A rift over environmental standards has erupted in Mexico after the Secretariat of Environment and Natural Resources (Semarnat) decided to adopt the U.S. Environmental Protection Agency's (EPA) technology requirements for new diesel trucks, "because it offers lower levels of contaminant emissions," according to Luis Barojas, head of industry standards for Semarnat.

The decision provoked immediate division within the industry as European truck manufacturers —including Volkswagen, Volvo Trucks, Volvo Bus, MAN Ferrostaal and Scania — as well as U.S. manufacturers Kenworth, Caterpillar and Cummins have threatened to pull out of Mexico if the EPA standards are imposed. The shift in technology, they claim, would require huge investments.

Two other OEMs ( original equipment manufacturers) — International and DaimlerChrysler Commercial Vehicles — are in favor of the EPA standards.

Barojas says the criteria used by Semarnat in reaching its decision is that the EPA Standard permits emissions between 2.0 and 2.3 ppm of nitrogen oxide (NOx), while the EURO III standards used within the European Union allows 3.7 ppm, which is 50% more contaminants than the EPA standard.

In February 2003 Semarnat permitted European truck and passenger bus manufacturers to market their vehicles using the EURO III standard. All manufacturers, except for International and Daimler-Chrysler, want to stay with the EURO III standards, rather than the stricter EPA requirements. The threat to pull investments out of Mexico was the result of a manufacturer's meeting last month.

The threat, however, is not being taken seriously by Semarnat. Those companies using the EURO III standard will have to present their case to an analytical commission headed by Nobel Prize winning environmentalist Mario Molina. Baroja says the decision will go into effect at the end of 2006.