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Volkswagen Diesel Emissions Settlement

Settlement Background

In January 2016 the United States and the State of California filed a lawsuit against Volkswagen (VW) alleging it had manufactured diesel cars sold and operated in the U.S. with systems intended to defeat emissions tests. These systems allowed vehicles to emit nitrogen oxide (NOx) pollution at levels up to 40 times the amounts allowed under the Clean Air Act.

The total VW settlement is over $15.7 billion dollars across three categories:

Vehicle Buyback and Modification: $10.8 billion for buyback or emission control modifications on at least 85 perfect of the affected vehicles.
Environmental Mitigation Trust: $2.9 billion in an account to be used for 'Eligible Mitigation Actions' to achieve reductions of mobile NOx emissions. Eligible beneficiaries of this trust account include each of the 50 states and American Indian Tribes.
Zero Emission Vehicle Investment: $2 billion for investments in zero emissions vehicles and infrastructure.

VW_Settlement_Breakdown

Montana will receive $12.6 million from the environmental mitigation trust. This trust fund will be used for projects that are Eligible Mitigation Actions under the trust that mitigate NOx emissions in the transportation sector. Projects eligible for funding include but are not limited to diesel trucks, buses, freight switcher locomotives, and airport ground support equipment. Vehicle replacements, engine upgrades and retrofits are eligible for funding. States can also use up to 15 percent of their funds for light duty electric vehicle charging stations available to the public or located at workplaces or multi-unit housing locations.

The Montana Department of Environmental Quality (DEQ) is the state’s lead agency to oversee how Montana’s $12.6 million allocation is distributed and spent. DEQ will be consulting with other agencies and members of the public on how best to spend these funds on eligible projects to maximize air quality and other economic and environmental benefits. Prior to receiving funding, the agency must submit a Beneficiary Mitigation Plan describing how the state plans to use the funds. To develop the Plan, DEQ is seeking public input on state goals, criteria, focus areas and other issues associated with spending and disbursing the environmental mitigation trust funds.

To view information and additional resources from other states involved in the Volkswagen Environmental Mitigation Trust settlement please visit the VW Settlement Clearinghouse page. This page includes contact information and other state’s progress on their mitigation plans.

Settlement Documents

Montana Impacts

Approximately 2,800 Montanans are registered as owning or leasing affected vehicles. The additional NOx emissions from the affected vehicles is between .07 tons and .26 tons per day.

Projects

Project Tools

The AFLEET Tool - AFLEET stands for Alternative Fuel Life-Cycle Environmental and Economic Transportation (AFLEET). This Excel-based tool allows anyone to input simple fleet/vehicle information data and compare emissions, cost of ownership and other outputs.

Mitigation Activity Eligible for Funding:

Eligible Medium Trucks - Class 4-7 Freight Trucks
Eligible Buses - Class 4-8 School Bus, Shuttle Bus, or Transit Bus
Eligible Large Trucks - Class 8 Local Freight Trucks
Airport Ground Support Equipment
Ferries/Tugs
Forklifts
Railroad Freight Switchers
Charging Stations for light duty electrical vehicles
- Up to 15% of total state allocation
Administration Marketing and Education
- Up to 15% of total state allocation

*Click on the drop-downs below to view criteria for each category*

Class 4-7 Local Freight (Medium Trucks) Eligibility

Gross Vehicle Weight Rating (GVWR 14,000-33,000 lbs.)
1992-2009 engine model year medium trucks
Repower with new diesel or alternate fueled engine
Replace with new diesel or alternate fueled vehicle
Repower with all-electric engine (can include charging infrastructure)
Purchase new all-electric vehicle (can include charging infrastructure)
Alternate fuels include CNG, propane, hybrid

Class 4-8 School Bus, Shuttle Bus, or Transit Bus Eligibility

Bus with 2009 engine model year or older
Repower with new diesel or alternate fueled engine
Replace with alternate fueled vehicle
Repower with all-electric engine (can include charging infrastructure)
Purchase new all-electric vehicle (can include charging infrastructure)
Alternate fuels include CNG, propane, hybrid

Class 8 Local Freight Trucks Eligibility

1992-2009 engine model year Class 8 truck
Repower with new diesel or alternate fueled engine
Replace with new diesel or alternate fueled vehicle
Repower with all-electric engine (can include charging infrastructure)
Purchase new all-electric vehicle (can include charging infrastructure)
Alternate fuels include compressed natural gas (CNG), propane, hybrid

Airport Ground Support Equipment Eligibility

Tier 0, Tier 1, Tier 2
Uncertified, or certified to 3g/bhp-hr. spark ignition
Repower with all-electric engine (can include charging infrastructure)
Purchase new all-electric vehicle (can include charging infrastructure)
Electrification projects only, no new diesel or alternate fuels

Ferry/Tugs Eligibility

Ferries/Tugs with unregulated, Tier 1, Tier 2 marine engines
Repower with new diesel or alternate fueled engine or generator sets
Repower with all-electric engine (can include infrastructure)
No funding for replacement ferries/tugs

Forklifts Eligibility

Forklifts with greater than 8,000 lb. lift capacity
Repower with all-electric engine (can include charging infrastructure)
Purchase new all-electric vehicle (can include charging infrastructure)
Electrification projects only, no new diesel or alternate fuels

Freight Switcher Eligibility

Switcher with pre- Tier 4 that operates at least 1,000 hours per year
Repower with new diesel or alternate fueled engine or generator sets
Replace with new diesel or alternate fueled freight switcher certified to meet US EPA emission standards
Repower with all-electric engine (can include charging infrastructure)
Purchase all-new electric freight switcher (can include infrastructure)

