Subaru said in a report to the government on Friday that mileage and emissions data for nearly 1,000 new cars were manipulated at one of its plants and that the wrongdoing may have started around 2002.
The report was submitted by Subaru President Yasuyuki Yoshinaga to Tetsuya Okuda, Director of the transport ministry’s Road Transport Bureau.
“I apologize from the bottom of my heart for causing so much concern and trouble,” Yoshinaga told a news conference after the report was submitted.
Yoshinaga vowed to enforce preventive measures. “This is a serious compliance issue. I deeply regret (what happened.)”
In the report to the ministry, Subaru said it examined available fuel economy test data from December 2012 to November 2017 and found 903 instances of data manipulation. The company also said employee interviews led the company to believe the practice went back further but it could not support this.
The data-rigging was conducted during final testing of new cars at Subaru’s Ota plant in Gunma Prefecture, on the orders of the head of the inspection staff, the carmaker said. The misconduct was continued by later employees.
Friday’s report cited inadequate communication and a lack of respect for norms, as well as insufficient internal rules. The carmaker plans to create a manual for the inspection process and step up oversight to prevent a recurrence.
Subaru said it did not believe a recall was necessary since its emissions standards are stricter than the relevant national rules. Exports to North America are not affected since the tests are conducted differently. The company is still examining whether exports to other locations might be affected by the data manipulation.
The Motor Industry Association (MIA) has welcomed the Productivity Commission’s draft report on a low-emissions economy, which was released on April 27.
David Crawford, chief executive officer of the MIA
David Crawford, chief executive officer of the MIA, says the documents contain important analysis and recommendations to stimulate an essential debate on measures to accelerate a reduction of New Zealand’s greenhouse gas emissions. “The new-vehicle sector welcomes the opportunity to participate in a discussion on measures that would be effective in achieving an acceleration of reduction in greenhouse gases,” he says.
Greenhouse gas emissions from transport are around 18.4 per cent of New Zealand’s total emissions. It’s the third largest sector behind energy at 22.5 per cent and agriculture with 47.9 per cent, according to 2015 figures as used by the Productivity Commission.
Crawford says: “To avoid distortions in long-term resource allocation, it’s important a low-emissions economy includes all gases and sectors. It’s time to have a discussion on the incorporation of agriculture into our regulatory approach to reduce greenhouse emissions as it will remove a current distortionary effect that places an unfair burden on the other sectors.
“When it comes to transport, New Zealand is a technology taker. How we leverage the importation of low-carbon technological innovations is important, especially given the high volume of old imported vehicles that are on average one to two generations behind technologies found in new vehicles.”
The MIA believes there’s scope to make better use of economic pricing signals to influence vehicle-purchasing decisions, especially those that make it easy for consumers to identify the relative fuel efficiency of models. Making it easier and more transparent for consumers to understand a vehicle’s greenhouse gas performance and associated cost is more likely to be successful in changing consumers purchasing patterns.
“Discussion on transport incentives and disincentives within the draft report are welcomed as it stimulates a healthy debate on what policy measures are best for New Zealand,” says Crawford.
Murray Sherwin, Chairman of Productivity Commission.
Agriculture is the largest source of emissions, primarily methane, in New Zealand. The second largest source is transport – particularly vehicles. These sources account for two-thirds of emissions, while forestry sequesters almost 30 per cent of the country’s gross emissions.
“Climate change is one of the most serious issues we face,” says Murray Sherwin, chairman of Productivity Commission. “How New Zealand responds to its international commitment to reducing GHG emissions will have major implications for our future.”
“The issues paper [on a low-emissions economy] gives us the opportunity to share what we know, and ask questions about important areas where more information and discussion is required.”
The inquiry aims to “identify options” for how New Zealand could reduce its domestic GHG emissions by moving towards a lower-emissions future. “Action to mitigate GHG emissions will require significant changes, which will have disruptive and potentially painful impacts on some businesses and households,” the issues report states.
“These changes mean the shift will be profound and widespread – transforming land use, the energy system, production methods and technology, regulatory frameworks and institutions, and business and political culture.”
