Focus On Air Division
Volkswagen Environmental Mitigation Trust Fund
Background and History
SizeFile Name
714 KB NE_VW_Mitigation_Plan_Jan2018.pdf

Following Public Input, NDEQ 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 (NDEQ) 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. NDEQ filed forms with the court and with the Trustee to certify Nebraska as a beneficiary of the Trust; certification was received January 29, 2018.

NDEQ sought public input and has developed an initial Mitigation Plan to best utilize these funds to benefit Nebraska and meet the purpose of the VW State Trust. NDEQ accepted public comments on this draft plan through December 31, 2017. The plan is available for download from the link at the top of this page.


Nebraska Mitigation Plan

As the state’s designated lead agency, NDEQ will administer how the VW Trust money will be distributed and spent in Nebraska. As required by the VW Trust, NDEQ 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.

During development of the plan, NDEQ 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.


NDEQ 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 has been submitted. During the course of the Trust, the state will be allowed to adjust its goals and selection of mitigation actions at its discretion by providing updated Mitigation Plans to the Trustee.


Mitigation Activities Eligible for Funding

Trust funds can only be expended for specific actions designed to reduce NOx emissions.

The eligible actions and their maximum allowed reimbursement percentages are spelled out in the court settlement and are detailed in Appendix A of the Mitigation Plan.

NDEQ has assessed the eligible mitigation activities in the context of Nebraska’s air pollution issues, population distribution, existing transportation infrastructure, estimated project cost-effectiveness, potential public health benefits, and public comments. The activities Nebraska proposes to pursue in the initial Mitigation Plan are outlined below, with the percentage of funds anticipated to be used for each.


Nebraska has ten years to expend at least 80% of its initial allocation from the Trust. NDEQ currently plans to expend the state’s allocation within five years. The timing of the mitigation actions outlined in the Nebraska’s plan is still in development.

Category*
Action
Percent
Dollars
2
Transit Bus Alternative Fuel Replacements
10%
$1,224,834.75
2
School Bus Diesel and Alternative Fuel Replacements
25%
$3,062,086.87
10
Diesel Emission Reduction Act (Clean Diesel Program)
25%
$3,062,086.87
9
Zero Emission Vehicle (ZEV) Charging Infrastructure
10%
$1,224,834.75
1, 6, 7, 8
Eligible Actions Based on Demand
25%
$3,062,086.87

Administrative Costs (maximum 15%)
5%
$612,417.37

TOTAL
100%
$12,248,347.48
* Eligible Mitigation Action Number in the VW State Trust Agreement


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 Environmental Quality
FSAD 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 *


* This Page contains links to Non-NDEQ websites, these links will open in a New Tab or Window