November 6, 2014

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On November 3, the US Environmental Protection Agency (EPA) and the US Department of Justice announced a significant settlement with Hyundai and Kia, automakers facing allegations of inaccurate testing and certification of vehicles sold in America.  According to EPA, nearly 1.2 million vehicles sold by the automakers will emit approximately 4.75 million metric tons more in greenhouse gases than what was certified to EPA.  The automakers overstated fuel economy by one to six miles per gallon.  Under the settlement, Hyundai and Kia will:

• Pay a $100 million civil penalty, which is the largest in the history of the Clean Air Act;

• Spend around $50 million on measures aimed at preventing future violations; and

• Forfeit 4.75 million greenhouse gas emission credits, which automakers receive to offset emissions from less fuel-efficient models, valued at $200 million.

This settlement sends a strong signal that EPA has placed a high priority on enforcement in the area of greenhouse gas and fuel economy laws.  EPA Administrator Gina McCarthy stated, “Businesses that play by the rules shouldn’t have to compete with those breaking the law. This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact.”  David Zuchowski, president and CEO of Hyundai Motor America, also released a statement:  “Hyundai has acted transparently, reimbursed affected customers and fully cooperated with the EPA throughout the course of its investigation.  We are pleased to put this behind us, and gratified that even with our adjusted fuel economy ratings, Hyundai continues to lead the automotive industry in fuel efficiency and environmental performance.”

The consent decree is available here.