Substantial and sustained reductions in global GHG emissions are required to limit rises in global temperatures and climate change.
Recently, New Zealand submitted its first nationally determined contribution under the Paris Agreement to reduce its emissions to 30 per cent below 2005 levels by 2030. The most long-term target, set in 2011, aims to cut them to 50 per cent below 1990 levels by 2050.
The commission says there are no technical barriers to generate more electricity from renewable sources. The relative cost and efficiency of renewables, such as wind power, make them a price-competitive option.
Wind generation could meet the increased demand from the uptake of electric vehicles (EVs) up to 2040.
Complementary technologies, particularly batteries, are also falling in price. New Zealand’s seasonal pattern of demand favours more use of wind than solar power.
Wind generation could meet the increased demand from the uptake of electric vehicles (EVs) up to 2040, with charging of EVs when there’s lower grid demand, such as late at night. Distributed generation and possible use of batteries to even out peak load, and of EVs as “batteries”, are likely to require more flexible pricing and network capabilities than now.
Current policies include the government targeting an increase in the proportion of renewable electricity to 90 per cent by 2025. After the metal industry, the next biggest source of industrial emissions comes from HFCs used to replace ozone-depleting substances in refrigeration and air-conditioning units.
Intervention to cut emissions in some parts of the economy can have flow-on effects for demand and opportunities to reduce emissions in other parts of the economy. For instance, converting the vehicle fleet to electricity would increase the demand for electricity generation and increase demand for new renewable sources for New Zealand to meet its mitigation targets.
Effects of EVs on the overall demand for renewable electricity, could, in turn be managed through timing the charging of EVs, and the possible use of their “batteries” to store electricity for sale back to the grid.
Lithium-ion battery costs have reduced by 73 per cent over the past seven years, making EVs cost-competitive with ICEs far earlier than most predictions.
Forests could be used to produce a renewable source of woody biomass to generate heat for industry or biofuels. Norske Skog Tasman and Z Energy recently investigated this for New Zealand. The evaluation concluded that, while technically feasible, using biomass to produce fuel was of doubtful commercial viability given “the current global economic and energy outlook”.
The viability of using biomass for energy hinges on low-value feedstocks, short transport lines and efficient digestion of biomass.
The commission will be investigate if some core policies could be used to cut emissions, such as direct regulation, market-based approaches, and support for innovation and technology. An example of a standard-based approach is 2007 Land Transport Rule on Vehicle Exhaust Emissions, which is enforced by the NZTA.
An example of regulation is France is banning the sale of petrol and diesel cars by 2040. Then there are market-based approaches, such as the Irish government linking vehicle registration and annual circulation taxes to CO2 emissions.
In New Zealand, the 2016 EVs Programme exempts light and heavy electric vehicles from RUC until they make up two per cent of their respective fleets.
As for supporting innovation, New Zealand may not need to develop many of the technologies required itself, but it needs to ensure they are able to be used effectively – for example, the country’s uptake of EVs in New Zealand illustrates this point.
Adaptive systems are also on the agenda. For example, lithium-ion battery costs have reduced by 73 per cent over the past seven years, making EVs cost-competitive with ICEs far earlier than most predictions.
One of the main weaknesses of manufacturing an EV battery is that it produces higher emissions than making an ICV.
THE PROS & CONS OF EVs – Productivity Commission
Substantially reduce emissions compared with internal combustion vehicles (ICVs).
EVs already used in New Zealand.
Similar road performance to ICVs.
Substantially cheaper to use than ICVs – equivalent to about 30c per litre.
Electricity grid already established.
Most of New Zealand’s electricity is from renewable energy.
Ability to charge EVs by plugging in at home.
Cost of EV batteries likely to drop over time.
Developing on-road charging infrastructure is expensive.
At present, smaller travel ranges than ICVs.
Manufacturing an EV battery produces higher emissions than making an ICV.
Charging EVs adds demand to the electricity grid.
It’s currently slower to recharge an EV than to refuel an ICV.
