Volkswagen Settlement Sets Aside $75.7M Initial Allocation to Maryland

The National Association of State Energy Officials (NASEO) reports that $2.9 billion of the Volkswagen 2.0 liter and 3.0 emissions settlement will be dedicated to an Environmental Mitigation Trust to be used by the States and territories affected by Volkswagen emissions.

As described by NASEO, to mitigate environmental damages from violating the Clean Air Act, the settlement requires Volkswagen to invest $2.9 billion in an independently administered Trust, which will fund projects to reduce diesel emissions.

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Timing of the release of funds from the VW settlement to the States, from NASEO.

The initial allocation to Maryland from the Trust is $75.7 million based on the number of vehicles affected in Maryland.

Once the Environmental Mitigation Trust is actually established, states will have 60 days to submit certification forms to be approved as beneficiaries of the Trust.

In June, 2016, the U.S. Department of Justice issued a partial consent decree settling claims by the U.S. EPA and the Federal Trade Commission against German automaker, Volkswagen AG (VW). The civil complaint filed against Volkswagen claimed that the automaker installed software in its 2.0 liter diesel engine vehicles to disable emission controls under normal use and to turn on emission controls only when the vehicle was being tested. . . The testing revealed that average emissions in on-road testing exceeded federal NOx limits by between 9 and 38 times the U.S. limit depending on driving conditions, which is roughly equivalent to real-world emissions from a modern tractor-trailer truck.

Examples of potential uses of funds from the VW settlement include various local government projects to reduce emissions of fleet vehicles, including:

  • Transitioning trash truck fleets to use compressed natural gas,
  • Converting school buses to propane,
  • Switching airport ground support equipment from fossil fuel to electric power, and
  • Installing idle reduction technology for emergency management vehicles.

For more information on these examples, see NASEO’s toolkit.

If a state is designated a beneficiary of the Volkswagen settlement, the state has 90 days to submit a “beneficiary mitigation plan,” according to NASEO. The state must then submit mitigation plans for use of the funds. The plans should include the state’s overall goals for using the funds and proposed mitigation actions and how the actions will improve air quality.

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State’s can use this toolkit to apply to be a beneficiary of the Volkwagen Settlement, and receive funds to improve NOx emissions in their state.

Based information from NASEO, trust funds may be used for projects that repower and replace government fleet vehicles with new vehicles or engines that use more efficient fuels. From the toolkit,

In this instance, “repower” means “to replace an existing engine with a newer, cleaner engine or power source that is certified by U.S. EPA . . . to meet a more stringent set of engine emission standards.” The replaced vehicles must also be scrapped.

MACo is reaching out to Maryland’s energy and environmental agencies to determine their roles in the State’s application process and any opportunities for county governments to apply for use of the funds, if received. Contact Robin Clark at MACo with any questions.

In the meantime, see The National Association of State Energy Officials (NASEO) toolkit for more information.