Funding Opportunities for Clean Vehicle & Equipment Acquisition under VW Settlement

~ Special Meeting of the Southwestern Pennsylvania Commission Freight Forum ~

Most people have an understanding of the element of the “VW Settlement” that addresses the owners of affected vehicles, whereby Volkswagen will offer consumers a buyback and lease termination for nearly 500,000 model year 2009-2015 2.0 liter diesel vehicles sold or leased in the U.S., and spend up to $10.03 billion to compensate consumers under the program.

Few people realize that there is a second, public element to the settlement.  Volkswagen AG and related entities have agreed to spend more than $4 billion to mitigate the pollution from these cars and invest in green vehicle technology.

Emissions Reduction Program: The settlement of the company’s Clean Air Act violations also requires Volkswagen to pay $2.7 billion to fund projects across the country that will reduce emissions of NOx where the 2.0 liter vehicles were, are or will be operated. Volkswagen will place the funds into a mitigation trust over three years, which will be administered by an independent trustee.  Beneficiaries, which may include states, Puerto Rico, the District of Columbia, and Indian tribes, may obtain funds for designated NOx reduction projects upon application to the Trustee.  Funding for the designated projects is expected to fully mitigate the NOx these 2.0 liter vehicles have and will emit in excess of EPA and California standards.

This program will provide cash subsidies to public and private entities seeking to replace older vehicles, diesel locomotives, towboats and other heavy equipment.  Cash subsidies may approach 100% in some cases for governmental and other public agencies.  Pennsylvania’s share of these funds is expected to exceed $100 million.

Zero Emissions Technology Investments: The Clean Air Act settlement also requires VW to invest $2 billion toward improving infrastructure, access and education to support and advance zero emission vehicles.  The investments will be made over 10 years, with $1.2 billion directed toward a national EPA-approved investment plan and $800 million directed toward a California-specific investment plan that will be approved by CARB.  As part of developing the national plan, Volkswagen will solicit and consider input from interested states, cities, Indian tribes and federal agencies.

On November 14, 2016, SPC’s Freight Forum will bring in a regional expert on this program to discuss the public program elements of the VW Settlement and provide updates on program eligibility, application requirements and timeframe, and other information of use to potential applicants.