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Date | 2009–2015 |
---|---|
Location | Worldwide |
Type | Emissions violation |
Cause | Engaging full emissions control only during testing |
Participants | Volkswagen Group, US EPA, other local regulators |
1999 | New Tier 2 rules established to replace Tier 1. NOx limit decreasing from 1.0 g/mi to .07 g/mi |
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2004–2009 | Phase in period of diesel emissions rules |
2007 | VW suspends sales of current diesel lines awaiting technology to meet new standards |
2008 | VW announces new Clean Diesel cars |
2009 | Tier 2 fully in effect, VW TDI cars go on sale |
2009–2015 | VW diesel sales in the US rebound, Clean Diesels win several enviornmental awards, receive tax breaks |
2014 | International Council on Clean Transportation asks U. of W. VA. CAFEE to help demonstrate the benefits of US diesel technology, hoping to have Europe follow suit |
May 2014 | Instead, CAFEE finds discrepancies showing poor on-road emissions. Results presented at public forum and published, getting attention of EPA |
2014–2015 | EPA repeats tests, and contacts VW for explanation of poor real world NOx emissions |
December 2014 | VW orders voluntary recall of TDI cars but CARB and EPA not satisfied |
September 3, 2015 | EPA threatens to not certify 2016 diesels, VW responds by admitting software was programmed to cheat testing |
September 18, 2015 | Public announcement by EPA of order to recall 2009–2015 cars |
September 20, 2015 | VW admits deception, issues public apology |
September 21, 2015 | First business day after news, VW stock down 20% |
September 22, 2015 | VW to spend $7.3B to cover costs of scandal; stock declines another 17% |
September 23, 2015 | CEO Winterkorn resigns |
In September 2015, German car maker Volkswagen AG was caught using software designed to illegally cheat on US emissions tests for almost 500,000 of its model year 2009 through 2015 diesel engine Volkswagen and Audi cars. The software, which the company admitted was in use in 11 million of its cars worldwide, detected when cars were being lab tested for emissions, and turned on pollution controls that were normally inactive. This resulted in car models passing United States Environmental Protection Agency (EPA) tests while in real-world driving emitting up to 35 times the legal limit of nitrogen oxides (NOx). The EPA has issued Volkswagen a Notice of Violation, saying that the software functions as a defeat device, as prohibited by the US Clean Air Act. The company has apologized for the action and is facing legal proceedings, regulatory investigations, and class action lawsuits in multiple countries.
The independent body International Council on Clean Transportation (ICCT) commissioned a study in 2014 and sought data from three different sources on 15 vehicles. Among these was a group of five scientists at West Virginia University who detected a high level of emissions during live road tests on three diesel cars. ICCT also purchased data from two other sources. They provided their findings to the EPA and the California Air Resources Board, who found the software that created the illegal defeat device in Volkswagen's diesel engines. The scrutiny focused on Volkswagen AG's use of engine control unit programming techniques in vehicles equipped with turbocharged direct injection (TDI) diesel engines to skirt vehicle emissions compliance laws in the United States. On 24 September Germany's Transport Minister Alexander Dobrindt said that Volkswagen has admitted to manipulating emissions tests in Europe as well.
Background
Starting with the 2009 model year, Volkswagen Group began migrating its light-duty passenger vehicle turbocharged direct injection (TDI) diesel engines to a common-rail fuel injection system. This type of injection system allows for higher-precision fuel delivery through the use of electronically controlled fuel injectors and higher injection pressure, theoretically leading to better fuel atomization, better air/fuel ratio control, and by extension, better control of emissions.
With the addition of a diesel particulate filter to capture soot, and on some vehicle models, a urea-based exhaust aftertreatment system, the engines were touted by Volkswagen as being as clean as or cleaner than U.S. and Californian requirements, while providing good performance and drivability.
Low emissions levels of Volkswagen vehicles enabled the company to avail itself of green car subsidies and tax exemptions in the USA.
