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My 2003 Jetta TDI check engine light recently came on, and a scan by Advance Auto revealed code P0401 -- EGR insufficient flow.

I took the vehicle to the local TDI guru, who gave me the option of removing the EGR from the system entirely, and replacing it with a race pipe (and a rechip to prevent the CEL from coming on). The FAQ at Dieselgeek explains that there is no disadvantage to removing the EGR, and it saves the vehicle from future clogging, and with the addition of a race pipe, it gives +3hp over 3000rpm.

This site explains that:

The main purpose of the EGR is to reduce NOx emissions produced during diesel or gasoline engine combustion.

... it lowers peak combustion temperatures and reduces NOx emissions anywhere from 50%-75% vs. a non-EGR system.

And this site says:

Disabling the EGR increases NOx emissions, but also reduces particulate emissions.

And this site says:

[Soot buildup inside the manifold] further reduces engine performance and airflow, which in turn reduces combustion efficiency and increases other unwanted emissions, principally Co2 and particulate emission.

So this seems to imply that particulate emissions (and Co2) go up only after a build-up of soot occurs, and engine performance is degraded, but not as a direct result of removing the EGR.

But then later says:

"All EGR systems reduce air flow, combustion efficiency and consequently engine power"

What would be the complete effect of removing the EGR from this vehicle?

Flimzy
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As a vehicle technician for BMW I can assure that it is good for your engine to get rid of EGR. EGR systems are there to improve the exhaust gas quality and slightly win a few miles on a tank (in theory). What really happens is quite different. Your oil will become polluted quicker, your manifold / intake will get clogged by excessive amounts of soot and eventually your car will become a big pollution mobile that isn't as fast as when you bought it. The people who know this solve this problem easily by disabling the EGR system on old cars. But on cars from 2004 and on, it can get more difficult because chip tuning might be needed. In any case, removing the EGR is a bit more harmful for the environment, but not as harmful as a clogged up diesel engine & disabling makes a lot of diesels pretty much indestructible.

Flimzy
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Disadvantage is that tampering with emissions systems makes a vehicle no longer street legal.

Other than that, it probably won't hurt anything at all.

I don't see how removing EGR will increase power though. EGR closes at high power settings anyways. The gain would be entirely from some other feature of the racepipe (perhaps it's bigger). The fact that there's no longer an EGR isn't going to make a difference.

Brian Knoblauch
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You might find this post about Dynamic EGR Control for TDIs on the TDI Club forums by Mark at Malone Tuning interesting. Mark reports on his experiments with the EGR system on a 2006 TDI. He reports that the stock EGR settings resulted in a faster warm up (less wear on the engine) and better fuel economy than he got with the EGR deleted or dialed back.

The EGR system does lead to carbon deposits in the intake and these can be greatly reduced by cutting back on the EGR amount after the engine is warmed up. He claims that maintains the environmental and longevity benefits of the EGR will minimizing the carbon build up.

I would strongly recommend against doing an "EGR valve delete" the EGR valve assembly includes and anti-shudder valve that also gives you a way to shutdown a runaway engine. Runaways are rare, but if not controlled they usually result in substantial engine damage.

dlu
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I just replaced my cylinder head on 2003 beetle TDI ALH. you can clean the egr all you want, but won't be able to touch the intake ports on the head. Minimizing the egr is a must or mileage will suffer as well as pollutants which result form an inefficient engine.