Volkswagen Mitigation Trust
Status of Arkansas Volkswagen Settlement Programs
On November 26, 2019, DEQ submitted an amended Beneficiary Mitigation Plan to the Trustee that supersedes earlier submissions in June 2018 and June 2019. This plan describes four new programs that DEQ intends to implement to reduce emissions using funding from the Volkswagen Settlement. These programs include an alternative fuel bus pilot program (ABC Pilots), an alternative fuels funding assistance program for repower/replacement of heavy-duty and medium-duty diesel local freight and drayage trucks and diesel buses (Clean Fuels Program), a rebate for light duty electric vehicle charging infrastructure (EVSE Program), and a funding assistance program for Arkansas state agencies (SAFER) to repower/replace medium and heavy-duty diesel local freight and drayage trucks and diesel buses. This plan also reserves a small portion of settlement funds to supplement DEQ’s Go RED! program.
Individual Program Status
ABC Pilots (Program Contact – Patti Springs, (501) 682-8065)
- Request for proposals under development
- Scoring procedures under development
- Certification documents for the program under development
Clean Fuels (Program Contact – Deiona McKnight, (501) 682-0641)
- Applications will be accepted between September 11, 2020 and February 28, 2021
- The Applicant Guidance provides detailed information on eligibility, cost-share requirements, and the project selection process. The Applicant Guidance also contains the link to the online application form. The online application form will go live by September 11, 2020.
- Applicant Guidance
EVSE Program (Program Contact – Patti Springs, (501) 682-8065)
- Level 2 EVSE rebate application materials under development
- Revised Level 2 EVSE rebate certification submitted to the Trustee on April 17, 2019
- Revised Level 2 EVSE rebate certification and project management plan approved by the Trustee on June 19, 2019
- DC Fast Charge EVSE request for proposals under development
- Revised DC Fast Charge certification documents submitted to the Trustee on February 20, 2020
SAFER (Program Contact – Deiona McKnight, (501) 682-0641)
- Proposals will be accepted between September 1, 2019 and February 28, 2020
- The Proposal Guidance provides detailed information on eligibility, the project selection process, and how to submit a proposal.
- Proposal Guidance
Background of Volkswagen Settlement
Arkansas has been allocated $14,647,709.09 to be used toward projects that reduce emissions from motor vehicles as a result of two partial consent decrees in a case filed against Volkswagen for alleged violations of the federal Clean Air Act by the sale of approximately 500,000 model year 2009 – 2015 2.0 liter (L) diesel engine vehicles and approximately 80,000 model year 2009 – 2016 3.0 (L) diesel engine vehicles equipped with emissions control defeat devices.
The air quality in Arkansas is among the best in the nation, and these settlement funds provide an additional opportunity for Arkansas to realize further improvement in air quality with respect to nitrogen oxides (NOx), ozone, and fine particulate matter. This funding can be leveraged to help state and local agencies, schools, and organizations replace aging high-emitting vehicles and equipment with newer, cleaner vehicles and equipment.
In September 2015, EPA alleged that Volkswagen had installed software that renders certain emission controls inoperable in turbocharged direct injection (TDI) diesel Volkswagen and Audi vehicles. These defeat devices resulted in up to 40 percent higher nitrogen oxide emissions during normal driving.
In January 2016, the United States and the State of California filed a lawsuit against Volkswagen alleging that the manufacture and sale of diesel cars with systems intended to defeat emissions tests were in violation of section 203 of the Clean Air Act.
On October 18, 2016, the U.S. District Court for the Northern District of California held a hearing on the partial consent decree including amendments made in response to public comment. On October 25, 2016, the court granted the motion to enter into the amended partial consent decree. The approved partial consent decree consists of three major parts:
- Volkswagen will buy back, terminate leases, or provide approved emissions modifications for subject 2.0 L TDI diesel vehicles.
- Volkswagen will invest $2 billion over ten years in projects that increase the use of zero emission vehicles.