Disposal of EV batteries can cause negative environmental impacts.
Making cement from tyres
In June 2017, the government announced funding of $18.6 million to shift the heat source for making cement from coal to waste tyres. New Zealand generates about five million unwanted tyres a year, making them a viable ongoing industrial fuel source.
The substitution of rubber biofuel for coal by a major grant recipient, Golden Bay Cement – New Zealand’s fifth largest single emitter of GHGs – will cut emissions by 13,000 tonnes a year. The company will burn 3.1 million waste tyres a year – the equivalent of taking about 6,000 cars off the road.
Schmidt oversaw the company’s environmental and engineering office, until February 2015, where he oversaw emissions issues.
The sentence and fine for the executive were the maximum possible under a plea deal in August.
“It is my opinion that you are a key conspirator in this scheme to defraud the United States,” U.S. District Judge Sean Cox of Detroit told Schmidt in court.
“You saw this as your opportunity to shine … and climb the corporate ladder at VW.”
In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve U.S. charges that it installed secret software in vehicles to elude emissions tests.
U.S. prosecutors have charged eight current and former Volkswagen executives. Six of those remain at large.
The auto industry is still feeling the effects of Volkswagen’s diesel cheating.
Regulators around the world are currently investigating other carmakers for potential violations of diesel emissions rules.
On Wednesday, German prosecutors said they had begun an initial inquiry into BMW AG, as it is speculated that the automaker is selling a vehicle that emits up to seven times the allowed levels of smog-forming nitrogen oxides.
South Korea’s Ministry of Environment plans to enforce a combined fine of NZ$90.2 million on units of automakers BMW AG, Mercedes-Benz and Porsche citing violation of emission rules.
The BMW will be fine NZ$78 million for “falsifying” documents on emission test results and not obtaining approval for changes in emission-control components before their cars were sold, said the Ministry of Environment.
The Mercedes-Benz and Porsche units will be fined around NZ$10 million and NZ$2.2 million respectively for the same reasons.
The BMW unit said it is “faithfully cooperating” with the government on the investigation into certificate documentation errors, and will take necessary actions.
A few of the 200,000 cars that had been imported through customs between 2012-2017 had been declared for customs before approval was given or changes in components were reported, the Mercedez-Benz unit said.
Internal processes will be strengthened to stop such instances in future, it added.
A spokeswoman for the Porsche unit said the ministry’s measure will not have any effect on their business, as the emissions fine only involves component changes between 2010 and 2015, and all cars being sold now are properly certified.
A third of the 1.2 million cars manufactured by Volkswagen with devices to cheat emissions tests remain unfixed, two years after the scandal erupted.
VW admitted back in September 2015 that they had been using software to cheat diesel emission tests in the United States and has since paid out compensation to U.S. motorists but has refused to do so in Europe.
The British parliament’s Environmental Audit Committee said that Volkswagen had slowed the pace of its work in recent months and called on the transport ministry to take action.
“It is over two years since the VW emissions scandal was discovered, a third of vehicles have yet to be fixed and rates have slowed considerably,” said committee Chairwoman Mary Creagh, a lawmaker for the opposition Labour Party.
“The campaign will remain open for the foreseeable future but the 100 percent point can never be reached for the following reasons: Some vehicles will have been scrapped, some written off, some exported and some owners decline or never respond,” a spokesman said.
The European Union has proposed tougher car emission targets for carmakers in order to boost low-emission car production, including a fine system for exceeding carbon dioxide limits.
The EU’s proposed on Wednesday a 30 per cent reduction carbon-dioxide emissions cars and vans by 2030 compared with 2021 levels. It also sets a provisional goal of a 15 per cent reduction by 2025 to help ensure automakers start investments early.
The EU’s eagerness for legislation to accelerate the development of electric vehicles stems from the need to stay ahead of the times and not fall behind the likes of China, Japan and the United States.
“The competition is here,” Commission Vice President Maros Sefcovic said, citing the use of Chinese electric cars by Brussels taxis firms. “The car was invented in Europe and I believe it should be reinvented here.”
