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Volkswagen Settlement - Florida Mitigation Fund

Volkswagen Consent Decree and Partial Settlements

In October 2016, Volkswagen (VW) settled with the U.S. government resolving claims that it violated the Clean Air Act by selling diesel vehicles that violated the U.S. Environmental Protection Agency’s (EPA) mobile source emission standards. The violation involved installation and use of emission testing “defeat devices” in approximately 500,000 turbocharged direct injection (TDI) 2.0-liter diesel engine vehicles sold and operated in the United States from model year 2009 through 2015. In May 2017, VW entered into a second settlement with the U.S. government resolving additional claims that it violated the Clean Air Act by selling approximately 80,000 TDI 3.0-liter diesel engines also equipped with defeat devices.

The defeat devices allowed the 2.0-liter and 3.0-liter diesel vehicles to meet the applicable nitrogen oxides (NOx) emission limits during emissions tests while not meeting these limits during normal vehicle operation. To resolve the 2.0-liter and 3.0-liter diesel engine Clean Air Act violations, VW has agreed to provide approximately $16 billion to fund the following actions:

  • A requirement that VW spend $11 billion to buy back or install pollution control equipment for at least 85 percent of the 2.0-liter and 3.0-liter TDI engines (more information on vehicle buybacks and modifications is available at www.VWCourtSettlement.com);
  • A $2 billion investment to promote the use of zero emission vehicles and infrastructure (more information is available in EPA’s response to Frequently Asked Questions); and
  • $2.925 billion to fully remediate the excess NOx emissions that were emitted by the approximately 500,000 2.0-liter and 80,000 3.0-liter vehicles equipped with defeat devices (the “Mitigation Trust Fund”).

Owners/lessees of VW vehicles should visit www.VWCourtSettlement.com for information on vehicle buyback and modification options under the Class Settlement Program.

Mitigation Trust Fund

On October 2, 2017, the executed Final Trust Agreement was filed with the court, establishing the terms and conditions of the Mitigation Trust Fund. The trustee is Wilmington Trust, N.A., and will manage the trust for the beneficiaries. Under the terms of Final Trust Agreement, all 50 states, the District of Columbia and Puerto Rico are eligible to become beneficiaries under the Environmental Mitigation Trust Agreement for State Beneficiaries.

Each eligible beneficiary can receive a predetermined share of $2.925 billion, which is based upon the number of 2.0-liter and 3.0-liter diesel vehicles sold in each jurisdiction. Florida’s share is more than $166 million, or 5.68 percent of the overall Mitigation Trust Fund. The $166 million is the combined amount from the 2.0-liter settlement ($152.4 million), as specified in Appendix D-1 to the Final Trust Agreement, and from the 3.0-liter settlement ($12.9 million), as specified in the Appendix D-1A to the Second Partial Consent Decree.

The purpose of Mitigation Trust Fund is to provide money for specified diesel emission reduction projects. These projects are intended to offset excess emissions of NOx caused by the subject vehicles in order to fully mitigate the total, lifetime excess NOx emissions from the 2.0-liter and 3.0-liter vehicles.

Timeline for Participation in the Mitigation Trust Fund

The Environmental Mitigation Trust Agreement for State Beneficiaries provides a process that the states must follow in order to become beneficiaries under the Volkswagen Environmental Mitigation Trust Agreement.

The “Trust Effective Date” is October 2, 2017. For a state to become a Beneficiary, the state must execute and file the Certificate for Beneficiary Status contained in Appendix D-3 by December 1, 2017 – 60 days after the Trust Effective Date.

On November 28, 2017, the State of Florida elected to become a Beneficiary under the Volkswagen Environmental Mitigation Trust Agreement by submitting the completed Certification Form to Wilmington Trust, N.A., the court-appointed Trustee. The Certification designated the Department of Environmental Protection as the Lead Agency in Florida for purposes of participation in the Volkswagen Environmental Mitigation Trust.

On January 29, 2018, Wilmington Trust filed with the court the Notice of Beneficiary Designation, confirming that the State of Florida is a Beneficiary to the Volkswagen Environmental Mitigation Trust.

State Mitigation Plan

Now that the trustee has declared that Florida is a beneficiary, the state is required to prepare and submit to the trustee a Mitigation Plan before the trustee will distribute funds to the state.

