Emis­sions probe widens to Re­nault, Fiat

The Globe and Mail (Prairie Edition) - - OPINION - GILLES GUIL­LAUME SI­MON CARRAUD AG­NIESZKA FLAK

French clam­p­down on Re­nault fol­lows al­le­ga­tions from U.S. EPA that Fiat Chrysler used il­le­gal soft­ware to hide ex­cess emis­sions

Euro­pean car mak­ers were drawn into a widen­ing probe of diesel-emis­sions test­ing on Fri­day, with French pros­e­cu­tors ex­am­in­ing

Re­nault SA and Bri­tish au­thorit

ies seek­ing an­swers from Fiat Chrysler Au­to­mo­biles NV.

Volk­swa­gen’s ad­mis­sion that some of its diesel ve­hi­cles were fit­ted with soft­ware de­signed to hide their true level of emis­sions has high­lighted that most cars spew out far higher lev­els of health-threat­en­ing ni­tro­gen ox­ide (NOx) in ev­ery­day driv­ing con­di­tions than in lab­o­ra­tory tests.

Shares in Re­nault fell more than 4 per cent to their low­est level in around a month af­ter a source at the Paris pros­e­cu­tor’s of­fice said it had launched a ju­di­cial in­ves­ti­ga­tion into pos­si­ble cheat­ing on ex­haust emis­sions at the French car maker.

Re­nault said it re­spected all laws con­cern­ing ex­haust emis­sions, adding that its ve­hi­cles did not have soft­ware en­abling them to cheat on emis­sions stan­dards.

The French clam­p­down fol­lows al­le­ga­tions by the U.S. En­vi­ron­men­tal Pro­tec­tion Agency (EPA) on Thurs­day that Fiat Chrysler, like Volk­swa­gen, was po­ten­tially us­ing il­le­gal soft­ware to hide ex­cess diesel emis­sions.

No man­u­fac­turer other than VW has been found to have in­stalled soft­ware de­signed solely for the pur­pose of cir­cum­vent­ing emis­sions tests, but reg­u­la­tors in Bri­tain and Ger­many say that car mak­ers have made ex­ten­sive use of a “ther­mal win­dow” that al­lows man­u­fac­tur­ers to turn down pol­lu­tion-con­trol sys­tems for the sake of pro­tect­ing an en­gine.

Ger­man in­ves­ti­ga­tors said they had found that some car mak­ers de­fined the “ther­mal win­dow” in such a way that ex­haust treat­ment sys­tems were switched off most of the time.

Reg­u­la­tors across the globe are now seek­ing to de­ter­mine when a “ther­mal win­dow” en­gine man­age­ment sys­tem be­comes an il­le­gal “de­feat de­vice.”

Un­der U.S. law, there is an obli­ga­tion for man­u­fac­tur­ers to de­clare their emis­sion con­trol strat­egy. This has been the ba­sis for EPA ac­tion against Volk­swa­gen and now against Fiat Chrysler.

The Euro­pean Com­mis­sion said it had been in­formed about the “wor­ry­ing” EPA al­le­ga­tions and would look at what im­pli­ca­tions they might have for the Euro­pean Union.

The Euro­pean Com­mis­sion has lim­ited pow­ers to force pol­lut­ing cars off Euro­pean roads, since ve­hi­cle li­cens­ing in the Euro­pean Union is still con­ducted on a na­tional level.

But Euro­pean reg­u­la­tors have in­tro­duced a more strin­gent test­ing regime de­signed to re­flect ev­ery­day driv­ing con­di­tions in the wake of the VW scan­dal that will take ef­fect this year.

Bri­tain on Fri­day said it was ur­gently seek­ing in­for­ma­tion from the EPA over its al­le­ga­tion that Fiat Chrysler used hid­den soft­ware to al­low ex­cess diesel emis­sions to go un­de­tected.

“We are ur­gently seek­ing fur­ther in­for­ma­tion from the U.S. En­vi­ron­men­tal Pro­tec­tion Agency … and will also be seek­ing in­for­ma­tion from the man­u­fac­turer re­gard­ing ve­hi­cles in the U.K. mar­ket,” a spokesman at the Depart­ment for Trans­port said.

Fiat Chrysler chief ex­ec­u­tive Ser­gio Mar­chionne an­grily re­jected the al­le­ga­tions on Thurs­day, say­ing there was no wrong­do­ing and Fiat never at­tempted to cheat emis­sions rules with soft­ware de­tect­ing a ve­hi­cle was in test mode.

Fiat’s volatile shares surged 7 per cent in Europe, af­ter fall­ing sharply in U.S. trad­ing on Thurs­day, and were trad­ing 5 per cent higher in the af­ter­noon.

The auto maker’s stock has risen by around 70 per cent this year since Don­ald Trump’s elec- tion, on ex­pec­ta­tions of less strin­gent emis­sions poli­cies un­der the next U.S. ad­min­is­tra­tion.

But car mak­ers con­tinue to face scru­tiny in Europe. Ear­lier this week the Euro­pean Com­mis­sion called on Italy to co-op­er­ate with a Ger­man probe in­ves­ti­gat­ing al­le­ga­tions that the Fiat 500X, Fiat Doblo and Jeep Rene­gade mod­els were equipped with il­le­gal cheat­ing soft­ware. Fiat re­jects the al­le­ga­tions.

Ger­many’s mo­tor ve­hi­cle au­thor­ity KBA be­gan test­ing the ve­hi­cles of sev­eral for­eign man­u­fac­tur­ers as part of a blan­ket probe of ve­hi­cle emis­sions af­ter the Volk­swa­gen scan­dal first came to light.

And the coun­try’s trans­port min­istry asked the Euro­pean Com­mis­sion to in­ves­ti­gate Fiat’s emis­sions af­ter be­ing stonewalled by Ital­ian au­thor­i­ties.

Fiat Chrysler (FCAU) Close: $9.73 (U.S.), down 23¢

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