U.S. District Judge Charles Breyer had earlier set a
March 24 deadline for Europe's biggest automaker to explain where it stood on
remediation efforts, after months of talks with the U.S. Justice Department,
the Environmental Protection Agency and California Air Resources Board.
Breyer, VW and regulators all said at Thursday's
hearing in San Francisco that progress has been made in intensive negotiations,
but issues remain and no settlement has been reached yet.
The remedy could involve fixing the roughly 580,000
U.S. vehicles or buybacks and other options, Breyer said.
He did not elaborate, but one central issue is whether
the EPA would accept a fix that does not completely address excess on-road
emissions.
Earlier this month, a California official said the
state may allow partially repaired VW diesel cars to continue operating on its
roads because a full fix may be impossible.
The cars are equipped with "defeat devices"
that allow them to pass laboratory emissions tests despite exceeding federal
standards by up to 40 times when they are driven on roads.
If no deal is reached by the April 21 deadline, Breyer
said he would consider holding a trial on the issue this summer to address the
vehicles that the U.S. Environmental Protection Agency says emit up to 40 times
legally allowable pollution in real world driving.
Former FBI director Robert Mueller, who is Breyer's
court appointment settlement master, briefed the judge on the status of the
talks on Wednesday.
The U.S. Justice Department in February sued VW for up
to $46 billion for violating U.S. environmental laws. VW and its Audi and
Porsche brands remain barred from selling any new 2016 diesel models in the
United States. It faces more than 500 U.S. civil lawsuits that have been
consolidated in front of Breyer.
(Additional reporting by David Shepardson in New York;
Editing by Tom Brown)
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