Emission standards
The VW and Audi cars identified as violators had been certified to meet either the US EPA Tier 2 / Bin 5 emissions standard or the California LEV-II ULEV standard. Either standard requires that nitrogen oxide emissions not exceed 0.07 grams per mile (0.043 g/km) for engines at full useful life which is defined as either 120,000 miles (190,000 km) or 150,000 miles (240,000 km) depending on the vehicle and optional certification choices.
This nitrogen oxide emission standard is among the tightest on vehicles in the world. For comparison, the contemporary European standards known as Euro 5 (2010–2014 models) and Euro 6 (2015 models) only limit nitrogen oxide emissions to 0.29 grams per mile (0.18 g/km) and 0.13 grams per mile (0.08 g/km) respectively.
Early discrepancies
The independent body International Council on Clean Transportation (ICCT) commissioned a study in 2014 and sourced data on 15 vehicles from three sources. This included a group of five scientists at West Virginia University who conducted tests on three diesel cars, two which were later identified as belonging to the Volkswagen group and one other vehicle from another manufacturer. ICCT also purchased data from Emissions Analytics, a UK-based emissions consultancy, and from stakeholders of the RDE group.
The scientists, led by research assistant professor Arvind Thiruvengadam, tested tailpipe emissions under actual road conditions, which revealed emissions far exceeding legal limits set by both European and U.S. standards. Thiruvengadam said, "... we did so much testing that we couldn't repeatedly be doing the same mistake again and again".
The authors reported that under real-world driving conditions one VW car exceeded US emissions limits "by a factor of 15 to 35" while the other VW car exceeded the limit "by a factor of 5 to 20". The test car by a different manufacturer was "at or below the standard … with exception of rural-up/downhill driving conditions". All three cars were below emissions limits when using the standard laboratory testing protocols. The published results confirmed the ICCT's findings. The findings were also directly presented to the EPA and CARB in May 2014.
Notice of emissions testing falsification allegations
On September 18, 2015, the U.S. EPA and CARB served notice to Volkswagen Group that approximately 480,000 VW and Audi automobiles equipped with 2-litre TDI engines, and sold in the U.S. between 2009 and 2015, had an emissions-compliance "defeat device" installed.
The "defeat device", in the form of specially crafted engine management unit firmware, detects emissions testing conditions, and in such conditions will cause the vehicle to comply with emissions regulations by properly activating all emissions controls. However, under normal driving conditions, the emissions controls are suppressed, allowing the engine to produce more torque and get better fuel economy, at the expense of emitting up to 40 times more nitrogen oxides than allowed by law.
The action the EPA took against Volkswagen on September 18 is called a Notice of Violation, which is a type of Civil Enforcement Action carried out by US government agencies. Civil Enforcement Actions are not judicial and involve no judicial process, in contrast to Judicial Actions, either civil or criminal, which the would be filed by United States Department of Justice on behalf of the EPA. In a Judicial Action the guilt of the accused is not established until the courtroom proceedings have been completed, while Civil Enforcement Actions are decided on the authority of the EPA alone, and result in either orders from the EPA, or consent agreements with the violator, to make some remedy, which in this case is the EPA's order to recall some 500,000 vehicles. The Notice of Violation found Volkswagen to have broken US laws, including 42 U.S.C § 7401-7671, 42 U.S.C. § 7522(a)(3)(B), and 203(a)(1) of the Clean Air Act. The EPA's order to recall the cars is legally enforceable without need for legal process outside of the EPA itself. Beyond the Notice of Violation, the US Department of Justice investigation currently in progress could result in actual court filings against the company and possible criminal charges.
Volkswagen's admission of violation
According to the United States Environmental Protection Agency (EPA), Volkswagen had insisted for a year until the outbreak of the scandal that discrepancies were mere technical glitches. Volkswagen only fully acknowledged that they had manipulated the vehicle emission tests after being confronted with evidence regarding the "defeat device". Reuters reported that what the news agency described as a "formal acknowledgement of the deception" was made by Volkswagen executives in Germany and the United States to EPA and California officials during a September 3 conference call, during which Volkswagen executives discussed written materials provided to the participants demonstrating how Volkswagen's diesel engine software circumvented U.S. emissions tests.
