Caterpillar to pay $2.55mn in Clean Air Act settlement

The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) reached a $2.55 million settlement with Caterpillar Inc. (NYSE: CAT) to resolve alleged Clean Air Act violations for shipping more than 590,000 highway and non-road diesel engines without correct emissions controls. Caterpillar also allegedly failed to comply with emission control reporting and engine-labeling requirements.

Caterpillar allegedly shipped more than 590,000 engines to vehicle assemblers without the correct after-treatment devices (ATDs) such as catalytic converters and diesel particulate filters, and with improperly configured fuel injector and map settings that are required under the Clean Air Act. In some cases, the misconfigured engines were installed in vehicles, which resulted in excess emissions of NOx and particulate matter into the environment.

The consent decree requires Caterpillar to continue its recall of non-compliant engines to install the correct ATDs and correct the fuel injector and fuel map settings. In addition to the recall, Caterpillar will mitigate the effects of the excess emissions through permanent retirement of banked emission credits. Caterpillar will also improve its reporting of emission control system defects, as required under the Clean Air Act.

The California Air Resources Board is also settling claims for violations arising from the sale of improperly configured engines in the state. California will receive $510,000 of the civil penalty.

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