Bloomberg News

Navistar Faces EPA Fines of Up To $2,000 Per Heavy-Duty Engine

February 03, 2012

Feb. 1 (Bloomberg) -- Navistar International Corp., the maker of International brand trucks, faces fines of as much as $2,000 for each of its heavy-duty engines because they don’t meet pollution standards, according to a federal regulation.

The Environmental Protection Agency issued an emergency rule yesterday on fines for truck-engine makers that don’t meet federal nitrogen oxides standards, without naming the company. Transport Topics reported that the regulation applied to Navistar.

“These penalties allow a manufacturer to produce and sell nonconforming engines upon payment of a penalty,” the EPA said in its regulation published on its Web site. One company was set to run out of pollution credits during this model year, according to the EPA. Credits allow it to sell engines that don’t meet federal standards, the agency said.

Navistar must pay a sliding scale of fines on its heavy- duty engines that can reach almost $2,000, according to a chart included in the rule. Its medium heavy-duty engines face fines of up to almost $700 each. The EPA didn’t provide the exact level of the maximum fine in its synopsis.

Navistar “expects to comply soon” with federal standards, spokesman Jim Spangler said in an interview. He declined to comment on whether the company may have to pay fines or how many credits are left.

Navistar chose to meet tightening federal standards with exhaust gas recirculation, and its sales have suffered. Competitors including Volvo AB and Daimler AG have adopted selective catalyst reduction technology.

Oxides of nitrogen exacerbate breathing and asthma problems, and can lead to the formation of ozone.

--With assistance from Jeff Plungis in Washington. Editors: Frank Longid, Robert Fenner

To contact the reporters on this story: Mark Drajem in Washington at mdrajem@bloomberg.net; Mark Clothier in Southfield, Michigan at mclothier@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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