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U.S. reaches $1.5 billion settlement with Daimler over emissions cheating

Christian Fernsby |
The U.S. Department of Justice, Environmental Protection Agency (EPA), and California Air Resources Board (CARB) announced a proposed settlement with German automaker Daimler AG and its American subsidiary Mercedes-Benz USA, resolving alleged violations of the Clean Air Act and California law associated with emissions cheating.

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Topics: U.S.    DAIMLER   

Under the proposed settlement, lodged with the U.S. District Court for the District of Columbia, Daimler will recall and repair the emissions systems in Mercedes-Benz diesel vehicles sold in the United States between 2009 and 2016 and pay $875,000,000 in civil penalties and roughly $70,300,000 in other penalties.

The company will also extend the warranty period for certain parts in the repaired vehicles, perform projects to mitigate excess ozone-creating nitrogen oxides (NOx) emitted from the vehicles, and implement new internal audit procedures designed to prevent future emissions cheating.

The recall program and federal mitigation project are expected to cost the company about $436,000,000.

The company will pay another $110,000,000 to fund mitigation projects in California.

Taken together, the settlement is valued at about $1.5 billion.

Vehicle manufacturers are required by the Clean Air Act and federal regulations to apply for and receive a certificate of conformity from EPA before selling a new model year vehicle in the United States.

As part of the application process, manufacturers must demonstrate through testing that a vehicle meets applicable emissions standards and disclose to EPA all auxiliary emission control devices (AECDs) and any defeat devices installed in the vehicle.

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