REAL.
REAL is motivated by nothing other than a fundamental goal of CARB, which is to control real-world emissions, and not test cell emissions. At the present time, test cell emissions are what we are forced to use as a surrogate for what we are actually interested in. In-use data, however, suggest that with trucks, we are falling short of our goals. This can be seen most prominently with recent diesel emissions issues that have emerged with Cummins engine catalysts, for example, that spanned 2010 through 2015 model years. In the light-duty world, the Volkswagen diesel case is even more well-known, which involved 2009 through 2015 model years. These issues highlight the need to monitor actual real world emission performance and to identify in-use emissions problems sooner than we are doing today. Clearly, we need to make some changes to improve our effectiveness, and that means we need more data. Our emissions inventory, heavy-duty standards programs, certification, and OBD programs all need more real-world data to be able to move forward in the right direction. We could conduct more of the usual in-use test programs, but they are slow, expensive and yield small sample sizes. A more powerful alternative would be for each truck to use the sensors it already has to estimate and track its own emissions. If such a tool were applied to every new truck, we would have access to far greater amounts of data on the real-world emission performance of these vehicles.
Therefore, as part of the introduction of REAL, staff is proposing that heavy-duty engines track and report data characterizing their own NOx and GHG or CO2 emissions in the real world. Details of this proposal will be discussed in the following slides.
Proposal: Track and report data characterizing NOx and GHG/CO2 emissions in the real world
Proposed Amendments

13. REAL: NOx Data Tracking
Relies on existing technology and hardware to estimate and track NOx emissions
Quick real world screening tool for flagging issues
Emissions inventory development
New tool for evolution of future regulatory development
Proposal:
New MD and HD on-road diesel engines
Require engines to log NOx emissions and engine activity data (e.g., work, speed distributions)
Store recent and lifetime data separately
Let’s first discuss the NOx data tracking proposal. The idea is to use existing technology and hardware, like the NOx sensors already on trucks, to estimate and track NOx emissions in the real world. These data could be used as a quick, real-world screening tool for flagging potential high-emissions problems in the field. The data could also be used to improve our emissions inventory and serve as a new tool in the evolution of future regulations. Therefore, we would need to work in parallel with the emissions regulations so that we can evaluate this new program tool and revise as needed.
The proposal would require NOx data tracking on new medium-duty and heavy-duty on-road diesel engines. Engines would be required to log both NOx emissions and engine activity data, such as work and speed distributions while being driven in-use. Recent and lifetime data would need to be stored separately. Because the data would be stored in aggregate without any location related information, it could not be used to identify the movement or driving behavior of an individual vehicle operator.
Proposed Amendments

14. REAL: NOx Data Tracking (cont.)
Working with industry to develop standard specifications
Implementation of adopted standards straightforward and relies on existing technology
Limitations exist in current engine control modules regarding space for proposed parameters
Sufficient lead-time needed
CARB staff is currently working with industry to develop standard specifications for these data, which will be contained in future versions of SAE J1979 and J1939 documents. Implementation of the adopted standards is straightforward and, as mentioned previously, relies on existing technology on the engines such as the NOx sensors. Through discussions with industry, however, CARB staff learned that current engine control modules could have insufficient space to store the proposed tracking parameters. CARB therefore recognizes that lead-time is required prior to implementation of this proposal for manufacturers to update their control modules to accommodate the additional data.
Proposed Amendments

15. REAL: GHG Data Tracking
Relies on existing technology and hardware to estimate and track CO2 emissions
Critical for determining actual benefits and establishing future standards
Federal Phase 2 Rule (2016)/CA Phase 2 Rule (2018)
No GHG OBD malfunction criteria
Proposal:
All HD on-road engines
Log GHG technology activity and CO2 emissions/fuel consumption of HD trucks in real-world
Next I will discuss the greenhouse gas data tracking concept. Similar to the NOx tracking proposal, GHG tracking would rely on existing technology and hardware on the engine to estimate and track CO2 emissions. Because fuel consumption would be used as a surrogate for CO2 emissions, no new hardware like CO2 sensors would be needed to comply with the proposal. The GHG-related data that CARB would gain access to as a result of this proposal is critical for determining the actual benefits of new technologies and establishing future standards. The background to this point is that earlier this year, CARB adopted rules that harmonized with the Federal Phase 2 regulation, which was published in The Phase 2 regulation establishes technology-forcing GHG standards for heavy-duty engines and vehicles. The data generated through our proposal would be used in emission inventory development and help us to understand the impacts of Phase 2 technologies on CO2 emissions from trucks in the real world. Many of these impacts cannot be adequately characterized in the test cell environment. As such, it is essential to capture emissions from real-world driving. This proposal does not add any GHG OBD malfunction criteria at this point, so GHG-specific parameters will not be used to illuminate the MIL.
Staff’s proposal would apply to all new heavy-duty on-road engines and require the logging of both GHG technology activity and CO2 emission data as trucks operate in the real world. Overall, this proposal is similar to the GHG tracking concept that was adopted as part of the 2015 OBD II regulation update for light- and medium-duty vehicles.
Proposed Amendments

