Volkswagen Settlement

 

Background

The Volkswagen Settlement is a combination of three partial settlements the EPA has resolved in a civil enforcement case against Volkswagen (VW). The settlements resolve allegations that Volkswagen violated the Clean Air Act by the sale of approximately 590,000 model year 2009 to 2016 diesel motor vehicles equipped with “defeat devices.” VW has agreed to spend up to $14.73 billion to settle allegations of cheating emissions tests and deceiving customers. The automaker will spend $10.03 billion to compensate customers who purchased affected 2.0 liter diesel engines, and $4.7 billion to mitigate pollution from these vehicles and invest in zero emission vehicle (ZEV) technology and infrastructure. The settlement contains investment to three main pools of funding: funds detiticated to individual customers, nationwide investment in zero electric vehicles and infrastructure, and environmental mitigation trust fund to be distributed to states.

Customers

The partial settlement requires VW to stop selling or preform emissions modifications on at least 85 percent of the affected vehicles in the U.S. with 2.0 liter engines. VW must offer every owner and lessee of an affected vehicle the option of a buyback or lease termination. If VW submits an emissions modification proposal, and federal EPA and the California Air Resources Board approve it, VW must offer owners and lessees the option of an emissions modification. Should VW not achieve the 85% recall rate, it must pay additional money into the environmental mitigation trust. (See Appendices A & B of the Settlement; visit https://www.vwcourtsettlement.com/en/ for more information.

Nationwide

The settlement required VW to invest $2 billion ($800 million in California and $1.2 billion for the remainder of the U.S.) to prmote the use of zero emissions vehicle technology across the country. The funds created the Electrify America program. Over a ten year period ending 2027, Electrify America will invest the $2 billion. The funds will be invested over four 30 month cycles. The first cycle of investment (currently active, ending June 2019) will establish a network of non-proprietary electric vehicle chargers at over 650 community-based sites and nearly 300 highway sites across the country. The second cycle recommendations were due March 1, 2018 for the period of July 2019 to December 2021. The Electrify America program has begun installing DC fast chargers. While they have not indicated exact locations in Kentucky, they have indicated that they plan to install DC fast chargers in the state. The map of locations is available on their website. (Visit https://www.electrifyamerica.com/ for more information.)

States

The final pool of funding was allocated to create the Mitigation Trust Fund which would allocate $2.7 billion from affected 2.0L engines and $225 million from affected 3.0L engines to the states to reduce nitrogen oxide (NOx) emissions. Kentucky’s projected allocation under the Mitigation Trust Fund is approximately $20.379 million. Governor Bevin delegated the Kentucky Energy and Environment Cabinet (EEC) at the “Lead Agency” with authority to be the legally binding administrator of the trust for Kentucky. The plan for how the funding will be allocated in Kentucky is being discussed in the legislature. Once the plan is complete, KCFC will assist EEC with outreach.

The KCFC held webinars and coordinated with stakeholders for project plans. All project plans submitted to KCFC were provided to EEC. KCFC is dedicated to remaining actively involved in the process. The EEC has a comment form on their website to submit additional information.

If you have any questions please contact KCFC at [email protected].

Update as of 05/15/2018.

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