Daimler AG and Mercedes-Benz USA, LLC Clean Air Act Civil Settlement
(Washington, DC) – The Department of Justice, the Environmental Protection Agency (EPA), and the California Air Resources Board (CARB) have resolved a civil enforcement case against Daimler AG and Mercedes-Benz USA, LLC (collectively, “Daimler”). This settlement, filed on September 14, 2020 and entered by the Court on March 9, 2021 (the “Effective Date” of the agreement), resolves violations of the Clean Air Act and California law based on Daimler’s cheating on emission tests and failing to disclose unlawful defeat devices in approximately 250,000 diesel vehicles sold or leased in the United States. Daimler has agreed to implement a recall program to repair the noncompliant vehicles, offer an extended warranty on repaired vehicles, and pay a civil penalty of $875 million. Daimler also will implement a program to mitigate excess pollution from these vehicles.
In a separate settlement with California, Daimler will mitigate excess emissions from more than 36,000 of the noncompliant vehicles in California. In addition, in a separate administrative agreement with the United States Customs and Border Protection (CBP), Daimler resolved allegations of illegally importing many of the noncompliant vehicles.
- Overview
- Violations
- Defendants
- Vehicle Repair
- Mitigation
- Preventing Future Violations
- Health Effects and Environmental Benefits
- Civil Penalty
- State and Regional Partners
- Contact: for more information about your recall
- Contact: for more information about the settlement
Overview
EPA alleged that Daimler installed undisclosed software functions and defeat devices in approximately 250,000 light and medium-duty diesel vehicles (passenger cars and Sprinter vans, model years 2009-2016). The undisclosed software functions and defeat devices cause the vehicles’ emission control systems to perform differently, and less effectively, during certain normal driving conditions than on federal emission tests, resulting in increased emissions of oxides of nitrogen (“NOx”) during typical vehicle operation. NOx includes harmful air pollutants linked to cardiac and respiratory disease.
This settlement resolves the complaint filed by the United States Department of Justice, on behalf of EPA. The California Air Resources Board is a co-plaintiff to this settlement.
Defendants
Defendants are Daimler AG and Mercedes-Benz USA, LLC. Daimler AG is a publicly-held German corporation with its headquarters in Stuttgart, Germany. Daimler AG and its subsidiaries manufactured and assembled the vehicles, imported many of the vehicles, performed emission tests on the vehicles, met with EPA regulators about the vehicles, and submitted information about the vehicles to EPA.
Mercedes-Benz USA, LLC (MB USA) is a wholly-owned subsidiary of Daimler AG, and is a Delaware limited liability company with its headquarters in Sandy Springs, GA. MB USA acts for and is under the control of Daimler AG in connection with the distribution of new motor vehicles in the United States. MB USA is also listed as a manufacturer in certain certificate of conformity (COC) applications submitted to EPA.
Clean Air Act Certification Requirements and Violations
The Clean Air Act and its regulations aim to protect human health and the environment, in part, by reducing harmful emissions from mobile sources of air pollution. The Act requires vehicle manufacturers to demonstrate to EPA through a certification process that their products meet applicable federal emission standards to control air pollution. As part of the certification process, automakers are required to disclose and explain any functions, known as auxiliary emission control devices (AECDs), that can alter how a vehicle emits air pollution. Daimler did not disclose the existence of certain AECDs to EPA in its certificate applications for approximately 250,000 model year 2009 – 2016 light and medium-duty diesel vehicles sold in the United States, despite knowing that AECDs were present and that disclosure of such is mandatory.
In addition, the Clean Air Act makes it a violation to manufacture, sell, offer to sell, or install defeat devices. A defeat device is a vehicle design feature that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use.
A certificate of conformity (COC) covers only those new motor vehicles that conform, in all material respects, to the design specifications described in the manufacturer’s application for that COC. Manufacturers are prohibited from selling any new motor vehicle in the United States unless that vehicle is covered by an EPA-issued COC. By selling approximately 250,000 diesel vehicles that contain undisclosed AECDs and one or more defeat devices, Daimler violated important provisions of Section 203 the Clean Air Act.
Vehicle Repair: Reducing their Harmful Emissions
Daimler must recall the affected vehicles and update the software and certain hardware in order to remove all defeat devices and ensure the vehicles comply with all applicable emission standards. Due to variation within the affected Daimler fleet, there are 12 subgroups of fixes, or vehicle updates. The updates are known as Approved Emissions Modifications (AEMs). The 12 subgroups are known as “Emission Modification Categories 1 - 12,” or “EMCs 1 - 12.” Each AEM includes a Daimler-developed software repair and a hardware upgrade. The hardware changes vary across EMCs; however, each vehicle shall receive a new NOx sensor, and any vehicle not already equipped with a copper catalyst will have one installed.
EPA and CARB have already approved the AEMs for eight EMCs (EMCs 1 - 4 and 9 - 12). The agencies will approve the remaining updates (EMCs 5 - 8) in a staggered fashion through 2021, based on their review of Daimler’s proposed updates and emissions test results demonstrating that each update will ensure the relevant vehicles comply with applicable emission standards. Daimler will be liable for stipulated penalties in the unlikely event that one or more AEMs do not meet the applicable emission standards, and any excess NOx emissions from this noncompliance will be covered by the federal mitigation project required under the consent decree (CD).
