A View from Here

Bill's Sisson's weekly Trade Only blog

The price of cleaner air in California: unfair competition

Starting January 1, 2008, California based marine dealers will be competing for new boat sales against retailers in the other 49 states at a distinct price disadvantage thanks to new inboard engine emission regulations instigated and mandated by the California Air Resources Board (CARB). After pushing to clean- up the two-stroke outboard industry in the ’90s, CARB has been relentless in its pursuit of reducing HC+NOx emissions from recreational motor boats powered by inboard gasoline engines.

The result of nearly six years of meetings, public hearings, development and testing commences next year when all new inboard (under 500 horsepower) powered boats sold in California must be standard equipped from the engine manufacturer with catalytic converters in order to meet the 5.0 g/kW-hr HC+NOx state limit.  Since this is a California only regulation, none of the other 49 states will be burdened with this requirement.

What California new boat dealers don’t know at this time is how much more will their catalyzed boat inventory cost than identical models sold in every other state. Presently, California dealers are worried on two major fronts.  First is a perception problem.  It’s understandable that a majority of potential new boat buyers are not going to be enthralled with the idea of owning a boat with a catalytic converter under the aft engine hatch for a number of safety and performance concerns.  The other major hurdle will be price.  Although California dealers don’t know the exact amount of pass-along cost increase that will result from adding a catalytic converter to the exhaust system, but ballpark estimates range anywhere from $600 to $1,800 per boat to the purchaser depending on the specific engine model.

Given just these two factors, California dealers have plenty of reason to speculate that it won’t take long for local boat buyers to start shopping in neighboring states. And although it will be illegal according to the CARB regulation to sell a new inboard powered boat in California after January 1, 2008 without a catalytic converter system, it is not illegal for a resident to purchase a non-catalyzed boat in another state and bring it into California. It is also fact that there is no enforcement provision in the CARB regulation requiring new inboard boats purchased after January 1, 2008 to be inspected or certified for emissions compliance prior to registration by the DMV.

SCMA has become proactive on this issue by introducing new legislation to the state assembly (AB 695, sponsored by Assemblywoman Betty Karnette, D) making it illegal for a non-compliant inboard boat to be registered after January 1, 2008.

At this point it’s purely speculation as to how many potential boat sales this will cost California dealers in 2008 and the years ahead.  According to reports from the NMMA, the new California inboard engine emissions regulation will likely become a similar federal standard for all 50 states by the year 2010 or 2011, but that’s not a guarantee.  In principle, California boat dealers and the SCMA support measures that promote cleaner air and water, but not when it results in unfair competition.

Dave Geoffroy
SCMA Executive Director

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