Court strikes down EPA decision on Navistar noncompliance fines

Christopher Goodfellow - 12 June 2012

The U.S. Court of Appeals has thrown out an interim rule by the Environmental Protection Agency (EPA) to permit Navistar sell non-EPA 2010 complaint engines.

The court found the agency violated the Administrative Procedures Act by issuing the interim final rule (IFR), without opportunity for comment or the criteria of "good cause".

"The context of this case reveals that the only purpose of the IFR is, as petitioners put it, to rescue a lone manufacturer from the folly of its own choices," said the ruling.

The document highlights the investment in Selective Catalytic Reduction (SCR) technology, which requires Diesel Exhaust Fluid (DEF), made by Navistar's competitors to meet the 2010 standards:

"Simply put, it [Navistar] bet on finding a way to make exhaust gas recirculation a feasible and compliant technology before its finite supply of credits ran out."

The EPA is drafting a final rule and the ruling indicates that the manufacturer still has emissions credits and can continue to produce engines in the short term.

In a written statement the manufacturer said: "While this was a lawsuit filed by certain Navistar competitors against the EPA, Navistar is impacted by the decision. We disagree with the court's ruling and will ask for a rehearing.

"Navistar continues to make and ship engines and our customers will continue to receive the products they ordered with EPA certified engines."

In January, 2012, the Californian Air Resources Board said it expected the manufacturer to run out of credits on February 29, 2012.

The company has incurred $10 million in fines for the production of non- compliant engines, according to its second quarter results.

Navistar submitted an EGR-only 0.2 g/bhp-hr NOx emissions engine in February. The company said talks on certification are "ongoing", in its recent quarterly results.

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