VW Settlement April 2018 Program Fact Sheet


Alaska has been approved as a beneficiary of $8.125 million from the federal Volkswagen Settlement for Volkswagen's installation of illegal software in diesel vehicles designed to cheat emission tests.  The funds will be used to reduce air pollution through implementation of 10 types of eligible mitigation actions identified in the Settlement.

AEA has developed a draft Beneficiary Mitigation Plan (Plan) that describes how the state proposes to distribute the funds.   AEA is seeking public comment on the draft Plan for a period of 60 days, from now through July 1, 2018.

AEA will hold webinars describing the proposed draft Beneficiary Mitigation Plan Wednesday June 20 (1:00 – 3:00 pm) and Thursday June 21 (12:00 – 2:00 pm). 

Click here for webinar registration.

  • Overview
  • Background
  • Eligible Mitigation Actions
  • Beneficiary Mitigation Plan
  • Tribal VW Settlement
  • Legal Documents
  • Related Websites
  • Emission Calculators
  • Contact us

Draft Beneficiary Mitigation Plan

On January 29, 2018, Alaska became a beneficiary of the Volkswagen Settlement Environmental Mitigation Trust. AEA has developed a Draft Beneficiary Mitigation Plan as required by the Trust Agreement and is soliciting public input. The Draft Plan summarizes how the State proposes to allocate the mitigation funds among the various Eligible Mitigation Actions to reduce NOx emissions.

AEA will revise the Draft Plan based on review of written comments received and meeting discussions. AEA will submit the Final Plan to the Trustee for approval. Public comments to the Draft Plan will be summarized and made publically available.

Request for Public Comment

AEA is currently accepting comments from the public and interested parties through July 1, 2018 on the Draft Plan to determine what types of eligible pollution-reducing projects are of priority to Alaska communities and to identify possible synergies and partnerships that might leverage Trust funds.

AEA has created a web-based comment form that can be completed online or downloaded and submitted via mail, fax, or email. Please note that the comments will be aggregated and made publically available.

Please submit all written comments by website, mail, fax, or email to:

Alaska Energy Authority

ATTN: Volkswagen Settlement

813 W. Northern Lights Blvd, Anchorage, AK 99503

Fax: (907) 771-3044

vwsettlement@akenergyauthority.org

Public Meetings

AEA is holding a series of public meetings, listed below, and we want to hear from you. The public meeting will:

  1. include an overview of the settlement and the State’s draft plan,
  2. offer an opportunity for questions to be answered by program staff, and
  3. provide a venue for submitting public comment on the plan.

Public meetings will be held in Anchorage, Fairbanks, and Juneau:

Fairbanks: June 1, 3:00 – 5:00 and 6:00 – 8:00 pm

Anchorage: June 4, 3:00 – 5:00 and 6:00 – 8:00 pm

Juneau: June 7, 3:00 – 5:00 and 6:00 – 8:00 pm

Webinars will also be held June 20 (1:00 - 3:00 pm) and June 21 (12:00 - 2:00 pm). Click here to register.

Click here to download the presentation.

Please subscribe to the listserve to stay up to date on activities related to the VW Settlement.

Eligible Mitigation Actions

The Trust Agreement identifies 10 categories of Eligible Mitigation Actions that reduce NOx pollution and reimbursement rates for these actions. Most EMAs focus on reducing NOx pollution from diesel-powered trucks and buses, locomotives, ferries/tugs, airport ground support equipment, and port cargo handling equipment. Generally, the types of approved actions include replacing older diesel-powered engines or vehicles with newer cleaner diesel engines, alternative fueled engines or all-electric engines. Installation of shorepower for ocean going vessels and electric charging stations are also eligible. Trust funds may be used as voluntary match for projects funded through the Diesel Emission Reduction Act (DERA). The DERA option expands the types of diesel engines eligible for replacement to include non-road engines such as those used for electric generation and construction equipment, and marine vessels with >1,000 hours of use per year. The 10 EMAs defined in the trust Agreement are as follows:

  1. Class 8 local freight trucks and port drayage trucks
  2. Class 4-8 school buses, shuttle buses or transit buses
  3. Freight switcher locomotives
  4. Ferries and tugs
  5. Shorepower for ocean going vessels
  6. Class 4-7 local freight trucks
  7. Airport ground support equipment
  8. Forklifts and port cargo handling equipment
  9. Light duty Zero Emission Vehicle supply equipment  (e.g., charging stations)
  10. Voluntary matching funds for projects eligible under the Diesel Emission Reduction Act (DERA)

Inventory Survey

AEA is interested in knowing what eligible vehicles occur in Alaska at a fleet and industry level. If interested, please complete the diesel inventory survey or electric vehicle inventory survey based on your area of expertise by July 2, 2018.