Martin Winterkorn, resignation statement, September 23, 2015.I am shocked by the events of the past few days. I am stunned that misconduct on such a scale was possible in the Volkswagen Group. As CEO I accept responsibility for the irregularities. I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part.
Volkswagen's CEO Martin Winterkorn was contrite, saying "I personally am deeply sorry that we have broken the trust of our customers and the public." Winterkorn was in charge at Volkswagen from the start of 2008 to September 2015. He attributed the admitted wrongdoing to "the terrible mistakes of a few people". Winterkorn initially resisted calls to step down from his leadership role at VW, and then resigned as CEO on September 23, 2015.
Volkswagen Group of America CEO Michael Horn was more direct, admitting "We've totally screwed up." Horn added, "Our company was dishonest with the EPA, and the California Air Resources Board and with all of you."
Volkswagen announced that 11 million cars were involved in the falsified emission reports, and that over seven billion dollars would be earmarked to deal with the costs of rectifying the deceptive software at the heart of the fraudulent pollution statements.
Consequences
Legal and financial repercussions
Roughly 482,000 diesel Volkswagen cars sold in the United States since 2009 emit pollutants "linked to a range of health problems, including asthma attacks, other respiratory diseases and premature death". Polluting models include the Volkswagen Jetta, Beetle, Golf, and Passat, and the Audi A3.
Government actions
- United States: The EPA announced that should the allegations be proven, Volkswagen Group could face fines of up to US$37,500 per vehicle (approximately US$18 billion in total). VW suspended sales of TDI-equipped cars in the US on September 20, 2015. In addition to possible civil fines, media reports state that the United States Department of Justice Environment and Natural Resources Division is conducting a criminal probe of Volkswagen AG's conduct. The United States House Energy Subcommittee on Oversight and Investigations has announced that it would hold a hearing into the Volkswagen scandal. New York Attorney General Eric Schneiderman said that his investigation was already underway and warned: "No company should be allowed to evade our environmental laws or promise consumers a fake bill of goods".
- Canada: Environment Canada has announced that it has initiated proceedings to evaluate if "defeat devices" were installed in Volkswagen vehicles to bypass emission control tests in Canada.
- South Korea: Authorities in South Korea announced pollution control investigations into cars manufactured by Volkswagen and other European car-manufacturers. Park Pan-kyu, a deputy director at South Korea's environment ministry said: "If South Korean authorities find problems in the VW diesel cars, the probe could be expanded to all German diesel cars".
- Switzerland: The Swiss Federal Roads Office is investigating if Volkswagen diesel cars similar to those sold in the U.S. were also sold in Switzerland.
- European Union: Government regulatory agencies and investigators have initiated proceedings in France, Italy, Germany, Spain, the Netherlands, the Czech Republic and Romania. Several countries have called for a Europe-wide investigation.
- United Kingdom: The Department of Transport announced on 24 September that it would begin re-testing cars from a variety of manufacturers to ensure the use of "defeat devices" is not industry wide.
- India: Indian government officials announced that they are closely following developments. The Indian Foundation of Transport, Research and Training (IFTRT) has demanded a probe into Volkswagen's Confirmation of Production process for vehicles sold in India.
- Netherlands: Netherlands has spent billions of Euros on subsidies in energy-efficient cars in the recent years. Jesse Klaver from the political party GroenLinks responded that the Netherlands must claim back money from the car manufacturers when it appears that they have also committed fraud in the Netherlands.
Private actions
As of September 23, 2015, at least 25 class-action lawsuits have been filed in the U.S. and Canada on behalf of Volkswagen and Audi owners, claiming fraud and breach of contract, positing the "diminished value" of diesels that will be fixed to conform with pollution regulations, due to expected reductions in horsepower and fuel efficiency.
Market impact
Over one quarter of VW's sales in the U.S. are diesel-powered vehicles. The corporation has chosen a market strategy that emphasizes clean diesel over electric cars or hybrid vehicles.
