(Editor's Note: Confused about Tier IV and what it means for your dealership? Check out Farm Equipment's recent coverage of this topic by clicking here.)

Unveiling the next generation of industry leading products, Caterpillar Inc. (NYSE: CAT) is showcasing its Tier IV Interim/Stage IIIB readiness at an emissions strategy update event for industry professionals at the company’s Edwards, Illinois, Learning and Demonstration facility.

Caterpillar’s Tier IV Interim/Stage IIIB engine technology includes state- of-the-art integrated system design built upon the success of the company’s ACERT technology.

Additional technologies, including powertrain innovation and aftertreatment devices, will be specifically tailored and applied to products to provide maximum value to customers while meeting the stringent emission requirements mandated by law.

“Our Tier IV Interim/Stage IIIB products will be delivered on time, on cost and with the quality, durability and reliability our customers expect and deserve,” said Caterpillar Group President, Stu Levenick. “Tier IV Interim/Stage IIIB is the most aggressive and expensive product development initiative in Caterpillar history. We began this journey with Tier 1 in 1996, and with each new tier we continue to build upon our proven technologies, product development and strong dealer network.”

Caterpillar's significant research and development costs are primarily due to the new product introduction programs related to Tier IV Interim//Stage IIIB emissions compliance.

“Our pricing strategy will focus on providing customers with the best value proposition in the market, a broad-based deployment process that minimizes disruption while at the same time allows the company to recover significant multi-year costs necessary to meet the new regulations,” said Levenick.

“While the details have not yet been finalized, price actions associated with recovering the costs of Tier IV Interim/Stage IIIB for our machines in the 130-560 kilowatt power range may increase prices by as much as 12 percent over our Tier IV Interim/Stage IIIB introduction time frame. We anticipate the first increase, starting January 1, 2011, to be about one third of the 12 percent increase. Pricing for commercial engine applications, such as electric power, industrial and petroleum, will vary depending on product and power range. We plan to initiate broad-based emissions related price actions also starting January 1, 2011, for all products, including those utilizing transitional provisions.”

In 2004, the Environmental Protection Agency and the European Union introduced Tier IV and Stage IIIB/IV emission standards respectively, with effective dates ranging from 2008 to 2015. Tier IV/Stage IV standards require emissions of particulate matter (PM) and oxides of nitrogen (NOx) to be reduced by more than 90%.

“It’s not just about emissions — our focus is on the customer,” said Marketing and Product Support Vice President, Rod Beeler. “Our ultimate goal is to exceed expectations by developing products that are safer, more efficient and environmentally responsible without sacrificing performance.”

It is projected that Caterpillar will accumulate nearly one million hours of testing on Tier IV Interim//Stage IIIB engines and machines by the end of 2010.

During the strategy update, Caterpillar previewed some of its newly developed machines including a 336E Hydraulic Excavator, 140M Motor Grader, 980H Wheel Loader and 775 Off-Highway Truck. The company will also showcase its Tier IV Interim/Stage IIIB readiness at the international trade show, bauma 2010, this April in Munich, Germany.