Bluewater Network v. Environmental Protection Agency

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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 20, 2004 Decided June 22, 2004

No. 03-1120

BLUEWATER NETWORK,
PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY AND
MICHAEL O. LEAVITT, ADMINISTRATOR,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENTS

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

J. Martin Wagner argued the cause for the petitioner.
Barbara B. Baird and Frances L. Keeler were on brief for
amicus curiae, South Coast Air Quality Management District.
Eileen T. McDonough, Attorney, United States Depart-
ment of Justice, argued the cause for the respondents. John

Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
 2

C. Cruden, Deputy Assistant Attorney General, United States
Department of Justice, was on brief.
Janice K. Raburn, for American Petroleum Institute, John
Longstreth, for The Transportation Institute, C. Jonathan
Benner, for International Association of Independent Tanker
Owners and Chamber of Shipping of America, and Marc J.
Fink for World Shipping Council, were on joint brief for
amici curiae, American Petroleum Institute et al. Sean T.
Connaughton, for International Association of Independent
Tanker Owners and Chamber of Shipping of America, en-
tered an appearance.
Before: GINSBURG, Chief Judge, HENDERSON, Circuit Judge,
and WILLIAMS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: Petitioner
Bluewater Network (Bluewater) challenges the Environmen-
tal Protection Agency’s (EPA or Agency) final rule adopting a
two-tiered approach to setting emissions standards for ‘‘Cate-
gory 3’’ marine diesel engines which are ‘‘very large marine
engines used primarily for propulsion power on ocean-going
vessels such as container ships, tankers, bulk carriers, and
cruise ships.’’ Control of Emissions from New Marine Com-
pression-Ignition Engines at or Above 30 Liters Per Cylinder,
68 Fed. Reg. 9746, 9747 (Feb. 28, 2003) (to be codified at 40
C.F.R. pts. 9 & 94). Bluewater claims that the rule fails to
reduce emissions from those engines and entirely omits to
regulate the emissions from foreign-flagged ships’ engines, as
required by section 213(a)(3) of the Clean Air Act (CAA). 42
U.S.C. § 7547(a)(3); see also id. § 7607(d)(9)(A). We con-
clude that the EPA reasonably interpreted and implemented
the CAA and therefore deny Bluewater’s petition for review.

I.
In 1970, the Congress enacted the CAA ‘‘to protect and
enhance the quality of the Nation’s air resources so as to
promote the public health and welfare and the productive
capacity of its population.’’ Id. § 7401(b)(1). In 1990, it
 3

added section 213, which authorizes the EPA to establish
emissions standards for ‘‘nonroad engines and nonroad vehi-
cles.’’ Id. § 7547(a)(1); see Husqvarna AB v. EPA, 254 F.3d
195, 197 (D.C. Cir. 2001); see also Engine Mfrs. Ass’n v.
EPA, 88 F.3d 1075, 1080-81 (D.C. Cir. 1996). Section
213(a)(1) and (2) requires the EPA to determine whether the
emissions from ‘‘new and existing nonroad engines or nonroad
vehicles’’ are ‘‘significant contributors’’ to air pollution in
areas with air quality problems. 42 U.S.C. § 7547(a)(1) & (2).
Section 213(a)(3) in turn requires the EPA to promulgate
emissions standards for all ‘‘new nonroad engines TTT which
in the Administrator’s judgment cause, or contribute to, such
air pollution.’’ Id. § 7547(a)(3) (emphasis added). The stan-
dards must:
achieve the greatest degree of emission reduction
achievable through the application of technology
which the [EPA] Administrator determines will be
available for the engines or vehicles to which such
standards apply, giving appropriate consideration to
the cost of applying such technology within the
period of time available to manufacturers and to
noise, energy, and safety factors associated with the
application of such technology.
Id. The standards must also ‘‘take effect at the earliest
possible date considering the lead time necessary to permit
the development and application of the requisite technology,
giving appropriate consideration to the cost of compliance
within such period and energy and safety.’’ Id. § 7547(b).
Finally, the EPA must revise the standards from ‘‘time to
time.’’ Id. § 7547(a)(3).
In 1994, the EPA determined that nonroad engines and
vehicles contribute significantly to air pollution in problem
areas throughout the country and set about the process of
setting emissions standards for various categories of engines,
including marine diesel engines. See Control of Air Pollution;
Determination of Significance for Nonroad Sources and Emis-
sion Standards for New Nonroad Compression-Ignition En-
gines at or Above 37 Kilowatts, 59 Fed. Reg. 31, 306 (June 17,
 4