- Volkswagen will pay $2.7 billion to an Environmental Mitigation Trust to fund projects to reduce emissions of NOx. Arkansas’s initial allocation under the first partial consent decree is $13,951,016.23.
On December 20, 2016, a second partial consent decree addressing 3.0 L subject vehicles was proposed. Notice of the second consent decree was published in the Federal Register on December 29, 2016, opening a thirty day comment period. On February 2, 2017, the comment period was extended to February 14, 2017. The proposed partial consent decree consists of two major parts:
- Volkswagen will buy back, terminate leases, or provide approved emission modifications for subject 3.0 L vehicles.
- Volkswagen will be required to pay an additional $225,000,000 to the Environmental Mitigation Trust. Arkansas’s initial allocation under the second partial consent decree is $696,692.86.
On January 11, 2017, a third partial consent decree was proposed to address Volkswagen’s liability under the Clean Air Act for civil penalties and injunctive relief to prevent similar future violations. Notice of the third consent decree was published in the Federal Register on January 24, 2017, beginning a thirty-day public comment period that closed on February 23, 2017.
Arkansas Beneficiary Mitigation Plan
The Department of Justice filed executed trust documents with the court, thus establishing October 2, 2017, as the Trust Effective Date. On November 8, 2017, Governor Asa Hutchinson named DEQ as the lead agency to develop and implement a plan to utilize the Environmental Mitigation Trust funds for projects that reduce NOx emissions in Arkansas.
DEQ submitted a plan on June 25, 2018, that provides a framework for programs to be implemented in Arkansas. The plan includes the following elements:
- The goal for use of the funds allocated under the trust
- Eligible mitigation actions selected and the percentage of funds to be used for each action
- A description of how the beneficiary will consider the beneficial impact of the actions in areas that bear a disproportionate share of air pollution
- A general description of emissions benefits
On June 3, 2019, DEQ submitted an amended Beneficiary Mitigation Plan to the Trustee that supersedes the June 2018 submission.
On September 5, 2017, DEQ issued a request for information to solicit stakeholder input on the Volkswagen Beneficiary Mitigation Plan. Responses were due by November 1, 2017. DEQ received responses from 32 individuals and organizations. DEQ has reviewed these responses and is in the process of producing a plan for submission to the Trustee.
- 9/5/2017 - Barbara Jarvis
- 9/6/2017 - EV Connect
- 9/22/2017 - Medidock
- 9/22/2017 - Penske
- 10/1/2017 - New Gas Industries
- 10/2/2017 - Arkansas Propane Gas Association
- 10/5/2017 - General Motors
- 10/5/2017 - Ozark Regional Transit
- 10/9/2017 - Matthew Lyon
- 10/10/2017 - ADOMANI
- 10/12/2017 - City of Eureka Springs
- 10/23/2017 - Martin Marietta's Hatton Quarry
- 10/23/2017 - Simmons Energy Solutions
- 10/24/2017 - Rock Region Metro
- 10/25/2017 - Windstream
- 10/26/2017 - Rousch CleanTech
- 10/27/2017 - Entergy
- 10/30/2017 - ChargePoint
- 10/30/2017 - Proterra
- 10/31/2017 - CenterPoint Energy, Black Hills Energy Arkansas, and Arkansas Oklahoma Gas Corporation
- 10/31/2017 - Central Arkansas Water
- 10/31/2017 - Electronic Vehicle Charging Association
- 10/31/2017 - Northwest Arkansas Regional Airport
- 10/31/2017 - UPS
- 10/31/2017 - Waste Management
- 11/1/2017 - Arkansas Department of Transportation
- 11/1/2017 - Arkansas Propane Gas Association
- 11/1/2017 - Caterpillar
- 11/1/2017 - Central States Bus Sales
- 11/1/2017 - Cummins Sales and Service
- 11/1/2017 - EV Connect
- 11/1/2017 - Interstate Clean Transportation Corridor
- 11/1/2017 - Natural Gas Vehicles for America
- 11/13/2017 - Kinetrex Energy AR