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Rules Forces Firms to Dump Old Diesel Gear

Sat August 18, 2007 - West Edition
Construction Equipment Guide

SACRAMENTO, Calif. (AP) Many businesses forced to upgrade their diesel fleets to meet new California emissions standards will likely sell their old equipment to countries with looser environmental regulations, according to companies affected by the recently adopted rules.

State air quality regulators in July approved the nation’s toughest standards for exhaust from off-highway diesel vehicles like bulldozers and airport baggage trucks. An estimated 180,000 vehicles in the state would have to be replaced or retrofitted with smog traps, filters or cleaner-burning technology as the new rules are phased in starting in 2010.

As a result, companies scrambling to comply with the regulations are looking to sell their diesel gear quickly, with buyers abroad often providing a ready market.

“We are working with a number of different organizations to see if we can move this equipment to Asia, South America or elsewhere,” said Rich Soltero, project manager at Dahl’s Equipment Rental Inc. in San Jose.

Still, purchasers of used diesel fleets in countries where emissions rules are less strict often won’t pay top dollar, since they know the stricter emissions standards often leave U.S. companies with little choice but to sell, used equipment brokers said.

Some environmentalists have voiced worry that the foreign sales amount to simply exporting California’s environmental problems elsewhere. But regulators have argued that shipping the old equipment abroad could prove to be an environmental boon not just for California, which will rid itself of the dirtier engines, but also the countries where the gear ends up.

“The equipment that will be moving to other parts of the world will still be meeting U.S. standards and may be cleaner than what they’ve got now,” said Mary Nichols, chairwoman of the California Air Resources Board. “It’s a little bit of a trickle-down effect, but it’s better than not doing anything at all.”

The used market for heavy construction equipment amounts to approximately $100 billion dollars, said Richard Aldersley, a manager with Ritchie Brothers Auctioneers, who said the proposed regulations drew a record number of would-be sellers to the firm’s May sale in Los Angeles.

One-fifth of the equipment sold in the auction went abroad to countries including Australia, Chile, Ghana, Latvia, Nigeria, Pakistan and Venezuela.

Proponents of the air board’s new regulations, intended to reduce the state’s diesel emissions 85 percent below 2000 levels by 2020, have said the rules will help prevent premature deaths and cases of asthma and acute bronchitis. The requirements will ultimately save the state $26 billion in health care costs, according to air board estimates.

But construction industry officials say upgrading their fleets could cost from $3 billion to $12 billion, and the air board’s staff has acknowledged the new regulations could result in a loss of up to 3,400 jobs a year.

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