CMI · 10-Q · 2026Q2 · Full report

EPA Emissions Transition

CUMMINS INC · 2026-08-04 · Importance 71 · Surprise 60 · In source text

Cummins remains subject to settlement agreements finalized in April 2024 with the U.S. EPA, California Air Resources Board, U.S. Department of Justice and California Attorney General’s Office. The agreements resolve civil regulatory claims concerning emissions certification and compliance processes for certain engines primarily used in U.S. pickup-truck applications. Required mitigation projects, reputational effects and potential related legal actions remain potential consequences. Cummins also cited increased global scrutiny and uncertainty in the adoption, implementation and enforcement of emissions standards, including possible future bans or limits on diesel-powered products.

Key facts

• In July 2025, the EPA published a proposed rule that would repeal GHG emissions standards and thus remove the requirement for vehicle and engine manufacturers to measure, control and report these emissions from vehicles. source
• In February 2026, the EPA finalized the rescission of the 2009 Greenhouse Gas Endangerment Finding and repealed all GHG emission standards for on-highway vehicles and engines with an effective date of April 20, 2026. source
• While the rules will likely be subject to legal challenges, in the period NHTSA finalizes a rule, we could be required to incur a non-cash expense up to the value of our existing credits. source
• Depending on NHTSA's future rulemaking, we may no longer utilize emission compliance credits on future engines sales and the credits could have a minimal, if any value to us. source
• In June 2025, NHTSA published an interpretive rule questioning the current regulatory framework of allowing credits as a compliance vehicle. source
• At June 30, 2026, we had $89 million of GHG emission compliance credits. source

Impact estimates