"2015 Cadillac Escalade" by AlBargan is licensed under CC BY-ND 2.0.

GM Penalty Due To Failure To Comply With EPA CO2 Emissions Over A 6-Year Span

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On July 3 the US Environmental Protection Agency (EPA) announced that General Motors (GM) agreed to retire approximately 50 million metric tons of greenhouse gas (GHG) credits to resolve excess CO2 emissions identified through EPA’s light-duty vehicle in-use testing program. This agreement is the result of an EPA investigation that identified excess CO2 emissions from approximately 5.9 million 2012-2018 model year GM vehicles currently in use.

GM will pay a $145.8 million penalty and forfeit credits worth hundreds of millions of dollars for fuel economy compliance issues and cancel more than 30.6 million fuel economy credits for the 2008-2010 model years to resolve the issues. GM previously purchased 38 million emissions credits to meet EPA requirements.

The EPA is not seeking a recall of the GM vehicles that generated excess CO2 emissions, as the EPA says the vehicles will remain on the road and cannot be repaired. The affected models include the Chevy Tahoe, Cadillac Escalade, and Chevy Silverado. About 40 variations of GM vehicles are covered.

GM said Wednesday that figure is “consistent with the costs of the final resolution of these matters with the federal government.” In a statement, GM said it “has at all times complied with and adhered to all applicable laws and regulations in the certification and in-use testing of the vehicles in-question.”

The company said it is not admitting to any wrongdoing nor that it failed to comply with the Clean Air Act. Instead, the problem stems from a change in testing procedures that the EPA put in place in 2016, GM spokesperson Bill Grotz explained. “We believe this voluntary action is the best course of action to resolve the outstanding issues with the federal government.”

GM earlier this year disclosed it was in discussions with the EPA and other regulators regarding adjustments to its credits, adding through 2023 its total costs expended in connection with the issue was $450 million representing its “current best estimate of the probable loss.” That would value the credits forfeited at about $300 million.

In June 2023, NHTSA said GM paid $128.2 million in fuel economy penalties for not meeting requirements for 2016 and 2017. GM had initially planned to use credits to meet its compliance shortfall but opted to pay penalties, NHTSA said.

Environmental advocates criticized the Detroit automaker, as reported by Reuters and AP. “GM’s admission that they cheated on federal emissions and mileage rules shows why automakers can’t be trusted to protect our air and health, and why we need strong pollution rules,” said Dan Becker, director of the Center for Biological Diversity’s safe climate transport campaign.

David Cooke, senior vehicles analyst for the Union of Concerned Scientists, questioned how GM could not know that pollution exceeded initial test by more than 10% because the problem was so widespread on so many different vehicles. “You don’t just make a more than 10% rounding error.”

“Any automaker failing its emissions limits should pay the price for its pollution,” added Katherine García, director of Sierra Club’s clean transportation for all campaign.

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EPA Testing Done to Assure that Automakers Conform to Testing Limits

Why is this agreement so significant? EPA light-duty vehicle standards are designed to ensure that vehicles on the road conform to the emissions performance asserted by manufacturers during EPA’s certification process. GM, like all US automakers, is required to test its vehicles on a 1-year and 4-year cycle and submit those test results to EPA. But it’s not just the automaker’s test results that are analyzed. The EPA also conducts its own tests to ensure vehicles on the road are complying with emissions standards.

Tests done by both EPA and GM showed the GM vehicles were emitting more than 10% higher CO2 on average than GM’s initial GHG compliance reports claimed. That amounted to approximately 4.6 million 2012-2018 full size pickups and SUVs and approximately 1.3 million 2012-2018 midsize SUVs. “EPA’s vehicle standards depend on strong oversight in order to deliver public health benefits in the real world,” said EPA Administrator Michael S. Regan. “Our investigation has achieved accountability and upholds an important program that’s reducing air pollution and protecting communities across the country.”

The in-use program is an essential part of EPA’s work to ensure that the climate benefits of EPA’s vehicle standards are realized. That includes the recently finalized light duty vehicle standards that are expected to avoid more than 7 billion tons of CO2 emissions and provide nearly $100 billion of annual net benefits. EPA remains vigilant in monitoring the performance of the vehicles on the road today to ensure automakers comply and the goals of the greenhouse gas programs are achieved.

Last year, NHTSA had proposed hiking fuel economy standards from 2027 through 2032 that it estimated would cost GM $6.5 billion over the period. Under the final rule issued last month NHTSA said GM could face $906 million in penalties through 2031.

GM’s credit retirement will be reflected in EPA’s next update of the Automotive Trends and GHG Compliance Report later this year.

It’s not the first time that GM has been nailed for emissions problems. In 1996, GM had to pay a near-record fine of $11 million and recall 470,000 vehicles, because of ECU software programmed to disengage emissions controls during conditions known to exist when the cars were not being lab tested by the EPA. The model year 1991–1995 Cadillacs were programmed to simply enrich the engine’s fuel mixture, increasing carbon monoxide (CO) and unburned hydrocarbon pollution, any time the car’s air conditioning or heater was turned on, since the testing protocol specified they would be off.

Unlike the 2015 Volkswagen diesel emissions case, the EPA is not alleging GM used a device to intentionally reduce emissions in testing.

The White House in March finalized the toughest limits yet on climate-warming emissions from passenger cars and light trucks, part of an effort to speed up the country’s less-than-smooth transition to EVs. Because GM agreed to address the excess emissions, EPA said it was not necessary to make a formal determination regarding the reasons for the excess pollution.

Other than CO2 Emissions, The GM News is Not All Bad

In other GM news released this week, in line with Tesla and other automakers, GM exceeded sales numbers of its EVs in the 2024 second quarter over the same period in the previous year. Those statistics emerged even as EV sales growth hasn’t risen exponentially as some had hoped. Then again, the positive GM deliveries make sense, as consumers have asked for a wider variety of EV models for several years.

It was the best quarter for GM since 2020, with record EV sales boosting the final totals. The legacy automaker had 696,086 total Q2 deliveries. Those numbers culminate 8 consecutive quarters of year-over-year retail sales growth and 6 consecutive quarters of year-over-year growth sales for its subsidiary Buick. In the second quarter, GM’s EV sales were up 34% from last quarter and up 40% year-over-year, with 21,930 cars sold.

The electric Hummer saw sales rise 76% compared to the previous quarter, and 70%of Hummer buyers are new to GM, the company said. It also reported a strong showing for the Cadillac LYRIQ, an electric SUV, which had a 26% increase in sales between the first and second quarters.

For all the media frenzy lately about how EV demand is falling, the data definitely doesn’t underpin such claims. Automakers are keenly aware of the contradiction, yet the EV ennui and discourse around the “we’re not ready” firestorm offers a methodical opportunity for automakers to ramp up their EV infrastructure, as GM has shown with its Q2 deliveries.

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Carolyn Fortuna

Carolyn Fortuna, PhD, is a writer, researcher, and educator with a lifelong dedication to ecojustice. Carolyn has won awards from the Anti-Defamation League, The International Literacy Association, and The Leavey Foundation. Carolyn is a small-time investor in Tesla and an owner of a 2022 Tesla Model Y as well as a 2017 Chevy Bolt. Please follow Carolyn on Substack: https://carolynfortuna.substack.com/.

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