Cummins Inc., a U.S. engine maker, is facing the largest penalty ever imposed under the Clean Air Act for cheating on emissions tests. The company has agreed to pay a historic $1.5 billion penalty to resolve allegations of Clean Air Act violations stemming from the sale of heavy-duty diesel engines that included illegal software designed to evade emissions tests.
The Justice Department announced that Cummins Inc. has agreed to pay a criminal penalty of $400 million, the largest penalty ever paid in a Clean Air Act case, and to plead guilty to one count of violating the Clean Air Act. In addition, Cummins Inc. also agreed to pay $1.1 billion in civil settlements with the federal government, U.S. states, and other affected stakeholders, including a $1 million fine to the California Air Resources Board and $400,000 to the State of Oregon Department of Environmental Quality.
The settlement resolves numerous wrongful allegations that Cummins Inc. used defeat devices to circumvent emissions tests from 1998 to 2016. Cummins Inc. installed software on its heavy-duty diesel engines (Model Year 2007 and later) that allowed the engines to better-manage their exhaust-intake system and thereby reduce emissions during laboratory tests, resulting in significantly reduced levels of nitrogen oxides (NOx) emission compliance with pollution standards. In practice, this software prevented the engines from operating in compliance with these standards on the roadway.
The company has agreed to implement a compliance and ethics program to ensure the company adheres to emissions standards, and it will also retain an independent auditor for three years to review compliance. Cummins Inc. will also install selective catalytic reduction systems on certain on-highway vehicles to reduce NOx emissions.
This Clean Air Act penalty settlement against Cummins Inc. underscores the importance of complying with environmental standards set by federal and state governments, and it is a reminder that companies that violate the law can face significant consequences.