1994) (to be codified at 40 C.F.R. pts. 9 & 89); Control of Air
Pollution; Emission Standards for New Gasoline Spark-
Ignition and Diesel Compression-Ignition Marine Engines, 59
Fed. Reg. 55,930 (notice of proposed rulemaking) (Nov. 9,
1994). As noted above, the Category 3 marine diesel engines
that are the subject of this rulemaking are some of the
largest engines in the world, with greater than 30 liters
displacement per cylinder. See 68 Fed. Reg. at 9747. The
engines burn residual fuel oil – a byproduct of refining crude
oil into higher-grade products – which tends to have higher
ash, sulfur and nitrogen content than other fuels. See id. at
9767. Residual fuel oil also has a higher variability than
other fuels, which makes engine emissions more difficult to
control. See id. at 9763. The engines thus contribute to
national ozone, carbon monoxide, nitrous oxide (NOx) and
particulate matter levels, especially near commercial ports
like New Orleans, LA and along coastal areas like Santa
Barbara, CA. See id. at 9751. Existing diesel engine tech-
nologies, such as turbo- and super-charging, in-cylinder injec-
tion improvements and engine cooling, are used to increase
the efficiency and reduce emissions from these engines. See
id. at 9749. There are also new, advanced technologies,
including systems that introduce water into the combustion
process, selective catalytic reduction systems that add a
reducing agent like ammonia into the engine’s exhaust and
the use of fuel cells. See id. at 9764-67.
The EPA’s effort to set emissions standards for Category 3
engines coincided with similar action taken by the Interna-
tional Marine Organization (IMO).1 See, e.g., Control of Air
Pollution; Emission Standards for New Gasoline Spark-
Ignition and Diesel Compression-Ignition Marine Engines;
Exemptions for New Nonroad Compression-Ignition Engines
at or Above 37 Kilowatts and New Nonroad Spark-Ignition
Engines at or Below 19 Kilowatts, 61 Fed. Reg. 4600, 4618
1 The IMO is an agency of the United Nations set up to improve
the safety of international shipping and to control marine pollution.
See International Marine Organization, at www.imo.org (‘‘Safer
Shipping, Cleaner Oceans’’). It consists of 163 member countries,
including the United States. Id.
 5

