As diesel comes under new EU pressure, VW bleeds money

August 7, 2016

The European Union has struck two important blows against diesel-fuelled transport in decisions announced on succeeding days in July. At the same time, the slow unravelling of the international VW diesel emissions crisis continues to dog the automotive giant.

Also exposed are the extraordinary lengths to which corporations will go to avoid environmentally sustainable production.

On July 19, the EU competition commissioner fined Daimler, Volvo/Renault and two other truck manufacturers a record €2.9 billion (about A$4.3 billion). It was punishment for 14 years of price collusion and passing onto customers the costs of emissions rules.

The illegal cartel — which covered 90% of the European truck market — did not corrupt emissions testing, as VW did with its diesel cars. It colluded on delaying the introduction of emissions control technology while raising truck prices.

Ironically, the cartel operation only came to light when MAN, a VW subsidiary, voluntarily, blew the whistle — thus avoiding a €1.2 billion ($1.77 billion) fine.

The day after the announcement, the EU released the European Strategy for a Low-Emission Mobility, which flags new diesel emissions standards.

Cars have been subject to strict emissions controls (which manufacturers dodged), but trucks have been largely spared — until now. “The EU must take action on the way to reduce emissions from heavy duty vehicles,” the draft strategy states.

“Transport contributes one third to the Carbon Footprint in Europe, it is the main source of air pollution in the cities,” the paper says.

The EU wants to move transport sector climate-impacting emissions towards zero by 2050.

The July 21 Die Welt commented that while the coincidence of the cartel fine announcement occurring immediately before the paper's presentation “is unclear”, it certainly “caught the producers with their pants down”.

“It has not been an easy week for Europe's truck manufacturers such as MAN and Daimler,” Die Welt said.

Meanwhile, VW's diesel-emissions scandal continues to bleed money. Die Welt reported on July 21 that new US court cases raise the scandal's cost estimates from €25 billion to €35 billion in that country. But according to Maryland's attorney-general further actions from states might cost VW hundreds of billions more.

VW continues to insist that the fraudulent software installed in its diesel cars was the decision of low level staff.

However, a different picture has emerged from the 1 million documents obtained by the New York state Prosecutor General. VW's software was “part of their normal daily business,” according to the Prosecutor General.

When the new court complaints became public on July 19, Volkswagen responded that the allegations were “not new in essence”. Die Welt quoted the group as saying that the new actions are “unfortunate”.

Unfortunate indeed.

Like the article? Subscribe to Green Left now! You can also like us on Facebook and follow us on Twitter.

Issue