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Administrator Gina McCarthy, Remarks Announcing Hyundai and Kia Settlement, As Prepared

I want to thank Attorney General Holder for having me here, and for his partnership on today’s announcement. I also want to thank Cynthia Giles, the head of EPA’s Enforcement office; Phil Brooks, the head of our air enforcement division; and all the dedicated EPA and DOJ staff that made this possible.

The light duty vehicle rule was the first time EPA acted to regulate greenhouse gas emissions. Addressing vehicle emissions is essential to our commitment to fight climate change. This case helps us deliver on that commitment. When we hold companies accountable, through accurate testing and honest reporting, we can ensure real emissions reduction.

Under President Obama’s leadership, EPA's historic fuel efficiency standards are cutting carbon pollution and saving families money at the pump. Fuel Efficiency Sells. It’s the number one consideration when buying a car, and it’s helped the auto industry come back from the brink. Since 2009, the auto industry added more than 250,000 jobs. Today, more cars are being made on American assembly lines than in the past 12 years.

However, a misstated fuel efficiency sticker on your car means you’re not getting the climate protections promised by the law. That tilts the market in favor of those who don’t play by the rules; that’s not fair, and it’s not legal. By enforcing our laws to protect our health, we also protect consumers and promote a vibrant economy.

To understand today’s action, you have to understand how our fuel efficiency program works: Our program uses greenhouse gas emission “credits” as currency for legal compliance. It’s a fleet-wide program where each credit is worth 1 metric ton of greenhouse gas emissions. When auto companies go above and beyond efficiency standards, they earn credits. But if they fail to meet those standards, they have to use credits to balance the ledger. That’s why companies buy and sell credits to make sure they’re in compliance. And if companies fail to pull their weight, it undercuts the integrity of the program, and we don’t get the emission reductions the law guarantees.

Here’s what today’s case is all about: Hyundai and Kia violated the Clean Air Act by overstating fuel efficiency in over 1 million cars and SUV’s. They had 4.75 million credits they did not rightfully earn, which means 4.75 million metric tons of greenhouse gas emissions unaccounted for.

Here’s how this settlement closes the gap: Hyundai and Kia will pay a civil penalty of $100 million dollars, and invest millions more to prevent future violations. And they’re forfeiting more than $200 million dollars’ worth of credits that they did not earn, and can no longer sell. We take the violations in this case very seriously, as this is the largest penalty we’ve ever assessed under the Clean Air Act. It goes to show the large unfair market advantage Hyundai and Kia captured with overstated fuel efficiency ratings.

The Clean Air Act grants EPA the authority and responsibility to regulate the harmful carbon pollution that fuels climate change. We’re just as committed to writing rules as we are to seeing them through. That’s our obligation to the American people, not just for vehicle fuel efficiency, but for the power sector, too.

For anyone out there wondering if EPA can successfully reduce carbon pollution by regulating under the Clean Air Act, stop wondering. We can, and we are.