(supplemental notice of proposed rulemaking; proposed revi-
sions) (Feb. 7, 1996); 59 Fed. Reg at 55,934. In 1997, the
IMO formally adopted Annex VI to the International Conven-
tion on the Prevention of Pollution from Ships, 1973, as
Modified by the Protocol of 1978 Relating Thereto (MAR-
POL). Annex VI prescribes a NOx emissions limit for diesel
engines on ships constructed on or after January 1, 2000 and
for engines undergoing ‘‘major conversion’’ on or after that
date. Regulation 13 to Annex VI of MARPOL. Annex VI
has recently been ratified by the requisite number of IMO
member countries and will take effect in May 2005. See
http://www.imo.org/home.asp (last visited June 2, 2004).
Following the IMO’s adoption of Annex VI, the EPA
noticed its intent to set the CAA emissions standards for
Category 3 engines at the same level set by Annex VI. See
Control of Emissions of Air Pollution from New CI Marine
Engines at or Above 37 Kilowatts, 63 Fed. Reg 28,309, 28,313
(advance notice of proposed rulemaking) (May 22, 1998). It
reasoned that Category 3 engines ‘‘have only a minimal
impact on U.S. air quality’’ because they operate in U.S.
waters for ‘‘only a limited amount of time’’ and that any
stricter standards could be applied to U.S. ships only, poten-
tially compromising their competitiveness in the world ship-
ping market. Id. Several months later, the EPA decided to
postpone adopting emissions standards for these engines.
Control of Emissions of Air Pollution from New CI Marine
Engines at or Above 37 kW, 63 Fed. Reg. 68,508, 68,541-42
(notice of proposed rulemaking) (Dec. 11, 1998). Because it
believed Annex VI’s standards to be appropriate for Category
3 engines under the CAA based on its analysis of available
control technologies, the EPA concluded that adopting those
standards ‘‘would be unnecessary and redundant’’ because it
expected U.S. vessels to comply with the Annex VI standards.
Id. at 68,542. In the same notice, the EPA also proposed
excluding smaller (categories 1 and 2) diesel engines on
foreign-flagged vessels in U.S. waters from any emissions
standards, id. at 68,516-17, because, relying in part on United
States Treasury Department rulings and tariff schedules, it
deemed foreign-flagged ships engaged in international trade
 6

not to have been imported into the United States. Id. The
EPA’s final rule adopted both positions: it did not set emis-
sions standards for Category 3 engines and it defined the
Category 1 and Category 2 engines to which its rule applied
so as to exempt those aboard foreign-flagged ships. Control
of Emissions of Air Pollution From New Marine Compres-
sion-Ignition Engines at or Above 37 kW, 64 Fed. Reg.
73,300, 73,302, 73,306 (Dec. 29, 1999) (codified at 40 C.F.R.
pts. 89, 92, 94).
In 2000, Earth Island Institute, an environmental group,
originally petitioned for review of that rule; Bluewater be-
came the petitioner in 2002. As part of a settlement agree-
ment in that matter, the EPA agreed to initiate the rulemak-
ing that resulted in the rule now under review. Thus, in May
2002, the EPA proposed, among other things, to formally
adopt the Annex VI emissions standards as the CAA stan-
dards for Category 3 engines. Control of Emissions of Air
Pollution from New Marine Compression-Ignition Engines at
or Above 30 Liters/Cylinder, 67 Fed. Reg. 37,548 (proposed
rule) (May 29, 2002). It also invited comment on whether it
should adopt stricter emissions standards in the future and
expand those standards to cover Category 3 engines on
foreign-flagged vessels entering U.S. territory. Id.
On February 28, 2003, the EPA issued the rule under
review. Control of Emissions from New Marine Compression
Ignition Engines at or Above 30 Liters Per Cylinder, 68 Fed.
Reg. 9746 (Feb. 28, 2003) (to be codified at 40 C.F.R. pts. 9 &
94). The rule provides a two-step approach for setting emis-
sions standards for Category 3 engines under the CAA. Id.
at 9748-49. The first step, which the EPA referred to as its
‘‘near term Tier 1’’ standard, tracks Annex VI’s emissions
standards and took effect on January 1, 2004. Id. at 9749.
The standards, the EPA explained, apply only to U.S.-flagged
ships and are intended to ‘‘achieve a 20-percent reduction in
the national Category 3 NOx inventory by 2030.’’ Id. at 9757,
9762. The EPA also committed to a second step, imposing
longer term ‘‘Tier 2 standards’’ in a rulemaking to be com-
pleted ‘‘no later than April 27, 2007.’’ Id. at 9749-50. In the
future rulemaking, the EPA promised to ‘‘consider the state
 7

