In recent years, VW officials have sometimes been quoted touting their “clean diesel” vehicles by paraphrasing one of their competitors—“this isn’t your grandfather’s diesel.” This month VW finally admitted to the U.S. Environmental Protection Agency (EPA) and customers worldwide that it “isn’t your regulator’s diesel” either. The company had programmed the electronics in millions of vehicles to provide false data during required emissions tests.
What Are The U.S. Testing Requirements?
In the U.S., the Clean Air Act (CAA) directs EPA to develop a research, testing and regulatory program designed to reduce air emissions from motor vehicles. EPA divides motor vehicles into different classes (for example, cars are “light duty vehicles”), establishes emission limits for a variety of air pollutants (such as nitrous oxide and ozone) for each model year, and prescribes specific tests that sample vehicles must pass in order to obtain a “certificate of conformity (COC)” that allows the manufacturer to sell that make and model in the U.S. COC application packages include technical information about the vehicle, including specifications for the engine and a variety of auxiliary equipment, including emission control devices, sensors and other electronics. Applications must also justify the benefits of each piece of auxiliary equipment, including “auxiliary emission control devices (AECDs),” and how any piece that may reduce the effectiveness of emission controls is not a “defeat device” that subverts effectiveness. EPA’s rules prohibit certification with a defeat device except in very narrow situations (e.g., necessary for safety, or incorporated into an emergency vehicle). As onboard electronics have become more sophisticated, reporting and testing requirements have become more detailed and elaborate.
What Did VW Do?
EPA has issued a notice of violation (NOV) alleging that four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015 include software that circumvents EPA emissions standards for certain air pollutants. The software senses when the vehicle is being tested, by measuring parameters that precisely track the parameters in the federal test procedure used for emission testing for EPA certification purposes, and then produces operating characteristics that achieve emission results that meet EPA standards. At all other times, the software produces different operating characteristics that lead to emissions of NOx that are 10 to 40 times above EPA standards. According to EPA, this software qualifies therefore as a prohibited “defeat device.” Media reports assert that this software appears in roughly half a million cars sold in the U.S. and over 11 million worldwide.
The California Air Resources Board (ARB) began investigating these issues before EPA, and has also issued a formal letter to VW asserting the same violations. Other states are now reported to be considering enforcement action as well.
Now What?
As I write this note, publicly available information about this scandal are changing every day. EPA’s NOV letter states that presently-alleged violations can lead to fines of up to $37,500 per car for each of a number of violations, and the agency’s website discusses development of a remediation plan to be implemented by recalls of every affected vehicle. Neither EPA nor ARB have alleged any evidence that the software poses an immediate danger to drivers, although vastly higher pollutant emissions are bad for public health.
In the first week since this information became public, VW’s chief executive officer and other high-ranking officials have resigned, and the company has set aside $7.3 billion for recalls. Meanwhile, EPA and ARB are continuing their investigations—and probably are expanding the scope. Most recently, U.S. holders of VW American Depositary Receipts (ADRs) have filed a federal securities suit alleging fraud by the company.
Self-Assessment Checklist
Does the organization own and operate any Volkswagen or Audi vehicles affected by these issues (makes and models are detailed in the EPA documents below)?
Has the organization catalogued the makes and models of other vehicles it owns and operates, to prepare for the possibility of expanded revelations?
Where Can I Go For More Information?
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EPA webpage for these Notice of Violations (with attached enforcement documents)
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EPA Vehicle Standards and Regulations webpage
Specialty Technical Publishers (STP) provides a variety of single-law and multi-law services, intended to facilitate clients’ understanding of and compliance with requirements. These include:
About the Author
Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 25 years. He was involved in developing 12 existing products, including Environmental Compliance: A Simplified National Guide and The Complete Guide to Environmental Law.
Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).
Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).
You may contact Mr. Elliott directly at: tei@ix.netcom.com.