BOARD MEETING DATE: October 2, 2009
AGENDA NO. 7

PROPOSAL:

Recognize Revenue from U.S. EPA and Execute Sole Source Contract for Optimization and Demonstration of Exhaust Emission Control Technologies for Heavy-Duty Diesel Trucks

SYNOPSIS:

On-road heavy-duty trucks contribute substantially to NOx and PM emissions within the South Coast Air Basin.  Selective catalytic reduction (SCR) systems and diesel particulate filter (DPF) technologies are capable of significantly reducing NOx and PM emissions, respectively.  Staff proposes to demonstrate both technologies deployed as a retrofit emission control system. This action is to recognize $4 million from U.S. EPA and upon receipt of award to execute two sole source contracts with Johnson Matthey Inc., to optimize and demonstrate selective catalytic regenerating and selective catalytic continuously regenerating technologies on on-road heavy-duty diesel trucks at a total cost not to exceed $4,600,000 from the Clean Fuels Fund. 

COMMITTEE:

Technology, September 25, 2009. Less than a quorum was present for the discussion of this item; the Committee member present communicated his concurrence and recommended that this item be forwarded for Board consideration.

RECOMMENDED ACTIONS:

1. Authorize the Chairman to execute two interagency agreements with U.S. EPA to receive funding in an amount not to exceed $4,000,000, to cosponsor a project with Johnson Matthey and recognize this revenue in the Clean Fuels Fund (Fund 31).
    
2. Execute contracts with Johnson Matthey to:
    
   1. Cosponsor the optimization and demonstration of SCRT for NOx and PM emissions control on up to 90 model year 1999 through 2002 heavy-duty Class 8 on-road diesel trucks powered by non-exhaust gas recirculation engines in an amount not to exceed $2,300,000 from the Clean Fuels Fund (Fund 31); and
       
   2. Cosponsor the optimization and demonstration of SCCRT for NOx and PM emissions control on up to 90 model year 2002 through 2006 heavy-duty Class 8 on-road diesel trucks powered by exhaust gas recirculation or non-exhaust gas recirculation engines in an amount not to exceed $2,300,000 from the Clean Fuels Fund (Fund 31).
       

Barry R. Wallerstein, D.Env.
Executive Officer

Background

There are approximately 205,000 diesel vehicles, excluding passenger cars and buses, operating in the South Coast Air Basin, which produce over 252 tons per day of NOx and 9 tons per day of PM emissions. Heavy-duty diesel trucks represent 59 percent of diesel vehicles and emit more than 90 percent of total NOx and diesel PM emissions from on-road diesel vehicles. Selective catalytic reduction technology and diesel particulate filters are capable of reducing NOx and PM emissions from heavy-duty diesel trucks by 65 and 85 percent or more, respectively.

In 2009, AQMD applied for two $2,000,000 awards from the U.S. EPA’s American Recovery and Reinvestment Act Funding for the Clean Diesel Emerging Technologies Program to retrofit up to 180 heavy-duty Class 8 on-road diesel trucks with a combined NOx and PM retrofit device. The program limits retrofit devices to only those technologies listed on “U.S. EPA’s Emerging Technology List.” AQMD staff selected Johnson Matthey (JM) and their Selective Catalytic Regenerating Technology (SCRT) and Selective Catalytic Continuously Regenerating Technology (SCCRT) from among several technologies on the list because they achieve higher reduction of PM, NOx, CO, and HC emissions over the other technologies. The SCRT and SCCRT systems combine JM’s particulate filter technology (CRT or CCRT) with a urea-based selective catalytic reduction system to reduce PM, NOx, CO, and HC emissions by at least 90%, 65%, 85%, and 90%, respectively.

JM will demonstrate its SCRT and SCCRT systems for reduction of NOx and PM emissions on heavy-duty diesel trucks powered by exhaust gas recirculation or non-exhaust gas recirculation engines. In addition to the grant from the U.S. EPA’s Clean Diesel Emerging Technologies Program, AQMD will provide $600,000 in direct cash contribution, and JM will provide up to $2,761,640 in-kind contribution to conduct the demonstration program.
 

Proposal

The proposed project is to assess the reliability and emission reduction potential of JM’s SCRT and SCCRT systems on heavy-duty diesel trucks operating in the South Coast Air Basin. The scope of the project includes the design, installation, optimization and in-field demonstration of SCRT and SCCRT on up to 180 model year 1999 through 2006 heavy-duty Class 8 on-road diesel trucks in actual commercial service.

JM proposes to select up to 180 Class 8 heavy-duty diesel trucks from at least four fleets that move goods between major distribution facilities and retail establishments in the Los Angeles and Inland Empire regions. Two trucks per fleet will be data-logged for temperature and pressure with one truck retrofitted with SCRT and the other truck retrofitted with SCCRT systems. The technologies will be evaluated to optimize the performance and emission-reduction potential of these technologies. The result of this evaluation will be used to fabricate up to 180 SCRT and SCCRT systems suitable for heavy-duty diesel truck applications. The fabricated SCRT and SCCRT systems will then be installed on the exhaust system of the trucks.

The trucks will then be demonstrated in service for twelve months to evaluate performance, reliability and emissions-reduction potential of the SCRT and SCCRT systems. One truck with SCRT and one with SCCRT will be tested over transient and steady-state cycles on a chassis dynamometer.

This action is for AQMD to enter into agreements with U.S. EPA to receive funding in an amount not to exceed $4,000,000, and place this revenue in the Clean Fuels Fund. In addition, this action is for AQMD to enter into agreements with Johnson Matthey, Inc., to cosponsor the optimization and demonstration of SCRT and SCCRT for NOx and PM emissions control from up to 180 model year 1999 through 2006 heavy-duty Class 8 on-road diesel trucks powered by exhaust gas recirculation or non-exhaust gas recirculation engines in a total amount not to exceed $4,600,000.
 

Benefits to AQMD

The proposed project is included in the Technology Advancement Office 2009 Plan Update under the category, “Emission Control Technologies: Develop and Demonstrate Advanced Aftertreatment Technologies.” The proposed project supports the implementation of near-term emission control technology that could potentially reduce NOx and PM emissions from diesel-powered heavy-duty trucks by more than 65 and 85 percent, respectively, and help the AQMD to achieve its Clean Air goals.
 

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions under which a sole-source award may be justified. This request for a sole source award is made under provision B.2.c(3): the contractor has ownership of key assets required for project performance, and B.2.d(1): projects involving cost sharing by multiple sponsors. In addition, JM’s SCRT and SCCRT are listed on the U.S. EPA’s Emerging Technology List, which is a basis for gaining the U.S. EPA’s support.

JM designs and manufactures a wide range of exhaust aftertreatment technologies for reducing criteria and air toxics emissions from liquid and gaseous fuels. In addition, JM has considerable experience with SCR and diesel particulate filter technologies, and presently designs and supplies SCR and particulate filters to major engine manufacturers.

The details of cost-sharing provided by the AQMD, U.S. EPA and JM are shown in the following section.
 

Resource Impacts

The total cost for this project is estimated to be $7,361,640, of which AQMD’s cost share shall not exceed $600,000 from the Clean Fuels Fund in addition to a total of $4,000,000 in co-funding to be received from the U.S. EPA. JM will provide up to $2,761,640 in-kind contribution. The total estimated cost-share for this project is provided below:

Sufficient funds are available from the Clean Fuels Program Fund, established as a special revenue fund resulting from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program.