Students:

Andreia Contreiras
Mateusz Krawczyski
Yen Hai Pham

Course: Sustainable Development in European Countries

Volkswagen emissions
scandal explained
Overview of the scandal
In September 2015, the Environmental Protection Agency (EPA) found out
that many Volkswagen cars had software in diesel engines that could detect
when they were being tested, changing the performance accordingly to
improve results. When not being tested, the cars would emit up to 40 times
the allowable levels of pollution. Therefore, EPA issued a notice of violation of
the Clean Air Act to German automaker Volkswagen Group.
The EPA's findings cover 482,000 cars in the US only, including the VWmanufactured Audi A3, and the VW models Jetta, Beetle, Golf and Passat. But
VW has admitted that about 11 million cars worldwide, including eight million
in Europe, are using this so-called "defeat device". The company has also
been accused by the EPA of modifying software on the 3-litre-diesel engines
in some Porsche and Audi as well as VW models. VW has denied the claims,
which affect at least 10,000 vehicles. Later on, in November, VW said it had
found "irregularities" in tests to measure carbon dioxide emissions
levels that could affect about 800,000 cars in Europe - including petrol
vehicles.
Company description
Volkswagen is a German car manufacturer headquartered in Wolfsburg,
Lower Saxony, Germany. Established in 1937, Volkswagen is the top-selling
and namesake marque of the Volkswagen Group, the holding company
created in 1975, and is now the second-largest automaker in the world. Their
cars are sold worldwide in 153 countries. In 1934, Ferdinand Porsche
presented a German government project of new car legendary Beetle. It
was response for Hitlers expectations, who demanded a cheap and family
car. Then cornerstone for building a factory was held. Hitler christened this
vehicle as a German folks car.
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Progressively, thanks to quite accessible price of Beetle as well as developing

new models (especially Transporter) in further years, Volkswagen advanced
to bunch of the largest manufacturers in Europe. In 1973 the premiere of
Passat took place. The successor of Beetle became Golf. A little bit smaller
Polo had its debut on 1975. In 1997 Volkswagen de Mexico started a serial
production of New Beetle remembrance of Beetle. In USA this model
caused a real beetlemania just like forty years before. Beetle was produced
in Wolfsburg since 1945 to 1977, while in Mexico until 2003. In total, 22
millions of this model was created.
Explanation on Volkswagens defeat device
On 18 September 2015, the United States Environmental Protection Agency
(EPA) issued a notice of violation of the Clean Air Act (CAA) to Volkswagen
Group, after it was discovered that the company had intentionally
programmed Turbocharged Direct Injection (TDI) diesel engines to activate
certain emissions controls only during laboratory emissions testing. The
program caused the vehicles' nitrogen oxide (NO x) output to meet US
standards during regulatory testing, but emit up to 40 times more NO x in
reality especially for the EA 189 engine. Since their system was not able to
match low-usage of fuel and low-emissions of NO x in the same time, they
programmed the scheme to provide low emissions only during test, and after
that the system would switch emissions to high level in real life in order to
consumers use less fuel (see Appendix 1). System knew exactly when the
test time was. Sensors and electronic components in modern vehicles are
capable of 'detecting' the start of an emissions test process in the laboratory
(for example based on acceleration sensors or not-driven/not-rotating
wheels). The newspaper Der Spiegel reported that at least 30 people at
management level in VW knew about the cheating for years; VW denies this.
Group of scientist from University of Western Virginia made a research
regarding releasing pollution to environment. They examined three
Volkswagen cars with diesel engine: Passat, Jetta and BMW X5. All three
vehicles were already certificated as clean and harmless. Two professors and
two students started emission tests of three above mentioned cars in driving
condition in the beginning of 2014, using portable measurement system of
exhaust emission, what allowed to gather real data regarding driving in real
world and comparison this with data coming from laboratory tests. Models
Jetta and BMW have been driven for 2400 kilometers and Passat even 3200
kilometers (almost all US West Coast). It occurred, that level of emission of
toxic substance remarkably overstepped European and American legal limits.
One of the team members Professor Arvind Thiruvengadam, claimed: We
had made so much tests, that it was impossible to make the mistake again
and again. They made a conclusion that the manipulation required more
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effort than only adding some code to the engine software, as the code also
had to be validated. The West Virginia scientists did not identify the failure
device, but they reported their findings in a study they presented directly to
the EPA in May 2014.
Influence of the scandal
Volkswagen put this programming in about eleven million cars worldwide.
The most affected countries were: Germany (2.800.000), United Kingdom
(1.200.000), France (984.064), Belgium and United States (500.000 each) as
we can see in the graphic below from International Business Times (see
Appendix 2).
Environmental and health consequences
The scandal raised awareness over the higher levels of pollution being
emitted by all vehicles built by a wide range of car makers, which under real
world driving conditions are prone to exceed legal emission limits.
According to Scientific American EPA now suspects that these cars
emitted 10 to 40 times more nitrogen oxidea pollutant that can harm
human healththan standards allow. Many news organizations were quick to
jump on this number. The Guardian ran its own analysis, claiming that the
scandal may have caused nearly one million extra metric tons of pollution
yearly. But experts remain skeptical.
Still, experts agree that nitrogen oxide is a nasty pollutant. Once released
into the air it quickly converts into nitrogen dioxide and then absorbs
sunlight to transform into the yellow-brown haze that blankets cities. It is this
smog that can exacerbate dozens of respiratory problems like asthma,
bronchitis and emphysema. Nitrogen oxides also amplify the effect of fine
particulate soot that causes heart problem.
Also, it can be washed into the ground in the form of acid rain, which can kill
plants and animals. Once the damage is done there is no antidote, says
Yiannis Levendis, an engineering professor at North-eastern University who
focuses on diesel emissions.
Governmental/ NGO reactions
The issue with Volkswagen (VW) cheating on emissions test has resulted in
an increase in political pressure. EU Commission has requested for responses
from VW upon this scandal.