If carmakers breach the new rules, they face impending fines in the millions, with penalties fixed at 95 euros for every gram of CO2 above the limit and for each new vehicle registered in that year.
Inspired by Californian climate policy, the draft bill would allow carmakers to offset their overall target if the share of zero and low-emission vehicles in their fleet surpasses a benchmark set by regulators.
Naturally the plan faces criticism from countries with large automotive industries. German foreign minister, Sigmar Gabriel, warned on Tuesday that stricter emissions rules could cost growth and jobs.
“The current proposal is very aggressive when we consider the low and fragmented market penetration of alternatively-powered vehicles across Europe,” Erik Jonnaert, ACEA secretary general, said in a statement.
Greenhouse gas emissions are increasing in New Zealand and road transport has one of the highest emission rates.
According to the latest national report from the Ministry of the Environment and Statistics New Zealand, while agriculture makes up nearly half of NZ gross emissions, road transport has had one of the largest increases in emissions, with a 78 per cent increase since 1990.
The report discusses the state of the atmosphere as well as projections for the country’s climate and the factors that influence our ultraviolet light levels, carbon dioxide levels in the atmosphere have increased by 23 per cent since 1972.
According to secretary for the Environment, Vicky Robertson the most concerning change in New Zealand’s atmosphere is the unprecedented high levels of carbon dioxide, which are leading to increasing global temperatures and changes to our oceans, including rising sea levels and increasing ocean acidity.
“While New Zealand is not a large contributor of emissions globally, we are certainly affected locally and we need to act on what that means for us,” Ms Robertson said.
“The future impacts of climate change on our lives all depend on how fast global emissions are reduced and the extent to which our communities can adapt to change.
“Encouragingly, the report shows international efforts have been successful in phasing out the use of ozone-depleting substances. This has led to gradual recovery of the ozone hole.”
Meanwhile, global gross greenhouse gas emissions have risen by 51 per cent from 1990 to 2013 and gross greenhouse gas emissions have risen 24 per cent from 1990 to 2015.
New Zealand has experienced a 1°C temperature increase since 1909 and the country’s glaciers have decreased by a quarter of their volume since 1977.
Sea levels have risen 14–22cm at four main New Zealand ports since 1916
The global production of ozone-depleting substances has dropped 98 per cent from 1986 to 2015.
“We have enough data on measures like annual average temperature to confidently say New Zealand’s climate is warming. That is showing up, for example, in the significant loss of our glacier volume,” said government statistician Liz MacPherson.
“New Zealand has naturally variable weather, making trends in some areas difficult to determine. We need longer-term data to establish whether changes are persisting.”
“National and international data collections on the atmosphere and climate are increasingly comprehensive but there are still some things we don’t know at this time, in particular the full impact of climate change on our biodiversity, cultural values and the economy,” MacPherson said.
The NZTA has embarked on an emissions testing project with two Auckland consultancies, and has made a call for diesel vehicles to take part.
A 2012 report for the NZTA found that harmful emissions from vehicles cause 256 premature deaths (with social costs of $934 million) annually in New Zealand.
The research is a joint effort between Emission Impossible Ltd and AirQuality Ltd, and will be using a portable emissions measurement system (PEMS) to test real-world fuel consumption and tailpipe emissions from vehicles – a first in New Zealand for on-road emissions testing.
The project is an NZ Transport Agency research project which aims to improve our understanding of real world emissions and fuel consumption in New Zealand.
The project is looking for vehicles built to a range of emission standards, including light duty petrol and diesel vehicles and to heavy duty trucks.
A list of the vehicle types the project is looking to test.
Testing is scheduled to be undertaken in Auckland over October and November this year.
The project is one of several NZTA initiatives that seeks to reduce emissions in, others including subsidies for electric vehicles, the emissions trading scheme and the Heavy Vehicle Fuel Efficiency Programme, launched 2012.
Interest in the emissions testing project can be expressed via phone or email to Gerda Kuschel at Emission Impossible on 09 629 1435, or email at email@example.com.