Taiwanese and U.S. Companies Settle Clean Air Violations

(Washington, D.C. – April 24, 2008) A Taiwanese manufacturer and three American corporations will pay a $2 million civil penalty for allegedly importing and distributing approximately 200,000 chainsaws in the U.S. that failed to meet federal air pollution standards, the Justice Department and U.S. Environmental Protection Agency announced today. The companies also agreed to spend approximately $5 million on projects to reduce air pollution.

The settlement resolves alleged violations of the Clean Air Act by MTD Southwest of Tucson, Ariz., its parent company, MTD Products of Cleveland, Ohio, Jenn Feng Industrial Co. of Taiwan, and its subsidiary, McCulloch Corp. of Santa Fe Springs, Calif. Jenn Feng manufactured the engines for sale in the U.S. and McCulloch obtained certificates of conformity from EPA for the engines. MTD Products/MTD Southwest purchased the engines from Jenn Feng and imported and distributed the engines to the United States.

“EPA will continue to enforce the Clean Air Act and stop illegal imports,” said Granta Y. Nakayama, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Reliable and effective pollution control systems are essential to protect human health and the environment from harmful emissions from non-road engines.”

“In addition to securing a significant civil penalty, today’s settlement more than compensates the environment for the illegal emissions caused by these violations,” said Ronald J. Tenpas, Assistant Attorney General of the Environment and Natural Resources Division. “The settlement requires the companies to reduce nearly four times the estimated excess hydrocarbon emissions resulting from the violations, as well as reducing approximately 13,000 tons of other air pollutants.”

The settlement involves the largest civil penalty for violations of federal air pollution emissions standards for engines in “non-road” equipment. These engines are used in a variety of equipment including chainsaws, lawnmowers, trimmers and blowers.

More than 100,000 of the chainsaws were sold to consumers at Sears, McCulloch and Troy-Bilt retail outlets. EPA estimates that these chainsaws will emit approximately 268 tons of excess hydrocarbons into the environment over their lifetime.

In addition to the penalty, the companies will conduct the following projects to reduce air pollution to remedy the impact of the alleged violations. These projects are expected to reduce more than the excess emissions resulting from the violations:

Install streetlights with light-emitting diodes (LED) in selected cities to reduce greenhouse gas emissions by about 11,460 tons and reduce energy consumption;
Install low-permeable fuel lines in at least 1 million engines used in lawn and garden equipment to reduce hydrocarbon emissions by about 1,000 tons; and
Purchase nitrogen oxides emissions allowances and surrender them to EPA to prevent about 1,470 tons of NOx emissions represented by those allowances from ever entering the environment.

The settlement also requires that the companies prevent future violations by implementing rigorous plans to ensure that all imports meet emissions and design standards. Under the settlement, the importers will randomly sample imported engines and test for compliance with air standards. The settlement also requires the companies to set up compliance hotlines that will allow people to submit confidential, anonymous information about each company’s compliance with the non-road regulations. The companies are required to export from the U.S. any illegal chainsaws that have not yet been sold.

The government’s complaint alleges that the chainsaw engines did not conform to specifications provided by McCulloch in its applications for certification. McCulloch’s applications claimed that the 2006 model year engines would be built with catalytic converters to control air pollution and meet air emissions standards. The complaint also alleges that a number of 2005 model year chainsaws did not conform to the specifications in the certification application.

MTD notified EPA regarding the potential violations. During the subsequent investigation, EPA discovered that the 2006 model year engines were built without catalytic converters and did not meet federal emissions requirements.

In 1995, EPA established regulations to reduce emissions of hydrocarbons from small gasoline powered non-road engines. To obtain a certificate of conformity from EPA, a manufacturer must submit an application to EPA that describes the engine and its emission control system, and that demonstrates that the engines will meet federal emissions standards for nitrogen oxides and total hydrocarbons.

Non-road engines emit volatile organic compounds and nitrogen oxides, which contribute to the formation of ground-level ozone, or smog. Exposure to even low levels of ozone can cause respiratory problems, and repeated exposure can aggravate pre-existing respiratory diseases.

In addition to today’s settlement, EPA has imposed nearly $2.4 million in fines during the past 18 months against more than 58 importers for engines that failed to have required certification or emission controls. Without the proper controls, engines can emit 30 percent more pollution than allowable under EPA standards.
The consent decree, lodged in the U.S. District Court for the District of Columbia, is subject to a 30-day public comment period and approval by the federal court.