The Commission invites Volkswagen to speed up its internal investigation to

clarify without delay what kind of CO2 emissions irregularities were found,
what has caused them, which cars are affected, where they were registered,
and what measures the group will undertake to remedy the situation, said
spokeswoman Lucia Caudet.
The EU Commission has urged all member states to investigate on how many
cars have been using the illegal software to cheat the emissions tests in light
of VW scandal. EU regulators said they have been in contact with Volkswagen
and US authorities, and they require all member states to enforce rigorously
the relevant laws. In addition, EU is on its process to revamp a new testing
procedure, bring the cars out of the lab and on to the actual road. This
means stunts like taping over the cracks in doors and removing side mirrors
in order to boost ratings will no longer be allowed. The new procedure is
planned to be applied on several cars starting from 2017.
Furthermore, national European regulators have also given various reactions
towards the scandal, which according to a Business Insider journalist as
European ministers have been climbing over each other to express their
outrage. Some of these reactions can be found below:
Italy: Environmental Minister Gian Luca Galettii has asked VW for
evidence that it has not tampered with its Italian-sold cars and has
said that otherwise it should recall the vehicles and stop selling them
in Italy.
Britain: Britains transport minister said the government would work
with vehicle manufacturers to ensure that the use of emissionscheating software was not being used widely in the industry.
Germany: Germanys transport ministry said it would send a factfinding committee to Volkswagen this week. The committee is to speak
with executives at Volkswagens headquarters in Wolfsburg and
request access to documents, the ministry said in a statement.
France: France will carry out testing to establish whether vehicles on its
roads are equipped with banned software of the kind used by
Volkswagen in the United States to trick emissions tests, the countrys
environment minister.
On the other hand, NGOs have pointed out the defects in Europes car tests
for a long time before this scandal.
This widening of the VW scandal is shocking but it doesnt come as a
surprise, said Monique Goyens, director general of BEUC, the European
consumer organization. It sadly confirms what we have said since a long
time. The whole testing system in Europe is flawed because there is no room
for independent testing and there is also no obligation to make real life
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testing, on-the-road testing. To make things worse, this scandal has brought
Volkswagen to the list of most-hated companies by NGOs in UK, followed by
Shell and several other oil and gas companies.
Reactions from automotive industry
The revelation of VWs illegal act has influenced largely on Germany
automakers and auto industry in general. Most diesel car manufacturers
have been questioned about their compliance to standard testing
procedures. Soon after the controversy was publicized, these competitor
automakers have announced their reactions as below.
Toyota: Toyota does not engage in any practice that would seek to
enhance emissions performance of its engines during regulated
emissions testing or homologation cycles, nor does it use any
practice that would make engine performance different during these
tests."
PSA Peugeot Citroen: "PSA's Research & Development Department
reaffirms that PSA complies with the approval procedures in effect in
all countries where it operates, and that engine settings, assuming
the same conditions of use, are identical whether for approval
procedures or in real life.
Daimler: "We heard of the EPA's [US Environmental Protection
Agency] accusations against VW from the press. The issue
described by the press does not apply to Mercedes-Benz Cars."
Renault: "Renault complies with all regulations and legislation for
the markets in which it operates. Its vehicles are not equipped with
defeat devices designed to alter the results of regulatory emissions
tests.
These companies might have to apply new test standards from the
governmental organizations, but up to now, this is indeed their opportunity
to gain customer trust over VW in the competition. On the other hand, this
scandal also raised a question over whether consumers would lose belief in
such so-called green technologies. Tesla Motors founder, Elon Musk, takes
this issue to a different aspect: What Volkswagen is really showing is that
weve reached the limit of whats possible with diesel and gasoline. The time
has come to move to a new generation of technology. Musk was of course
referring to EV (electric vehicles) and the prospects of this area.
Volkswagen responses to the controversy
The VW group's chief executive at the time, Martin Winterkorn, said his
company had "broken the trust of our customers and the public". Mr
Winterkorn resigned as a direct result of the scandal and was replaced by
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Matthias Mueller, the former boss of Porsche. VW has set aside 6.7 billion to
cover the costs for fixing this issue, which resulted in its first quarterly loss
for 15 years of 2.5 billion in late October 2015. But besides that, VW is still
likely to face a maximum of $18 billion fined by EPA, not to mention other
class-action lawsuits.
There are two options so far for VW: remaining the scandal cars on road
while paying hefty fines, or buy back all those cars. According to analysts, in
order to fix all cars that were fitted with the software-based defeat devices, it
would take VW approximately 4.4 billion (see Appendix 3). However, there
has not been any perfect fix for these cars, since its not only an
engineering problem anymore. But on the other hand, buying back is not
only the most expensive option, but can also raise huge issues with
precedent VW owners demanding the same treatments. Up to now, VW has
asked US court to extend the deadline for this fix until April 21, 2016, since
they couldnt come up with any on the last deadline on March 24.
Conclusion
Since the scandal of VW, sustainable development has never been so hotly
debated. Some developed countries, including the Netherlands, are even
considering banning all diesel cars and even hybrid vehicles. Testing
procedures and standards are going to be adjusted as well, since the current
ones have been proved to be flawed and not as reliable as on-the-road tests.
In addition, the rising potential of electric cars has been changing consumer
attitudes towards environmental issues.

