EPA under fire for zero emission funding in VW deal

Keith Laing
Detroit News Washington Bureau

Washington — Lawmakers in the U.S. House raised questions Tuesday about the inclusion of a provision in Volkswagen’s $14.7 billion settlement with federal regulators over emission cheating that requires the German automaker to pump money into zero-emission vehicles such as electric cars.

Volkswagen is required to contribute $2 billion to zero-emission vehicle research under the agreement that was reached between the company and the U.S. Environmental Protection Agency and Department of Justice after it was caught rigging hundreds of thousands of cars to cheat U.S. pollution standards.

Republicans on the House Energy and Commerce Committee argued the zero emissions clause in Volkswagen’s deal could give the company an unfair leg up in the U.S. electric-car market.

Rep. Tim Murphy, R-Pa., chairman of the Energy and Commerce Committee’s Oversight and Investigations panel, said: “If someone has a violation of their individual car and they’re caught by local law enforcement or the state and says ‘we know you violated the law, but we’re going to let you choose your penalty and let us know when it’s done and you can supervise yourself and, by the way, ‘it’s OK if you open a store and make money on the whole thing.’ It just doesn’t make sense to us.”

Volkswagen’s settlement, which was approved by a federal judge in October, calls for $1.2 billion for federal zero-emission vehicle research and $800 million to help fund similar efforts in California, which helped catch the German automaker.

The funding is part of an agreement that calls for Volkswagen to pay more than $10 billion to either buy back or repair about 475,000 2-liter diesel vehicles that were sold between 2009 and 2015, and were built with devices to trick emissions testers.

Under the agreement, Volkswagen also will compensate owners who bought 2-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of the car. Volkswagen will also have to pay $2.7 billion into a federal environmental mitigation trust fund.

EPA officials Tuesday defended the inclusion of zero emission funding in the Volkswagen settlement as a “court-ordered remedy intended to address the specific harm that VW caused to public health by requiring investments to accelerate the growth of clean transportation and to advance cleaner air in America.”

“Over the course of several years, Volkswagen sold vehicles in the United States that it claimed were ‘green,’ ‘lower emitting,’ and ‘clean diesel’ vehicles,” Cynthia Giles, assistant administrator of the EPA’s Office of Enforcement and Compliance Assurance, said. “Consumers looking to reduce air pollution purchased these vehicles on the premise that they were clean vehicles. We now know that the vehicles are far from clean.”

“VW’s ZEV infrastructure investments and its public outreach efforts must be brand neutral. That means that ZEV infrastructure must be accessible to all ZEV vehicles, utilizing non-proprietary charging equipment — and not just the ones VW makes.”

Volkswagen has admitted to programming its diesels to trick emissions testers into believing the engines released far less pollution than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving the cars emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

Democrats on the panel sided with the EPA, casting the inclusion of zero-emission funding in Volkswagen’s settlement as a fair remedy for the company’s years of selling polluting vehicles to unsuspecting U.S. consumers.

“I think we really need to put today’s hearing into context,” Rep. Diana DeGette, D-Colo., said. “Let’s remind ourselves what VW did that necessitated legal action and what the overall settlement was intended to accomplish.”

However, Republicans accused the EPA of overreaching with the inclusion of zero-emission funding in the deal.

“Where does the Clean Air Act give you authority force a company to invest in clean technologies,” Rep. Markwayne Mullin, R-Oklahoma, asked the EPA officials who were testifying Tuesday. “I don’t think you find that in the Clean Air Act.”

Volkswagen is working to finalize an agreement with federal regulators to fix or buy back about 80,000 3-liter diesel vehicles that were also rigged to cheat U.S. emission standards.

klaing@detroitnews.com

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Twitter: @Keith_Laing