From: Dee-Ann Durbin, Associated Press
Published April 19, 2006 12:00 AM

EPA, BorgWarner to Jointly Develop Diesel Technology

AUBURN HILLS, Mich. — As oil prices reached a record high Tuesday, the U.S. Environmental Protection Agency and auto parts supplier BorgWarner Inc. announced a partnership to develop diesel technology with the goal of reducing dependence on foreign oil.


Under the deal, Auburn Hills-based BorgWarner and the EPA will work together to turn EPA technology into market-ready products. BorgWarner Chairman and Chief Executive Tim Manganello said he expects the diesel technology to be on the market within five years.


The partnership focuses on clean combustion systems, which attack emissions at their source -- the vehicle's combustion chamber -- instead of using expensive treatments after the emissions leave that chamber. The technology will help diesel vehicles meet the EPA's Tier 2 clean air standards for passenger vehicles, which are being phased in through 2009, as well as standards for heavy-duty vehicles that will go into effect in 2010, BorgWarner said.


Financial terms of the partnership weren't disclosed, but BorgWarner said it is providing financial support. BorgWarner is one of the top 50 global auto suppliers and provides parts to the Big Three U.S. automakers as well as Toyota Motor Corp. and Honda Motor Co. The company reported revenue of $4.29 billion last year.


EPA Administrator Stephen Johnson said the partnership isn't an unusual one for the agency, which serves as a regulatory body but also conducts its own research. Johnson said one recent example is partnership with United Parcel Service Inc. to test the EPA's diesel hydraulic hybrid technology on delivery trucks. Johnson said the EPA currently holds 55 patents on fuel combustion systems.


Johnson said diesel improvements are necessary to protect air quality and meet President Bush's goal of reducing foreign oil imports 75 percent by 2025. Diesel engines are 20 to 30 percent more fuel efficient than their gasoline counterparts, and the U.S. Department of Energy estimates that if one in three Americans were driving diesels by 2020, U.S. oil consumption would fall by 350,000 barrels a day.


"The best way to get off this treadmill of dependency is to develop this new technology," Johnson said.


Diesels have had trouble gaining ground in the U.S. market because they cost up to $1,000 more than conventional gasoline engines and produce more smog-forming emissions. Five states -- California, Massachusetts, Maine, New York and Vermont -- currently prohibit the sale of diesels because of clean air standards.


But diesels will get a big boost this October, when U.S. diesel retailers are required to begin selling low-sulfur diesel. Johnson said the new fuel regulations will cut smog-forming pollutants by 90 percent on new trucks and buses.


Under a new federal law, diesels also are eligible for tax credits of up to $3,400 per vehicle through 2010 as long as they emit a certain low level of smog-producing nitrogen oxide.


BorgWarner shares rose $1.15, or 2 percent, to close at $59.98 in trading on the New York Stock Exchange.


Source: Associated Press


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