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Hyundai, Kia Hit With Record-Setting $300M Fine From EPA

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By Mark Wilson, Esq. on November 06, 2014 8:36 AM

The largest Clean Air Act fine in history will send $300 million from Hyundai and Kia up in smoke.

Pause for laughter.

Hyundai and Kia gave the EPA incorrect certifications for the greenhouse gas emissions of 1.2 million cars in 2012 and 2013. How much is that in greenhouse gas? About 4.75 million metric tons more than what the auto makers told the EPA the cars emitted, according to an EPA press release.

The Largest Clean Air Act Settlement Ever

As part of their settlement with the government, they also forfeited the same amount in federal greenhouse gas emission credits, worth about $200 million. (That, coupled with $100 million in civil fines, amounts to $300 million.) Car makers are allowed to take greenhouse gas emission credits for manufacturing cars that reduce fuel consumption.

So what does $200 million in greenhouse gas emission credits look like? Glad you asked: 4.75 million greenhouse gas credits is about the same amount of emissions you'd get from powering 433,000 homes for a year, according to the press release.

It's not clear if the car companies' acts were negligent or intentional. The release says only that the designs of several models of cars submitted to the EPA for certification differed from the final product, leading to underestimations of the cars' fuel efficiency in the EPA certifications. The EPA discovered the discrepancies during a routine audit.

But There's More!

In addition to pecuniary penalties, the settlement requires Hyundai and Kia to undertake corrective measures to prevent future violations. They're also being subjected to auditing until the corrective measures are completed. The remediation will cost about $50 million. Of the $100 million civil penalty, about $6.3 million will go to the California Air Resources Board, which is also a party.

The previous "largest fine in history" (under the Clean Air Act, anyway) was levied against Alpha Natural Resources Inc., a coal company, in March. The EPA fined that company $27.5 million for illegally discharging toxic coal-processing byproducts into rivers and streams.

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