Please submit your information to us at vwsettlement@akenergyauthority.org 

We appreciate your input!

National Zero-Emission Vehicle (ZEV) Investment Plan

Volkswagen is required to invest $2 billion ($800 million within California and $1.2 billion outside of California) in four 30-month investment cycles over 10 years in ZEV infrastructure, access, and awareness initiatives. For each investment cycle, project proposals are submitted to Volkswagen, and Volkswagen develops an investment plan to be reviewed and approved by the EPA. The first round of project proposals closed January 16, 2017. Proposals for the second round are currently being accepted. Additional information is available at www.electrifyamerica.com

Please submit comments to AEA regarding your interest in the National ZEV Plan and the Mitigation Trust.

Other Funding Opportunities

The following grant funding opportunities and loans are available that may be used as match for projects that are eligible for Volkswagen Trust funding.

DERA

EPA grants are now available to reduce emissions from diesel engines in Region 10 (Alaska, Idaho, Oregon and Washington). The EPA will accept proposals requesting up to $900,000 in grant funds. Grants are prioritized for diesel engine fleets in areas facing air quality challenges. Eligible applicants include regional, state, local or tribal agencies, or port authorities with jurisdiction over transportation or air quality. Applicants may apply until Tuesday, June 5, 2018.

Power Project Loan Fund

AEA provides loans to local utilities, local governments or independent power producers for the development or upgrade of power facilities. These loans may be used as mandatory cost-share for DERA projects to repower or replace diesel engines or gensets in diesel powerhouses. The loan term is related to the life of the project. Interest rates are between tax-exempt rates at the high end and zero on the low end.

Commercial Fishing Loan Fund - Engine Fuel Efficiency Upgrade

 

Background

On January 24, 2016, the United States and the State of California filed a lawsuit against Volkswagen alleging it had manufactured diesel cars sold and operated in the U.S. beginning in 2009 with emission control systems intended to defeat emissions tests. These systems allowed vehicles to emit nitrogen oxide (NOx) pollution at levels that significantly exceeded the amounts allowed under the Clean Air Act.

Volkswagen agreed to settle these allegations. The first partial settlement, regarding the installation and use of emission testing defeat devices in 2.0 liter diesel vehicles, was approved by a federal court in California on October 25, 2016. On December 20, 2016 an agreement was reached in a second partial settlement regarding the installation and use of emission testing defeat devices in 3.0 liter diesel vehicles. The overall settlement consists of three major parts:

Buyback, Lease Termination, Vehicle Modification and Emissions Compliant Recall Program

Volkswagen was required to earmark about $11.2 billion ($10.033 billion from the first 2.0 L consent decree and $1.2 billion from the second 3.0 L consent decree) to buy back affected noncompliant vehicles, terminate leases early, or repair the vehicles by 2019 or 2020 depending on the make and model. Volkswagen administers this part of the settlement directly with affected vehicle owners.

Additional information is available at www.VWCourtSettlement.com

National Zero-Emission Vehicle (ZEV) Investment Plan

Volkswagen was required to invest $2 billion ($800 million within California and $1.2 billion outside of California) in four 30-month investment cycles over 10 years in ZEV infrastructure, access, and awareness initiatives. The form of the Trust Agreement can be found in Appendix C of the first partial consent decree. This part of the settlement is administered by Volkswagen as a subsidiary named Electrify America, the U.S. EPA and California. For each cycle, project proposals are submitted to Electrify America, and Electrify America develops an investment plan to be reviewed and approved by the EPA. The first round of project proposals closed January 16, 2017. Electrify America is currently implementing the Cycle 1 National ZEV Investment Plan, the Cycle 1 California ZEV Investment Plan, and the Supplement to the California ZEV Investment Plan. Proposals for the second round are currently being accepted through mid-2019. Additional information is available at www.electrifyamerica.com

While AEA does not administer these funds, AEA is seeking information from interested parties to identify projects and partnering opportunities. Go to the "Contact us" tab to submit a contact form, send an email, or subscribe to the list serve to receive program related email updates..