of technology that may permit deeper emission reductions
and the status of international action for more stringent
standards’’ as well as ‘‘application of [these] standards to
engines on foreign vessels that enter U.S. ports.’’ Id. at 9746.
In establishing the Tier 1 emissions standards at the Annex
VI level and postponing Tier 2 standards to the 2007 rule-
making, the EPA recognized that ‘‘manufacturers are gener-
ally already meeting the internationally negotiated standards’’
and thus ‘‘[t]he near term standards will require no additional
development, design, or testing beyond what manufacturers
are already doing to meet the TTT Annex VI TTT standards.’’
Id. at 9761; see id. at 9749. The EPA explained, however,
that the Tier 1 standards are ‘‘designed to be achievable
immediately without additional research and development’’
and are thus ‘‘based on readily available emission-control
technolog[ies]’’ – like ‘‘optimized turbocharging, higher com-
pression ratios, and optimized fuel injection.’’ Id. at 9748-49,
9761. Most importantly, the EPA explained, these standards
will be almost immediately (i.e., on January 1, 2004) ‘‘enforce-
able under U.S. law TTT regardless of whether Annex VI has
entered into force or whether the United States has deposited
its instruments of ratification to TTT Annex VI.’’ Id. at 9761.
The EPA understood that ‘‘manufacturers [could] achieve
additional [emission] reductions with more lead time’’ by
‘‘expanding the use and optimization of in-cylinder controls’’
and by utilizing one or more of the ‘‘advanced technologies
such as selective catalytic reduction or water injection,’’ and
thus that it could have established stricter Tier 1 as well as
specific Tier 2 standards. Id. at 9748-49, 9761-62. It noted,
however, several problems with both approaches. Stricter
Tier 1 standards would require ‘‘more lead time’’ for manufac-
turers as opposed to the readily-achievable Annex VI stan-
dards. Id. at 9749, 9761. Furthermore, there were ‘‘several
outstanding technical issues concerning the widespread com-
mercial use’’ of the current, in-cylinder and advanced emis-
sion control technologies. Id. at 9748; see id. at 9749, 9761-
63. Postponing the adoption of specific, and stricter, stan-
dards until the Tier 2 rulemaking allowed the industry and
the EPA to ‘‘obtain important additional information on the
 8

use of these advanced technologies.’’ Id. at 9478, 9763.
Additionally, mandating greater reductions via current, in-
cylinder controls alone – which might reduce emissions by 10
or even 30 per cent – risked sacrificing potentially greater
future reductions from the combination of in-cylinder controls
and the new technologies, which the EPA expected to ‘‘be
greater than 30 percent below Tier 1 levels.’’ Id. at 9749.
Setting specific and stricter Tier 2 standards based on the
available and emerging control technologies at the same time
that engine manufacturers were investigating other controls
could have the perverse effect of encouraging manufacturers
to conduct ‘‘two separate and possibly conflicting design
steps, potentially delaying introduction of advanced emission-
control technologies and their anticipated emission reduc-
tions.’’ Id.; see id. at 9761. By providing manufacturers
additional time to test and study the results of those technolo-
gies, the EPA would be better positioned in 2007 ‘‘to make a
technology-based decision that maximizes emission reduc-
tions.’’ Id. at 9749. Finally, the EPA noted that postponing
the adoption of stricter standards allowed the United States
‘‘to pursue further negotiations in the international arena to
achieve more stringent global emission standards for marine
diesel engines’’ inasmuch as, in the EPA’s view, ‘‘adopting
appropriate international standards has the potential to max-
imize the control of emissions from U.S. and foreign vessels.’’
Id. In sum, the EPA decided to adopt the Annex VI emis-
sions standards as the Tier 1 standards in order to ‘‘ensure
that Category 3 engines achieve the greatest reductions
achievable in this [short] time frame, until the more stringent
long-term standards [the EPA] adopt[s] [at the Tier 2 rule-
making] go into effect.’’ Id. at 9761.
The EPA also postponed imposing emissions standards on
Category 3 engines on foreign-flagged vessels. Id. at 9759.
The EPA noted that in its 1999 rulemaking for categories 1
and 2 marine diesel engines, it had interpreted the term ‘‘new
nonroad engine’’ to exclude such engines on foreign-flagged
vessels. Id.; see supra. Even assuming it had the authority
under the CAA to regulate Category 3 engines on foreign-
flagged ships, the EPA nevertheless opted to postpone the
 9

