Dive Brief:
- Volvo Group North America will pay nearly $197 million to settle an emissions violation case with the California Air Resources Board, according to a May 18 press release.
- CARB alleged that 10,000 Volvo model year 2010-2016 trucks used auxiliary emission control devices that were not disclosed during California’s required emissions certification process, in violation of the state’s heavy-duty engine regulations.
- As part of the settlement, Volvo Group will extend a partial warranty and make software updates available for about 7,200 model year 2014-2016 engines in California. The company is not admitting liability.
Dive Insight:
Volvo Group’s settlement with CARB marks one of the largest recent emissions enforcement actions involving a heavy-duty truck manufacturer and underscores California’s aggressive stance on diesel emissions compliance.
The case also comes as tensions grow between federal and state environmental policy.
While the U.S. Environmental Protection Agency has moved to scale back national emission rules, California continues to expand its own regulatory authority and enforcement under waivers granted through the Clean Air Act. The Golden State is also among the 24 states challenging the EPA’s repeal of Phase 3 greenhouse gas standards.
CARB alleged that Volvo Group’s noncompliant engines produced excess nitrogen oxides beyond certified thresholds. The settlement includes $108 million earmarked for California emission reduction projects with a deadline for submitting those projects to CARB within a year.
“This case underscores why CARB's compliance testing and strong enforcement are essential to protecting the state's air quality and public health. Our responsibility goes beyond adopting regulations — we are committed to upholding them by identifying violations and holding companies accountable for meeting emissions standards,” CARB Chair Lauren Sanchez said in a press release.
Volvo Group maintained that it cooperated with regulators through the investigation and disclosed the issues nearly 10 years ago. The OEM added that an internal review found no evidence that employees acted in bad faith.
Volvo Group said its Q2 operating income will include a negative impact of $196.5 million, which will be excluded from its adjusted operating income. The company added its Q2 operating cash flow will be negatively impacted by $89 million and that the remaining negative impact from the settlement would be spread out over the next five years.
