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E.U. Threatens to Sue 4 Countries Where VW Sold Polluting Cars

By JAMES KANTER and JACK EWINGDEC. 8, 2016
http://www.nytimes.com/2016/12/08/business/international/vw-emissions-eu.html

BRUSSELS — European Union officials threatened on Thursday to sue four countries, including Germany and Britain, for allowing Volkswagen and other carmakers to sell vehicles that were built to cheat on emissions tests, an apparent attempt by the bloc to catch up after facing criticism for a lax response to the yearlong diesel scandal.

The deception by Volkswagen exposed serious shortcomings in the way the European Union enforces pollution rules, as well as a lack of penalties for violators. While the company has agreed to pay almost $15 billion to settle claims with owners of its diesel cars in the United States, there have been almost no financial consequences for the company in Europe.

European Union law uses almost the same language as rules in the United States to ban carmakers from installing software intended to deceive regulators on emissions. But the 28-nation bloc has no counterpart to the Environmental Protection Agency to police the regulations. Enforcement is left to member states, which also determine the penalties, and there is no system for mandatory Europewide recalls of defective vehicles.

On Thursday, the European Commission, the bloc’s executive agency, said that four countries — Britain, Germany, Luxembourg and Spain — had approved Volkswagen cars but failed to punish the company for installing software that let the vehicles pass emissions tests in the lab while exceeding legal levels of pollution on the road.

Britain and Germany also broke the law by refusing to share information their national authorities had gathered while investigating “irregularities” concerning nitrogen oxide emissions from diesel cars made by Volkswagen and other manufacturers, the commission said.

It said the Czech Republic, Greece and Lithuania still needed to pass legislation making it possible to penalize automakers for using such cheating methods.

“Abiding by the law is first and foremost the duty of car manufacturers,” Elzbieta Bienkowska, the European commissioner for industry, said in a statement. “But national authorities across the E.U. must ensure that car manufacturers actually comply with the law.”

In an admission that the region does not have firm regulations concerning vehicle emissions, Ms. Bienkowska encouraged European authorities and legislators to introduce greater oversight and to make the system “more robust.”

GRAPHIC
How Volkswagen Is Grappling With Its Diesel Scandal
Volkswagen has admitted that 11 million of its vehicles were equipped with software that was used to cheat on emissions tests. The company is now contending with the fallout.
OPEN GRAPHIC

European rules give carmakers much wider leeway than in the United States to turn down emissions controls to protect the engine. Studies by the German and British governments have found that almost all carmakers took liberal advantage of this loophole. As a result, cars produce far more pollutants than they are supposed to during normal driving, as opposed to official laboratory tests.

In the United States, however, carmakers must obtain permission from regulators to dial back pollution controls under certain conditions, such as cold weather, when the systems are prone to clogging.

Lax European rules have also led to high pollution levels in many urban areas even though emissions standards have, in theory, become tighter. Paris has restricted vehicle traffic in recent days because of record levels of fine, cancer-causing soot particles produced by cars and trucks.

The commission gave the countries two months to respond to Thursday’s announcement, but such cases can take a long time to play out. Nations can seek to change laws and practices, using lengthy negotiations with Brussels to avoid the prospect of being fined at the Court of Justice of the European Union, the bloc’s highest tribunal.

Enforcement varies widely. In the Netherlands and Denmark, violators can be jailed. But in Austria, the maximum penalty is a fine of a few thousand euros, equivalent to a few thousand dollars. When the European Commission asked member countries in October 2015 how they enforced emissions rules, 11 of the 28, including Britain, France and Poland, did not bother to reply.

Environmental groups also note that a carmaker needs to obtain certification of emissions compliance in only one country to be able to sell the vehicle anywhere in the 28-member region.

There is evidence that carmakers seek out countries where scrutiny is less stringent: About one-third of new vehicles are certified in Germany, Europe’s biggest car producer, while nearly one-fifth are certified in Luxembourg, which has no auto manufacturing.

Bas Eickhout, a Dutch member of the European Parliament who is part of a committee investigating the emissions scandal, accused the European Commission of dragging its heels.

“After months of delays, and years of deception of consumers, this action is overdue,” Mr. Eickhout said in a statement. “Today’s announcement also proves that the commission does indeed have the ability to take action against member states, something they have repeatedly denied in the past.”

James Kanter reported from Brussels, and Jack Ewing from Frankfurt.

A version of this article appears in print on December 9, 2016, on page B3 of the New York edition with the headline: E.U. Says It May Sue 4 Countries for Letting VW Sell Polluting Vehicles. Order Reprints| Today's Paper|Subscribe
http://www.nytimes.com/2016/12/08/business/international/vw-emissions-eu.html