Volkswagen Settlement – Florida Mitigation Fund
In October 2016, Volkswagen (VW) entered into a Partial Consent Decree with the U.S. Government settling claims that it violated the Clean Air Act by selling diesel vehicles that violated the U.S. Environmental Protection Agency’s (EPA) mobile source emission standards. The violation involved installation and use of emission testing “defeat devices” in approximately 500,000 turbocharged direct injection (TDI) 2.0-liter diesel engine vehicles sold and operated in the U.S. from model year 2009 through 2015. In May 2017, VW entered into a Second Partial Consent Decree with the U.S. government settling additional claims that it violated the Clean Air Act by selling approximately 80,000 TDI 3.0-liter diesel engines also equipped with defeat devices.
The defeat devices allowed the 2.0-liter and 3.0-liter diesel vehicles to meet the applicable nitrogen oxides (NOx) emission limits during emissions tests while not meeting these limits during normal vehicle operation. To resolve the 2.0-liter and 3.0-liter diesel engine Clean Air Act violations, VW has agreed to provide approximately $16 billion to fund the following actions:
A requirement that VW spend $11 billion to buy back or install pollution control equipment for at least 85 percent of the 2.0-liter and 3.0-liter TDI engines (more information on vehicle buybacks and modifications is available at www.VWCourtSettlement.com);
A $2.0 billion investment to promote the use of zero emission vehicles and infrastructure (more information is available in EPA’s response to Frequently Asked Questions); and
$2.925 billion to fully remediate the excess NOx emissions that were emitted by the approximately 500,000 2.0-liter and 80,000 3.0-liter vehicles equipped with defeat devices (the “Mitigation Trust Fund”).
Trust funds may be used to pay some or all of the cost to repower or replace eligible diesel-powered vehicles with new diesel, alternative fueled or for replacements with all-electric engines or vehicles. Both privately-owned and government-owned fleets will be eligible to receive funding, which requires that the old vehicles and/or diesel engines be scrapped. Appendix D-2 to the Partial Consent Decree provides detail on eligible equipment categories and model years, as well as the different percentages of the matching cost that recipients of the funding must provide. The 10 categories of Eligible Mitigation Actions are:
- Repower or replace Class 8 local freight trucks and port drayage trucks with new diesel, alternative fuel or electric engines;
- Repower or replace Class 4 – Class 8 school buses, shuttle buses or transit buses with new diesel, alternative fuel or electric engines;
- Repower or replace Class 4 – Class 7 local freight trucks with new diesel, alternative fuel or electric engines;
- Repower or replace Pre-Tier 4 diesel switcher locomotives with new diesel, alternative fuel or electric engines;
- Repower or upgrade diesel-powered ferries and tugs with new diesel or alternative fuel engines;
- Provide electric shorepower equipment for oceangoing vessels;
- Repower or replace diesel-powered airport ground support equipment with electric engines;
- Repower or replace large forklifts and port cargo handling equipment with electric engines;
- Build new light duty zero emission vehicle supply equipment (electric charging or hydrogen dispensing stations); and
Use trust funds to provide matching funds for state allocation of funding under the Diesel Emission Reduction Act (DERA). Additional information on Florida’s participation in the DERA program can be found here.