Engine maker Cummins to pay record-setting $1.7B to settle emissions-cheating claims

Sarah Bowman, Indianapolis Star
·4 min read
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Indiana-based engine-maker Cummins Inc. on Friday morning agreed in principle to pay roughly $1.7 billion for allegedly installing emissions defeat devices on hundreds of thousands of engines over the last decade, according to the U.S. Department of Justice.

This is the largest-ever civil penalty for a Clean Air Act violation, the DOJ said. The settlement is with both the United States as well as the State of California.

“The types of devices we allege that Cummins installed in its engines to cheat federal environmental laws have a significant and harmful impact on people’s health and safety," said Attorney General Merrick B. Garland in a statement.

"The Justice Department is committed to vigorously enforcing the environmental laws that protect the American people from harmful pollutants," he added.

Cummins Inc. officials said in a new release that the company does not admit any wrongdoing and has "worked collaboratively over the past four years to resolve this matter and we have addressed many of the issues already."

A spokesman told IndyStar that the company is a leader in decarbonizing its industry, or working to reduce emissions of greenhouse gases such as carbon dioxide. Cummins continues to invest in clean technologies, manufacturing and electric vehicles and plans to jointly invest billions in the coming years as part of its "decarbonization journey."

On Friday, Cummins Inc. agreed to pay nearly $1.7 billion in the largest-ever civil penalty for Clean Air Act violations. It is settling claims that the company allegedly installed emissions defeat devices on nearly 1 million vehicles over the last decade.
On Friday, Cummins Inc. agreed to pay nearly $1.7 billion in the largest-ever civil penalty for Clean Air Act violations. It is settling claims that the company allegedly installed emissions defeat devices on nearly 1 million vehicles over the last decade.

How much money is Cummins paying?

As part of the agreement, the Justice Department will require Cummins to pay $1.675 billion. In addition to being the largest civil penalty levied under the Clean Air Act, it also is the second largest environmental penalty ever secured, according to the DOJ.

This is an agreement in principle, meaning it is a stepping stone to an official contract. Garland said in the statement that the Justice Department will work to incorporate Friday's agreement into a consent decree that will be filed with the U.S. District Court for the District of Columbia.

All told, Cummins said it will book a nearly $2 billion charge in the fourth quarter to settle the claims it skirted emission rules.

How did Cummins violate the Clean Air Act?

According to the Justice Department, Cummins violated the Clean Air Act by installing emissions defeat devices on hundreds of thousands of truck engines.

The Act requires that vehicle and engine manufacturers ensure their products comply with applicable emission limits. Defeat devices are physical parts or software installed that bypass, defeat or render inoperative emissions controls in cars. That can include emission sensors and onboard computers.

Cummins Inc. has long been a leader in environmental sustainability. On Friday, it agreed to pay nearly $1.7 billion in the largest-ever civil penalty for Clean Air Act violations.
Cummins Inc. has long been a leader in environmental sustainability. On Friday, it agreed to pay nearly $1.7 billion in the largest-ever civil penalty for Clean Air Act violations.

In other words, the types of devices the DOJ alleges Cummins installed "cheat federal environmental laws." Cummins in a statement said that "the company has seen no evidence that anyone acted in bad faith and does not admit wrongdoing."

In April 2019, in a statement at the time, Cummins disclosed that it was formally reviewing its emissions certification and compliance process for its pickup trucks following conversations with federal and state regulators.

How many additional emissions were released because of this?

According to the DOJ, its preliminary estimates suggest that defeat devices on some of the Cummins engines have resulted in the production of thousands of tons of excess emissions of nitrogen oxides. These are a family of "poisonous, highly reactive gases," according to the U.S. Environmental Protection Agency.

The cascading effect of these pollutants can, over long-term exposure, lead to breathing issues such as asthma and respiratory infections. The excess emissions can have particular impact on communities composed predominantly of persons of color or individuals below the poverty line.

EPA Administrator Michael Regan in a statement said "vulnerable communities are more likely to reside near highways where these harmful emissions are concentrated, making this agreement critical to advancing our environmental justice agenda."

Cummins allegedly installed defeat devices on 630,000 model year 2013 to 2019 RAM 2500 and 3500 pickup truck engines. This led to the release of thousands of tons of excess emissions of poisonous gases that can cause breathing issues.
Cummins allegedly installed defeat devices on 630,000 model year 2013 to 2019 RAM 2500 and 3500 pickup truck engines. This led to the release of thousands of tons of excess emissions of poisonous gases that can cause breathing issues.

What cars are involved?

Nearly 1 million engines are involved in the settlement. Cummins allegedly installed defeat devices on 630,000 model year 2013 to 2019 RAM 2500 and 3500 pickup truck engines.

The company also allegedly installed undisclosed auxiliary emission control devices on 330,000 model year 2019 to 2023 RAM 2500 and 3500 pickup truck engines.

The engine maker has already recalled some of the impacted vehicles. The 2013 to 2019 vehicles have been or are being recalled, a Cummins official said.

Is this similar to the VW settlement?

In 2016, German automaker Volkswagen AG and related entities were made to pay big money to settle allegations of cheating emissions tests as well as deceiving customers. The companies agreed to spend up to nearly $15 billion in two related settlements, one with the U.S. and California and the other with the U.S. Federal Trade Commission.

While the details are different, this issue did relate to the vehicles' use of "defeat devices" across nearly 500,000 vehicles to cheat emissions tests.

Call IndyStar reporter Sarah Bowman at 317-444-6129 or email at sarah.bowman@indystar.com. Follow her on Twitter and Facebook: @IndyStarSarah. Connect with IndyStar’s environmental reporters: Join The Scrub on Facebook.

IndyStar's environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.

This article originally appeared on Indianapolis Star: Cummins to pay record-setting $1.7B fine for emissions-cheating claims