matter until the Tier 2 rulemaking. 68 Fed. Reg. at 9759.
Employing the same rationale used to postpone rulemaking
for Category 3 engines for U.S. vessels, the EPA concluded
that the delay would not ‘‘lead to any significant loss in
emission reductions’’ because it expected all foreign-flagged
vessels, like U.S. vessels, to comply with the Annex VI
standards (as manufacturers had been doing since 2000). Id.
It also noted that the delay could ‘‘help facilitate the adoption
of more stringent consensus international standards,’’ id., and
stated elsewhere that it would ‘‘continue to promote more
stringent standards at [the] IMO’’ and that it ‘‘now believe[d]
that TTT the IMO should consider further reductions of
significantly more than 30 percent from the [current Annex
VI] NOx limits.’’ Id. at 9767.
On April 23, 2003, Bluewater petitioned this court for
review of the EPA’s Category 3 engine rule. It raises two
claims. First, it asserts that the Agency acted arbitrarily and
capriciously in failing to adopt standards that reduce emis-
sions from Category 3 engines to the greatest degree achiev-
able through available control technologies. See 42 U.S.C.
§ 7607(d)(9)(A) (reviewing court may reverse emissions stan-
dards promulgated under 42 U.S.C. § 7547 if ‘‘arbitrary,
capricious, an abuse of discretion, or otherwise not in accor-
dance with law’’). Second, Bluewater contends that the EPA
violated the command of section 213(a)(3) of the CAA by
failing to regulate emissions from engines on foreign-flagged
vessels. See id. § 7547(a)(3).

II.
We give particular deference to the EPA when it acts
under ‘‘ ‘unwieldy and science-driven’ ’’ statutory schemes like
the Clean Air Act. Husqvarna, 254 F.3d at 199 (quoting
Appalachian Power Co. v. EPA, 135 F.3d 791, 801-02 (D.C.
Cir. 1998)); see Baltimore Gas & Elec. Co. v. NRDC, 462 U.S.
87, 103 (1983) (court is ‘‘at its most deferential’’ if agency is
‘‘making predictions, within its area of special expertise, at
the frontiers of science’’). We will therefore affirm the EPA’s
action unless it is ‘‘arbitrary, capricious, an abuse of discre-
 10

tion, or otherwise not in accordance with law.’’ 42 U.S.C.
§ 7607(d)(9)(A). Our review of the EPA’s interpretation of
the CAA is governed by the familiar two-step from Chevron,
U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43 (1984). We first
ask ‘‘whether Congress has directly spoken to the precise
question at issue,’’ in which case we ‘‘must give effect to the
unambiguously expressed intent of Congress.’’ Id. If the
‘‘statute is silent or ambiguous with respect to the specific
issue,’’ however, we move to the second step and defer to the
agency’s interpretation as long as it is ‘‘based on a permissi-
ble construction of the statute.’’ Id. at 843.
1. EPA’s Two-Tiered Emissions Standards for Category 3
Engines
Bluewater first contends that the EPA’s rule adopting two-
tiered emissions standards for Category 3 engines is arbi-
trary and capricious because it fails to reduce NOx emissions
as required by the CAA. It argues that, because manufactur-
ers are already complying with the Annex VI standards, the
Tier 1 standards are simply an iteration of the status quo and
effect no reduction in emissions. The contemplated Tier 2
standards, meanwhile, cannot save the rule, Bluewater says,
because the EPA has not even committed to stricter Tier 2
standards. Relying on this court’s decision in Husqvarna,
254 F.3d at 201, Bluewater contends that section 213(a)(3) of
the CAA is a ‘‘technology-forcing standard’’ that requires the
EPA to adopt stricter emissions standards based on the
technologies available to manufacturers, including both in-
cylinder and advanced technologies. We disagree.
The EPA rule adopting the two-tiered approach to emis-
sions standards is, we think, a reasonable one that satisfies
the requirements of section 213(a)(3) of the CAA. The
Agency expects the Tier 1 emissions standards to reduce
Category 3 NOx emissions by 20 per cent by 2030. 68 Fed.
Reg. at 9762, 9777. Furthermore, after surveying the avail-
able technologies and ‘‘consider[ing]’’ emissions reductions
beyond the Annex VI standards, the EPA concluded that it
could require the use of only those technologies manufactur-
ers currently employed to meet Annex VI’s requirements
 11

