Directive 97/68/EC is hereby amended as follows:

1. (1)

   Article 4(6) is replaced by the following:

   ‘6.

   Compression ignition engines for use other than in the propulsion of railcars and inland waterway vessels may be placed on the market under a flexibility scheme in accordance with the procedure referred to in Annex XIII in addition to paragraphs 1 to 5.’;

2. (2)

   Article 10 is amended as follows:

   1. (a)

      in paragraph 1a, the second subparagraph is deleted;

   2. (b)

      the following paragraphs are inserted:

      ‘1b.

      By way of derogation from Article 9(3g), (3i) and (4a), Member States may authorise the placing on the market of the following engines for railcars and locomotives:

      (a)

      replacement engines that meet the Stage III A limits, where they are to replace engines for railcars and locomotives that:

      1. (i)

         do not meet the Stage III A standard; or

      2. (ii)

         meet the Stage III A standard but do not meet the Stage III B standard;

      (b)

      replacement engines that do not meet Stage III A limits, where they are to replace engines for railcars without driving control and not capable of independent movement, so long as such replacement engines meet a standard no lower than the standard met by engines fitted to existing railcars of the same type.

      Authorisations under this paragraph may be granted only in cases where the approval authority of the Member State is satisfied that the use of a replacement engine that meets the requirements of the latest applicable emissions stage in the railcar or locomotive in question will involve significant technical difficulties.

      1c.

      A label bearing the text “REPLACEMENT ENGINE” and bearing the unique reference of the associated derogation shall be affixed to engines covered by paragraph 1a or 1b.

      1d.

      The Commission shall assess the environmental impacts of, and possible technical difficulties in respect of compliance with, paragraph 1b. In the light of that assessment, the Commission shall, by 31 December 2016, submit to the European Parliament and the Council a report reviewing paragraph 1b accompanied, if appropriate, by a legislative proposal including an end date for the application of that paragraph.’;

   3. (c)

      paragraph 7 is replaced by the following:

      ‘7.

      Member States shall permit the placing on the market of engines, as defined in points A(i), A(ii) and A(v) of Section 1 of Annex I, under the flexibility scheme in accordance with the provisions set out in Annex XIII.’;

3. (3)

   Annex XIII is amended in accordance with the Annex to this Directive.