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EPA,Department of Justice and the State of California Clean Air Act Settlement with Kohler Co. will Reduce Emissions by 3,600 Tons

Settlement also requires Kohler to pay a $20 million penalty

WASHINGTON (January 30, 2020) — Today, the Environmental Protection Agency (EPA), Department of Justice and the state of California announced a settlement with Kohler Co. (Kohler) resolving alleged violations of the Clean Air Act and California law. Under the terms of the settlement, Kohler will retire unlawfully generated hydrocarbon (HC) and oxides of nitrogen (NOx) emission credits. Retirement of these credits will result in approximately 3,600 tons of HC and NOx emissions reductions. In addition, the company will pay a $20 million civil penalty.

The violations pertain to Kohler’s manufacture and sale of millions of small, nonroad, nonhandheld spark-ignition (small SI) engines that did not conform to the certification applications Kohler was required to submit to the EPA and the California Air Resources Board (CARB). More than 144,000 of the engines were also equipped with a fueling strategy designed to cheat emissions testing standards (commonly referred to as a “defeat device”). Small SI engines are used in lawn mowers, ride-on mowers, commercial landscaping equipment, and generators.

“Today’s settlement will reduce air pollutants by 3,600 tons and require Kohler to implement procedures to help ensure future compliance with environmental regulations,” said EPA Assistant Administrator for Enforcement and Compliance Assurance Susan Bodine. “The settlement also sends a clear message that EPA will investigate and hold responsible those who seek to illegally circumvent engine emission requirements.”

“One of EPA’s top priorities is preventing vehicle and engine manufacturers from selling products that circumvent emissions requirements,” said EPA Pacific Southwest Regional Administrator Mike Stoker. “Today’s precedent setting settlement sends an unequivocal message to all types of engine manufacturers—from manufacturers of heavy-duty highway engines to manufacturers of small nonroad engines like those at issue in this settlement—that EPA will vigorously investigate and bring companies into compliance to reduce pollution and protect public health.”

“Today’s settlement holds Kohler accountable for flouting federal law, and evens the playing field for others in the regulated community who invest in compliance programs designed to prevent illegal and harmful emissions to the air,” said Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division. “This settlement is the result of the Justice Department’s and the EPA’s aggressive investigation of actors who thwart the emissions testing regime, and recognizes that Kohler self-reported some violations and cooperated with the government’s investigation.”

“We applaud the significant results of the work done by the partnership of the DOJ, EPA and CARB in this case,” said U.S. Attorney David L. Anderson of the Northern District of California. “With this successful state and federal cooperation, we can now breathe a sigh of relief that our air quality is being protected. Once again, the results have proved that we all are safer, and we are all better off, when we work together.”

“Kohler voluntarily disclosed some of the violations, mitigated the emissions, and agreed to new procedures to ensure future compliance,” said CARB Executive Officer Richard W. Corey. “In addition, Kohler will be funding an innovative program to supply free ultra-clean solar-powered generators to low-income Californians who live in areas that are subject to more frequent utility power outages. The solar-powered generators are capable of running refrigerators or lights, helping ease the impacts of power outages to those affected.”

In December 2015, Kohler self-disclosed to EPA and the CARB that it had been using the wrong test cycle to test many of its small SI engines. EPA and CARB’s subsequent investigation revealed that millions of additional small SI engines were noncompliant.

Examples of additional noncompliance that was discovered include:



Not fully complying with the test procedures Kohler certified to;



Failing to comply with the applicable emission limits;



Failing to age emission-related components for deterioration factor testing;



Failing to disclose auxiliary emission control devices and adjustable parameters equipped on the engines;



Making changes to production engines without amending the certification application covering those engines; and



Failing to comply with the applicable production line testing requirements.



The defeat device Kohler developed and deployed on at least 144,000 electronic fuel-injected small SI engines significantly reduced NOx emissions during certification testing when compared to real-world operation (i.e., ran rich during certification testing but lean during in-use operation). The fueling strategy in the calibration was not disclosed in Kohler’s certification applications and Kohler was aware that the fueling strategy was designed to reduce NOx emissions during certification testing even though the certification results were not representative of real-world operation.

In addition to paying a $20 million civil penalty and retiring HC and NOx emission credits, Kohler has already taken the following steps to prevent future violations. The company has established an independent environmental regulatory compliance team, conducts annual compliance training for engine division employees, and maintains an employee code of conduct and an ethics helpline for employees to report noncompliance. Kohler will convene semiannual meetings with all engine division managers and regulatory personnel to discuss compliance with applicable regulatory requirements and the settlement. Kohler must also conduct annual audits and implement an emissions testing validation plan that includes third-party observation and emissions verification testing. Kohler estimates the compliance measures will cost approximately $3.7 million.

In a separate settlement agreement resolving California-only claims, Kohler will pay an additional $200,000 civil penalty and will fund a program that will supply $1.8 million worth of solar-battery generators to low-income residents in California that live in areas subject to public safety power shutoffs to mitigate wildfire risk.

The proposed settlements, lodged in the U.S. District Court for the Northern District of California, are subject to final court approval. The settlement among the United States, California and Kohler is also subject to a 30-day public comment period. Information on submitting comments is available at https://www.justice.gov/enrd/consent-decrees.

To learn more about this settlement, visit https://www.epa.gov/enforcement/kohler-co-clean-air-act-civil-settlement-information-sheet.

Members of the public can help protect our environment by identifying and reporting environmental violations. Learn more here: https://www.epa.gov/enforcement/report-environmental-violation-general-information.