EPA Developed Emission Technology in Noncompliant Navistar Diesels

The Navistar International Inc. diesel engines being penalized for violating U.S. Environmental Protection Agency pollution standards use emission control technology developed and licensed by the EPA, Bloomberg News reports.

The result is a "blatant conflict," in which an agency is regulating its own business partner, declares Jeff Ruch, executive director of Public Employees for Environmental Responsibility. PEER, a Washington, D.C.-based watchdog, used the Freedom of Information Act to uncover the business arrangement between Navistar and the EPA.

The EPA ruled in January that Navistar could sell noncompliant 13-liter diesels if it paid fines of as much as $1,900 per engine sold. Since then the company has paid penalties of about $3.3 million per month. A U.S. appeals court in Washington overturned the EPA's decision earlier this month, but the agency may soon issue a final rule that reinstates the policy, thus allowing Navistar to resume sales of the engines.

Bloomberg says EPA researchers at the agency's National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Mich., developed the technology, which uses low engine temperature to reduce the formation of nitrous oxide. The agency thought the technique would enable engine makers to meet EPA's 2010 emission standard which requires a 95% reduction in CO₂, without the use of expensive reduction catalysts.

Navistar signed an agreement in 2004 to commercialize the technology and pay the EPA royalties for its use. Bloomberg says the partnership, which focused on relatively small V-8 diesels, lasted until 2008. Neither party has divulged the amount of royalties paid.

Patrick Charbonneau, Navistar's vice president for government relations, tells Bloomberg the same technology has since been deployed across its entire diesel engine lineup, including the noncompliant 13-liter powerplants. The company's competitors opted for catalysts and other technologies to meet the 2010 EPA standard.

Navistar's largest diesels have since failed to meet the standard. The agency said in January that Navistar could sell them anyway if it paid fines of as much as $2,000 per engine. Earlier this month the U.S. Court of Appeals in Washington overruled that policy. Separately, the agency is reviewing a Navistar request to approve the engine design in spite of its higher emission levels.