16. Proposed HD OBD Amendments
Monitoring
Testing
Data
Compliance &
Enforcement
Next, I will be talking about the proposed amendments to compliance and enforcement requirements.
Proposed Amendments

17. Set Fines to Deter Noncompliance
Deficiencies allow CARB to certify OBD systems not in full compliance with OBD regulations.
2021+
Emission Threshold (ET) Monitor $0
$50
$100-$450
“Major” monitors
$100
All Other Monitors
$25
Total Fine Cap
$500
$750 (2021),
$1000 (2022),
$1500 (2023+)
First up are the proposed amendments to the deficiency provisions. Sometimes manufacturers put in a good faith effort to meet the requirements of the OBD regulations, but for various reasons can fall short of meeting them. In such cases, the OBD regulations allow manufacturers to certify their OBD systems with deficiencies. To qualify for a deficiency, manufacturers must demonstrate that they made a good faith effort to fully satisfy the requirements and have plans to fix the problems as soon as possible. Fines are applied to these deficiencies to prevent misuse of the provisions and to ensure equity among manufacturers. However, CARB staff learned that some manufacturers have been using deficiencies as a product planning tool instead of investing the engineering resources needed to produce a compliant product. There is also concern that some manufacturers may be asking for deficiencies to reduce in-use liability and manufacturer self-testing burdens.
To deter these behaviors, staff is proposing to increase the fines associated with deficiencies. <CLICK> As can be seen from the table, no fines were applied in the years 2010 through 2012 which were the first years of HD OBD implementation. This was justifiable because OBD was new to the heavy-duty world and manufacturers needed time and experience to develop compliant OBD systems. <CLICK> Then, starting with 2013, fines of $50 were applied to deficiencies related to emission threshold monitors and major monitors, while all other requirements had fines of $25 each, with the total fine cap being $500 per engine. This is the same as the current deficiency fine structure for the light-duty OBD II regulation. However, since heavy-duty engine production volumes are much less than light-duty vehicle volumes, the fines that manufacturers must pay for noncompliant heavy-duty OBD systems are much less than those in the light-duty world. As such, the current deficiency fines have been less of a deterrent to developing noncompliant OBD systems relative to the light-duty side. <CLICK>
Therefore, staff is proposing that starting with the 2021 model year, deficiency fines for emission threshold monitors would range from $100 to $450 depending on how much emissions exceed the required thresholds before a fault is detected. Other major monitors would have deficiency fines of $100 each, while all other requirements would have fines of $50 each. The total fine cap per engine would increase from $750 for the 2021 model year up to $1500 for 2023 and later model year engines.
Proposed Amendments

18. Compliance and Enforcement
Manufacturer Self Testing (MST)
Provisions to make it easier to find engines to test
Reduced emissions testing burden
Upon request, require manufacturers to provide hardware and software for in-depth investigations
The past few slides have covered the more “stringent” requirements that CARB staff is proposing to the heavy-duty OBD regulation. However, staff is also proposing amendments that would “relax” certain requirements due to manufacturers’ concerns about workload and cost issues. The major relaxation staff is proposing relates to the manufacturer self testing requirements. These require manufacturers to procure near full-useful life engines from the field and then test them to ensure that their emission threshold monitors are indeed detecting faults and illuminating the MIL before emissions exceed the required threshold levels. If an engine was found to exceed a threshold, manufacturers would be required to procure additional engines and conduct more testing to see if the issue is prevalent among the engines in that engine family.
Due to manufacturers’ difficulty in finding engines that meet the criteria laid out in the regulation, staff is proposing amendments that would broaden some of the criteria and make it easier to find engines to test in the field. These include things like expanding the required mileage on the vehicle and having some flexibility on the power rating of the engine. Additionally, staff is proposing to reduce the emissions testing burden by cutting the number of monitors that need to be tested in half, from about 30 monitors to 15 monitors. This change would save manufacturers a large amount of time and money.
Moving now to the topic of investigations, staff is proposing a clarifying amendment to make it easier for CARB staff to receive technical support from manufacturers when needed. Specifically, staff wants to clarify that manufacturers are required to provide full details on engine and aftertreatment controls, including hardware and software, to assist staff during in-depth investigations of OBD systems. CARB already has the authority to ask for this support, but in some instances manufacturers have been refusing to provide the requested information. Staff believes that the proposed language would clarify what is required of manufacturers and enable investigations to proceed.
Proposed Amendments

