Gasolinegate?

EU expands emissions probe of German carmakers

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Every one a potential fine. Source: Reuters

How could Dieselgate get any worse for German carmakers? If it also becomes Gasolinegate.

That’s the prospect facing Volkswagen, BMW, Daimler, Audi and Porsche – the so-called Circle of Five – after the European Commission said it will include gasoline engines in its new investigation into the carmakers’ alleged collusion to block emissions-reducing technology.

The EU’s executive arm said it would assess whether firms met to discuss selective catalytic reduction control (SCR) systems, which reduce nitrogen oxide emissions in diesel cars, and “otto” filters, which reduce particle emissions in gasoline vehicles. The investigation seeks to determine if they then colluded to limit the development and implementation of these emissions-control systems. The carmakers have long had the technology, but implementing it would have added weight to their cars, making them more inefficient.

“If proven, this collusion may have denied consumers the opportunity to buy less polluting cars, despite the technology being available to the manufacturers,” Margrethe Vestager, commissioner for competition, said in a statement.

More fines

The announcement in Brussels opens up the possibility of another wave of heavy fines for the carmakers, which have already paid out billions in fines and settlements and face further criminal prosecutions and civil lawsuits in Germany and other countries. The extension of the probe to gasoline engines significantly increases the number of vehicles subject to potential fines.

The new announcement comes nearly a year after EU officials carried out inspections of car manufacturers in Germany on suspicion of anti-competitive practices. More recently, documents seized by German antitrust authorities appeared to provide further evidence of collusion on diesel emissions cheating.

The announcement also acknowledged, however, that “at this stage, the Commission has no indications that the parties coordinated with each other in relation to the use of illegal defeat devices to cheat regulatory testing.” VW and Daimler admitted to using such devices.

The Commission added that its investigation is limited solely to possible collusion on blocking emissions technology in violation of EU treaties. Sources in Brussels suggest its aim is to increase pressure on BMW, which continues to deny that it used emissions-cheating devices. VW and Daimler pledged full cooperation as “crown witnesses” in order to mitigate eventual penalties. BMW has been notably less helpful in the investigation.

Handelsblatt reported last week that documents from the Dieselgate investigation into VW indicate carmakers agreed to limit the size of tanks containing the reagent needed to reduce nitrogen dioxide emissions, thus reducing weight. So-called defeat devices were allegedly installed in the SCRs to hide the fact the supply was insufficient.

Till Hoppe is a Brussels correspondent for Handelsblatt. Martin Murphy covers the auto industry and Volker Votsmeier heads the investigative team for Handelsblatt. Darrell Delamaide adapted this story into English for Handelsblatt Global. To contact the authors: hoppe@handelsblatt.com, votsmeier@handelsblatt.com and murphy@handelsblatt.com.

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