Cummins Hit With Nearly $2B Penalty in Emissions Cheating Fiasco

Nobody likes a cheater. Even more so, cheaters don't like getting caught. Sadly, we learned weeks ago that the government had accused diesel engine manufacturer Cummins of knowingly installing emissions defeat devices on nearly 1 million Ram Heavy Duty pickups. We also learned that Cummins had agreed to pay a $1.675 billion settlement, the largest civil penalty ever issued under the Clean Air Act and the second-largest environmental penalty ever levied.

It's worth noting that despite agreeing to the massive EPA settlement and providing recall and remediation support, Cummins maintains that it "sees no evidence that anyone acted in bad faith and does not admit wrongdoing." In the same statement Cummins also said that it has "worked collaboratively over the past four years to resolve this matter and we have addressed many of the issues already." In a statement in April of 2019 Cummins disclosed that it was officially reviewing its emissions certification and compliance process for its pickup trucks following conversations with federal regulators.

How the Cheating Happened

While neither the Environmental Protection Agency nor the Department of Justice have elaborated fully on exactly how Cummins perpetrated the alleged infractions, the documents released disclose that nearly 1 million Ram 2500 and 3500 Heavy Duty pickups built from 2013 until 2023 are embroiled in the mess. Roughly 630,000 of those trucks, built from 2013 to 2019, were equipped with software-related defeat devices. The EPA suggests that the remaining 330,000 Ram trucks, built from 2020 to 2023, were found include "undisclosed engine control features."

The EPA says that it discovered these emissions defeat devices in use on Cummins engines through testing at the agency's National Vehicle and Fuel Emissions Laboratory in Michigan. Testing of Ram trucks was performed as a follow-up on a 2015 warning to manufacturers from the EPA that the agency planned to conduct special testing to identify emissions defeat devices on diesel engines in the wake of Volkswagen's "Dieselgate" scandal. This testing includes, but is not limited to, driving cycles and conditions that are not part of the standard EPA emissions test but are still reflective of normal vehicle use.

The Fix: Recall and Repair

Cummins is ultimately responsible for cleaning up its mess as the engine manufacturer sought all EPA and CARB certifications for the Ram trucks its engines were installed in, leaving Stellantis and its Ram brand mostly off the hook (albeit with a serious black eye). As part of the settlement Cummins must work with Ram and its dealers on a recall program that will remove the defeat device from all the affected 2013 to 2019 Ram trucks free of charge, bringing the vehicles into compliance with standards under the Clean Air Act. The repair is simple and only involves a software update. Cummins must repair at least 85 percent of the affected trucks within the span of three years and must also offer an extended warranty covering the emissions systems of the repaired vehicles.

What's yet to be told is whether this repair will have any effect on the truck's power output, towing capability, diesel exhaust fluid usage, or fuel economy. It has also yet to be announced what solution will be offered, if any, for affected 2020 to 2023 model Ram Heavy Duty trucks.

Additional Emissions Mediation

In addition to repairing the effected vehicles, the EPA has also mandated that Cummins must fully offset the excess NOx emissions created by the 2013 to 2019 trucks equipped with the defeat device. For California, Cummins will make a lump-sum payment of "slightly more than $175 million" to CARB, which will use the money to fund NOx mitigation projects throughout the Golden State. For the rest of the country, Cummins will offset the NOx produced by working with railroad locomotive owners on a pair of emissions reduction projects. First, Cummins will finance and ensure the replacement of 27 old, high-emitting, diesel locomotives. And second, Cummins will fund and complete 50 projects aimed at reducing idling time for diesel-powered switching locomotives. This will reduce fuel usage along with emissions of NOx, particulate matter, VOCs, and carbon dioxide.

Is This Similar to the VW Settlement?

In September of 2015 the US EPA issued a notice of violation of the Clean Air Act to German automaker Volkswagen Group upon finding that the company had intentionally programed its turbocharged direct injection (TDI) diesel engines to activate their emissions control systems only during laboratory testing. While vehicle NOx output met the required standards during testing, in real world operation the vehicles were found to emit up to 40 times more NOx than was allowed. Approximately 500,000 vehicles were found to be in violation in the United States, with as many as 11 million being affected worldwide. Volkswagen was ordered to pay up to $14.7 billion to settle civil charges stemming from the EPA, CARB, and Federal Trade Commission. By June of 2020 Volkswagen had already paid out more than $33 billion in fines, penalties, judgements, and buybacks.