VW Settlement Agreement

Updated as of August 15, 2017

On October 18, 2016, the U.S. Department of Justice and the Volkswagen (VW) Corporation and its subsidiaries finalized a partial consent decree on the installation and use of emissions testing defeat devices in 2.0-liter diesel engine vehicles sold and operated in the United States beginning in 2009 (VW Settlement Agreement). The use of these defeat devices increased NOx emissions, adversely impacted air quality, and violated the federal Clean Air Act. An Environmental Mitigation Trust (Trust) was established as part of the VW Settlement Agreement to fund eligible mitigation actions. The goal is to offset the environmental damage caused by the use of the VW defeat devices with NOx emissions reductions from cleaner diesel engines or alternatively fueled engines. The initial share to Georgia from the Trust is $58,105,433.35.

Additionally, on December 20, the U.S. Environmental Protection Agency, Department of Justice, and the State of California announced a second partial settlement with VW pertaining to the 3.0 liter diesel vehicles. The agreement included VW recalling 83,000 3.0 liter diesel vehicles for model years 2009 through 2016 that were sold or leased in the U.S. and alleged to be equipped with "defeat devices" to cheat emissions tests.  The settlement also requires VW to pay an additional $225 million to fund projects that will reduce emissions of NOx.  The additional funds will be placed in the same Environmental Mitigation Trust to be established under the $2.7 billion settlement for the 2.0 liter vehicles. Georgia’s additional allocation is set at $5,519,292.21.

On March 15, 2017, the court appointed Wilmington Trust, N.A. to serve as trustee. The trust effective date (TED) will be that day when the United States files the finalized trust agreement with the court, which may occur at any point. Within 60 days of the trust effective date, potential government beneficiaries (States) must elect to become beneficiaries under the trust agreement and states’ mitigation plans must be submitted with 210 days of the TED.

The VW Settlement Agreement establishes a process to administer the funds and a process for states to receive the funds. It describes the development of state mitigation plans. Appendix D-2 of the VW Settlement Agreement lists mitigation actions eligible for funding from the Trust. Eligible mitigation actions include replacing or repowering diesel engines in the following vehicle or equipment categories:

  1. On-road heavy duty vehicles, including Class 8 local freight trucks and port drayage trucks (large trucks)
  2. Class 4-7 local freight trucks (medium trucks)
  3. Class 4-8 school buses, shuttle buses, or transit buses
  4. Non-road equipment, including airport ground support equipment, large forklifts, and port cargo handling equipment
  5. Freight-switcher locomotives
  6. Commercial marine vessels, including shore power for ocean-going vessels
  7. Ferries and tugs
  8. Light duty zero emission vehicle supply equipment, including charging equipment located in a public place, workplace, or multi-unit dwelling
  9. Diesel Emission Reduction Act (DERA) option for projects not specifically listed in Appendix D-2 of the trust, including long-haul locomotives and non-road engines, and equipment and vehicles used in agriculture, construction, cargo handling, energy production, and mining

Additional information regarding the VW settlement can be found here. Information on the court case can be found here. If you would like to provide feedback, please fill out the form below. If you have any general questions, please email us at GAVWSettlement@opb.georgia.gov. We would like to thank you for your interest and look forward to your submission. 

 

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