Volkswagen Settlement Estimated Timeline

*All dates are estimates and subject to change*

Event	Approximate Time Frame
Trust Effective Date (TED)	October 2, 2017
Montana filed beneficiary certification	November 14, 2017
Montana receives beneficiary designation	January 30, 2018
DEQ sends out request for public comment	Early February 2018
DEQ develops draft mitigation plan	March-April 2018
Public outreach on draft mitigation plan	April-May 2018
DEQ finalizes mitigation plan and files with Trustee	30 days prior to submitting first funding request
Montana requests and receives funds	Late summer/early fall 2018

Public Involvement

Volkswagen News and Information Mailing List

DEQ will be sending out all information related to the Volkswagen settlement, development of the mitigation plan, information and updates on our VW settlement interested parties list.

To subcribe, click here
Enter your name and e-mail address and click submit
Scroll down and check the Volkswagen Settlement Interested Parties box
Click submit

Request for Public Comment Regarding the Volkswagen Settlement and Montana’s Environmental Mitigation Trust Funds

The Montana Energy Office at the Department of Environmental Quality (DEQ) requests public comment on aspects of Montana’s plan to fund eligible projects and activities as part of the Environmental Mitigation Trust (EMT) portion of the Volkswagen settlement agreement. About $12.6 million is available through the EMT to Montana for the next 10 years. Projects and activities that mitigate mobile sources of nitrogen oxide (NOx) emissions are eligible for trust funds. Local, state, tribal and federal government entities, private businesses, non-profit organizations, and individuals may receive funding for eligible projects. Eligible mitigation projects include replacement or repowering the following vehicles with cleaner diesel, alternative fuel, or all-electric engines or vehicles. The list of vehicle categories below does not include ocean-going vessels because these vehicles do not operate in Montana.

Class 4-8 school bus, shuttle bus, or transit bus
Class 4-7 local freight trucks
Class 8 local freight trucks
Ferries/tugs
Airport ground support equipment
Railroad freight switchers
Forklifts

Off-road vehicle replacements and repowers are not eligible mitigation categories under the EMT settlement. However, states may use Volkswagen EMT settlement funding as match towards the Environmental Protection Agency’s State Clean Diesel grant. If Montana supplements our State Clean Diesel grant with EMT settlement funds, this allows non-road engine repowers and vehicle replacements to be funded.

Additionally, states can use a maximum of 15% of their trust allocation to fund light duty zero emission vehicle supply equipment(e.g., electric vehicle charging stations). States can also spend a maximum of 15% of their funds on administration, including education and marketing, costs directly associated with eligible mitigation actions listed above.

As a beneficiary of the trust funds, DEQ must develop a draft mitigation plan. Public input on the questions in this survey, specific project ideas as well as general comments and input related to Montana’s goals and prioritization of our trust allocation will help inform DEQ’s mitigation plan. DEQ must develop a draft mitigation plan that addresses the following issues:

Summarizes how the beneficiary plans to use the mitigation funds allocated to it through the Trust
Overall goal for the use of the funds
Categories of eligible mitigation actions the beneficiary anticipates 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
A description of how the beneficiary will consider the potential beneficial impact of the selected eligible mitigation action on air quality areas that bear a disproportionate share of the air pollution burden within its jurisdiction
General description of the expected ranges of emission benefits the Beneficiary estimates would be realized by implementation of the eligible mitigation actions

Please click on the button below to open the survey and respond to any or all of the 16 questions to help inform DEQ’s draft mitigation plan. Please be as specific as possible in your responses. Please fill out this survey by Friday, March 2, 2018

VW Settlement Survey

Request for Project Information

If you have specific vehicle replacement, repowers, or charging station projects that are listed under the eligible mitigation actions, please submit information related to your project. This Request for Information (RFI) is being sought strictly for gaining knowledge of services and supplies available with an estimate of their corresponding costs and should not be construed as intent, commitment, or promise to acquire services, supplies, or solutions offered. No contract will result from any response to this RFI.

Information about projects may include:

Eligible mitigation project category (e.g., vehicle replacements, repowers, light duty electric vehicle charging stations, marketing or education directly associated with projects)
Project location (including city and county as well as whether project is in an area that receives a disproportionate quantity of air pollution from NOx emissions such as near a school, in an existing industrial area, and other relevant location information)
For light duty electric vehicle charging stations indicate whether project is Level II, Level III or a mix of both.
Fleet type, number of vehicles targeted
Project technology (e.g., diesel bus replacement with battery-electric, freight truck diesel engine repower with cleaner alternative fueled engine)
Government or non-government owned
Projected total project cost
- If the project would replace eligible class 4-8 vehicles with an all-electric vehicle please include the estimated cost of the charging station.
Expected NOx and other emission reductions associated with the project
Other economic, public health and environmental benefits

At a later date, a formal project solicitation period will occur prior to project evaluation, selection and execution. Please send all information to Kyla Maki at kmaki@mt.gov

Resources

VW Settlement Clearinghouse - This website gathers resources and information from states on the Volkswagen Environmental Mitigation Trust settlement. It also includes contact information and state progress on their mitigation plans.
AFLEET Tool - AFLEET stands for Alternative Fuel Life-Cycle Environmental and Economic Transportation (AFLEET). This Excel-based tool allows anyone to input simple fleet/vehicle information data and compare emissions, cost of ownership and other outputs.

Frequently Asked Questions

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