GE says first to meet 2015 U.S. rail emission rules

Fri Aug 24, 2012 11:14am EDT

(Reuters) - General Electric Co (GE.N) on Friday plans to unveil a new generation of railroad locomotive that will meet strict U.S. emission standards set to take effect in 2015.

The new Evolution locomotive keeps the largest U.S. conglomerate a step ahead of rival Caterpillar Inc's (CAT.N) Electro-Motive Diesel train unit and will allow railroads to meet emission standards without adding another fluid to the list of chemicals needed to maintain trains, GE officials contend.

The locomotive aims to meet a new U.S. Environmental Protection Agency standard that will require a 76 percent reduction in diesel engines' emissions of nitrogen oxide, a pollutant associated with asthma, as well as limiting particle emissions, without using the additive urea.

In going without urea, GE is using a different technology than makers of heavy trucks have chosen. Navistar International Corp (NAV.N) last month backed off from its effort to develop a compliant urea-free engine after extensive delays in its efforts to win EPA approval, saying it would begin buying engines made by Cummins Inc (CMI.N) that use urea -- the same technology its rivals have adopted.

GE officials said they are confident their locomotive will meet the new emission standards -- a critical step to keep the company's fastest-growing division on track. Through the first six months of 2012, profits at the rail division rose 53 percent to $514 million on a 33 percent rise in sales to $2.84 billion.

"We've spent a lot of time with the EPA as we've gone through this," said Lorenzo Simonelli, CEO of GE's Transportation arm, which makes locomotives. "We're very confident that with our global research center, with the amount of testing we've done, that we've got a solution that works."

The company has invested $600 million in the locomotive.

TEMPERATURE MANAGEMENT

GE's approach works by carefully managing the engine's temperature -- hitting a point hot enough to limit the amount of the greenhouse gas nitrogen oxide produced by burning diesel fuel, but not getting so hot as to cause a dramatic rise in output of particulate matter that contributes to air pollution.

Finding a way to meet the standards without using urea was a higher priority for railroads than truckers, said Rob McKeel, general manager of GE's global locomotive operations.

"Our customers didn't want to go that way because of the infrastructure investment that would be required for such a fixed network. They can't do like trucks and just turn left," into a service station if it needs urea, McKeel said.

The engines GE has tested in labs so far have all met the EPA's numeric targets, McKeel said. The company will not submit a locomotive for EPA approval until it has tested them in actual use -- a step it plans to take over the next two years, as it plans to ship 30 locomotives to the largest U.S. railroads to test in a variety of load and climactic conditions.

While the company has not yet secured commitments, it aims to conduct tests with all the largest U.S. railroads, McKeel said. That group includes Berkshire Hathaway Inc (BRKa.N)'s BNSF, Union Pacific Corp (UNP.N), CSX Corp (CSX.N) and Norfolk Southern (NSC.N).

GE is not the only company working on the Tier 4 standards -- Union Pacific said on Wednesday that the railroad and Caterpillar's rail arm had developed an experimental locomotive it would use in California to test varying technological approaches to meeting the upcoming tighter emissions standard.

(This story corrects 8th paragraph to show temperature management balances emissions of nitrogen oxide and particulate matter, not nitrogen oxide and carbon dioxide)

(Reporting By Scott Malone; editing by Sofina Mirza-Reid)

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