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Caterpillar Inc. to pay $2.55 million penality [Updated]

August 2, 2011 |  3:21 pm

Manufacturing company Caterpillar Inc. will pay a $2.55-million penalty and recall 925 engines that failed to meet emission control standards under the Clean Air Act, according to the U.S. Environmental Protection Agency and the U.S. Department of Justice, which settled with the company last week.

The EPA said the company did not report emission controls or correctly label the engines built between 2001-2005. Failing to comply with emission controls allows engines to release excess nitrogen oxides, particulate matter and other air pollutants that cause respiratory illness and aggravate asthma. 

"The enforcement of vehicle emissions standards, labeling and reporting requirements is critical to protecting the air we breathe and ensuring that companies play by the rules,” said Cynthia Giles, assistant administrator for the EPA’s Office of Enforcement and Compliance Assurance. The “settlement will protect public health and create a level playing field for companies that meet their environmental obligations.”

Of the $2.55-million fine, Caterpillar will pay $2.04 million to the U.S. government and $510,000 to California for the sale of improperly configured engines in the state, the EPA said.

“Caterpillar will pay a substantial civil penalty for shipping engines that did not comply with these Clean Air Act requirements, and under this settlement, it must continue its recall and correction of engines that do not have correctly configured emissions controls,” said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice.

In addition to the penalty and recall, the company will have to mitigate the effects of the excess emissions from its engines through permanent retirement of banked emission credits. Caterpillar will also improve its reporting of emission control system defects.

Bridget M. Young, spokeswoman for Caterpillar, said the company denies any wrongdoing, has “fully cooperated” with the government and agrees the settlement “represents a good faith effort between the parties to resolve their differences and avoid potentially lengthy litigation.”

“Caterpillar is committed to following the terms of the decree,” Young said.

Caterpillar allegedly violated the Clean Air Act by shipping engines without the correct after-treatment devices, such as catalytic converters and diesel particulate filters that control engine exhaust emissions. The EPA said the company also improperly configured the engines’ fuel injector and map settings, resulting in excess emissions of nitrogen oxides and particulate matter. 

The settlement was filed in the U.S. District Court for the District of Columbia and is subject to a 30-day public comment period.

[Correction, Aug 3, 2011 4:42 p.m.]The previous post said Caterpillar Inc. had to recall more than 590,000 engines. While 590,000 were allegedly shipped without certification, Caterpillar Inc. said only 925 had to be recalled.


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-- Ashlie Rodriguez

Photo: Paul Morse /Los Angeles Times