U.S. EPA suspected Fiat Chrysler of using 'defeat device' in 2015

By David Shepardson

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency told Fiat Chrysler Automobiles NV in November 2015 it suspected some of its vehicles had at least one "defeat device" that improperly bypassed emissions controls, emails disclosed under a public records request on Friday show.

The EPA and California Air Resources Board accused Fiat Chrysler in January of using undisclosed software to illegally allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks. Fiat Chrysler did not immediately comment on the public records.

Byron Bunker, director of the EPA's Transportation and Air Quality compliance division, said in a January 2016 email to Fiat Chrysler obtained by Reuters under the Freedom of Information Act that he was "very concerned about the unacceptably slow pace of the efforts to understand the high NOx emissions."

NOx refers to the nitrogen oxides in polluted air.

Bunker's email said the EPA had told Fiat Chrysler officials at a November 2015 meeting that at least one auxiliary emissions control device appeared to violate the agency's regulations.

Mike Dahl, head of vehicle safety and regulatory compliance for Fiat Chrysler's U.S. unit, responded in a separate email that the company was working diligently and understood the EPA's concerns. He added that if the EPA declared vehicles to contain defeat devices, it would result in "potentially significant regulatory and commercial consequences."

The documents redacted the vehicles named, but two officials briefed on the matter said they referred to diesel models.

At an event in Venice on Friday, Fiat Chrysler Chief Executive Sergio Marchionne said he was "confident of the fact that there was no intention on our part to set up a defeat device that was even remotely similar to what (Volkswagen) had in their cars."

The Justice Department sued Fiat Chrysler in May, saying it placed eight undeclared "defeat devices," or auxiliary emissions controls, in 2014-2016 Fiat Chrysler diesel vehicles that led to "substantially" higher than allowable levels of nitrogen oxide, which is linked to smog formation and respiratory problems. It has a separate ongoing criminal probe into the matter. Marchionne said on Friday he was "confident that we have a solution that is acceptable to EPA and (California) in terms of 2017 certification and as flashback mechanism on all the 2014 to 2016 cars."

The EPA notice was the result of a probe that arose out of regulators' investigation of rival Volkswagen AG's excess diesel emissions.

(Reporting by David Shepardson. Additional reporting by Agnieszka Flak in Venice; Editing by Richard Chang and Steve Orlofsky)