VW - Federal settlement funds
The Volkswagen settlement case has been steadily progressing since EPA issued their first notice of violation to Volkswagen in September 2015 for violating the federal Clean Air Act.
VW violated the Clean Air Act by manufacturing diesel vehicles with software installed that cheated emissions tests by only turning on the vehicle’s emission control systems when the car was being tested.
EPA and Volkswagen have entered into multiple settlement agreements that affect all 50 states, Puerto Rico, the District of Columbia, and tribes. Washington must apply to receive $112.7 million and develop a plan on how to use the settlement monies to reduce diesel pollution.
Washington to receive $112.7 million
Volkswagen has agreed to pay about $3 billion into a trust that will be used to pay for past, present, and future harm caused by the excess nitrogen oxide emissions released by the affected vehicles. All 50 states, Puerto Rico, the District of Columbia, and tribes may apply to become beneficiaries of trust funds. Each approved beneficiary will receive a specific amount of money based on the number of affected vehicles registered in their area.
We estimate that there are 22,000 affected vehicles registered in Washington and therefore are eligible for $112.7 million.
Applying to become a state beneficiary
Washington must become a beneficiary before receiving trust funds. The court appointed Wilmington Trust as the Mitigation Fund trustee on March 15, 2017. The trustee will have oversight over the funds and how they are administered. We estimate that funds will be available to state and tribal beneficiaries in about six months.
Once approved as a beneficiary, we will then need to submit a plan to the trustee on how we intend to administer the funds.
How funds can be used
States and tribes will need to develop plans that show how the funds will be used. The money can be used in a variety of ways to reduce nitrogen oxide pollution from vehicles but must meet the requirements in the consent decrees.
Eligible vehicles and equipment may be replaced or repowered with new diesel engines, alternate fueled engines (compressed natural gas, propane, or hybrid), or all-electric engines.
Eligible vehicles and equipment include:
The consent decrees also set parameters on what percentage of the monies can be spent on ZEV infrastructure and equipment. As shown in the pie chart, up to $16.9 million can be spent on those types of projects.
More details about the use of trust funds are found in Appendix D of the partial Consent Decree.
Background on settlement agreements
Volkswagen reached three partial settlement agreements with the EPA and California. The settlements state that VW must:
There are approximately 590,000 affected 2.0 and 3.0 liter diesel vehicles in the nation. About 22,000 of the vehicles are registered in Washington. Consumer remedies include buy backs, repairs, and cash settlements, depending on the engine size and pollution control equipment installed.
For more information about consumer relief visit the Volkswagen website.
Zero emission vehicle infrastructure
As part of the 2.0 liter partial settlement, VW will invest $2 billion over the next 10 years in ZEV infrastructure. These monies are separate from the $112.7 million in trust funds that Washington is eligible for.
Of the $2 billion for ZEV infrastructure, Volkswagen will invest $800 million in California and $1.2 billion throughout the rest of the nation. There will be opportunities for public input on the type and locations of the ZEV projects.
Washington and Oregon jointly submitted a proposal to Volkswagen recommending ZEV infrastructure projects in our states. Examples of ZEV investment projects include:
Visit EPA's website to learn more about this part of the settlement.
Mitigation trust fund details
Volkswagen will pay about $3 billion into a trust that will be used to pay for past, present, and future harm caused by the excess nitrogen oxide emissions released by the vehicles. VW will fund the trust in three equal installments, over the next three years. All 50 states, Puerto Rico, the District of Columbia, and tribes may apply to be beneficiaries. Each approved beneficiary will receive a specific amount of funds based on the number of affected vehicles registered in their area.
Beneficiaries must submit a mitigation plan that summarizes how the beneficiary intends to use its allotted funds. Beneficiaries have 10 years from the Trust Effective Date to implement mitigation actions and spend their allocation. Tribal beneficiaries have six years from the Trust Effective Date to spend their allocations.
The trustee has 120 days from the Trust Effective Date (sometime in 2017) to file a list of all beneficiary applicants. Once approved, each beneficiary can request funds through from the trustee. Funds should be available about six months after the Trust Effective Date. Beneficiaries can spend up to one-third of their funds within the first year and up to two-thirds within the second year. All funds must be spent within 10 years.
Unused money will be redistributed among beneficiaries that have used at least 80% of their trust funds. These additional funds must be used within five years.
Under the 2.0 and 3.0 liter settlements, Washington is eligible to receive a total of $112.7 million to mitigate emissions from the nearly 22,000 affected vehicles in Washington. The governor has designated Ecology to manage the funds. Ecology will partner with the Department of Transportation to select projects in accordance with "Results Washington's" goal of 50,000 electric vehicles by 2020.
More details about the Mitigation Trust Fund are found in Appendix D of the initial partial consent decree.
Ecology's proposed overarching goals, principles, and priorities
Ecology held a survey that closed on March 23, 2017 to get feedback from you on our proposed overarching goals, principles, and priorities. We are planning a webinar with those results in May. Below is quick overview of those topics.
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Ecology is dedicated to keeping you informed as the settlement progresses.
For questions about the settlement, please email us.
For more information, visit:Volkswagen partial consent decree
VW/Audi diesel emissions settlement program
VW Clean Air Act partial settlement
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