The Environmental Mitigation Trust Agreement for State Beneficiaries specifies that the following issues be addressed in the Mitigation Plan:

  • The state’s overall goal for the use of the funds;
  • The categories of Eligible Mitigation Actions that the state 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 state will consider 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 within its jurisdiction;
  • A general description of the expected ranges of emission benefits that the state estimates would be realized by implementation of the Eligible Mitigation Actions identified in the Mitigation Plan; and
  • An explanation of how the state will seek and consider public input on its Mitigation Plan.

The department will solicit public input to help inform the development of Florida’s Mitigation Plan. Additional information and instructions on how to submit comments will be provided at a future date. The state’s Mitigation Plan is not a formal solicitation for project proposals.

Eligible Mitigation Actions

Appendix D-2 of the Environmental Mitigation Trust Agreement for State Beneficiaries specifies 10 types of projects eligible for the Mitigation Trust Fund.

These projects are different from the options available to owners/lessees of VW vehicles. VW owners/lessees should visit www.VWCourtSettlement.com for information on vehicle buyback and modification options under the Class Settlement Program.

Trust funds may be used to pay some or all of the cost to repower or replace eligible diesel-powered vehicles with new diesel vehicles or engines, alternative fueled vehicles or engines, or replacements with all-electric vehicles or engines. Both privately-owned and government-owned fleets are potentially eligible to receive funding. The settlement expressly requires that the old vehicles and/or diesel engines be scrapped.

Appendix D-2 to the Environmental Mitigation Trust Agreement for State Beneficiaries provides detail on eligible equipment categories, model years, and the percentages of matching costs that funding recipients must provide. There are 10 categories of Eligible Mitigation Actions:

