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Diesels are complicated to sell in the US because of their emissions profile. Part of this is because they must run lean in order to completely burn fuel and prevent soot formation. This results in very high NOx emissions compared to contemporary gasoline engines.

Typically, passenger diesels employ a urea injection system to meet EPA standards, which reduces NOx as a catalyst. This system adds expense and maintenance duties. VW claimed their small diesels could meet emissions standards without such a system. What they have actually admitted to doing is writing a complicated algorithm that detects the conditions of a CARB emissions test and modifies running parameters in order to reduce NOx to acceptable levels during the test. This isn't in dispute by any party.

As emissions are not tested during typical driving scenarios, and given that CARB and the EPA has measured 40x the acceptable level of NOx, I speculate that VW is enriching the fuel-air mixture when their algorithm detects the conditions of an emissions test; this would dramatically reduce NOx emissions at a measurable cost to fuel economy.

As other automakers—such as Mazda with their perpetually delayed Mazda 6 diesel—are having trouble developing urea-free diesel engines for the US market, it is no wonder that someone noticed the discrepancy between USDM and EUDM emissions numbers for these vehicles.

Note that the EPA does not perform emissions testing of its own; automakers self-certify. CARB is the de-facto enforcer of EPA standards.




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