In 2017, Volkswagen AG (VW) agreed to plead guilty to charges that it installed software in its model year 2009-2016 2.0 liter and 3.0 liter diesel cars that circumvented EPA emissions standards using a “defeat device.” These vehicles emit up to 40 times more pollution than emissions standards allow in the form of nitrogen oxides (NOx), a pollutant that harms public health and contributes to ozone or smog formation.
As part of a settlement, states are eligible to receive funds to pay all or part of the cost of projects to reduce emissions from diesel vehicles and to install electric vehicle charging stations. See Appendix D.
The amount paid to each state is based on the number of subject VW vehicles registered in the state. Louisiana’s share is approximately $19.8 million. To qualify for the funds, the state has to develop a Mitigation Plan for expenditure of the funds and submit that plan to the VW trust fund for approval. That plan has to outline how the state will use the funds to reduce NOx emissions.
The Louisiana Department of Environmental Quality (LDEQ) was designated the lead agency (beneficiary) by the Office of Gov. John Bel Edwards. Three Louisiana state agencies were designated to receive equal shares of the fund: LDEQ, the Louisiana Department of Natural Resources (LDNR) and the Louisiana Department of Transportation and Development (LDOTD). These agencies were tasked to allocate the VW Mitigation Trust funds. The agencies, with public input, are proposing to pool their funds to target replacement of eligible diesel school buses. The bus replacement program will offer partial funding primarily to school districts to replace their buses with electric, alternative fuel or high-efficiency diesel vehicles.
LDOTD is proposing to use its share of the funds to replace eligible diesel vehicles and heavy equipment with new, less polluting engines.
Volkswagen Clean Air Act Civil Settlement
The Volkswagen settlement was approved by a federal court in California on October 25, 2016. VW is required to pay $2.9 billion into an environmental mitigation trust fund to be shared among the states and tribes. Louisiana will receive $19.8 million over three years. The money will be used to offset the excess air pollution caused by VW’s actions.
Separate parts of the settlement require Volkswagen to spend $10 billion to buy back affected vehicles, terminate leases early, or repair the vehicles. Additionally, Volkswagen is required to invest $2 billion over 10 years in electric vehicle charging stations and education. VW, the U.S. Environmental Protection Agency (EPA), and California will administer these parts of the settlement.
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