  • Eligible Large Trucks include 1992-2009 engine model year Class 8 Local Freight or Drayage.
  • Eligible Large Trucks must be Scrapped.
  • Eligible Large Trucks may be Repowered with any new diesel or Alternate Fueled engine or All-Electric engine or may be replaced with any new diesel or Alternate Fueled or All-Electric vehicle, with the engine model year in which the Eligible Large Trucks Mitigation Action occurs or one engine model year prior.
  • For Non-Government Owned Eligible Class 8 Local Freight and Drayage Trucks:
    • Up to 40% of the cost of a Repower with a new diesel or Alternate Fueled (e.g., CNG, propane, Hybrid) engine, including the costs of installation of such engine.
    • Up to 25% of the cost of a new diesel or Alternate Fueled (e.g., CNG, propane, Hybrid) vehicle and up to 50% for drayage trucks.
    • Up to 75% of the cost of a Repower with a new All-Electric engine, including the costs of installation of such engine, and charging infrastructure associated with the new All-Electric engine.
    • Up to 75% of the cost of a new All-Electric vehicle, including charging infrastructure associated with the new All-Electric vehicle.
  • For Government Owned Eligible Class 8 Large Trucks: All options up to 100 percent funding.
  • Eligible Buses include 2009 engine model year or older class 4-8 school buses, shuttle buses, or transit buses.
  • Eligible Buses must be Scrapped.
  • Eligible Buses may be Repowered with any new diesel or Alternate Fueled or All-Electric engine, or may be replaced with any new diesel or Alternate Fueled or All-Electric vehicle, with the engine model year in which the Eligible Bus Mitigation Action occurs or one engine model year prior.
  • For Non-Government Owned Buses, Beneficiaries may draw funds from the Trust in the amount of:
    • Up to 40% of the cost of a Repower with a new diesel or Alternate Fueled engine, including the costs of installation of such engine.
    • Up to 25% of the cost of a new diesel or Alternate Fueled vehicle.
    • Up to 75% of the cost of a Repower with a new All-Electric engine, including the costs of installation of such engine, and charging infrastructure associated with the new All-Electric engine.
    • Up to 75% of the cost of a new All-Electric vehicle, including charging infrastructure associated with the new All-Electric vehicle.
  • For Government Owned Eligible Buses, and Privately-Owned School Buses Under Contract with a Public School District: All options up to 100 percent funding.
  • Eligible Freight Switchers include pre-Tier 4 switcher locomotives that operate 1,000 or more hours per year.
  • Eligible Freight Switchers must be Scrapped.
  • Eligible Freight Switchers may be Repowered with any new diesel or Alternate Fueled or All-Electric engine(s) (including Generator Sets), or may be replaced with any new diesel or Alternate Fueled or All-Electric (including Generator Sets) Freight Switcher, that is certified to meet the applicable EPA emissions standards (or other more stringent equivalent State standard) as published in the CFR for the engine model year in which the Eligible Freight Switcher Mitigation Action occurs.
  • For Non-Government Owned Freight Switchers, Beneficiaries may draw funds from the Trust in the amount of:
    • Up to 40% of the cost of a Repower with a new diesel or Alternate Fueled engine(s) or Generator Sets, including the costs of installation of such engine(s).
    • Up to 25% of the cost of a new diesel or Alternate Fueled Freight Switcher.
    • Up to 75% of the cost of a Repower with a new All-Electric engine(s), including the costs of installation of such engine(s), and charging infrastructure associated with the new All-Electric engine(s).
    • Up to 75% of the cost of a new All-Electric Freight Switcher, including charging infrastructure associated with the new All-Electric Freight Switcher.
  • For Government Owned Eligible Freight Switchers: All options up to 100 percent funding.
  • Eligible Ferries and/or Tugs include unregulated, Tier 1, or Tier 2 marine engines.
  • Eligible Ferry and/or Tug engines that are replaced must be Scrapped.
  • Eligible Ferries and/or Tugs may be Repowered with any new Tier 3 or Tier 4 diesel or Alternate Fueled engines, or with All-Electric engines, or may be upgraded with an EPA Certified Remanufacture System or an EPA Verified Engine Upgrade.
  • For Non-Government Owned Eligible Ferries and/or Tugs, Beneficiaries may only draw funds from the Trust in the amount of:
    • Up to 40% of the cost of a Repower with a new diesel or Alternate Fueled engine(s), including the costs of installation of such engine(s).
    • Up to 75% of the cost of a Repower with a new All-Electric engine(s), including the costs of installation of such engine(s), and charging infrastructure associated with the new All-Electric engine(s).
  • For Government Owned Eligible Ferries and/or Tugs: All options up to 100 percent funding.
  • Eligible Marine Shorepower includes systems that enable a compatible vessel’s main and auxiliary engines to remain off while the vessel is at berth. Components of such systems eligible for reimbursement are limited to cables, cable management systems, shore power coupler systems, distribution control systems, and power distribution. Marine shore power systems must comply with international shore power design standards (ISO/IEC/IEEE 80005-1-2012 High Voltage Shore Connection Systems or the IEC/PAS 80005-3:2014 Low Voltage Shore Connection Systems) and should be supplied with power sourced from the local utility grid. Eligible Marine Shorepower includes equipment for vessels that operate within the Great Lakes.
  • For Non-Government Owned Marine Shorepower, Beneficiaries may only draw funds from the Trust in the amount of up to 25% for the costs associated with the shore-side system, including cables, cable management systems, shore power coupler systems, distribution control systems, installation, and power distribution components.
  • For Government Owned Marine Shorepower, Beneficiaries may draw funds from the Trust in the amount of up to 100% for the costs associated with the shore-side system, including cables, cable management systems, shore power coupler systems, distribution control systems, installation, and power distribution components.
  • Eligible Medium Trucks include 1992-2009 engine model year class 4-7 Local Freight trucks.
  • Eligible Medium Trucks must be Scrapped.
  • Eligible Medium Trucks may be Repowered with any new diesel or Alternate Fueled or All-Electric engine, or may be replaced with any new diesel or Alternate Fueled or All-Electric vehicle, with the engine model year in which the Eligible Medium Trucks Mitigation Action occurs or one engine model year prior.
  • For Non-Government Owned Eligible Medium Trucks, Beneficiaries may draw funds from the Trust in the amount of:
    • Up to 40% of the cost of a Repower with a new diesel or Alternate Fueled engine, including the costs of installation of such engine.
    • Up to 25% of the cost of a new diesel or Alternate Fueled vehicle.
    • Up to 75% of the cost of a Repower with a new All-Electric engine, including the costs of installation of such engine, and charging infrastructure associated with the new All-Electric engine.
    • Up to 75% of the cost of a new All-Electric vehicle, including charging infrastructure associated with the new All-Electric vehicle.
    • For Government Owned Eligible Medium Trucks: All options up to 100 percent funding.
  • Eligible Airport Ground Support Equipment includes:
    • Tier 0, Tier 1, or Tier 2 diesel powered airport ground support equipment; and
    • Uncertified, or certified to 3 g/bhp-hr or higher emissions, spark ignition engine powered airport ground support equipment.
  • Eligible Airport Ground Support Equipment must be Scrapped.
  • Eligible Airport Ground Support Equipment may be Repowered with an All-Electric engine, or may be replaced with the same Airport Ground Support Equipment in an All-Electric form.
  • For Non-Government Owned Eligible Airport Ground Support Equipment, Beneficiaries may only draw funds from the Trust in the amount of:
    • Up to 75% of the cost of a Repower with a new All-Electric engine, including costs of installation of such engine, and charging infrastructure associated with such new All-Electric engine.
    • Up to 75% of the cost of a new All-Electric Airport Ground Support Equipment, including charging infrastructure associated with such new All-Electric Airport Ground Support Equipment.
  • For Government Owned Eligible Airport Ground Support Equipment: All options up to 100 percent funding.
  • Eligible Forklifts includes forklifts with greater than 8,000 pounds lift capacity.
  • Eligible Forklifts and Port Cargo Handling Equipment must be Scrapped.
  • Eligible Forklifts and Port Cargo Handling Equipment may be Repowered with an All-Electric engine, or may be replaced with the same equipment in an All-Electric form.
  • For Non-Government Owned Eligible Forklifts and Port Cargo Handling Equipment, Beneficiaries may draw funds from the Trust in the amount of:
    • Up to 75% of the cost of a Repower with a new All-Electric engine, including costs of installation of such engine, and charging infrastructure associated with such new All-Electric engine.
    • Up to 75% of the cost of a new All-Electric Forklift or Port Cargo Handling Equipment, including charging infrastructure associated with such new All-Electric Forklift or Port Cargo Handling Equipment.
  • For Government Owned Eligible Forklifts and Port Cargo Handling Equipment: All options up to 100 percent funding.