References
Bansal, T., King, M., & Seijts, G. (2015, September 26). The Volkswagen
emissions scandal: A case study in corporate misbehaviour. Retrieved from
http://www.theglobeandmail.com/report-on-business/rob-commentary/thevw-emissions-scandala-case-study-in-what-not-to-do/article26550100/
Bird, M. (2015, September 23). 'The Lance Armstrong of Automakers' is going
to slam the brakes on the whole car industry for years. Retrieved from
http://uk.businessinsider.com/volkswagen-emissions-scandal-could-set-backentire-car-industry-say-analysts-2015-9
Gates, G., Ewing, J., Russell, K., & Watkins, D. (2016, April 22). Explaining
Volkswagens Emissions Scandal. Retrieved from
http://www.nytimes.com/interactive/2015/business/international/vw-dieselemissions-scandal-explained.html?_r=0

Hall, S. (2015, September 29). VW Scandal Causes Small but Irreversible

Environmental Damage. Retrieved from
http://www.scientificamerican.com/article/vw-scandal-causes-small-butirreversible-environmental-damage/
Hotten, R. (2015, December 10). Volkswagen: The scandal explained.
Retrieved from http://www.bbc.com/news/business-34324772
Laha, K. (2015, December 2). Volswagen case study. Retrieved from
http://www.slideshare.net/KakoliLaha/volkswagen-case-study-54633145
Manoharan, S. E. (2015, December 2). Volkswagen emission scandal.
Retrieved from http://www.slideshare.net/SoorajEM2/volkswagen-emissionscandal
Mchugh, J. (2015, December 10). Volkswagen Diesel Scandal Update 2015:
Affected Countries Are Largely In North America, Europe, But Asia Not
Immune. Retrieved from http://www.ibtimes.com/volkswagen-diesel-scandalupdate-2015-affected-countries-are-largely-north-america-2137284
Mearian, L. (2015, September 23). A diesel whodunit: How software let VW
cheat on emissions. Retrieved from
http://www.computerworld.com/article/2985283/telematics/a-dieselwhodunit-how-software-let-vw-cheat-on-emissions.html
Oroschakoff, K. (2015, November 4). 6 ways the VW scandal impacts Europe.
Retrieved from http://www.politico.eu/article/six-ways-vws-co2-scandal-willimpact-europe/
Reuters. (2015, September 26). How regulators around the world have
reacted to the VW emissions scandal. Retrieved from
http://fortune.com/2015/09/26/heres-how-regulators-around-the-world-havereacted-to-the-vw-emissions-scandal/
SkyNews. (2015, September 24). VW Emissions Scandal: Motor Industry
Reaction. Retrieved from http://news.sky.com/story/1558200/vw-emissionsscandal-motor-industry-reaction
Wikipedia. (2015). Volkswagen emissions scandal. Retrieved from
https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal

Appendix 1: How the technology manipulation is operated

Appendix 2: Number of affected cars all over the world based on

countries

Appendix 3: Costs of fixing VW scandal cars

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