What We Need from Volkswagen, EPA, and California to Make Things Right

March 21, 2016 | 5:51 pm
Workers on a VW assembly line. Photo: iStock
Dave Cooke
Senior Vehicles Analyst

This Thursday, Volkswagen will be laying its cards on the table as to the severity of its diesel pollution problem and a path forward. It is required to present to a U.S. district court: 1) whether or not these vehicles can be fixed, 2) a definitive answer as to whether or not the EPA and Volkswagen have agreed on a remediation process for these vehicles; and 3) a timeline for this process. Because these vehicles also violated California’s own Low-Emission Vehicle program (LEV), any plan for remediation will also involve the California Air Resources Board (CARB).

As noted previously, the diesel vehicles that Volkswagen sold represent not just a black eye for the auto industry, but an environmental tragedy that must be remedied. Since I last posted on this subject, there has been a lot of news on the issue on how this could be resolved—while we will learn more on March 24th, I think it’s important that we lay out some of the issues surrounding this situation now six months on.

VW might not be able to fix all vehicles…

When this scandal broke, it was clear that it might not be possible for VW to remedy all vehicles—after all, if they could have done this easily, why bother exposing the company to as much as $18 billion in penalties by cheating?

The first “clean diesel” car that VW sold in the U.S. was the 2009 Jetta; it used exhaust gas recirculation (EGR) to reduce smog-forming pollution during combustion along with a lean NOx trap (LNT) that adsorbs pollution from the exhaust, similar to the catalytic converter on a gas-powered car. This engine and emissions control system was later used in the Beetle, Golf, and Audi A3.

When VW adapted this engine for use in the Passat in 2012, engineers added selective catalytic reduction (SCR), which uses a chemical reaction between the exhaust and a liquid catalyst (typically urea) to reduce smog-forming pollution. In 2015, they then introduced an entirely new diesel engine platform that also used a combination of SCR and EGR, but with improved efficiency.

When the 2009 diesels came out on the road, their competitors wondered how VW could manage to meet emissions standards with just the EGR system to reduce smog-forming emissions. Now we know that the answer is that they couldn’t. These “first gen” vehicles would almost certainly require an added SCR system to meet the standards they were originally certified to, requiring hardware upgrades and modifications that may not be possible given the compact size of these vehicles. While it is much more likely that the second and third generation of vehicles which already have SCR could meet certification with modifications, to-date VW has not been able to prove that it is possible.

…but they may allowed to be left on the road anyway

From an environmental perspective, one of the most alarming things that has come to light recently is a statement at a California hearing by Todd Sax , chief of the California Air Resources Board enforcement division: “Our goal has been to fix these vehicles….Unfortunately, this may not be possible.  We will have to decide what the best approach is to dealing with these vehicles, and one of the options potentially would be to accept something less than a full fix.” (emphasis added)

Given the environmental damage these vehicles have done already and the continued damage that would be caused by allowing them to remain on the road, this is a concerning statement and it raises the question as to what should be done with any vehicles that cannot meet the standards to which they were originally certified. Forcing VW to buy back any vehicles that could not be fully fixed would not just eliminate future environmental risks, but it would also compensate consumers who were deceived by VW and have seen the resale value of these vehicles plummet. However, should EPA and/or CARB allow these vehicles to remain on the road, VW must be forced to offset the continuing damages.

The Volkswagen e-Golf is a lot more environmentally friendly than its diesel counterpart, but selling a few more of them won’t undo the environmental damage that Dieselgate has caused.

The Volkswagen e-Golf is a lot more environmentally friendly than its diesel counterpart, but selling a few more of them won’t undo the environmental damage that “dieselgate” has caused.

Volkswagen could be “forced” to sell electric vehicles

Last month, a story broke that suggested EPA was going to force Volkswagen to produce electric vehicles at its Chattanooga plant as part of the settlement around “dieselgate.” Electric vehicles are a more environmentally friendly option than diesel, both in terms of global warming emissions and criteria pollution, and we are certainly in favor of increasing production of EVs as part of a sustainable transportation system.

However, it seems odd to include such a push as part of this settlement. CARB already requires that a certain fraction of Volkswagen’s sales must be electric as part of its Zero Emission Vehicle program, along with 9 other states who’ve adopted the program—therefore, Volkswagen will already be selling more EVs!

They’ve also already committed to spending millions on EV infrastructure. Moreover, with EVs expected to be a growing part of the fleet mix, any such “penalty” would simply be requiring VW to do what it’s already planning on doing—investing in technology to move it forward in the industry. This is not an appropriate trade-off to reduce penalties for environmental violations.

A better solution is about fixing the environment, not padding VW’s bottom line

If these diesel vehicles are here to stay, it is more important than ever that VW remedy the health of the public affected by these dirty vehicles. For that reason, EPA and CARB should be specifically targeting projects that would lead to the biggest smog reductions for the communities most impacted by the harmful effects of smog. Heavy-duty trucks emit more smog-forming pollution per mile than light-duty vehicles and remain on the road longer, which can make cleaning up this sector more difficult. Rather than focusing on cars, EPA and CARB may choose to focus on trucks.

Between 2003 and 2010, smog-forming emissions from a new heavy-duty diesel engine were reduced by 95 percent. However, the lifetime of heavy-duty trucks can be measured in decades, which means that vehicles manufactured well before 2010 continue to remain on the road, belching particulates and smog-forming NOx which poses health risks for the surrounding communities.

As part of any settlement, the EPA has the authority to set up a Supplemental Environmental Project, which would be funded by Volkswagen and can then be used for any remedial project. One strategy could be to set up a fund similar to the Diesel Emissions Reductions Act, which could accelerate fleet turnover and reduce emissions by retrofits or replacements. A portion of this fund could even be set aside for zero emission trucks, which are critical to reducing the impact of freight in densely trafficked areas such as ports and inner cities. Another area of critical importance could be to reduce the emissions from school buses, since children represent a particularly vulnerable population.

Volkswagen must be held accountable for its deception

Whatever we learn on Thursday, it is of the utmost importance that VW pay for its deception and remedy the damages of this corporate malfeasance. It is the role of the EPA and CARB to protect human health and the environment—a slap on the wrist and a nudge towards electrification is neither a suitable punishment nor remedy for the magnitude of this scandal. I look forward to seeing how Volkswagen, EPA, and CARB plan to make things right, and I hope above all that the settlement fits the magnitude of the crime, for the sake of the public and the environment.