Volkswagen Environmental Mitigation Trust Fund - Background and History

Following Public Input, NDEE Develops Initial Plan for Nebraska’s Volkswagen Trust Funds
 

Background

In October 2016, a U.S. District Court granted final approval of a $14.7 billion settlement against Volkswagen (VW) and Audi for equipping more than 500,000 of their 2.0-liter diesel vehicles to falsify vehicle emissions tests in violation of the Clean Air Act. A second partial settlement with VW filed in December 2016 addresses vehicles containing 3.0-liter engines. These court settlements require VW to establish a $2.925 billion Environmental Mitigation Trust Fund to assist states and tribes to offset the excess nitrogen oxide (NOx) pollution emitted by the offending diesel vehicles. Nebraska is eligible to receive approximately $12.25 million from the Trust, which will have a 15-year time span. No more than one-third of the available funds may be requested each year for the first three years of the Trust.

In September 2017, the Nebraska Department of Environmental Quality (now the Department of Environment and Energy, NDEE) was designated by Governor Ricketts as the lead agency to administer funds allocated to the state from the Volkswagen Diesel Emissions Environmental Mitigation Trust for State Beneficiaries (VW State Trust). As directed by the VW State Trust Agreement, these funds are to be used to undertake authorized actions to reduce nitrogen oxide emissions in Nebraska. The initial allocation to Nebraska from the State Mitigation Trust is approximately $12.25 million. NDEE filed forms with the court and with the Trustee to certify Nebraska as a beneficiary of the Trust; certification was received January 29, 2018.

Nebraska Mitigation Plan

As the state’s designated lead agency, NDEE is administering the distribution of VW Trust money in Nebraska. As required by the VW Trust, the department worked with other sectors of state government to establish a public process to develop a plan to administer the funds.

As a beneficiary of the Trust, Nebraska was required to develop a Mitigation Plan that summarizes how the state intends to use the funds allocated to it under the Trust to achieve reductions in NOx emissions. The Mitigation Plan must include opportunities for public comment and must be submitted to the Trustee for approval at least 30 days prior to submission of any funding requests. The plan describes which eligible mitigation actions Nebraska will pursue, the expected emission reduction benefits, and how these benefits will affect areas in the state that are disproportionately affected by air pollution. The initial plan is available for download from the link at the top of this page.

During development of the plan, the department posted a Request for Comment document to solicit comments and held public information meetings in Lincoln on October 16, 2017 and in North Platte on October 18, 2017. Written comments were accepted at these meetings, through the web portal, and via e-mail from September 21 through November 3, 2017. A tabulation of the written comments is included as Appendix B of the Mitigation Plan.

NDEE also solicited input from the public on Nebraska’s draft Mitigation Plan to reduce NOx emissions using funds provided by the VW Environmental Mitigation Trust. Comments were accepted through December 31, 2017.

Nebraska continues to have flexibility even after the initial Mitigation Plan was submitted. During the course of the Trust, the state is allowed to adjust its goals and selection of mitigation actions at its discretion by providing updated Mitigation Plans to the Trustee. After evaluating the responses to the first several years of program funding, NDEE has updated the Beneficiary Mitigation Plan as allowed by the Trust and adjusted the allocation of funds to several project categories. The updated allocations and Beneficiary Mitigation are available on the main Nebraska Diesel Emission Mitigation Program web page:https://dee.nebraska.gov/volkswagen-environmental-mitigation-trust-fund

Nebraska has ten years to expend at least 80% of its initial allocation from the Trust. NDEE currently plans to expend the state’s allocation within five to six years.

 

How to Contact the Agency and View Comments

To view comments that were submitted during the public comment periods and related public documents, go to our Comments Page at https://ecmp.nebraska.gov/DEQ-VW/ 


You may also contact the Department via mail or e-mail as follows:

Nebraska Department of Environment and Energy
Planning and Aid Division, Attn. VW Comments
P.O. Box 98922
Lincoln, NE 68509-8922

NDEQ.VWSettlement@nebraska.gov


Other Parts of the Volkswagen Settlements

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

Volkswagen is required to earmark about $11.2 billion 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 Emissions Vehicle (ZEV) Investment Plan

Volkswagen is required to invest $1.2 billion outside of California over 10 years to install and promote the use of infrastructure for zero emissions vehicles (ZEV). This part of the settlement will be administered by Volkswagen and the U.S. EPA in four 30-month investment cycles. The first round of project proposals closed January 16, 2017. Proposals for the second round are currently being accepted by Volkswagen. Additional information is available at www.electrifyamerica.com.

Resources

EPA’s Volkswagen Clean Air Act Partial Settlement web page 

U.S. District Court Volkswagen “Clean Diesel” case website 

U.S. Department of Justice’s Volkswagen Settlement web page 

Volkswagen/Audi Diesel Emissions Settlement Program website 

Volkswagen Zero Emission Vehicle (ZEV) Infrastructure program website