Section 1054.740 - What special provisions apply for generating and using emission credits?(a) You may generate Phase 3 emission credits from 2008 through 2011 model year Class I engines if you voluntarily meet the Phase 3 exhaust emission standards specified in § 1054.105 . Divide these into transitional and enduring emission credits as follows: (1) Transitional credits are based on reducing emissions from Phase 2 levels down to Phase 3 levels. Calculate the value of transitional emission credits as described in § 1054.705 , based on setting STD equal to 15.0 g/kW-hr and FEL equal to 10.0 g/kW-hr. You may use these transitional credits only for Class I engines in 2012 through 2014 model years. You may not use these transitional credits for Class II engines.(2) Enduring credits are based on reducing emissions below Phase 3 levels. Calculate the value of enduring credits as described in § 1054.705 , based on setting STD equal to 10.0 g/kW-hr and FEL to the value of the family emission limit you select for the family. You may use these enduring credits for any nonhandheld engines certified to the Phase 3 standards under this part, except as specified in paragraph (d) of this section.(b) You may generate Phase 3 emission credits from 2008 through 2010 model year Class II engines if you voluntarily meet the Phase 3 exhaust emission standards specified in § 1054.105 . Divide these into transitional and enduring emission credits as follows: (1) Transitional credits are based on reducing emissions from Phase 2 levels down to Phase 3 levels. Calculate the value of transitional emission credits as described in § 1054.705 , based on setting STD equal to 11.0 g/kW-hr and FEL equal to 8.0 g/kW-hr. You may use these transitional credits only for Class II engines in 2011 through 2013 model years. You may not use these transitional credits for Class I engines.(2) Enduring credits are based on reducing emissions below Phase 3 levels. Calculate the value of enduring credits as described in § 1054.705 , based on setting STD equal to 8.0 g/kW-hr and FEL to the value of the family emission limit you select for the family. You may use these enduring credits for any nonhandheld engines certified to the Phase 3 standards under this part, except as specified in paragraph (d) of this section.(c) You may not use emission credits generated by nonhandheld engines certified to Phase 2 emission standards to demonstrate compliance with the Phase 3 exhaust emission standards in 2014 and later model years.(e) You may use Phase 2 or Phase 3 emission credits from nonhandheld engines to demonstrate compliance with the Phase 3 standards for handheld engines subject to the following restrictions:(1) The handheld family must be certified in 2008 and all later model years using carryover of emission data from an engine family that was most recently certified with new emission data in 2007 or an earlier model year.(2) The handheld family's FEL may not increase above the level selected for the 2007 model year in later years unless such an increase is based on emission data from production engines.(3) Your total production of handheld engines certified under this paragraph (e) may not exceed 30,000 in any model year.73 FR 59259, Oct. 8, 2008, as amended at 86 FR 34523, June 29, 2021