Engine maker Cummins will pay $2.1 million for a costly supply chain error.
The company agreed to pay a $2.1 million penalty and recall 405 diesel engines built between 1998 and 2006 to settle allegations it violated the Clean Air Act by shipping engines without after-treatment devices needed to control emissions.
It also will retire carbon credits representing 167.1 tons of nitrogen oxide and non-methane hydrocarbons and 30.5 tons of particulate matter allegedly generated by the engines. The market value of those credits was not disclosed in the settlement.
The penalties and recall are part of agreements Cummins reached yesterday with the Environmental Protection Agency, U.S. Justice Department and California Air Resources Board. The settlement was filed in the U.S. District Court in Washington.
The engines at the heart of the dispute were shipped to truck makers without necessary after-treatment devices pre-installed, violating the federal anti-pollution law, the Environmental Protection Agency and Justice Department said in a complaint.
Cummins received certificates of conformity with EPA rules for those engines after testing them with ATDs installed. But the engine maker shipped 578,900 of those engines without ATDs, the complaint alleged, requiring truck makers to buy and install them.
The EPA found 405 of those engines were eventually sold without the ATDs. Cummins began to recall those engines last September, and will continue the recall under the settlement, which was filed yesterday in the U.S. District Court in Washington.
The United States will receive $1.68 million of the civil penalty, with $420,000 going to the California Air Resources Board under a separate settlement with Cummins.
Contact William B. Cassidy at email@example.com.