The U.S. Environmental Protection Agency is looking to revamp the way it tests emissions for all automobiles in the wake of the scandal over Volkswagen's manipulation of emissions data.

The EPA will also be working closely with Environment Canada, which has an "excellent laboratory," to co-ordinate widespread testing around the Volkswagen emissions, EPA officials said in a conference call on Friday.

Affected vehicles have yet to be recalled, but the EPA said it is looking for "recall solutions." Part of the problem is that there is no fix that won't negatively impact vehicle performance.

Volkwagen Brand in Tatters

The U.S. Environmental Protection Association will work with Environment Canada to retest Volkswagen vehicles. (Michael Sohn/The Associated Press)

An estimated half million vehicles in the U.S. are affected, with Environment Canada estimating 100,000 VW diesels are in service in Canada.

The EPA said it is sending a letter to automakers outlining plans for more extensive testing of all vehicle models.

That echoes an initiative by European regulators, who plan to move in 2017 to a system of road testing for vehicle emissions standards.

Light commercial trucks

The EPA move comes amid a widening scandal over Volkswagen's diesel vehicles, as the automaker has admitted it installed a cheat device to remove nitrous oxide from exhaust emissions during lab testing.

On Friday, Germany's transport minister said that light commercial trucks made by Volkswagen appeared to have the same software geared toward cheating on U.S. emissions tests.

Transport Minister Alexander Dobrindt told lawmakers Friday that 2.8 million vehicles in Germany may be affected.

Meanwhile, Daimler AG, the maker of Mercedes cars, is rejecting claims by a German environmental group that it appears to have been involved in manipulation of emissions data.

The Deutsche Umwelthilfe group said Friday it had information that almost all German manufacturers of diesel cars exceed emissions limits and speculated that the cars were declared road-worthy by regulators because of cheat devices.

"We sharply deny the allegation that we manipulated our cars during emissions tests. We never did and do not now use a defeat device," Daimler said in a statement.

Questions over emissions testing

Volkswagen cars as far back as 2009 are equipped with the defeat software that is geared toward passing emissions standards.

The revelation has put the EPA, and testing agencies around the world, on the alert.

Chris Grundler, head of the EPA's office of transportation and air quality, was clearly on the defensive, saying the EPA had left it to European regulators to do more extensive tests of diesel as the fuel is in wider use there.

It wasn't the EPA that uncovered the high nitrous oxide emissions from VW diesel cars, but the International Council on Clean Transportation (ICCT), a nonprofit research organization based in Virginia.

"Do I wish we had uncovered it sooner? Absolutely," he said.

VW was able to fool the EPA because the agency only tested the cars on treadmill-like devices called dynamometers and didn't use portable test equipment on real roads. The software in the cars' engine-control computers checked the speed, steering wheel position, air pressure and other factors to determine when dynamometer tests were under way. It then turned on pollution controls that reduced the output of nitrogen oxide, an ingredient in harmful ozone, the EPA has said.

The agency does have on-road testing equipment, but it is used to monitor automaker gas mileage estimates and heavy-duty diesel trucks, which create more emissions. 

"It's not a question of equipment or technology or capability. It's a question of where we deploy those resources," Grundler said.

Any new testing will include investigations that will uncover any software designed to fool emissions testers, Grundler said.

That letter to automakers reads, in part: "EPA may test or require testing on any vehicle at a designated location, using driving cycles and conditions that may reasonably be expected to be encountered in normal operation and use, for the purposes of investigating a potential defeat device. Such testing can be expected in addition to the standard emissions test cycles when Emissions Data Vehicles (EDV), and Fuel Economy Data Vehicles (FEDV) are tested by EPA." 

More extensive road testing is also on the way, he warned automakers, though he did not specify exactly which tests the EPA plans or when.

The scandal has also exposed holes in the European testing system, where tests are done in laboratory conditions on special pre-production models provided by the manufacturers. Norway, France and Italy announced moves today to investigate VWs sold in their countries.

Europe's tests have not been upgraded since 1996 and critics say its testing is less rigorous than North American testing.

The EU has proposed real-world testing from 2017, with new proposals to close loopholes and design testing to more closely resemble real-world road conditions.

ICCT testing of diesel cars hints at trouble for many automakers around diesel emissions, with poor results for Volvo, Renault and Hyundai as well as Volkswagen.

With files from The Associated Press