EPA: Navistar might have been “forced out of market” without fines

Christopher Goodfellow - 19 May 2012

Navistar might have been forced out of the Class 8 truck market had the Environmental Protection Agency (EPA) not permitted the manufacturer continue producing non EPA 2010-compliant engines based on Nonconformance Penalties (NCP).

In a briefing on the decision to let Navistar pay fines, the EPA said it was permitted to enforce penalties for "technological laggards", which "might be unable to comply and would be forced out of the marketplace".

Navistar's competitors have begun a legal challenge against the EPA over its decision to allow the manufacturer to continue producing non EPA 2010-compliant engines. The case, which was filed in February and began hearing oral evidence on 18 May 2012, has been brought by Mack Trucks, Volvo Group North America, Daimler Trucks North America, Detroit Diesel Corp and Cummins.

Volvo said in a legal brief: "It was not that Navistar lacked the technological know-how to use SCR technology. It just chose not to. Navistar gambled that it would produce a non-Selective Catalytic Reduction (SCR) compliant engine without running out of credits," according to the Wall Street Journal.

Navistar said it "chose the hard technology path," in its court filings.

The EPA said in its defence that halting production would cost the company at least $3 billion, more than 30% of its annual revenue, according to the Wall Street Journal.

Navistar ran out of emissions credits, which it had previously relied on to meet the emissions standards in its GVWR >14,000 pounds engine family, on 29 February 2012. The EPA said it would impose a penalty of at least US$1,900 per non-compliant engine after this point.

Navistar is the only manufacturer not to use SCR in its EPA 2010 models and has not yet certified a 13-litre engine at below the 0.20 gram of nitrogen oxide per brake-horsepower hour standard set out in EPA 2010.

A technological laggard is defined by the EPA as "a manufacturer who cannot meet a particular emission standard due to technological (not economic) difficulties and who, in the absence of NCPs, might be forced from the marketplace".

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