Dieselgate refueled

Carmakers still cheating, says US pollution chief

Inside The Lab That Smoked Out VW’s Emissions Scheme
I'm watching you VW. Source: Bloomberg/Getty

Christopher Grundler must surely haunt the nightmares of Volkswagen executives. As director of the Office of Transportation and Air Quality at the US Environmental Protection Agency, America’s main green regulator, he helped hunt down the German carmaker’s elaborate falsification of diesel emissions from its cars.

Nearly three years after the ensuing Dieselgate scandal broke, he says VW still has a lot to do, despite paying $15 billion (€12.8 billion) in fines and ordering a massive recall. “I don’t think the VW case is over,” he told Handelsblatt. “The big question is what they are doing about their corporate culture.”

The company is finding it difficult to change, and shake off Dieselgate. Just this month, the scandal roared back to life when Porsche, a VW subsidiary, recalled 60,000 vehicles after German authorities found emissions falsification devices in the engines of new cars.

“I am not naïve, I know it will take time to change corporate culture.”

Christopher Grundler, Environmental Protection Agency

Now Larry Thompson, Volkswagen’s US-mandated compliance monitor, has issued a report casting doubt on the “seriousness of the company’s will to change.” In it, he listed 32 areas in which improvement was still needed. VW sources told Handelsblatt the company has been given until mid-August to undertake further reform.

Mr. Grundler, the son of German emigrants to the United States, has been in close contact with Mr. Thompson. He thinks the rot goes deeper than just Volkswagen, and wants to find ways to avoid future scandals, above all by changing corporate culture.

The EPA already sends testers unannounced to American and overseas car companies to check cars and engines destined for the US market. As well as discussing new technologies with carmakers, the environmental officials pose questions about corporate culture: What are your company’s values? What controls have been put in place? How are staff trained?

“I am not naïve, I know it will take time to change corporate culture,” says Mr. Grundler. The purpose of the questions is to get companies to think differently, he adds. But can this happen at a time when a Trump-appointed leadership has brought the EPA closer to industry than it has ever been, with emissions standards watered down by the agency meant to protect the environment?

Mr. Grundler says the EPA still has teeth, and is not afraid to use them. It currently has cases pending against Fiat-Chrysler and Daimler, accused of using cheat software similar to that developed by Volkswagen. He won’t comment directly on those cases, but says EPA teams keep discovering more breaches of emissions rules. “When we go looking, we find,” he says.

Nonetheless, the original VW scandal still shocks the veteran environmental official: “The company’s behavior, and the scale of it, was unprecedented in the United States.” In particular, he criticizes VW’s initial response in 2015 – when it refused to acknowledge guilt and doubled down on its scheme – and the international scope of the Dieselgate manipulations.

In total, Volkswagen cheated on US emissions testing for six years, says Mr. Grundler, using their knowledge of the testing regime to build in specially designed cheat technologies. VW diesels were tweaked to pass emissions tests, but under real-life road conditions they spewed out up to 40 times the permitted levels of nitrogen oxide and other toxic pollutants.

To avoid any repetition of the cheating, the EPA has expanded its testing systems, so that tests are now far more difficult for carmakers to predict. In addition, testing under normal road conditions, outside the lab, has been introduced, and regular international consultation and sharing of information takes place.

Volkswagen has now repaired or bought back over 80 percent of the vehicles implicated by Dieselgate. No diesel-engine Volkswagens, Audis or Porsches are now sold in the United States, and the company is investing heavily in electric-powered vehicles. With EPA approval, however, BMW continues to sell diesel-engine cars in the US.

Mr. Grundler says it is unclear whether diesel has a future in America. “American car purchasers will be the ones to decide that,” he says. But he rejects the idea that diesel is needed to reach climate goals, pointing out that gasoline-engine emissions are constantly improving.

Astrid Dörner is an editor for Handelsblatt.To contact the author: adoerner@handelsblatt.com

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