The vehicles affected by the recall in the U.S. include the following models:
- 2009–2015 Audi A3 2.0L TDI
- 2009–2015 VW Beetle 2.0L TDI
- 2009–2015 VW Golf 2.0L TDI
- 2009–2015 VW Jetta 2.0L TDI
- 2012–2015 VW Passat 2.0L TDI.
Volkswagen has also stated that 11 million vehicles sold worldwide are affected in addition to the 480,000 vehicles with 2.0L TDI engines sold in the US. According to Volkswagen, vehicles sold in other countries with the 1.6L and 2.0L 4-cylinder TDI engine known as Type EA189 are also affected. This software is also said to affect EA188 and the 2015 EA288 generation of the four-cylinder.
Stock value
On 21 September 2015, the first day of trading after the EPA's Notice of Violation to Volkswagen became public, share prices of Volkswagen AG plunged 20% on the Frankfurt Stock Exchange. On 22 September, the stock fell another 22% for a 2-day cumulative decline of 35%. On 23 September, the stock quickly fell 10.5%, dropping through the €100 barrier to a record 4-year low before regaining some lost ground. Share prices of other German automakers were also affected, with BMW down 4.9% and Daimler down 5.8%.
Brand equity and media exposure
The Volkswagen TDI emissions scandal has received widespread negative media exposure all over the world, with headlines fronting the websites of multiple news gathering and reporting organizations.
Media outlets have called the scandal "Dieselgate" in reference to previous controversies.
Popular Mechanics stated that the scandal "is much worse than a recall", highlighting that Volkswagen had engaged in a pattern of "cynical deceit".
Deutsche Welle, Germany's state broadcaster, opined that a "lawsuit tsunami" was headed for Volkswagen and that the scandal had dealt a blow to the country's psyche and brand "Made in Germany".
Reactions from political and sectorial leaders
German Chancellor Angela Merkel stated she hoped that all facts in the matter would be made known promptly, urging "complete transparency". She additionally noted that Germany's Transport Minister, Alexander Dobrindt, was in ongoing communication with Volkswagen.
Michel Sapin, the French Finance Minister, called for an investigation of diesel-powered cars that would encompass the entire continent of Europe.
Renault-Nissan CEO Carlos Ghosn said it would be difficult for an automaker to conceal internally an effort to falsify vehicle emissions data, such as has happened at Volkswagen AG "I don't think you can do something like this hiding in the bushes".
Jim Holder, the editorial director of Haymarket Automotive, (which publishes WhatCar and AutoCar), opined that there had never been a scandal in the automotive industry of this size.
Precedents
Main article: Defeat deviceSee also
- Diesel exhaust
- Exhaust gas recirculation
- FTP-75
- NOx adsorber, a system to trap oxides of nitrogen used by Volkswagen Clean Diesel cars
- Vehicle regulation
References
- ^ Brooks, Phillip A. (September 18, 2015). "VW Notice of Violation, Clean Air Act (September 18, 2015)" (PDF). US Environmental Protection Agency. Retrieved September 20, 2015.
- ^ Enforcement Basic Information, United States Environmental Protection Agency, May 18, 2015, retrieved September 26, 2015
- ^ Esworthy, Robert (2010), Federal Pollution Control Laws: How are They Enforced?, DIANE Publishing, p. 25, ISBN 9781437938524
- ^ "Volkswagen under investigation over illegal software that masks emissions", The Guardian
- ^ Davenport, Coral; Ewing, Jack (18 September 2015), "VW Is Said to Cheat on Diesel Emissions; U.S. Orders Big Recall", New York Times, retrieved 18 September 2015
- Warrick, Joby (September 18, 2015), "EPA: Volkswagen used 'defeat device' to illegally skirt air-pollution controls", Washington Post
- Jordans, Frank (21 September 2015). "EPA: Volkswagon Thwarted Pollution Regulations For 7 Years". CBS Detroit. Associated Press. Retrieved 24 September 2015.
- "VW could face 'long legal nightmare'". BBC World Service. 24 September 2015.
- ^ "WVU study found elevated levels of emissions from Volkswagen vehicles". West Virginia University. September 24, 2015.