Environmental Mitigation Trust

Volkswagen is required to fund an Environmental Mitigation Trust in the amount of $2.925 billion ($2.7 billion from the first 2.0 L consent decree and $225 million from the second 3.0 L consent decree) to be used to offset the lifetime excess air pollution emitted by the Volkswagen vehicles that violated the Clean Air Act. The form of the Trust Agreement can be found in Appendix D of the first partial consent decree. The fund is distributed among states, territories and federally-recognized tribes based on the proportion of affected VW diesel vehicles registered in each jurisdiction.

 

Tribal Allocation

Nearly $54.5 million of the Mitigation Trust were allocated to federally-recognized tribes nationwide, to be disbursed annually over 6 years. Tribes may submit funding requests annually, beginning January 2, 2018 and due September 1 for the next five years thereafter. In order to apply for the VW Tribal allocation, Tribes must file to become Beneficiaries of the Trust. Beneficiary certification is due at the time of the first funding request.

The Institute for Tribal Environmental Professionals (ITEP) has been selected as the Technical Assistance Provider for tribes. To request ITEP assistance in accessing this funding opportunity, contact ITEP at http://www7.nau.edu/itep/main/ntaa/VWSettlement .  AEA is also available to assist Tribes interested in accessing these funds for DERA-eligible projects.

 

State Allocation

In November 2017, the State filed the certification for beneficiary status  with the Court and the Trustee. On January 29, 2018, Alaska was designated a Beneficiary of the Trust , with AEA identified as the Lead Agency to oversee how the funds will be distributed. In February 2018, as required by the terms of the Trust Agreement, AEA provided a Notice of Availability of Mitigation Action Funds to all federal agencies that have custody, control or management of land within or adjacent to Alaska.

Alaska was allocated $8.125 million dollars from the Environmental Mitigation Trust. All of the funds are to be disbursed within 10 years, with no more than one third disbursed in the first year or two-thirds disbursed in the first two years.

As a Beneficiary, Alaska is required to develop a Beneficiary Mitigation Plan that summarizes how the State allocation of mitigation funds will be distributed among the 10 Eligible Mitigation Actions (EMAs) to reduce NOx emissions in the most cost-effective manner, reduce public exposure, and promote the use of clean vehicle technologies. The Plan will be developed through a public process, with multiple opportunities for public comment. Once the Beneficiary Mitigation Plan is approved by the Trustee, AEA will request applications from stakeholders for eligible projects consistent with the Plan. AEA will submit funding requests for selected projects to the Trustee for approval. Projects may begin once the Trustee releases the funds.

 

 

 

 

The Trust Agreement identifies 10 categories of Eligible Mitigation Actions (EMAs) that reduce NOx pollution and reimbursement rates for these actions. Most EMAs focus on reducing NOx pollution from diesel-powered trucks and buses, locomotives, ferries/tugs, airport ground support equipment, and port cargo handling equipment. Generally, the types of approved actions include replacing older diesel-powered engines or vehicles with newer cleaner diesel engines, alternative fueled engines or all-electric engines. Installation of shorepower for ocean going vessels and electric charging stations are also eligible. Trust funds may be used as voluntary match for projects funded through the Diesel Emission Reduction Act (DERA). The DERA option expands the types of diesel engines eligible for replacement to include non-road engines such as those used for electric generation and construction equipment, and marine vessels with >1,000 hours of use per year. The 10 EMAs defined in the trust Agreement are as follows:

  1. Class 8 local freight trucks and port drayage trucks
  2. Class 4-8 school buses, shuttle buses or transit buses
  3. Freight switcher locomotives
  4. Ferries and tugs
  5. Shorepower for ocean going vessels
  6. Class 4-7 local freight trucks
  7. Airport ground support equipment
  8. Forklifts and port cargo handling equipment
  9. Light duty Zero Emission Vehicle supply equipment  (e.g., charging stations)
  10. Voluntary matching funds for projects eligible under the Diesel Emission Reduction Act (DERA)

 

Appendix D-2 of the First Partial Consent Decree (pdf). 
Appendix D-2 outlines how trust funds may be used for each of the 10 categories of eligible mitigation actions.

Comparison of VW Eligible Mitigation Actions 1-9 and Eligible Mitigation Action 10 - DERA option (pdf).
This EPA document compares the different eligibility requirements and funding levels for Eligible Mitigation Actions (EMAs) 1-9 and the DERA option, EMA 10

The Beneficiary Mitigation Plan summarizes how the State allocation of mitigation funds will be distributed among the 10 Eligible Mitigation Actions to reduce NOx emissions. AEA has developed a Draft Beneficiary Mitigation Plan and is seeking public input on the Draft Plan through July 1, 2018. Comments will be summarized and the Draft Plan will be finalized based on public input.