19. HD OBD Program Costs
Calculated incremental costs to consumer of proposed amendments at $43 per engine
Estimated costs based on published reports, related data, and input from manufacturers, suppliers, testing labs
Non-compliance increases costs
Deficiencies
Increased MST costs
I will now talk about the costs of the proposal. The proposed amendments are expected to result in an incremental cost to the consumer of about $43 per engine. This cost was based on published reports, related data, and input from manufacturers, suppliers, and testing labs. As mentioned in the previous slides, deficiencies and increased manufacturer self-testing due to OBD non-compliance would result in additional costs for manufacturers. More details about these costs will be discussed later in the presentation.
Costs and Benefits

20. HD OBD Program Benefits
Powerful tool on all on-road vehicles and trucks:
Ensures benefits of emissions programs are achieved in-use throughout the life of vehicle
Basis for warranty claims
Facilitates effective repairs
Promotes increased durability
Likely foundation for future HD I/M, similar to LD Smog Check
Cumulative HD OBD program cost-effectiveness of $28 per pound of PM and $0.20 per pound of NOx comparable to other recent measures.
I would now like to talk about the benefits of the heavy-duty OBD program. This program is a powerful tool on all on-road heavy-duty vehicles and trucks. The program ensures that the benefits of the emission standards programs are achieved in-use throughout the entire life of the vehicle. As mentioned before, OBD will be used as a basis for warranty claims. OBD also facilitates effective repairs by providing specific information about the malfunctioning component, and promotes increased durability of these emission control components. OBD will also likely be the foundation for a future heavy-duty I/M program, similar to how OBD is used today in California’s light-duty Smog Check program. Once the Real Emissions Assessment Logging element is added to the picture, it will further ensure that these benefits are realized and maintained.
Today’s proposal does not generate new emission benefits in the traditional sense, but instead serves to ensure that the benefits associated with the original regulation are preserved. Looking at the cumulative HD OBD program costs versus the original emission benefit estimates yields an overall cost-effectiveness of $28 per pound of PM and $0.20 per pound of NOx. These numbers compare favorably to other recently approved on-road HD rulemakings such as the Smoke Inspection program which calculated a PM cost-effectiveness of $93 per pound, and the Heavy Duty Warranty program that had a PM cost-effectiveness of $18-$49 per pound and NOx cost-effectiveness of $3-$8 per pound.
Costs and Benefits

21. Remaining Industry Concerns
REAL better suited to HD emissions standards update
Necessary tool for both current and future standards
Proposal based on current hardware and technology
Overall cost of OBD program too high
CARB acknowledges cost of program, but necessary
Non-compliance can significantly increase costs
Industry has come to us with several concerns they have with our proposal, the main concerns of which I will discuss today. First, industry indicated they believe that implementation of REAL should be delayed and is better suited to start with engines that will have to meet CARB’s future heavy-duty emission standards update, specifically the low NOx proposal. CARB staff disagrees with this, since we consider REAL to be a necessary tool for both current and future standards. Engines built before the new emission standards will be implemented will be on the road for many years, so it is important that REAL data are tracked on these engines to ensure they are running clean in-use. As illustrated by the various diesel emission issues found in the field, which we mentioned earlier in the presentation, these problems do indeed exist, and we can’t afford to delay addressing them. Using today’s hardware and technology, we can implement REAL to help us find these problems on engines in the near term. Doing so will also serve to lay the foundation for an evolution of REAL on engines that meet the future, lower emission standards.
Finally, manufacturers have indicated that the overall cost of the heavy-duty OBD program is too high. More costs of the program are detailed in the next few slides, but while CARB staff acknowledges that the cost is high, we consider it necessary to ensure that heavy-duty engines stay clean in-use. We also recognize the importance of OBD in the warranty program and in a future heavy-duty I/M program. Further, as mentioned before, noncompliance can significantly increase costs.
Industry Concerns

