Federal Settlement with Volkswagen Could Mean Big Dollars for Diesel Clean Up and Zero Emission Vehi

After months of negotiations between the Justice Department, the Environmental Protection Agency (EPA) and Volkswagen (VW), the federal government and VW have reached a “partial settlement” regarding the company’s illegal tampering to bypass established emissions standards. This illegal activity affected 11 million vehicles around the world, releasing large amounts of health-threatening excessive nitrogen oxide (NOx) pollution.

The settlement has three main parts:

1. Recall of 85% of affected vehicles through buy backs and lease termination, and emissions modifications;

2. Creation of a $2.7 billion national fund to remediate NOx emissions where violating VW vehicles operated or continue to operate, with a special focus on impacts to disadvantaged communities;

3. Investment of an additional $2 billion on zero emission vehicles (ZEV) and infrastructure to support and educate recharging or refueling.

The $2.7 billion NOx Remediation fund will be placed into a trust to be administered by a trustee to be selected by the federal government, likely by late 2016. Funds will be allocated to states based on an analysis of BMV data in each state of where offending VW vehicles were registered, not population. Ohio is slated to receive $71 million, according to the proposed settlement, but it's unclear at this point when those funds will be available.

States are required to file proposals with the court that explain the state's "beneficiary remediation plan." Plans are subject to public comment. States are required to follow project and cost parameters focused on repowering or replacing old diesel engines with new diesel, alternative fuel or electrified vehicles. On road projects are eligible, and marine projects that eliminate idling while vessels are docked may be eligible. The focus of the plan should be the elimination of higher pollution diesels that impact low income and disadvantaged communities, and communities disproportionately impacted by nitrogen oxide (NOx) pollution. Cost sharing requirements for projects may be included.

A public comment period of the federal government’s proposed settlement ended August 5. The EPA will now proceed to develop the plan. A final settlement with VW is not expected until October, so there is a strong possibility that plans will change. A web-based fact sheet with details is available at www.EPA.gov/VW. Emails can be directed to VW_settlement@epa.gov.

In public commentary to the US EPA, Clean Fuels Ohio submitted a number of key points:

1. Disproportionate Government vs. Private Fleet Reimbursement:

CFO suggests lowering government reimbursement from 100% to 80% and raise the rate for private fleets to 70%.

2. Fair and Equal assessment of Alternative Fuels Projects:

CFO recommends that the US EPA modify the DEQ tool to ensure it renders fully accurate results from modern CNG, LNG and LPG engines. If this is not possible, CFO asks the government to prohibit states from using the DEQ for evaluation, and instead use other data sources such as EPA or CARB engine certification data for these evaluations.

3. Truck Stop Electrfication and Inland Shore Power Eligibility:

CFO proposes that the government expand eligibility to inland (rivers, lakes) vessels and TSE facilities for trucks.

4. Transparency and Accountability in Volkwagon's ZEV Plan:

CFO recommends that the government provide much greater detailed guidance and accountability mechanisms for the ZEV program and create a program structure that ensures transparency and following of the best marker-oriented practices for charging infrastructure and other investments.

5. Balanced PEV Infrastructure and other investments: CFO recommends an approach that accounts for local market needs rather than a one-size-fits-all solution such as a focus only on fast EV charging along corridors

6. Balanced ZEV Investments in ZEV Markets by State:

CFO proposes an equitable distribution of settlement funds for the ZEV program based on population size and density.

7. General comments:

Clean Fuels Ohio asks the federal government to formally encourage states to consult and work with Clean Cities Coalitions as local partners to help identify, select and administer projects.

Clean Fuels Ohio will continue to monitor the situation. We also will actively engage both USEPA, Ohio EPA, and stakeholders at the state level and our community, fleet and industry partners and members. We will keep our members informed and act to create solutions to benefit our health and environment.

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Clean Fuels Ohio

3240 W Henderson Rd Suite A

Columbus, OH 43220-2300

614.884.7336

info@cleanfuelsohio.org