Historically the entire engine tuning industry's loophole was some text on their website and product packaging that said "for off road use only". But over the years they've become more brazen about marketing for street use while expecting that disclaimer to protect their liability. IMO the real breaking point was the diesel truck guys. They were both far more active in marketing their defeat devices for road use ("improve towing fuel economy with a DPF delete") as well as the coal rollers just being so hilariously anti-social that there was bound to be pushback. They really pushed the uneasy look-the-other-way truce that the industry had with the EPA and even as a longtime car enthusiast (and engineer who's worked in both emissions engine calibration and electrical vehicles) I can't fault the regulators on this.
So to answer your actual question, while technically actual off road use is still legal a lot of bad actors in the industry used every bit of leeway that the regulators gave them and now this crackdown is the result.
The EPA maintain that converting an on-road vehicle to off-road use is illegal, however, by decree rather than legislation. The EPA's interpretation of the Clean Air Act is that any alteration to an emissions control system is illegal - that it's the act of modification, and not the result, that's breaking the law.
This is a double edged sword for tuning companies as the "CARB approval makes the device EPA legal" loophole is also "just" an EPA enforcement order, rather than legislated.
> however, by decree rather than legislation. The EPA's interpretation of the Clean Air Act is that any alteration to an emissions control system is illegal
imo its pretty clearly part of the plain text of the Clean Air Act:
> The term "motor vehicle" means any self-propelled vehicle designed for transporting persons or property on a street or highway.
> [it is prohibited] for any person to manufacture or sell, or offer to sell, or install, any part or component intended for use with, or as part of, any motor vehicle or motor vehicle engine, [whose purpose is defeating emissions systems]
Clearly this applies to any vehicle sold to operate on roads. The owner's intent to use it only off-road has no bearing on the 'design' of the unmodified vehicle and thus is irrelevant to the legality. There are of course exceptions and legal complexities but to call it a decree rather than legislation is plain wrong.
> Chevron decision probably changes the playing field here a little bit.
This is probably true but if it does come into play it will have much less to do with the text of the law than it will the preferences of the majority.
All that said, the EPA has made it pretty clear that they don't really care if you perform your own emissions delete on your track only car:
> “In the course of selecting cases for enforcement, the EPA has and will continue to consider whether the tampered vehicle is used exclusively for competition. The EPA remains primarily concerned with cases where the tampered vehicle is used on public roads, and more specifically with aftermarket manufacturers who sell devices that defeat emission control systems on vehicles used on public roads.”
"The EPA maintain that converting an on-road vehicle to off-road use is illegal"
Technically you can convert the vehicle, you just can't convert the engine. The emission regulations prevent deletes based on the engine, not the vehicle. So you could drop in a purpose built race engine and be legal.
But even the EPA looks the other way if your vehicle is truly never used on the road. They only seem to enforce it on dual use vehicles.
This is incorrect. Installing an entire new powertrain constitutes a "defeat device". The EPA most definitely does not look the other way for non-road vehicles.
* Some crate engines are emissions legal as "service replacements," if installed into a chassis that originally had a variant of that engine and if all emissions control systems are retained. In this case you're using the emissions controlled accessories from the existing vehicle.
* A few crate engine packages have CARB Executive Orders. Due to a weird enforcement note from the EPA, CARB EOs are essentially a loophole in the emissions certification process. These Executive Orders apply only to crate engines that are retained in the shipped configuration and only apply to packages that come with accessories including intakes and upstream-catalyst exhaust systems (usually header+downpipe).
* Exhaust downstream of catalyst is a murky area. It's "de facto" considered not part of the emissions control system, even though backpressure could affect actual measured emissions.
Custom non-road engines are found in many track only cars. And if you are to read the article I posted early, even the EPA doesn't really care if a street car is converted to a track car so long as it's never used on the street. It might be technically illegal to do, but the enforcing agency doesn't care. Pretty similar to things like federal enforcement of marijuana. Not legal, but not generally not enforced.
So to answer your actual question, while technically actual off road use is still legal a lot of bad actors in the industry used every bit of leeway that the regulators gave them and now this crackdown is the result.