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 provides a high-level overview of which eligible vehicle/equipment categories the State of Utah is funding 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 Utah’s VW Settlement.

Statement from the Utah Department of Environmental Quality’s Interim Executive Director, Scott Baird

… 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 (EMA) 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%

*DERA is a federal appropriation through the Environmental Protection Agency (EPA) for reducing harmful emissions from diesel engines. The EPA’s DERA program has provided funding to DEQ for over a decade to retrofit, repower, and replace older diesel vehicles/equipment with newer, cleaner alternatives. The VW Settlement provides supplemental funding to continue these efforts.

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


Eligibility


Awards

The DEQ received 50 applications that included 379 total vehicles with a combined request of over $72 million. Each proposed vehicle replacement was evaluated for its cost effectiveness of achieving NOx reductions, location of operation (projects located in nonattainment areas received higher scores), and other community benefits. Applications that included electric vehicle projects received higher scores and will be funded at a higher percentage. The DEQ selected 104 vehicles to replace at 50-65 percent of the cost of the new vehicle.

    Other Resources

    Contact

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

    Courtney Ehrlich
    Division of Air Quality
    (385) 232-5157