Detroit Diesel Corp. will pay $28.5 million, in a combination of fines and funding for pollution-reduction projects, to settle alleged violations of the Clean Air Act that the Department of Justice said entailed selling heavy-duty diesel engines that were not certified by the Environmental Protection Agency and did not meet applicable emission standards.

Per the settlement agreement announced by DOJ, Detroit Diesel will pay a $14 million civil penalty and spend $14.5 million on projects to reduce nitrogen oxide and other pollutants, including replacing “high-polluting” diesel school buses and locomotive engines with models that meet current emissions standards.  

The government’s complaint, filed on Oct. 7 in tandem with the settlement, alleges that Detroit Diesel violated the Clean Air Act by “introducing into commerce 7,786 heavy-duty diesel engines for use in trucks and buses in model year 2010 without a valid EPA-issued certificate of conformity demonstrating conformance with Clean Air Act standards to control nitrogen oxide (NOx) emissions,” said DOJ. The complaint also alleges that the engines did not conform to emission standards applicable to model year 2010 engines.

“This case demonstrates the critical importance of EPA’s vehicle and engine certification program to achieving the goals of the Clean Air Act,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “By not certifying the engines in accordance with the rules, Detroit Diesel Corp. increased pollution and undercut competitors. We will uphold the integrity of that program by holding accountable those that skirt the rules.”

Per a statement received from David Giroux, director of corporate communications for Daimler Trucks North America, Detroit Diesel’s parent firm, in the second half of 2009 the engine maker received “an unexpected increase” in orders for MY2009 engines. 

“To complete production of those engines in 2009, Detroit would have had to ramp up production by adding shifts,” the statement reads. “Because of the low number of orders for MY2010 engines, Detroit would have then had to lay off workers at the end of the year and run a skeleton shift for the first half of 2010.  Instead of interrupting the labor force in that way, Detroit chose to take advantage of a provision in the Clean Air Act regulations that it believed allowed it to begin assembly of the MY2009 engines in 2009 and complete the engines in 2010.” 

The statement explains that by using this “short block” assembly method, Detroit Diesel assembled approximately 80% of each engine in 2009, including the crankshaft, block, pistons, and connecting rods. The engine maker then stored the short block engines temporarily and completed the remaining assembly in early 2010. 

DTNA also stated that before beginning short block assembly, Detroit Diesel informed EPA of its intent but “ultimately, the EPA disagreed with Detroit’s interpretation of the regulations, but not until it was too late for Detroit to reverse course. The EPA now asserts that because they were completed in 2010, the short block engines should have met the 2010 emission standards.” 

Detroit Diesel General Counsel Brian Burton added that while the company disagrees with EPA’s position and was “surprised to receive the EPA’s conclusion that its definition of ‘produced’ didn’t apply to our engines, to avoid litigation and stay focused on producing the most efficient engines in the market, Detroit has decided to settle with the EPA.