January 13, 2017 by Canadian Underwriter
The U.S. Environmental Protection Agency (EPA) announced on Thursday that it has issued a notice of violation to Fiat Chrysler Automobiles N.V. and FCA US LLC (collectively FCA) for allegedly failing to disclose software that increases air pollution from vehicles.
EPA said in a statement that the alleged violations of the Clean Air Act are for installing and failing to disclose engine management software in light-duty model year 2014, 2015 and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0 litre diesel engines sold in the United States. The undisclosed software results in increased emissions of nitrogen oxides from the vehicles; the allegations cover approximately 104,000 vehicles.
“Failing to disclose software that affects emissions in a vehicle’s engine is a serious violation of the law, which can result in harmful pollution in the air we breathe,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “We continue to investigate the nature and impact of these devices. All automakers must play by the same rules, and we will continue to hold companies accountable that gain an unfair and illegal competitive advantage,” she said in the statement
EPA is working in coordination with the California Air Resources Board (CARB), which has also issued a notice of violation to FCA. EPA and CARB have both initiated investigations based on FCA’s alleged actions.
The Clean Air Act requires vehicle manufacturers to demonstrate to EPA through a certification process that their products meet applicable federal emission standards to control air pollution. As part of the certification process, automakers are required to disclose and explain any software, known as auxiliary emission control devices, that can alter how a vehicle emits air pollution. It is alleged that FCA did not disclose the existence of such emission control devices, “despite being aware that such a disclosure was mandatory.”
The statement said that FCA may be liable for civil penalties and injunctive relief for the violations alleged in the notice of violation. EPA is also investigating whether the auxiliary emission control devices constitute “defeat devices,” which are illegal.
In September 2015, EPA instituted an expanded testing program to screen for defeat devices on light duty vehicles, which revealed that the FCA vehicle models in question produced increased nitrogen oxide emissions under conditions that would be encountered in normal operation and use. “As part of the investigation, EPA has found at least eight undisclosed pieces of software that can alter how a vehicle emits air pollution,” the statement contended.
FCA US disputed the EPA’s findings in a press release on Thursday, saying that it was “disappointed” that the EPA has chosen to issue a notice of violation. “FCA US intends to work with the incoming administration to present its case and resolve this matter fairly and equitably and to assure the EPA and FCA US customers that the company’s diesel-powered vehicles meet all applicable regulatory requirements,” the release said.
The automaker noted that FCA US diesel engines are equipped with state-of-the-art emission control systems hardware, including selective catalytic reduction (SCR). “Every auto manufacturer must employ various strategies to control tailpipe emissions in order to balance EPA’s regulatory requirements for low nitrogen oxide (NOx) emissions and requirements for engine durability and performance, safety and fuel efficiency,” the release said. “FCA US believes that its emission control systems meet the applicable requirements.”
The company argued that it has “spent months providing voluminous information in response to requests from EPA and other governmental authorities and has sought to explain its emissions control technology to EPA representatives. FCA US has proposed a number of actions to address EPA’s concerns, including developing extensive software changes to our emissions control strategies that could be implemented in these vehicles immediately to further improve emissions performance.”
The automaker said that it looks forward to meet members of the EPA’s enforcement division and representatives of the new administration to demonstrate that its emission control strategies are “properly justified and thus are not ‘defeat devices’ under applicable regulations and to resolve this matter expeditiously.”
The allegations came just days after a Volkswagen executive who was in charge of complying with U.S. emissions regulations was arrested and accused of deceiving federal regulators about the use of special software that cheated on emissions tests.
Oliver Schmidt, who was general manager of the engineering and environmental office for VW of America, was charged in a criminal complaint with conspiracy to defraud the U.S. government and wire fraud. Schmidt, 48, is the second Volkswagen employee to be arrested in an ongoing federal investigation into the company, which has admitted that it programmed diesel-powered vehicles to turn pollution controls on during tests and to turn them off in real-world driving. The so-called “emissions scandal” has cost the company sales and has tarnished its brand worldwide, the Associated Press reported on Jan. 9.