Volkswagen Diesel Settlement
Next Steps | Beneficiary Mitigation Plan
Legal Background | Eligible Mitigation Actions
On January 24, 2016, the United States and the State of California filed a lawsuit against Volkswagen alleging it had manufactured diesel cars sold and operated in the US beginning in 2009 with systems intended to defeat emission tests. These systems allowed vehicles to emit nitrogen oxide (NOx) pollution at levels 40 times the amounts allowed under the Clean Air Act.
After a significant amount of investigation and negotiation, Volkswagen has agreed to settle these allegations. A settlement was reached on October 25, 2016, for the 2.0-liter diesel vehicles. On December 20, 2016, another settlement was reached regarding the 3.0-liter diesel vehicles.
The overall settlement consists of three major parts:
- Buyback, Lease Termination, Vehicle Modification, and Emissions Compliant Recall Program
- National Zero-Emission Vehicle (ZEV) Investment Plan
- Environmental Mitigation Trust
Under the Environmental Mitigation Trust, Volkswagen is required to fund an Environmental Mitigation Trust in the amount of $2.925 billion ($2.7 billion from the first 2.0-liter consent decree and $225 million from the second 3.0-liter consent decree) to be used to offset the air pollution emitted by the vehicles that violated the Clean Air Act. The fund is distributed among states, territories, and federally recognized tribes based on the proportion of affected Volkswagen diesel vehicles registered in each jurisdiction. The State of Idaho has the opportunity to receive $17.3 million from this mitigation trust. The settlement document provides a list of the mitigation projects eligible for funding.
VW Mitigation Plan Project Proposal
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Stakeholders are invited to email comments or project proposals for eligible mitigation actions within the state of Idaho to: vwsettlement@deq.idaho.gov. This information will be used in the Beneficiary Mitigation Plan’s development. Please include as much detailed information as you can about your project ideas (cost per mitigation action is especially helpful), along with the following information:
Feel free to attach any pertinent files/information relating to your project proposal, and/or any comments or questions you may have. This will not represent the only submission opportunity. Full details will be developed between the stakeholder and DEQ once projects are selected, prior to project execution. |
Next Steps
Wilmington Trust, N.A. is the trustee responsible for administering the trust and approving projects proposed by beneficiaries. Once the trust effective date has been set, likely late spring 2017, a timeline begins for Idaho to take required actions to qualify to receive funds.
Within 60 days of the trust effective date, Idaho must submit a certification form, signed by the governor, explaining how Idaho qualifies to be a beneficiary under the trust. It is anticipated that the Idaho Department of Environmental Quality (DEQ) will be named Idaho’s designated beneficiary.
Within 90 days of Idaho being deemed a beneficiary, DEQ must submit a Beneficiary Mitigation Plan to the trustee for approval. The plan is intended to be a high-level, nonbinding plan that explains what eligible projects the agency hopes to fund with the mitigation money. The final plan will likely be submitted in late fall 2017.
DEQ intends to work closely with the Governor’s Office of Energy and Mineral Resources, the Idaho Transportation Department, and the Department of Administration in developing the plan. In addition, DEQ seeks any and all input from interested parties on proposed projects and ideas. The beneficiary certification includes a commitment by the beneficiary to solicit public input and ensure the process is inclusive, transparent, and easily accessible. This is an exciting opportunity for DEQ to work with others to ensure that the mitigation projects the state requests funding for meet the needs of Idaho in the areas most beneficial to its citizens.
Learn more about the settlement and program through the various links on this page. This website will be updated to include stakeholder meeting opportunities. At any time, the public is encouraged to share input with DEQ using the form above.
Eligible Mitigation Actions
Eligible mitigation actions are those that replace diesel emission sources with cleaner technology to reduce excess emissions of oxides of nitrogen (NOX) caused by the violating vehicles. Money from the settlement may be used to pay some or all of the cost to repower or replace eligible diesel-powered vehicles with new diesel or alternative fueled or all-electric engines or vehicles within the following 10 categories:
- Class 8 local freight trucks and port drayage trucks
- Class 4-8 school buses, shuttle buses or transit buses
- Freight switcher locomotives
- Ferries and tugs
- Ocean going vessels shore power
- Class 4-7 local freight trucks
- Airport ground support equipment
- Forklifts and port cargo handling equipment
- Light duty zero emission vehicle supply equipment
- Matching funds for projects eligible under the Diesel Emission Reduction Act (DERA)
Appendix D-2 to Partial Consent Decree - Appendix D-2 Outlines how trust funds may be used for each of the 10 categories of eligible mitigation actions
Comparison of VW Eligible Mitigation Actions 1–9 and Eligible Mitigation Action 10 (DERA Option) - This EPA document compares the different eligibility requirements and funding levels for eligible mitigation actions 1–9 and the DERA option, number 10.
Beneficiary Mitigation Plan
The Beneficiary Mitigation Plan summarizes how the state allocation of mitigation funds will be distributed among the various eligible mitigation actions to reduce NOx emissions. The plan will be developed through a public process, with multiple opportunities for public input.
Legal Background
2.0 Liter Partial Consent Decree - On October 18, 2016, the US District Court for the Northern District of California held a hearing on the partial consent decree including amendments made in response to public comment. On October 25, 2016, the court granted the motion to enter into the amended partial consent decree. The approved partial consent decree consists of three major parts:
- Volkswagen will buy back, terminate leases, or provide approved emissions modifications for subject 2.0-liter TDI diesel vehicles.
- Volkswagen will invest $2 billion over 10 years in projects that increase the use of zero emission vehicles (ZEV).
- Appendix C: The ZEV Investment Commitment
- Volkswagen will pay $2.7 billion to an Environmental Mitigation Trust to fund projects to reduce emissions of NOx.
- Appendix D: Form of Environmental Mitigation Trust
3.0 Liter Partial Consent Decree - On December 20, 2016, a second partial consent decree addressing 3.0-liter subject vehicles was proposed. Notice of the second consent decree was published in the Federal Register on December 29, 2016, opening a 30-day comment period. On February 2, 2017, the comment period was extended to February 14, 2017; a Preliminary Approval of the 3.0-Liter Class Action Settlement was granted by the court on February 16, 2017. While the proposed partial consent decree is waiting to be finalized by the court, it consists of two major parts:
- Volkswagen will buy back, terminate leases, or provide approved emission modifications for subject 3.0-liter vehicles.
- Volkswagen will be required to pay an additional $225 million to the Environmental Mitigation Trust.
Third Partial Consent Decree - On January 11, 2017, a third partial consent decree was proposed to address Volkswagen’s liability under the Clean Air Act for civil penalties and injunctive relief to prevent similar future violations. Under the third partial settlement, Volkswagen will pay $1.45 billion civil penalty for alleged civil violations of the Clean Air Act. Notice of the third consent decree was published in the Federal Register on January 24, 2017, beginning a 30-day public comment period that closed on February 23, 2017. On April 13, 2017, the court granted the motion for entry of this third partial consent decree.