- ^ Franco, Vicente; Sánchez, Francisco Posada; German, John; Mock, Peter. "Real-World Exhaust Emissions From Modern Diesel Cars" (PDF). Retrieved September 26, 2015.
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- "How A Little Lab In West Virginia Caught Volkswagen's Big Cheat". NPR. September 24, 2015. Retrieved September 16, 2015.
- Franco, Vicente; Posada Sánchez, Francisco; et al. (October 11, 2014). "Real-world exhaust emissions from modern diesel cars". International Council on Clean Transportation. Retrieved September 22, 2015.
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(help) - ^ Thompson, Dr. Gregory J.; Carder, Daniel K.; et al. (May 15, 2014). "In-Use Emissions Testing of Light-Duty Diesel Vehicles in the United States" (PDF). WVU Center for Alternative Fuels, Engines, and Emissions. Retrieved September 22, 2015.
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(help) - Ramsey, Mike (September 23, 2015). "Volkswagen Emissions Problem Exposed by Routine University Research". The Wall Street Journal. Retrieved 2015-09-23.
- "EPA, California Notify Volkswagen of Clean Air Act Violations". US Environmental Protection Agency. September 18, 2015. Retrieved September 20, 2015.
- ^ Davenport, Coral; Ewing, Jack (September 20, 2015). "Volkswagen to Stop Sales of Diesel Cars Involved in Recall". The New York Times. Retrieved September 21, 2015.
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(help) - Farrell, Sean (23 September 2015). "Volkswagen CEO Martin Winterkorn quits over diesel emissions scandal". The Guardian. Retrieved 23 September 2015.
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(help) - Ewing, Jack (September 21, 2015). "Volkswagen Stock Falls as Automaker Tries to Contain Fallout". The New York Times. Retrieved September 21, 2015.
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- Plungis, Jeff; Hall, Dana (September 20, 2015). "VW's Emissions Cheating Found by Curious Clean-Air Group". The Washington Post. Retrieved September 22, 2015.
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- Dreyfuss, Emily (2015-09-22). "Volkswagen Says Emissions Deception Actually Affects 11 Million Cars". Wired. Retrieved 2015-09-22.
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- Cremer, Andreas; Reuters (September 21, 2015). "Volkswagen AG shares plummet after admitting it cheated on emission tests". Financial Post. Retrieved September 21, 2015.
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has generic name (help) - "Volkswagen shares slump for third consecutive day as emissions scandal escalates". The Telegraph. 23 September 2015.
- "Volkswagen shares swing amid pressure on chief executive". Financial Times. 23 September 2015.
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- Estrada, Zac (September 21, 2015). "Which will Dieselgate hurt more, Volkswagen or US diesels?". autoblog. Retrieved September 22, 2015.
- Dyer, Ezra (September 21, 2015). "This VW Diesel Scandal Is Much Worse Than a Recall". Popular Mechanics. Retrieved September 22, 2015.
- "Lawsuit tsunami headed for Volkswagen". Deutsche Welle. 24 September 2015.
- Reuters (September 22, 2015). "Merkel calls for 'full transparency' in Volkswagen emissions scandal". France24. Retrieved September 22, 2015.
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(help) - Kalamur, Krishnadev (September 22, 2015). "Clean Diesel No More: Volkswagen Scandal Grows". theatlantic.com. Retrieved September 22, 2015.
- Reuters. "Nissan CEO says it would be hard to hide any effort to falsify emissions data".
{{cite web}}
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has generic name (help) - "Volkswagen board gathers for crisis meeting". BBC. 23 September 2015.
Further reading
- Plungis, Jeff; Hull, Dana (September 20, 2015). "VW's Emissions Cheating Found by Curious Clean-Air Group". The Washington Post. Retrieved September 25, 2015.
- "Volkswagen diesel scandal: What you need to know", Chicago Tribune, September 22, 2015
External links
- EPA Notice of Violation
- EPA Notices of Violation FAQ
- State of California EPA In-Use Compliance Letter
- DieselGate in Spanish
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