Each Beneficiary may use up to fifteen percent (15%) of its allocation of Trust Funds on the costs necessary for, and directly connected to, the acquisition, installation, operation and maintenance of new light duty zero emission vehicle supply equipment for projects as specified below. Provided, however, that Trust Funds shall not be made available or used to purchase or rent real-estate, other capital costs (e.g., construction of buildings, parking facilities, etc.) or general maintenance (i.e., maintenance other than of the Supply Equipment).

  • Light duty electric vehicle supply equipment includes Level 1, Level 2 or fast charging equipment (or analogous successor technologies) that is located in a public place, workplace, or multi-unit dwelling and is not consumer light duty electric vehicle supply equipment (i.e., not located at a private residential dwelling that is not a multi-unit dwelling).
  • Light duty hydrogen fuel cell vehicle supply equipment includes hydrogen dispensing equipment capable of dispensing hydrogen at a pressure of 70 megapascals (MPa) (or analogous successor technologies) that is located in a public place.
  • Subject to the 15% limitation above, each Beneficiary may draw funds from the Trust in the amount of:
    • Up to 100% of the cost to purchase, install and maintain eligible light duty electric vehicle supply equipment that will be available to the public at a Government Owned Property.
    • Up to 80% of the cost to purchase, install and maintain eligible light duty electric vehicle supply equipment that will be available to the public at a Non-Government Owned Property.
    • Up to 60% of the cost to purchase, install and maintain eligible light duty electric vehicle supply equipment that is available at a workplace but not to the general public.
    • Up to 60% of the cost to purchase, install and maintain eligible light duty electric vehicle supply equipment that is available at a multi-unit dwelling but not to the general public.
    • Up to 33% of the cost to purchase, install and maintain eligible light duty hydrogen fuel cell vehicle supply equipment capable of dispensing at least 250 kg/day that will be available to the public.
    • Up to 25% of the cost to purchase, install and maintain eligible light duty hydrogen fuel cell vehicle supply equipment capable of dispensing at least 100 kg/day that will be available to the public.

