Auto firms pay $100 million for breaching Clean Air Act

25th November 2014


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IEMA

Hyundai and Kia are to pay a $100 million civil penalty to US authorities for violating the Clean Air Act. This is the largest penalty imposed under the Act.

The companies reached the settlement with the Environmental Protection Agency and the US justice department for selling more than one million vehicles in the US that collectively will emit more greenhouse gases (GHG) than permitted under their certificates of conformance (COC).

The certificates, which are issued by the agency, ensure that vehicles introduced into the US satisfy appropriate benchmarks, in this case the tailpipe GHG emission standards. Under the COC programme, manufacturers apply to the agency for a certificate and must demonstrate in their applications that representative test vehicles meet the relevant standards. A vehicle’s road load force is one of the specifications manufacturers must describe in a COC application.

An investigation by the agency revealed that the test protocol Hyundai and Kia used to measure the road load force have included numerous elements that, once aggregated, generated inaccurately low road load forces. As a result, some Hyundai and Kia vehicles were alleged to have a higher road load force than was described in their application, meaning they would use more fuel and emit more GHGs.

The agency says that the two South Korean firms sold 1,181,776 new motor vehicles in 2012 and 2013 – four Hyundai models (Accent, Elantra, Santa Fe and Veloster) and two Kia models (Rio and Soul) – that violated the Clean Air Act.

Tailpipe GHG emissions are the average across a manufacturer’s whole fleet of vehicles, expressed in terms of grammes of GHGs per mile. Auto companies can comply with the standards by “averaging, banking and trading” GHG emission credits, which represent surplus reductions in emissions manufacturers have achieved beyond those required. In this case, the agency says Hyundai and Kia understated the GHG emissions of their fleets by approximately 4.75 million tonnes.

The two companies have been forced to forfeit emission credits to the equivalent amount. The agency estimates the forfeited credits to be worth in excess of $200 million. As part of the settlement, Hyundai and Kia have agreed measures to prevent future violations and to audit their fleets to ensure vehicles currently on sale conform to their certification. The agency says these corrective measures, which will apply to models placed on the US market in 2017, and audit testing will cost about $50 million.


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