Photo by Tudor Van Hampton for ENR

Between 2002 and 2006, Caterpillar allegedly shipped 590,000 diesel engines that were missing emission controls. It has agreed to pay $2.55 million and recall non-compliant engines, according to a federal consent order.

Caterpillar Inc. is recalling diesel engines and will pay $2.55 million in civil penalties under a Clean Air Act federal consent decree made public today.

The settlement, released on July 28, says that the Peoria, Ill.-based manufacturer shipped more than 590,000 on- and off-road engines between 2002 and 2006 that were not equipped with emissions controls needed to meet U.S. Environmental Protection Agency tailpipe standards.

Cat allegedly did not ship engines to original-equipment manufacturers with proper exhaust emission controls, such as catalytic converters and diesel particulate filters. In addition, some 925 engines were not programmed correctly, potentially emitting excess nitrogen oxides and particulate matter.

"Today's settlement will protect public health and create a level playing field for companies that meet their environment obligations," says Cynthia Giles, assistant administrator of EPA's Office of Enforcement and Compliance Assurance.

Caterpillar responded that it has fully cooperated with the Dept. of Justice and EPA in the matter.

"Caterpillar denies any wrongdoing, but does agree that the decree represents a good faith effort between the parties to resolve their differences and avoid potentially lengthy litigation," says Cat in a statement. "Caterpillar is committed to following the terms of the decree."

Under the terms of the settlement, Cat will pay the federal government $2.04 million and California $510,000 in penalties. The public has 30 days to comment on the ruling.