The Plan describes:

  • Alaska’s overall goal for the use of the funds;

  • categories of Eligible Mitigation Actions we anticipate will be appropriate to achieve the stated goals and the preliminary assessment of the percentages of funds anticipated to be used for each type of Eligible Mitigation Action;

  • how the potential beneficial impact of the selected Eligible Mitigation Actions on air quality in areas that bear a disproportionate share of the air pollution burden will be considered;

  • the expected ranges of emission benefits we estimate would be realized by implementation of the Eligible Mitigation Actions identified in the Plan; and

  • a process for seeking and considering public input on the Plan.

AEA has developed a Draft Beneficiary Mitigation Plan and is currently seeking public input through July 1, 2018.

Nearly $54.5 million of the Mitigation Trust were allocated to federally-recognized Tribes nationwide, to be disbursed annually over 6 years. Tribes may submit funding requests annually, beginning January 2, 2018 and due September 1 for the next five years thereafter. In order to apply for the VW Tribal allocation, Tribes must file to become Beneficiaries of the Trust. Beneficiary certification is due at the time of the first funding request.

The Institute for Tribal Environmental Professionals (ITEP) has been selected as the Technical Assistance Provider for tribes. To request ITEP assistance in accessing this funding opportunity, contact ITEP at http://www7.nau.edu/itep/main/ntaa/VWSettlement or email Andy Bessler at Andy.Bessler@nau.edu.

AEA is also available to assist Tribes interested in accessing these funds for DERA-eligible projects. Please contact Betsy McGregor at AEA or email VWSettlement@aidea.org if you have questions or to request assistance.

2.0 Liter Partial Consent Decree
On October 18, 2016, the U.S. District Court for the Northern District of California held a hearing on the partial consent decree including amendments made in response to public comment. On October 25, 2016, the court granted the motion to enter into the amended partial consent decree. The approved partial consent decree consists of three major parts:

  • Volkswagen will buy back, terminate leases, or provide approved emissions modifications for subject 2.0 L TDI diesel vehicles.

  • Volkswagen will invest $2 billion over ten years in projects that increase the use of zero emission vehicles.

  • Volkswagen will pay $2.7 billion to an Environmental Mitigation Trust to fund projects to reduce emissions of NOx.

    • Appendix D form of Environmental Mitigation Trust


3.0 Liter Partial Consent Decree
On December 20, 2016, a second partial consent decree addressing 3.0 L subject vehicles was proposed. Notice of the second consent decree was published in the Federal Register on December 29, 2016 opening a thirty day comment period. On February 2, 2017, the comment period was extended February 14, 2017. The proposed partial consent decree consists of two major parts:

  • Volkswagen will buy back, terminate leases, or provide approved emission modifications for subject 3.0 L vehicles.

  • Volkswagen will be required to pay an additional $225,000,000 to the Environmental Mitigation Trust.

     

Third Partial Consent Decree
On January 11, 2017, a third partial consent decree was proposed to address Volkswagen’s liability under the Clean Air Act for civil penalties and injunctive relief to prevent similar future violations. Notice of the third consent decree was published in the Federal Register on January 24, 2017 beginning a thirty day public comment period that closed on February 23, 2017.
 

Volkswagen Settlement Websites

National Association of Clean Air Agencies – repository of VW Settlement Lead Agency contact information

http://4cleanair.org/ 

National Association of State Energy Officials – repository of state planning and implementation tools

http://www.naseo.org/volkswagen-settlement

National Tribal Air Association Volkswagen Settlement Work Group

http://www7.nau.edu/itep/main/ntaa/

Electrify America - National Zero Emission Vehicle Plan

https://www.electrifyamerica.com

U.S. Department of Justice

US DOJ VW page

U.S. Federal Trade Commission

FTC VW general information

U.S. District Court, Northern District of California – court documents

Federal court VW page

U.S. Environmental Protection Agency - VW Settlement website

EPA general information

Volkswagen Emission Settlement Page

VW settlement page

Wilmington Trust, N.A. (the “Trustee”) site for the State Trust

https://www.vwenvironmentalmitigationtrust.com/state-trust.html

 

     


For more information contact:

Betsy McGregor
AEA Preliminary Design and
Environmental Manager
Tel: 907-771-3000
Fax: 907-771-3044

 

 This page was updated on May 1, 2018