Diesel engines used to power non-road equipment and vehicles, such as agricultural tractors and construction equipment, are a significant source of air pollutant emissions. Several regions around the world, led by the United States and the European Union, have implemented increasingly stringent performance-based emission standards for non-road diesel engines. These engines now incorporate improved emission control technologies and produce less than 10% of the pollutants emitted by their predecessors. For countries where standards lag behind international best practices or where no standards are in place, there is a significant opportunity to reduce emissions of harmful air pollutants from non-road engines through further regulatory action. The costs of non-road engine emission regulations are an important consideration for policymakers when evaluating new standards.
This paper aims to quantify the per-engine costs incurred by non-road engine manufacturers to comply with U.S. and European emission standards. We consider the direct material and manufacturing costs of major emission reduction technologies and fixed costs related to research and development, tooling, and certification. The total cost of emission reduction technologies is evaluated for each regulatory step, from Tier 2/3 to Tier 4f standards in the United States and from Stage II/IIIA to Stage V standards in the EU.
The total cost of emission control technologies is proportional to engine rated power. For some engine rating categories, the incremental cost is insignificant, as can be observed for engines rated below 19 kW. The most popular agricultural tractors in India are fitted with engines rated between 19 and 37 kW; for this particular segment, the incremental cost to reach Tier 4f from Tier 3 is estimated to be less than $785 and reaching Stage V would require around $1,000. Non-road equipment rated at the higher end of the power range shows cost numbers similar to those observed in the HDV vehicle sector. For this engine segment, the largest incremental cost is driven by the adoption of DPF and SCR systems in the Tier 4f and Stage V steps.
Summary of non-road emission control technology costs for U.S. regulatory progression.