Beneficiaries may use Trust Funds for their non-federal voluntary match, pursuant to Title VII, Subtitle G, Section 793 of the DERA Program in the Energy Policy Act of 2005 (codified at 42 U.S.C. § 16133), or Section 792 (codified at 42 U.S.C. § 16132) in the case of Tribes, thereby allowing Beneficiaries to use such Trust Funds for actions not specifically enumerated in this Appendix D-2, but otherwise eligible under DERA pursuant to all DERA guidance documents available through the EPA.  Trust Funds shall not be used to meet the nonfederal mandatory cost share requirements, as defined in applicable DERA program guidance, of any DERA grant.

Volkswagen Settlement Timeline

Event

Approximate Time Frame

2.0-Liter Partial Settlement approved by Court

October 25, 2016

3.0-Liter Partial Settlement approved by Court

May 17, 2017 

Wilmington Trust selected as Trustee

March 15, 2017

Wilmington Trust filed Final Trust Agreement with Court

September 6, 2017

Trust Effective Date

October 2, 2017

Florida Applies to Become a Beneficiary

November 28, 2017

States Notified of Beneficiary DesignationJanuary 30, 2018
Florida Submits its Mitigation PlanAt least 30 days prior to submitting any project-specific funding request to the Trustee.
Florida Submits Funding RequestsAt least 30 days after submitting the state’s Mitigation Plan to the Trustee.

Public Informational Meetings and Webinars

The Department recently held a series of public informational meetings describing the required elements of Florida's State Beneficiary Mitigation Plan and the various approaches that the state may take in prioritizing eligible mitigation actions. In continuation of the Department's effort to offer opportunities for the public to learn about Florida's Diesel Emissions Mitigation Program and the mitigation planning process, the Department will host two webinars to share this information with interested individuals who were unable to attend the in-person meetings.

These two webinars coincide with a 60-day period for all persons to complete an online public survey, the results of which the Department will use in developing Florida’s State Beneficiary Mitigation Plan under the Volkswagen Diesel Emissions Environmental Mitigation Trust. The Department respectfully requests that persons planning to attend the public informational webinars RSVP using the links below:

DateTimeLocationAgenda
Thursday, April 19, 20183:00 p.m. – 5:00 p.m.

Webinar
https://attendee.gotowebinar.com/register/2748578248773725443

Agenda

Thursday, April 26, 20186:00 p.m. – 8:00 p.m.

Webinar
https://attendee.gotowebinar.com/register/36096629790898065953

Agenda

The presentation materials that the Department used at the in-person meetings are identical to the materials that the Department will use on these two webinars. These materials are available in PDF format at the link below:

Diesel Emissions Mitigation Program Public Informational Meetings Presentation

Individuals interested in submitting general comments on Florida's approach to developing the State Beneficiary Mitigation Plan may also e-mail those comments to VWMitigation@FloridaDEP.gov. At this time, the Department is not soliciting funding requests or proposals for any specific diesel emissions mitigation project.

DateTimeLocationAgenda
Wednesday, March 21, 20183:00 p.m. – 5:00 p.m.

Department of Environmental Protection
Northeast District Office
8800 Baymeadows Way West, Suite 100
Jacksonville, Florida 32256

Agenda

Thursday, March 22, 20183:00 p.m. – 5:00 p.m.

Department of Environmental Protection

Bob Martinez Center
2600 Blair Stone Road
Tallahassee, FL 32399

Agenda

Tuesday, March 27, 20183:00 p.m. – 5:00 p.m

Department of Environmental Protection
Central District Office
3319 Maguire Boulevard
Orlando FL, 32803

Agenda

Wednesday, March 28, 20183:00 p.m. – 5:00 p.m.

Department of Environmental Protection
Southwest District Office
13051 North Telecom Parkway, Suite 101
Temple Terrace, FL 33637

Agenda

Thursday, March 29, 20183:00 p.m. – 5:00 p.m.

Department of Environmental Protection
Southeast District – West Palm Beach
3301 Gun Club Road
West Palm Beach, FL 33406

Agenda

Diesel Emissions Mitigation Program Public Survey

Thank you in advance for your feedback. This survey should take between 5 and 10 minutes to complete.

 

News and Updates

DEP has established an email list for parties interested in following developments related to the State Mitigation Plan and future activity under the Mitigation Trust Fund. Please visit DEP's subscription page to sign up for email updates.

 

Informational Links

 

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Last Modified:
April 11, 2018 - 6:17am

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