French prosecutors open Peugeot diesel-cheating probe

By Laurence Frost

PARIS (Reuters) - French prosecutors have opened a formal investigation into suspected diesel emissions test-cheating by carmaker PSA Group, a court official said on Monday.

The probe was opened earlier this month into alleged consumer fraud offences, the official said, confirming a report in daily newspaper Liberation.

Paris-based PSA in February became the fourth carmaker to be referred to prosecutors by France's DGCCRF consumer fraud watchdog over suspected diesel test manipulation in the wake of the Volkswagen "dieselgate" scandal.

Its referral, following that of VW, Renault and Fiat Chrysler, dealt a setback to the maker of Peugeot, Citroen and DS cars, whose emissions performance had so far escaped major criticism.

PSA, which denies any wrongdoing, said on Monday it had "taken note" of the prosecutors' decision to open a full investigation, reiterating that its vehicles comply with all regulations in countries where they are sold.

Following VW's exposure in 2015 for U.S. diesel test-cheating, several European countries launched their own investigative test programmes.

They found on-road nitrogen oxide (NOx) emissions more than 10 times above regulatory limits - for some GM , Renault and Fiat models - and widespread use of devices that reduce exhaust treatment in some conditions.

Carmakers have broadly invoked a European legal loophole allowing such software for safety purposes or engine protection.

PSA diesels under the current Euro 6 standard have cleaner emissions than many mass-market rivals, thanks to their standard deployment of costly selective catalytic reduction (SCR).

But in a government-backed testing programme last year, five PSA vehicles of the last Euro 5 diesel generation emitted significantly higher NOx in motorway driving conditions when engine temperatures were increased.

By design, the cars' so-called EGR emissions treatment is deliberately reduced at higher temperatures to improve fuel efficiency and carbon dioxide (CO2) emissions in out-of-town driving, where NOx and particle output is less critical, PSA engineering chief Gilles Le Borgne said in February.

The company last year began an independently certified real-world CO2 emissions-testing programme and began publishing results measured for all its vehicles on the road.