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Volkswagen Settlement

Introduction

The State of Utah will become a beneficiary of over $35 million from the Volkswagen (VW) Environmental Mitigation Trust, part of a settlement with VW for violations of the Clean Air Act (CAA). The Governor has designated the Utah Department of Environmental Quality (DEQ) as the lead agency to administer this funding, including the development of an Environmental Mitigation Plan (EMP). The EMP will provide a high-level overview of which eligible vehicle/equipment categories the State of Utah will fund through the settlement to reduce the excess nitrogen oxide (NOx) emissions from the VW, Audi, and Porsche vehicles that were not in compliance with the CAA. DEQ will use this website to communicate with the public on EMP development.

Statement from the Utah Department of Environmental Quality’s Executive Director, Alan Matheson

... Much of the area along the Wasatch Front has been reclassified by the Environmental Protection Agency (EPA) from moderate to serious nonattainment for 24-hour particulate matter (PM) 2.5 ... Therefore it is important that the use of this funding results in significant and measurable reductions of NOx emissions (precursor emissions to PM) and supports activities that will have long-term air quality benefits ...”

Background

Volkswagen (VW) has admitted to secretly installing illegal software on:

  • Approximately 500,000 vehicles, engine model years 2009-2015, with 2.0-liter diesel engines
  • Approximately 80,000 vehicles, engine model years 2009-2016, with 3.0-liter diesel engines

The software “cheats” engine certification and emissions testing by producing results that comply with federal law during testing, but emit up to 40 times the allowable emissions of nitrogen oxides (NOx) under normal driving conditions.

To settle these violations, VW agreed to pay $15.7 billion. The settlement has three components:

Impact in Utah

Excess emissions of nitrogen oxides (NOx) from the affected Volkswagen (VW), Audi, and Porsche vehicles are estimated to be 230.1 tons-per-year statewide. Approximately 70 percent of the affected vehicles are registered in the seven counties designated as nonattainment of the National Ambient Air Quality Standards for PM2.5 (Box Elder, Cache, Davis, Salt Lake, Tooele, Utah, and Weber).

Approximately 7,000 vehicles in Utah were affected by the cheat device on VW vehicles

  • 2.0-liter diesel VW vehicles (engine-model years 2009-2015): 5,983 statewide
  • 3.0-liter diesel VW, Audi, or Porsche vehicles (engine-model years 2009-2016): 1,030 statewide

Utah’s total allocation from the settlement is $35,177,506

Eligible Projects for NOx Mitigation

The following vehicles/equipment are the only categories eligible for funding through the Volkswagen (VW) Settlement

  1. Engine or vehicle/equipment replacements of the following:
    • Class 8 local freight trucks (engine-model years 1992-2009)
    • Class 4-8 school buses, shuttle buses, or transit buses (engine-model year 2009 or older)
    • Freight switchers (pre-Tier 4 switcher locomotives that operate 1000 or more hours/year)
    • Class 4-7 local freight trucks (engine model years 1992-2009)
    • Airport ground-support equipment (Tier 0, Tier 1, Tier 2 diesel-powered airport ground-support equipment and 3 g/bhp-hr or higher emissions, spark-ignition-engine-powered airport ground-support equipment)
    • Forklifts (greater than 8,000 pound lift capacity)
  2. Light-duty zero-emission vehicle supply equipment
    • Light-duty electric-vehicle supply equipment, including Level 1, Level 2 or fast-charging equipment located in a public place, workplace or multi-unit dwelling
    • Light-duty hydrogen-fuel-cell vehicle supply equipment (Up to 15 percent of the Trust Fund allocation may be used to fund necessary costs for and directly connected to the acquisition, installation, operation, and maintenance of new light-duty, zero-emission vehicle supply equipment).
  1. Activities eligible through the Diesel Emission Reduction Act (e.g., commuter rail locomotives, non-road diesel equipment)
  2. Ocean-going vessels, shorepower, and ferries/tugs (not applicable in Utah)

