Volkswagen Settlement


Request for Information Process

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

Excess emissions of nitrogen oxides (NOx) from the affected Volkswagen (VW), Audi, and Porsche vehicles are estimated to be 269 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 (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).
    • 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.
  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)

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.


Stakeholder & Public Input Process

Volkswagen Advisory Committee

DEQ established an advisory committee to develop recommendations for Utah. 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. The advisory committee recommendations, the public comments received during the November 2017 public comment period, and data and policy analysis will guide the funding decisions that will be detailed in the EMP. See the summary of public comments below:

Summary of Public Input

Survey Respondent Groups

Survey Respondent Groups

  • 63 comments received (43 online respondents and 20 emails)
  • Companies promoting their own technologies
  • Citizens (varied both geographically and content-wise)
  • Advocacy groups generally want DEQ to use this opportunity to promote electric technology
  • Government (all 16 comments were from Cache County government agencies in favor of public fleet replacements)
  • ~15 responses (7 advocacy groups, 4 citizens, and 3 companies) want to see full 15% used for EV infrastructure
  • 82 people submitted a form through one of the advocacy groups with the same comment

County where respondents reside (43 online respondents)

Each respondent could choose each eligible mitigation action that they would like to see funded (43 online respondents)

Please check back for Utah’s EMP in April 2018.


Volkswagen Settlement Timeline

(Dates are approximate and subject to change)

VW Settlement 2018 Approximate Time Frame
State of Utah received beneficiary designation January 30, 2018
DEQ’s Environmental Mitigation Plan submitted to the Trustee and made available to the public April 2018
Request for Applications (RFA) open for fleets to submit projects July – August 2018
DEQ evaluation of submitted projects September – October 2018
DEQ identifies successful projects October 2018
DEQ submits first funding request to Trustee November 2018

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

Becky Close
Division of Air Quality
(801) 536-4013

This entry was last updated in Air Quality on April 2, 2018 at 1:08 pm