EPA Proposes Major Changes to DEF Deratement Requirements

On July 9, 2026, the U.S. Environmental Protection Agency (EPA) issued a notice of proposed rulemaking to amend the selective catalytic reduction (SCR) system inducement requirements for newly manufactured diesel-powered highway engines and vehicles, as well as nonroad diesel engines and equipment. For those outside industries that rely on diesel-powered equipment, this proposal concerns potential changes to Diesel Exhaust Fluid (DEF) system requirements—an area of regulation that has significant operational and compliance implications for manufacturers, equipment owners, and commercial operators.

This is particularly important because the selective catalytic reduction system is responsible for the emissions control technology that manages and injects diesel exhaust fluid (DEF) into the exhaust system, which in turn converts nitrogen oxide into nitrogen and water. The EPA’s proposed rule changes would essentially replace the current requirements for engine derates and vehicle speed reductions with audible and/or visible notifications for newly manufactured diesel-fueled highway engines and vehicles, as well as nonroad engines and equipment. The proposed rule also includes updated guidance that would allow manufacturers to modify in-use engines and vehicles consistent with any changes the EPA ultimately adopts for new engines and vehicles.

As background on recent developments and the current state of the regulations, the 2023 Final Rule required manufacturers to initiate an engine performance derate, or inducement, to address concerns related to DEF quality, DEF supply, and tampering. The EPA has since acknowledged that these requirements have resulted in continued operator frustration and have “motivated the EPA to reassess the Agency’s approach to certifying SCR-equipped engines.” In the July 2026 proposal, the EPA is proposing to replace engine performance derates as part of the SCR-related inducement provisions with visible and/or audible notifications. Rather than reducing the performance of new model year engines and vehicles, the SCR system would instead utilize audio/visual notifications to alert operators that the DEF level or system requires attention. These proposed amendments to the inducement provisions would apply to newly manufactured highway engines and vehicles (i.e., light- and medium-duty vehicles and heavy-duty engines), as well as nonroad applications.

Under the Clean Air Act, the EPA establishes and implements emission standards for new highway and nonroad engines and vehicles throughout their useful life. In addition, the EPA will be considering new inducement guidance for in-use highway and nonroad diesel engines and vehicles to address ongoing compliance with these regulations. Specifically, the EPA is considering whether such guidance could provide recommendations for engine manufacturers seeking approval to modify in-use engines consistent with any provisions adopted in this rulemaking, while avoiding violations of prohibitions against tampering and defeat devices.

This means there may be a future procedure or guidance allowing operators whose heavy units already comply with the derate/slow-down requirements to modify those systems to activate audio/visual warnings rather than triggering system derates or speed reductions. To be clear, this is not the first time that derates and DEF sensors have been the subject of regulatory discussion in 2026. In March 2026, the EPA issued a policy change indicating that DEF sensors would no longer be required on certain equipment operating on diesel fuel. This change was prompted, in large part, by multi-industry concerns regarding the dangers, risks, and operational hazards associated with derates. The trucking and farming industries were among the most vocal opponents of the previous derate measures.

The American Trucking Association commented in March that the “decision to provide manufacturers with flexibility to suspend these inducements and eliminate problematic sensors altogether by monitoring a truck’s actual emissions is a pragmatic solution that reflects how these systems perform in the real world.” While the real-world implications raised by industry participants are legitimate, it is strongly encouraged that operators and industry stakeholders not move ahead of the regulatory process. Until any changes are formally adopted, industry participants must continue to prioritize compliance with the existing regulations. Operators should also keep in mind that regulatory standards can shift in either direction—meaning that requirements relaxed today could potentially be reinstated or modified in the future.

This proposed rule change is currently open for public comment through the EPA and will remain open for 45 days following its initial publication in the Federal Register. Once the public comment period has concluded, the EPA may advance the proposal toward finalization and potential adoption as a modification to the existing regulations.

Compliance with these regulations is not merely a suggestion—it is an ongoing obligation. While changes may be on the horizon, all stakeholders subject to these requirements must remain focused on complying with the existing regulations until any amendments are formally adopted. Although the President of the United States recently issued pardons for nine individuals convicted of tampering with diesel vehicle emissions-control systems, the potential for enforcement and prosecution remains until the regulatory framework is actually and definitively changed. A good faith effort alone is not sufficient; operators must have confidence that the equipment in their trucks is compliant and functioning as required.

As regulatory changes continue to develop, the most prudent approach is to remain informed, maintain proper compliance practices, and ensure that any modifications to emissions-control systems are made only through approved regulatory processes.

If you have questions about this article, please contact John Stacy (jstacy@setlifflaw.com) at (804) 377-1263 or Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261.