$1 billion settlement with diesel engine manufacturers is biggest in Clean Air Act history

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WASHINGTON (10/23/98) -- The Justice Department and the Environmental Protection Agency have announced a settlement with seven heavy duty diesel engine manufacturers that comprises the largest Clean Air Act enforcement action in history. 
According to the announcement, the manufacturers will spend more than one billion dollars to settle charges that they illegally poured millions of tons of pollution into the air, including an $83.4 million civil penalty, the largest in environmental enforcement history.

The settlement will resolve charges that the companies - Caterpillar Inc., Cummins Engine Company, Detroit Diesel Corporation, Mack Trucks, Inc., Navistar International Transportation Corporation, Renault Vehicles Industriels, s.a. and Volvo Truck Corporation - violated the Clean Air Act by installing devices that defeat emission controls. These companies comprise 95 percent of the U.S. heavy duty diesel engine market.

"The diesel engine industry has illegally poured millions of tons of pollution into the air. It's time for the diesel engine industry to clean up its act and clean up our air," said Attorney General Janet Reno. "These companies needlessly cost themselves millions of extra dollars by not complying with the law in the first place. Today's settlement shows that an ounce of compliance is worth a pound of penalties."

The settlement is expected to prevent 75 million tons of nitrogen oxide (NOx) air pollution over the next 27 years; 75 million is more than the total U.S. NOx emissions for three years. In addition, due to the settlement, the total NOx emissions from diesel engines will be reduced by one-third as of the year 2003.

"This landmark settlement - the biggest civil penalty ever for violating an environmental law - is proof that companies that fail to meet their responsibility to protect public health and the environment will pay a stiff price," said EPA Administrator Carol Browner. "These defeat devices are really deceit devices -- they defeat important public health protections and deceive the American people. The settlement underscores this Administration's commitment to vigorously enforce the environmental laws of this nation and to ensure that the air people breathe is safe and clean."

The complaint alleges that the companies violated the Clean Air Act by selling heavy duty diesel engines equipped with "defeat devices" -- software that alters an engine's pollution control equipment under highway driving conditions. The defeat devices allow engines to meet EPA emission standards during testing but disable the emission control system during normal highway driving. The Clean Air Act prohibits any manufacturer from selling any new motor vehicle engine equipped with any device designed to defeat the engine's emission control system. The engines meet the emission limits when they run on the EPA's 20-minute Federal Test Procedure, but when the engines are running on the highway, up to three times the limit of NOx emissions result.

The companies are alleged to have sold an estimated 1.3 million of the affected engines, which range from the type used in tractor trailers to large pick-up trucks. The affected engines emitted more than 1.3 million tons of excess NOx in 1998 alone, which is six percent of all NOx emissions from cars, trucks and industrial sources this year. This is equivalent to the NOx emissions from an additional 65 million cars being on the road. If the companies' use of defeat devices had not been detected and eliminated, more than 20 million tons of excess NOx would have been emitted by the year 2005.

EPA estimates that the companies will spend collectively more than $850 million to introduce cleaner new engines, rebuild older engines to cleaner levels, recall pickup trucks that have defeat devices installed and conduct new emissions testing. 

Under the agreements lodged with the U.S. District Court for the District of Columbia, the companies will reduce significantly emissions from new heavy duty diesel engines by the end of the year and then meet levels beyond what the law requires by October 2002. The companies also will ensure that when older heavy duty diesel engines are rebuilt, their excess emissions will be reduced. The companies also will move up the date for meeting certain NOx emission standards applicable to non-road engines such as construction equipment. 

In addition to reducing NOx emissions from the heavy duty diesel engines, the companies will undertake a number of projects to lower NOx emissions, including research and development projects to design low-emitting engines that use new technologies and cleaner fuels. Collectively, these projects will cost $109.5 million.

The emission problems were discovered last year when EPA tested one of the company's engines. EPA and DOJ then began an extensive investigation. Settlement discussion began earlier this year.

The manufacturers will be subject to additional heavy penalties if they do not meet the agreement deadlines, and will be required to demonstrate compliance with the settlement on tests, which supplement the Federal Test Procedure to ensure there are no new defeat devices used.

The proposed settlements must still be approved by the Court.