22. Overall HD OBD Program Costs to Consumers
Unit
First HD OBD Regulation
($2005)
MST ($2009)
Alt Fuels and Misfire Monitoring
($2012)
Current Proposal
($2018)
Total OBD Program
Per engine
$132 $2
$23
$42
$242
Per “average” OEM
$9.5M
$123K
$1.8M
$14.3M
Industry Wide
$66.2M
$0.9M
$11.7M
$21.2M
$121.1M
As previously mentioned, HD OBD was first adopted in 2005 and has been updated 2 other times in 2009 and Cost analyses were conducted each time the program was updated with the incremental costs to the consumer for each change as shown in the first row. <CLICK> The incremental cost of the current proposal was determined to be $42 per engine. When this cost is added to all of the other costs for each HD OBD change and adjusted for inflation, the total incremental cost comes to $242 per engine. <CLICK> In the 2nd row is the incremental cost to consumers for each major change to the HD OBD program that is scaled up to the production volumes of the “average” OEM at the time of the proposal’s adoption. If we assume that all costs are passed on to the consumers, the total costs to consumers for an average OEM’s production volume is projected to total $14.3 million per year in 2018 dollars. <CLICK> Scaled to the annual production volume of the entire heavy-duty engine industry, the total incremental cost to consumers is estimated to be $121.1 million dollars. While these costs are significant, staff believes that the benefits from the HD OBD program are well worth the costs, and as discussed on a previous slide, the costs are consistent with other adopted measures. It is worth noting that these costs assume full-compliance with the HD OBD regulations. On the following slide, staff wanted to indicate what the costs of non-compliance with the current program can look like.
Industry Concerns

23. Costs of Non-compliance to OEMs
Cost Type
OEM A
(0 ET & 9 other deficiencies)
OEM B
(5 ET & 13 other deficiencies)
Cost of compliant engine (average OEM)
Incremental cost of proposal
$32
Cost of non-compliance (actual scenarios, proposed costs)
Deficiencies
$450
Capped at $1500 ($1575)
Additional MST costs $0
$20
Total cost to OEM
(per engine)
$482
$1553
This slide utilizes actual data from recent model year engines and compares the non-compliance costs to the engine manufacturer for 2 similar OEMs using the currently proposed fines structure. The costs for OEM A is shown in the 2nd column. The costs for OEM B is shown in the last column to the right. The first row is the total incremental cost to comply with the proposal requirements for the OEM. Since these OEMs have similar annual sales numbers in California and offer the same number of engine families, the $32 incremental cost is identical. The 2nd row shows the costs of non-compliance for the two OEMs. OEM “A” has no ET deficiencies but does include 9 total deficiencies for a total cost of $450 to the OEM per engine. In contrast OEM “B” has 5 ET deficiencies and 13 conventional deficiencies for a total deficiency cost of $1575 but is capped at $1500 by the proposal. The last row sums up all of the costs to the OEM. As you can see, OEM A which has less non-compliance issues is subject to over $1000 less cost per engine sold than OEM B. This demonstrates that working to have compliant systems up front saves money in the long run.
Industry Concerns

24. Proposed Changes 15-day Changes:
Delay HD OBD amendments, excluding REAL, MST relaxations, and other flexibilities, to 2024 MY
Amend REAL proposal:
Option 1: Reduce required REAL parameters in MY
Option 2: Full REAL in 2022, reduced OBD testing in MY
Delay deficiency fine increases to 2024 MY with 4 year increase trend and cap of $1250
Based on evaluation of industry comments, staff is proposing the following fifteen-day changes. First is a delay in the heavy duty OBD amendments, with the exception of the REAL proposal, manufacturer self-testing relaxations, and other proposed amendments that provide further flexibilities, to the 2024 model year. Second, is providing manufacturers with two compliance options for the introduction of REAL. The first option is a reduction in the required REAL parameters in the 2022 through 2023 model years. Specifically, staff is proposing that only the lifetime, and not the recent history data be stored in the on-board computer during these introductory years. The second option provides manufacturers with two years of reduced OBD demonstration testing in exchange for full implementation of REAL in Third, staff is proposing to delay the implementation of the increased fine structure to the 2024 model year in an effort to allow manufacturers to come into fuller compliance prior to the implementation of higher fines. Additionally, staff is proposing to slightly reduce the total fine cap to $1250 as opposed to $1500.
Industry Concerns

25. Staff Recommendation Commitment to:
Report to Board in 2021 calendar year
Technical review in light of HD on-highway program developments
Economic analysis for ongoing cost and benefits of OBD program
In addition to the proposed 15-day changes, staff is committing to come back to the Board in 2021 with a technical review of the heavy duty OBD program in light of the other on-highway program developments that are projected to take place between now and At that time staff is also committing to conduct an economic analysis of the ongoing costs and benefits of the OBD program.
Staff Recommendation

26. Staff Recommendation Approve staff’s proposal with 15-day changes
15-day changes for clarifications and updating references
Staff-proposed 15-day changes
Approve written response to
environmental comments
In concluding this presentation, staff recommends that the Board adopt the proposed amendments with 15 day changes. The 15-day changes will include clarifications and updates to references that are incorporated in the regulations as well amendments stemming from ongoing discussions with industry, as I mentioned earlier. Staff also recommends that the Board approve the written response to the environmental comments that were received. This concludes the staff presentation, and I thank you for your attention.
Staff Recommendation