Automakers fined $100 million over inaccurate carbon emissions claims

FRISCO — If you’ve ever wondered what a ton of carbon dioxide is worth, just ask Hyundai or Kia, who recently agreed to pay a $100 million settlement for selling about 1.2 million cars that will emit about 4.75 million metric tons of greenhouse gases above the amount certified to the EPA.

That comes to about $4.75 per ton, totaling the largest civil penalty ever levied under the Clean Air Act, a sign that the EPA is taking seriously its mandate to protect Americans from heat-trapping greenhouse gas pollutants.

Cleaning up carbon emissions is a big deal for Colorado and the rest of the world. Emissions from cars, trucks, planes and ships are second only to emissions from power plants. In Colorado, daily carbon emissions from one section of highway — I-70 between Golden and Glenwood Springs — are greater than daily emissions from the Navajo Generating Station, one of the largest coal-fired power plants in the country.

Planned increases in overall fuel efficiency standards may keep carbon emissions somewhat in check the next few decades, but there’s nothing to suggest that Colorado has a plan to significantly cut emissions from cars and trucks. That doesn’t mesh well with the stated intention to reduce the state’s overall carbon footprint as part of a global push to limit global warming to 2 degrees Celsius.

Under the settlement with the EPA, the South Korea-based multinational car-maker essentially admitted that it misrepresented emissions data for more than 1 million 2012 and 2013 cars, including Hyundai Accent, Elantra, Veloster and Santa Fe vehicles and the Kia Rio and Soul vehicles.

According to the EPA, Hyundai and Kia also lied to consumers about the real-world fuel economy performance of many of these vehicles, overstating the fuel economy by one to six miles per gallon. Similarly, they understated the emissions of greenhouse gases by their fleets by approximately 4.75 million metric tons over the estimated lifetime of the vehicles.

In addition to the $100 million fine, Hyundai and Kia also committed to spending about $50 million on measures to prevent future violations, and will also forfeit $200 million worth of greenhouse gas emissions credits.

Automakers earn greenhouse gas emissions credits for building vehicles with lower emissions than required by law. These credits can be used to offset emissions from less fuel-efficient vehicle models or sold or traded to other automakers for the same purpose.

“Greenhouse gas emission laws protect the public from the dangers of climate change, and today’s action reinforces EPA’s commitment to see those laws through,” EPA Administrator Gina McCarthy said in a statement announcing the agreement.

“Businesses that play by the rules shouldn’t have to compete with those breaking the law. This settlement upholds the integrity of the nation’s fuel economy and greenhouse gas programs and supports all Americans who want to save fuel costs and reduce their environmental impact,” McCarthy said.

Attorney General Eric Holder said the Justice Department is “committed to safeguarding American consumers, ensuring fairness in every marketplace, protecting the environment, and relentlessly pursuing companies that make misrepresentations and violate the law.”

The settlement came after the Justice Department and the California Air Resources Board filed a complaint in the U.S. District Court for the District of Columbia.

The EPA discovered these violations in 2012 during audit testing. Subsequent investigation revealed that Hyundai’s and Kia’s testing protocol included numerous elements that led to inaccurately higher fuel economy ratings. In processing test data, Hyundai and Kia allegedly chose favorable results rather than average results from a large number of tests.

In November 2012, Hyundai and Kia responded to EPA’s findings by correcting the fuel economy ratings for many of their 2011, 2012 and 2013 model year vehicles and establishing a reimbursement program to compensate owners for increased fuel costs due to overstated fuel economy.

Hyundai and Kia have agreed to reorganize their emissions certification group, revise test protocols, improve management of test data and enhance employee training before they conduct emissions testing to certify their model year 2017 vehicles. In the meantime, Hyundai and Kia must audit their fleets for model years 2015 and 2016 to ensure that vehicles sold to the public conform to the description and data provided to EPA.

[ Photo of Colorado traffic by John Tomasic.]