Engine-Maker Cummins Will Pay Record Air Pollution Fine To Feds And California

One of the world’s largest engine manufacturers has agreed to pay a record-breaking fine and other costs totaling $2 billion after facing charges that about 1 million pickup trucks were illegally equipped with devices circumventing California and national emission standards.

Cummins Inc. agreed to pay a $1.675 billion penalty — the largest civil penalty in a Clean Air Act case and the second largest environmental penalty ever imposed in the nation. Of that, $1.48 billion will go to the federal government and $164 million to California.

In addition, the company will pay another $325 million to fund projects in communities across the nation to make up for the excess air pollution, including a lump sum of $175 million to California.

In a statement, Cummins said “the company has seen no evidence that anyone acted in bad faith and does not admit wrongdoing.”

Under the settlement, Cummins must recall and replace its engine software in about 630,000 diesel-powered RAM 2500 and RAM 3500 pickup trucks for model years 2013 through 2019. It must repair at least 85% of the vehicles within three years or face additional penalties. The devices also were installed on about 330,000 model year 2020 through 2023 trucks, which are not subject to recalls.

“Today’s agreement, which includes the largest-ever Clean Air Act civil penalty, stands as notice to manufacturers that they must comply with our nation’s laws, which protect human health and the health of our environment,” U.S. Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division, said in a statement. “We appreciate the work of our partners, the EPA and the State of California, in helping us reach this significant settlement.”

Because of the illegal devices installed on the truck engines, tons of nitrogen oxides — a main ingredient of smog and fine particle pollution — were spewed into the air, Environmental Protection Agency officials said. The pollutants in the exhaust are linked to heart attacks and respiratory diseases, including asthma attacks.

Cummins “exposed overburdened communities across America to harmful air pollution,” said Assistant Administrator David M. Uhlmann of the federal EPA’s Office of Enforcement and Compliance Assurance.

The investigation was conducted by the U.S. EPA and the California Air Resources Board. California is the only state in the nation that is allowed under federal law to impose its own emission standards for vehicles; the Clean Air Act bestowed that ability on the state half a century ago because of its severely polluted air.

“Cummins knowingly harmed people’s health and our environment when they skirted state emissions tests and requirements,” California Attorney General Rob Bonta said in a statement. “Today’s settlement sends a clear message: If you break the law, we will hold you accountable.”

The violations were discovered during special tests conducted at a EPA’s national laboratory — which occurred after engine manufacturers were warned in 2015 that the agency would check for so-called “defeat devices.” EPA officials said Cummins’ devices, which reduced the effectives of the trucks’ catalytic emissions controls, ensured that the vehicles would pass standard EPA and California tests, but the excess emissions were detected by the special tests.

Cummins is a global leader in diesel engine manufacturing, with revenue last year reported at $28 billion.

Before now, the largest civil penalty in a Clean Air Act case was $1.45 billion paid by Volkswagen, which installed illegal defeat devices on 590,000 model year 2009 to 2016 diesel cars. That case led to the special tests that discovered the Cummins violations. Volkswagen also paid a $2.8 billion criminal fine to the U.S. government in that 2017 case. California received $153.8 million.