Daimler Unit to Pay $28.5 Million to Settle U.S. Clean Air Act Claims

October 6, 2016, 5:16 PM UTC
A car is prepared for standard emissions testing under laboratory conditions during a workshop for media on automobile emissions at the DEKRA testing facility in Klettwitz, on November 25, 2015. DEKRA is Germany's largest independent automotive technical testing agency. AFP PHOTO / JOHN MACDOUGALL / AFP / JOHN MACDOUGALL (Photo credit should read JOHN MACDOUGALL/AFP/Getty Images)
John MacDougall — AFP/Getty Images

Detroit Diesel Corp, a unit of automaker Daimler AG, will spend $14.5 million to reduce pollutants and pay a $14 million civil penalty to settle alleged violations of the U.S. Clean Air Act, the Justice Department said on Thursday.

The settlement is the latest penalty imposed by U.S. regulators on auto and engine manufacturers for failing to meet emissions regulations.

The U.S. government alleged that Detroit Diesel had violated the act by introducing heavy-duty diesel engines in model year 2010 without properly certifying they complied with the law, the department said. It also said the engines did not conform to emission standards.

Daimler didn’t immediately respond to requests for comment.

The case involves nearly 7,800 engines sold in 2010 that did not meet emissions standards. Detroit Diesel started building the engines in 2009 but did not complete them until 2010, when tougher emissions rules were in place.

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Detroit Diesel will offer $14.5 million in incentives to replace older polluting school buses with school buses with a 2013 or newer diesel engine and replace or re-power high-polluting switch locomotives, the settlement said.

The Environmental Protection Agency has stepped up efforts to ensure compliance with emissions rules after Volkswagen AG admitted to installing illegal defeat devices in nearly 500,000 U.S. cars that allowed them to emit up to 40 times the legally allowable pollution in on-road driving.

In May, Daimler said it hired auditor Deloitte Touche Tohmatsu to help with an internal investigation into its diesel-engine emissions technology requested by the Justice Department, the company said.

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In June, VW agreed to buy back 475,0000 U.S. vehicles equipped with 2.0 liter engines at a cost of up to $10.03 billion or offer fixes if regulators approve.

VW also agreed to spend up to $5.3 billion to address claims by federal regulators and 44 U.S. states.

VW will offer up to $2.7 billion over three years to offset excess diesel emissions, allowing government and tribal agencies to replace old buses and fund other efforts to reduce diesel emissions.

Over the last year, the EPA has scrutinized other diesel engines and in some instances has taken longer than usual to approve new diesel engines.

In August, Harley-Davidson Inc agreed to pay a $12 million civil fine and stop selling illegal after-market devices that cause its motorcycles to emit too much pollution, the Justice Department said.