Emissions Modification Category |
Model (MY) |
# Subject Vehicles |
Approved Emissions Modification Component Updates |
Availability of AEM |
|
EMC 1 |
Sprinter (MY13-16) 6-cyl |
74,332 |
|
Upon Effective Date of Consent Decree(March 9, 2021) |
|
EMC 2 |
Sprinter (MY10-12) 6-cyl |
46,086 |
|
Upon Effective Date of Consent Decree |
|
EMC 3 |
Sprinter (MY14-16) 4-cyl |
40,981 |
(These vehicles have copper catalysts already installed) |
Upon Effective Date of the Consent Decree |
|
EMC 4 |
ML350 (MY12-14) 6-cyl |
32,764 |
|
Upon Effective Date of Consent Decree |
|
GL350 (MY13-16) 6-cyl |
||||
|
EMC 5 |
ML320 (MY09) ML350 (MY13-16) 6-cyl |
27,847 |
|
Expected to be available on or around February 2022, after approval |
|
GL320 (MY09) GL350 (MY10-12) 6-cyl |
||||
|
R320 (MY09) R350 (MY10-12) 6-cyl |
||||
|
EMC 6 |
S350 (MY12-13) 6-cyl |
1,601 |
|
Expected to be available on or around January 2022, after approval |
|
EMC 7 |
E350 (MY13) 6-cyl |
1,267 |
|
Expected to be available on or around April 2022, after approval |
|
EMC 8 |
E350 (MY11-12) 6-cyl |
5,702 |
|
Expected to be available on or around April 2022, after approval |
|
EMC 9 |
GLK250 (MY13-15) 4-cyl |
9,580 |
|
Upon Effective Date of Consent Decree |
|
EMC 10 |
GLE300d (MY16) 4-cyl |
1,818 |
(These vehicles have copper catalysts already installed) |
Upon Effective Date of Consent Decree |
|
EMC 11 |
ML250 (MY15) 4-cyl |
3,588 |
|
Upon Effective Date of Consent Decree |
|
EMC 12 |
E250 (MY14-16) 4-cyl |
5,713 |
|
Upon Effective Date of Consent Decree |
The Subject Vehicles consist of both passenger cars and Sprinter vans, commonly used in commercial applications. Daimler must install an AEM in at least 85% of the U.S. passenger car vehicle fleet (“National Passenger Car Emission Modification Program (EMP) Rate”) by two years from the Effective Date of the CD or two years from approval of the last-submitted passenger vehicle EMC, whichever is later. Daimler must install the AEM in at least 85% of the U.S. Sprinter vehicle fleet (“National Sprinter EMP Rate”) by three years from the Effective Date of the consent decree or three years from approval of the last-submitted Sprinter EMC (EMC 3), whichever is later. For each percentage point by which Daimler falls short of the National Passenger Car EMP Rate, Daimler must pay a civil penalty of $6,445,600 to the United States. For each percentage point by which Daimler falls short of the National Sprinter EMP Rate, Daimler must pay a civil penalty of $9,137,866 to the United States. There are separate California EMP Rates under the consent decree for Passenger Cars and Sprinters registered in California. Daimler must meet the 85% California Passenger Car EMP Rate and 85% California Sprinter EMP Rate or pay $1,325,910 and $1,485,655, respectively, for each percentage point by which Daimler falls short of the California EMP Rates.
Daimler must offer a broad extended warranty for vehicles once the AEM is installed, covering all hardware or software affected by the AEM. Daimler must also conduct additional testing in the coming years to demonstrate to EPA and CARB that the vehicles continue to meet emission standards over their full useful life.
Mitigation
Daimler must implement a program to fully mitigate the lifetime excess NOx emissions from the vehicles it sold in violation of the Clean Air Act. The mitigation program requires Daimler to replace or repower 15 older, more-polluting line-haul locomotive engines to more stringent emissions standards than the standards to which they were certified, thereby reducing emissions from these locomotives. In selecting locomotives, Daimler shall preferentially repower those that are likely to run long distances to geographically diverse locations across the continental United States, except that Defendants shall not be required to repower locomotives located in or traveling to California because there is a separate mitigation program in California.
Actions to Prevent Future Violations
Daimler will take various measures to prevent future violations. Daimler will maintain its recent corporate reorganization, which separates emissions certification and product development activities. Daimler will perform enhanced annual technical training on certification compliance requirements and will also publish its Compliance Operation Plan which will include details about the company’s internal controls around emissions compliance. The company will perform portable emission measurement system (PEMS) testing on its new diesel and gasoline vehicles, and special-cycle testing of select diesel vehicles, to assess whether the vehicles operate similarly on the federal emissions test cycles as compared to off-cycle, typical driving conditions. This testing will be performed prior to certification, which will enable the EPA to take the PEMS results into account in making new-vehicle certification decisions. Lastly, Daimler will conduct internal audits by a dedicated settlement compliance team, observed by an external compliance consultant, to assess the implementation of the consent decree requirements.
Health Effects and Environmental Benefits
NOx pollution contributes to the formation of harmful smog and soot, exposure to which is linked to a number of respiratory- and cardiovascular-related health effects as well as premature death. Children, older adults, people who are active outdoors (including outdoor workers), and people with heart or lung disease are particularly at risk for health effects related to smog or soot exposure. Nitrogen dioxide formed by NOx emissions can aggravate respiratory diseases, particularly asthma, and may also contribute to asthma development in children.
Civil Penalty
Daimler will pay a civil penalty of $875,000,000 for its alleged civil violations of the Clean Air Act. Of that amount, the company will pay $743,750,000 to the United States and $131,250,000 to CARB.
State and Regional Partners
The California Air Resources Board joined the United States in this settlement.
Contact: for more information about your recall
Daimler Settlement Websites:
- https://BlueTecUpdate.mbusa.com
- https://BlueTecUpdate.mbvans.com
- https://BlueTecUpdate.freightlinersprinterusa.com
Daimler Customer Assistance Centers:
- 1-833-841-9363 (Vans number)
- 1-833-841-9362 (Passenger Car number)
Contact: for more information about the settlement
Brianna Iddings Mattox
[email protected]
Gregory Orehowsky
[email protected]