Monday 29 February 2016

VW’s US emission penalties gather momentum

More details have emerged of the additional penalties for Volkswagen AG (AIN, 23 February 2016) being mooted by different authorities in the United States, writes Alan Bunting.

These ‘penalties are being viewed as ‘punishment’ for the German car maker’s misdemeanours in rigging diesel emission tests.
Environmental and consumer groups are pushing the federal government to consider a long list of possible reparations.
As well as funding the promotion of electric cars, it is suggested by Frank O’Donnell, president of Clean Air Watch, that fines be imposed on VW amounting to five times the cost of cleaning up the rule-breaking pollution released by the engines.
O’Donnell cites the precedent set in 1998 when nearly all manufacturers of heavy-duty truck diesel engines were found guilty of so-called cycle-beating.
The US Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) must now decide not only how VW can bring over-polluting diesel cars into compliance and somehow reimburse owners of cars which cannot be modified or retrofitted, but what other fines or penalties the company should face.
According to Cynthia Giles, the EPA’s administrator for enforcement and compliance assurance, any ‘offsetting projects’ had to provide ‘significant, quantifiable benefits to public health or the environment. Accordingly, the agency may reduce initially proposed penalties if the penalised company ‘agrees to such supplemental projects’.
VW North America spokesperson Jennine Ginivan says the company is continuing to work with EPA and CARB ‘to develop remedies acceptable to the agencies, as quickly as possible’.
Due to the scale of the cheating, the EPA has indicated that VW may be required to eliminate more pollution ‘than the raw amount of excessive NOx (oxides of nitrogen) that the cars omitted’.
That could include, Giles suggests – in addition to funding electric and hydrogen-fuelled car development – paying for other indirectly related environmental projects, such as retrofitting older trucks and buses in US cities that have air quality problems with pollution-reducing devices.
According to Patrick Hummel, an analyst with UBS AG in Zurich, Switzerland, the final cost to Volkswagen globally, including recall repairs, remedial actions, investor lawsuits and penalties, could exceed US$42.2 billion.
Dan Becker, director of the Washington DC-based Safe Climate Campaign, says VW must also make sure there are adequate incentives for owners of over-polluting diesel cars to respond to dealer recalls to have their NOx emissions reduced.
According to Becker there has never been a recall where every owner responded, even where a physical safety issue was involved.

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