Volkswagen Settlement


Introduction

The State of Utah is 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

UDEQ estimates the lifetime NOx emitted by the non-compliant vehicles to be between 351-1,556 tons of NOx over the span of time they were operating in Utah. 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.

Utah’s Selection of Eligible Mitigation Action Categories for NOx Mitigation

Utah’s Selected Eligible Mitigation Action Categories
With Focus on Government Fleets

Eligible Mitigation Actions

Replacement or Repower of the Following:

Funding Percentages

Class 8 Local Freight Trucks 73.5%
(These categories are combined to optimize the VW Settlement. Final determinations will be based on projects received through the application process.)
Class 4-7 Local Freight Trucks
Class 4-8 School, Shuttle, or Transit Buses
Freight Switchers 0%
Airport Ground Support 0%
Forklifts > 8,000 lb. lift capacity (port handling equipment) 0%
Light-Duty Zero Emission Vehicle Supply Equipment 11%
Diesel Emission Reduction Act (DERA) Option 7%
Administrative Costs 8.5%
                                    Total 100%

Utah’s Environmental Mitigation Plan

All VW funds will be used for public fleets, except for projects funded through the DERA category.

UDEQ’s selection of EMA categories is based on the advisory committee’s recommendations, public input, and UDEQ’s goals:

  • To achieve significant NOx reductions that work toward fully mitigating the excess lifetime NOx emissions from the non-compliant VW vehicles and contribute to the State’s ongoing goal of reaching attainment of the NAAQS,
  • To maximize the amount of emissions reductions for each dollar spent,
  • To benefit areas in Utah that bear a disproportionate amount of the air pollution burden,
  • To stimulate emerging vehicle technologies that result in long-term emissions benefits, and
  • To provide economic and health benefits to the citizens of Utah.

73.5% for Class 4-8 Local Freight Trucks and School, Shuttle, and Transit Buses:

  • Combining these categories allows for flexibility when selecting specific projects
  • Represents half of the NOx emissions from on-road mobile sources in PM2.5 nonattainment areas
  • Achieves NOx reductions from the top five most cost-effective EMA categories
  • Targeting government-owned vehicles, allowing up to 50% funding, providing double benefit to taxpayers
  • Providing higher incentive for all-electric

7% for the DERA Option:

  • Allocates funding for other projects not limited to the EMA categories that are prescribed in the Trust (i.e. construction, agriculture, locomotives)
  • Allows flexibility for funding NOx reduction projects that are relevant to fleet owners in Utah
  • Provides an avenue for private fleet owners to participate
  • Invests in a funding source that results in additional funding

11% for Light-Duty, Zero-Emissions-Vehicle Supply Equipment:

    • Recommended by advisory committee and received significant support from the public
    • Stimulates the deployment of emerging technologies that have long-term air quality benefits
    • Recognizes existing efforts statewide that provide various (and abundant) funding sources
    • Targets government-owned facilities, providing double benefits to taxpayers
    • Prioritizes facilities in nonattainment areas, near major transportation corridors, and allows public access

8.5% for Administrative Costs:

  • Allowed up to 15%: Recognizes that effective implementation requires significant resources
  • Recognizes that it’s a long-term program
  • Funds state resources without using taxpayer dollars

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


Stakeholder & Public Input Process


Application Process for Government Entities

Application period is open from October 1, 2018, until November 30, 2018. Applications will not be evaluated prior to closing date and may not be revised or supplemental information provided after November 30, 2018.

Eligibility

Entities: Government entities as defined in Utah Code § 63G-7-102(4) and federal government agencies.

Eligible Equipment (Application forms listed in next section)

  • Vehicle or engine replacements of Class 4-8 local freight trucks, school buses, shuttle buses, and/or transit buses (323 KB), engine model years 1992-2006*. VW funding is available for:
    • Up to 50% of the cost for new diesel or alternative fueled vehicles or engines
    • Up to 55% for new vehicles or engines certified to the California Air Resources Board’s (CARB) Optional Low-NOx Standards
    • Up to 65% for new all-electric replacement vehicles or engines
      • Charging infrastructure may be included

*Note: Engine model years 1992-2006 vehicles/engines must be operable with a minimum of three years remaining in their useful life.

  • Light-duty, electric-vehicle supply equipment (EVSE), including Level 1, Level 2, and fast charging equipment. Funds may be used by government entities to purchase, install, and maintain eligible light-duty EVSE on government-owned property. VW funding is available for:
    • Up to 100% of the cost to purchase, install, and maintain EVSEs available to the public at government-owned facilities
    • Up to 60% of the cost to purchase, install, and maintain EVSEs available at a government workplace but not available to the general public

How to Apply

Email applications and supplemental documents to vw@utah.gov by November 30, 2018, at 5:00 p.m.

Required Submittals

Light-Duty EVSE Projects
  • Light-Duty EVSE Application (`71 KB)
  • Cost-Share Commitment Letter: If applicable, a cost-share commitment letter is required from each source of funding for the project. The letter must specify the budget year in which the cost-share funding will be available. The cost-share commitment letter shall be signed by an individual legally authorized to commit funds on behalf of the governmental entity. If the requesting organization is a school, a cost-share commitment letter must be signed by the district superintendent or college/university president.
  • Site Photos: Photos of proposed project site and/or locations with captions. Provide a clear aerial image identifying the proposed location and distance from major traffic corridors and other businesses.
  • Electric Utility Provider Site Evaluation: A signed and dated statement from the electric utility provider certifying that it has reviewed your EVSE project and there is sufficient electrical load to support the proposed charging equipment.
    • Rocky Mountain Power customers should contact Shawn Grant at 801-220-4196 or shawn.grant@pacificorp.com. Other customers should contact their electric utility provider.
  • Site Approval Agreement: Documentation from the facility management agency that: 1) certifies an authorized representative is aware of the project and agrees that the project is feasible; 2) an electrical panel capacity review has been completed; 3) provides detail as to whether any system upgrades are necessary to support the proposed project, and if so, includes the required upgrades; and 4) will operate and maintain the EVSE for a minimum of 5 years.
  • Vendor Bid(s): A formal bid prepared by a qualified vendor that includes, at a minimum, the EVSE cost, installation cost, electrical system upgrades, operation and maintenance (O and M) costs, and dates in which the bid is valid. The following vendors are currently on the State of Utah Approved Vendor List:
  • Procurement Code Compliance: Documentation that the governmental entity obtained the submitted vendor bid, whether a State of Utah Approved Vendor or other vendor, in compliance with the Utah Procurement Code, Utah Code Title 63G, Chapter 6a, and any local procurement rules.

Updates

If you represent a public entity with a government-owned fleet, please sign up below to be notified about when the Request for Applications process opens.

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

Courtney Ehrlich
Division of Air Quality
(801) 536-4430