Potential NOx Emissions Reductions and Cost Estimates Using Interactive Calculator

The calculator may be downloaded to evaluate impacts of the various eligible projects outlined in the Volkswagen (VW) Settlement

Interactive Calculator (Excel)

Volkswagen Settlement Parameters

  • The funds may only be used for “eligible mitigation actions” to offset excess nitrogen oxide (“NOx”) emissions from non-compliant 2.0-liter and 3.0-liter diesel Volkswagen (VW), Audi, and Porsche.
  • Up to one-third of funds may be requested initially; up to another third may be requested one year after the Trust Effective Date (TED); and the final third may be requested two years after the TED.
  • All funds are to be expended by ten years after the TED, or they revert back to the Trust, and will be reallocated by the Trustee to those states that spent 80 percent of their first allocation.
  • All eligible vehicles replaced with these funds must be scrapped.
  • Vehicles may be repowered or replaced with any new diesel engine, alternate-fueled engine or all-electric engine.
  • Non-government vehicles qualify for 25 to 75 percent of replacement costs and 40 to 75 percent of repowered costs.
  • Mitigation funds may cover 100 percent of costs to repower or replace government vehicles.
  • Mitigation funds may cover 25 to 100 percent of light-duty, zero-emission vehicle supply equipment.

DEQ's Cost-Per-Ton Analysis of Eligible Vehicles/Equipment Replacement Projects

The following chart shows the cost-per-ton of NOx emissions reduced by replacing eligible vehicles and equipment. For a comparison, the green line represents the cost-per-ton of excess NOx emissions from the affected Volkswagen (VW) vehicles that VW will pay in penalties through the settlement to the State.

Click to view larger
Note: Costs for new forklifts, airport ground support equipment, and light-duty zero-emission vehicle supply equipment are based on an all-electric fuel. Costs for new Class 8 local freight trucks, Class 4-7 local freight trucks, freight switcher locomotives, and school, shuttle, and transit buses are based on diesel fuel. Alternative fuel vehicles/equipment costs vary by fuel type.

Volkswagen Settlement Timeline

(Dates are approximate and subject to change)

Events Approximate Time Frame
Court Approves Settlement October-2016
Wilmington Trust selected as Trustee for the $2.9 billion Environmental Mitigation Trust March-2017
Environmental Mitigation Trust becomes effective or Trust Effective Date (TED) October 2, 2017

The State of Utah certifies that it meets the requirements to become a beneficiary identifying the Utah Department of Environmental Quality as the Lead Agency

Trustee notifies the State of Utah of beneficiary designation

by December 1, 2017
Utah submits Environmental Mitigation Plan 30 days before submitting first funding request
Utah may begin requesting funds from Trust Early 2018
Utah begins to receive funds 2018

Volkswagen Advisory Committee

DEQ established an advisory committee to develop recommendations for Utah’s Environmental Mitigation Plan (EMP). The agency asked the committee to identify and evaluate eligible mitigation actions, suggest funding options, and develop recommendations for public review and comment. See their recommendations.

Public Input

The public input period for the State’s Environmental Mitigation Plan has closed. A summary of the public's selections and comments will be summarized and made available on this website.

There will be an opportunity in the coming months for fleet owners to submit specific vehicle/equipment information to be evaluated for potential funding. Check this website for updates.

Utah’s Diesel-Emissions-Reduction Accomplishments

Utah has been making efforts to reduce emissions from heavy-duty diesel vehicles and equipment for nearly a decade, partnering with businesses, government entities, and other organizations to upgrade fleets with cleaner alternatives. The Volkswagen (VW) Settlement will assist DEQ in continuing these efforts.

  • Utah Clean Diesel Program
  • Governor Herbert has allocated $7.87 million for the replacement of diesel school buses from a separate 2016 partial settlement for VW violations of unfair trade, deceptive acts, and consumer protection laws.

Other Resources:

Contact:

Lisa Burr
Division of Air Quality
(801) 536-4000