because the Tier 1 standards were scheduled to go into effect
less than one year from the date of publication. Id. at 9749;
see id. at 9761. The consideration of ‘‘lead time’’ in setting
emissions standards is specifically contemplated by the CAA.
42 U.S.C. § 7547(b) (standards must ‘‘take effect at the
earliest possible date considering the lead time necessary to
permit the development and application of the requisite tech-
nology’’); Husqvarna, 254 F.3d at 202 (EPA appropriately
determined that ‘‘schedule of declining emission standards
TTT provide[d] adequate time for manufacturers’ transition to
cleaner engine technologies’’); see Sierra Club v. EPA, 325
F.3d 374, 378 (D.C. Cir. 2003) (‘‘The statute TTT intends the
agency to consider many factors other than pure technologi-
cal capability, such as costs, lead time, safety, noise and
energy.’’ (emphasis added)).
Bluewater does not allege that the EPA ignored the avail-
able in-cylinder and advanced technologies or improperly
evaluated their merit; it argues instead that the Agency
impermissibly postponed incorporating them into the emis-
sions standards until the Tier 2 rulemaking in 2007. But the
lesson from Husqvarna – a challenge by engine manufactur-
ers to an emissions standard mandating the use of costly
control technologies – is not that the EPA must adopt the
most stringent standards based on the most advanced control
technologies but that the EPA is to arrive at standards that
reduce emissions to the greatest degree possible after consid-
ering the spectrum of available technologies and the costs and
benefits associated with those technologies. See Husqvarna,
254 F.3d at 201 (‘‘The record shows that the EPA reasonably
arrived at what it determined was the best regulatory stan-
dard by ascertaining the greatest degree of emissions reduc-
tion achievable while giving appropriate consideration to cost,
noise, energy and safety factors.’’); see also 42 U.S.C.
§ 7547(a)(3) (standards must achieve greatest reduction avail-
able through technology ‘‘which the [EPA] Administrator
determines will be available TTT giving appropriate consider-
ation to the cost of applying such technology’’). Indeed, this
 12

Court – in interpreting section 202(l )(2) of the CAA,2 a
provision in pari materia with section 213(a)(3) – has ac-
knowledged that, while the CAA is ‘‘ ‘technology-forcing,’ ’’
‘‘[t]he statute also intends the [EPA] to consider many factors
other than pure technological capability, such as costs, lead
time, safety, noise and energy’’ and that ‘‘its language does
not resolve how the [EPA] should weigh all these factors in
the process of finding the ‘greatest emission reduction achiev-
able.’ ’’ Sierra Club, 325 F.3d at 378 (quoting Husqvarna,
254 F.3d at 201 and 42 U.S.C. § 7521(l )(2)). Here the record
indicates that the EPA recognized the merits of the advanced
technologies but chose not to forestall their further develop-
ment by either: (1) forcing the industry to ignore them and
instead pursue greater traditional in-cylinder reductions only,
or (2) mandating their use without complete information and
study, thereby potentially handicapping their future (and
greater) success. See, e.g., 68 Fed. Reg. at 9749. These
considerations are hardly unreasonable; indeed, for this court
to reject them would defeat the purpose of the statute by
forsaking, in the EPA’s determination, greater reductions in
air pollution.3 Finally, and perhaps most importantly, the
EPA has committed to incorporating the new technologies
into stricter emissions standards in the 2007 rulemaking.
2 Section 202(l )(2) requires the EPA to enact standards that

