In: Accounting
In September 2015, the United States Environmental Protection Agency (EPA) disclosed a notice of violation of the Clean Air Act to German automaker Volkswagen Group. The agency reported that Volkswagen had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate their emissions controls only during laboratory emissions testing which caused the vehicles' nitrogen oxide (NOx) output to meet US standards during regulatory testing, but emit up to 40 times more NOx in real-world driving. Volkswagen deployed this programming software in about eleven million cars worldwide, including 500,000 in the United States, in model years 2009 through 2015.
On 4 January 2016, the Justice Department, on behalf of the EPA, filed a lawsuit against VW in a federal court in Detroit. The complaint, seeking up to $46 billion in penalties for Clean Air Act violations
ANALYSE (30 – 50 words)
Identify the issue and why it matters. Determine what you need to find out.
RESEARCH & EVALUATE (200-250 words)
Presentrelevant facts and evidence, or issues.
ANSWER (200-250 words)
Provide your opinion based on your discussion of relevant facts, evidence, or issues.
Issue
Volkswagen violated Clean Air Act as it turbocharged injection diesel engines to activate their emission control only during testing. Thus emissions are within standards during testing but emitted 40 times nitrogen oxide during real world driving.
Why it matters
It matters because excess NO2 has severe health effects.
NO2 is a precursor to ground level ozone which causes asthma, bronchitis etc
NO2 also contribute to acid rain and visibly brown clouds and smog.
We need to find out the authenticity of the complaint submitted by EPA. We need to check evidences and determine how many cars were sold with such software and quantify the impact of the violations.
We need to finalise the penalty to be levied on volkswagen.
Research and Evaluate
In 2011, the European commission joint research center published a report which found that all diesel tested vehicles emitted.0.93 g/km and that the tested Euro 5.diesel vehicles emitted 0.62g/km, which substantially exceeded the respective euro 3 -5 emission limit.
In 2013, the research center then warned:
Sensors and electronic components in modern light duty vehicles are capable of detecting the start of an emissions test in the laboratory (eg. Based on acceleration sensors or jor driven/ not rotating wheels). Some vehicle functions may only be operational in the laboratory, if a predefined test mode os activated. Detecting emissions test is problematic from the perspective of emissions legislation, because it may enable the use of defeat devices that activate, modulate, delay or deactivate emissions control systems with the purpose of either enhancing the effectiveness of these systems during emissions testing or reducing the effectiveness of these systems under normal vehicle operation and use. While the use of defeat device is generally prohibited, exceptions exist in cases where it is necessary to protect the engine against damage.
In the United Kingdom, the Department of Transport received a report from the International Council on Clean Transportation in October 2014, which stated there was a real world nitrogen oxides compliance issue with diesel passenger cars. The UK's DEFRA research indicated a significant reduction in Nox and particulate matter from 1983 to 2014 despite the increased number and size of diesel cars in the UK.
International Council on Clean Transportation commissioned a study in 2014 and obtained data on 15 vehicles from three sources. Mr. German said they chose to put US vehicles through on road tests because their emissions regulations are more stringent than those in the European Union. The ICCT expected the cars to pass and thought they would be able to use the results to demostrate to Europeans that it was possible to run diesel cars with cleaner emissions. The study found emission discrepancies in the diesel VW passat and VW jetta and no discrepancy in BMW X5.
Opinion
Various tests clearly are the evidence of the fraud comitted by Volkswagen.
ICCT also purchased data from Emissions Analytics, a UK based emissions consultancy and from stakeholders in the Real Driving Emissions - Light Duty Vehicles working group in charge of amending Euro 6 regulations.
In early 2014, two professors and two students began testing emissions from three vehicles under road conditions using a portable emissions measurement system making it possible to collect real world driving emisdions data for comparison with laboratory dynamometer testing.
The three vehicles were all certified at California Air Resources Board facility before the tests as falling below the emissions lumits when using standard laboratory testing protocols. They put 2400 kilometres on Jetta and BMW. For their final test, they wanted to put even more mileage on Passat and drove it fr Los Angeles and Seattle and back again. The reasearchers found that under real world driving conditions the Jetta exceeded US emissions limits by a factor of 15 to 35 and passat exceeded the limit by a factor of 5 to 20.
The emissions far exceeded legal limits set by both European and US standards. The US test results confirmed the ICCT findings in Europe.
After a year long investigation, an international team of investigators identified the defeat device as a piece of code labelled as acoustic condition which activated emissions curbing systems when the car computer identified it was undergoing a test.
Testing carried out by various organisations confirm the violation.
Defeat device was found in the form of code.
Volkswagen engineers admitted the violation.
Hence, Volkswagen should recall all cars fitted with such software and pay back customers.
Also it should pay fines and penalties to environment agency for violation of clean air act and causing environmental pollution.