Navistar, Inc. Clean Air Act Settlement

(Washington, DC – October 25, 2021)  The Environmental Protection Agency (EPA) and the U.S. Department of Justice today announced a settlement with Navistar, Inc. (Navistar) for violations of the Clean Air Act based on Navistar’s introduction into commerce of 7,749 heavy-duty diesel engines that were not covered by an EPA-issued certificate of conformity and that did not meet applicable emission standards. Under the terms of the settlement, Navistar has agreed to retire its remaining balance of oxides of nitrogen (NO_x) credits under the EPA’s Averaging, Banking & Trading program and will spend at least $30 million implementing a mitigation program that will result in the reduction of at least 10,000 tons of NO_x emissions. Navistar’s implementation of the mitigation program is expected to reduce NO_x and other pollutants in areas disproportionally impacted by mobile source air pollution (e.g., communities surrounding ports, depots, warehouses). Navistar will also pay a civil penalty of $52 million.

On this page:

• Overview of Company
• Violations
• Injunctive Relief
• Pollutant Impacts
• Health and Environmental Benefits
• Civil Penalty
• Comment Period
• Contact

Overview of Company

Navistar is an integrated manufacturer and distributor of diesel engines and vehicles, headquartered in Lisle, Illinois with facilities in Ohio, Texas and Huntsville, Alabama. It is currently a subsidiary of Navistar International Corporation (NIC), a publicly traded holding company which is in turn a wholly owned subsidiary of TRATON SE, a Societas Europaea, the heavy truck division of Volkswagen AG, a German multinational company that manufactures and sells vehicles worldwide.

Violations

The EPA alleged that in Navistar violated section 203(a)(1) of the Clean Air Act, 42 U.S.C. § 7522(a)(1), when it sold, offered for sale, introduced or delivered for introduction into commerce 7,749 on-highway heavy duty diesel engines in model year 2010 that failed to meet 2010 emissions standards and were not covered by an EPA-issued certificate of conformity.

The Clean Air Act (CAA) and its regulations aim to protect human health and the environment by reducing harmful emissions from mobile sources of air pollution. The CAA authorizes the EPA to establish emissions standards and requires manufacturers of on-highway engines to apply for and obtain a certificate of conformity demonstrating compliance with emissions standards prior to introducing an engine into U.S. commerce. Certificates of conformity cover only those engines produced within a single model year. A model year for an engine family ends either when the last such engine is produced, or on December 31 of the calendar year for which the model year is named, whichever date is sooner.

Navistar began building its heavy-duty diesel engines (HDDEs) during model year 2009 by installing crankshafts in engine blocks (the first step in producing an engine). Navistar completed the engines in 2010, after the new emissions standards took effect. Throughout, Navistar held out the HDDEs as EPA-certified model year 2009 engines. But because Navistar completed all manufacturing and assembling processes for the HDDEs in 2010, the engines were actually model year 2010 and required a certificate of conformity demonstrating compliance with 2010 emission standards.  

Between January 2010 and approximately October 2010, Navistar sold the engines for on-highway use in vehicles which were introduced into commerce across the country. Because the engines did not meet 2010 emission standards, the sale of these engines resulted in excess emissions.   

Injunctive Relief

The consent decree requires Navistar to acquire older, high-polluting HDDEs from the used HDDE market and destroy enough of them to result in at least 10,000 tons of NO_x emissions reduction. Navistar must structure its mitigation of NO_x emissions through one or more projects approved by the EPA that will take into consideration geographic diversity and will benefit communities that are overburdened by air pollution.

Navistar is required to complete this mitigation within four years, and completion requires that Navistar demonstrate that the company mitigated 10,000 tons of NO_x (and this will also have the effect of reducing other air pollution from diesel engines including particulate matter):

• On-Highway Heavy-Duty Diesel Engine Retirement Project(s): Navistar may permanently destroy any combination of on-highway HDDEs from model year 2009 or older that are used to power Class 4-8 heavy-duty diesel trucks, transit, intercity, or school buses, or any other on-highway heavy duty diesel vehicles.
• Nonroad Heavy-Duty Diesel Engine Retirement Project(s): Navistar may permanently destroy any combination of heavy-duty nonroad diesel engines subject to Tier 1, 2, 3, or 4 (Interim) standards promulgated under EPA’s regulations at 42 U.S.C. § 7547, including but not limited to those used in agricultural tractors, inboard/sterndrives, rubber tire loaders, combines, crawler tractor/dozers, other oil field equipment, off-highway trucks, commercial chippers/stump grinders, excavators, scrapers, generator sets, and cranes.

Pollutant Impacts

Navistar’s mitigation projects will reduce diesel emissions, which include NOx, particulate matter, hazardous air pollutants and other pollutants. Nitrogen oxide is a precursor to ozone and can lead to acid rain. Diesel exhaust poses a lung cancer hazard for people and can cause respiratory effects such as asthma, and these risks can disproportionately impact sensitive populations such as children.  

Health and Environmental Benefits

The mitigation project is expected to be implemented by Navistar in a manner that seeks project options across many geographic areas and emphasizes project options that maximize environmental benefit, including in potential low-income areas. 

This enforcement action is part of an ongoing effort by the EPA to protect the public from harmful air pollution by ensuring that all vehicles and engines meet federal emission limits. 

Civil Penalty

Navistar will pay a $52,000,000 civil penalty.

Comment Period

The proposed settlement, lodged in the U.S. District Court for the Northern District of Illinois, is subject to a 30-day public comment period and final court approval.  Information on submitting comments is available at the Department of Justice website.

For more information, contact:

Ed Kulschinsky
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
kulschinsky.edward@epa.gov

Evan Belser
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
belser.evan@epa.gov

Christina Cobb
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
cobb.christina@epa.gov