reduce emissions from motor vehicles and motor vehicle fuels that
‘‘reflect the greatest degree of emission reduction achievable
through the application of technology which will be available, taking
into consideration TTT the availability and costs of the technology,
and noise, energy, and safety factors, and lead time.’’ 42 U.S.C.
§ 7521(l )(2).
3 To the extent that Bluewater contends that ongoing treaty
negotiations over international emissions standards impermissibly
factored into the EPA’s decision under section 213(a)(3), that chal-
lenge is immaterial because the EPA gave other, independent (and
sufficient) reasons to support the two-tiered standards. See
Indiana Mun. Power Agency v. FERC, 56 F.3d 247, 256 (D.C. Cir.
1995) (upholding agency action resting on several independent
grounds if any are valid unless agency was influenced by their
combined force).
 13

See, e.g., 68 Fed. Reg. at 9761 (‘‘The near-term Tier 1
standards are interim standards. They are intended to en-
sure that Category 3 engines achieve the greatest reductions
achievable in this time frame, until the more stringent long-
term standards we adopt go into effect.’’).
The two-tiered approach and the Tier 1 standards them-
selves are best viewed as akin to the ‘‘anti-backsliding’’ provi-
sion this Court upheld in Sierra Club. 325 F.3d at 379. There
we permitted the EPA to utilize a near-term provision pre-
venting fuel refineries and importers from increasing the
toxicity levels in their motor vehicle fuel rather than imposing
a ‘‘more aggressive emissions cap’’ because the provision was
to be in effect for a short period of time only and because it
allowed the EPA to ‘‘assess achievability on a longer term
basis’’ where ‘‘the agency didn’t know what technological fixes
TTT manufacturers would use to’’ best reduce emissions. Id.
at 378-80. Bluewater correctly points out that the Sierra
Club refineries and importers were operating under other
stringent emissions standards already imposed by the EPA,
id. at 380, but the Tier 1 standards effect a 20 per cent
reduction in NOx emissions and guarantee that the Annex VI
standards are ‘‘enforceable under U.S. law for engines on
vessels flagged or registered in the United States, regardless
of whether Annex VI TTT enter[s] into force.’’ 68 Fed. Reg.
at 9761. Based on the record before us, we conclude that the
EPA’s two-tiered approach reasonably implements section
213(a)(3) of the CAA.
2. EPA’s Decision to Defer Regulation of Engines on For-
eign-Flagged Vessels
Bluewater further claims that the CAA requires the EPA
to adopt emissions standards for the Category 3 engines of
foreign-flagged vessels. Bluewater contends that, because
the term ‘‘new nonroad engine’’ does not expressly exclude
foreign-flagged vessels’ engines, the statute requires their
regulation. It further argues that, even if the definition of
‘‘new nonroad engine’’ is ambiguous, the EPA’s decision not
to regulate Category 3 engines on foreign-flagged vessels at
 14

Tier 1 and instead postpone resolution of the matter until the
Tier 2 rulemaking is arbitrary and capricious. We disagree.
We have previously upheld the EPA’s determination that
‘‘new nonroad engine’’ in 213(a)(3) is ambiguous. See Engine
Mfrs. Ass’n, 88 F.3d at 1086-87. We have also decided that
the two-tiered rulemaking is reasonable and Bluewater offers
nothing in response to the EPA’s claim that delayed resolu-
tion of the issue until the 2007 Tier 2 rulemaking would not
‘‘lead to any significant loss in emission reductions’’ because it
expects foreign-flagged vessels to ‘‘comply with the [Annex
VI] standards whether or not they are also subject to the
equivalent Clean Air Act standards.’’ 68 Fed. Reg. at 9759.
We therefore conclude that Bluewater’s claim regarding the
EPA’s deferment of whether to regulate Category 3 engines
on foreign-flagged vessels is premature.

III.
For the foregoing reasons, the petition for review is denied.
So ordered.