If readers have been wondering when GHG regulation would truly feel real, EPA may have delivered the answer yesterday, with its announcement of a $350 million settlement with Hyundai and Kia over allegations of violations of EPA’s GHG tailpipe standards. The details may matter only to those subject to the tailpipe rule, but they do demonstrate that EPA is not merely regulating GHG emissions for show; they genuinely mean it and are getting down in the weeds to ensuring compliance.
The specific allegation in the complaint was basically that Hyundai and Kia understated the “road load force” – essentially the resistance faced by a vehicle – on a number of different models, thus overestimating fuel efficiency and underestimating GHG emissions. My favorite allegation is that
Hyundai and Kia relied predominantly on data gathered when test vehicles were aided by a tailwind.
The costs to Hyundai and Kia are not trivial. They will pay a $100 million penalty, largest in CAA history. They will forfeit $200 million in GHG emission credits – basically giving up the economic benefit of noncompliance. Finally, the cost of the remedial program to ensure that the violations do not recur will be approximately $50 million.
Yup. GHG regulation has arrived.