North Carolina Volkswagen Phase 2 Mitigation Plan
North Carolina’s Phase 2 beneficiary mitigation plan is the final phase of funding combining the previously proposed phases 2 and 3 into one final phase. This plan addresses Phase 2 (2022 - 2024) only. DEQ plans to invest the remaining funds ($66.5 million) during this period.
DEQ will manage the Volkswagen Settlement funds through two main programs: the Diesel Bus & Vehicle Replacement Program, and the Zero-Emission Vehicle (ZEV) Infrastructure Program. Each program will have several funding opportunities.
Diesel Bus & Vehicle Replacement Programs
The Diesel Bus & Vehicle Replacement Programs target funding for the replacement of older diesel vehicles with new, cleaner alternatives. These programs will prioritize funding to electrification projects.
School Bus Replacement Program
Transit and Shuttle Bus Replacement Program
Clean Heavy-Duty Equipment and Vehicle Replacement Program
Zero-Emission Vehicle Infrastructure Programs
The ZEV Infrastructure Programs provide grants and rebates for the funding of two types of electric-vehicle charging infrastructure: DC Fast chargers and Level 2 chargers. Eligibility in each program depends on the location and purpose of the chargers.
DC Fast Infrastructure Program
Level 2 Infrastructure Program
Phase 2 Plan Goals
DEQ solicited input from North Carolinians across the state on how the VW Phase 2 mitigation trust funds should be spent in the state. We used the public feedback to set goals to guide the DEQ on how to allocate the funds over the duration of the program.
Phase 2 prioritizes vehicle electrification projects. DEQ will continue to use the funds to achieve significant NOx emissions reductions across the state.
Based on the distribution of violating vehicles registered across the state, DEQ plans to allocate the funds between urban/suburban counties (68%) and rural counties (32%). DEQ will submit requests to the Trustee of the Environmental Mitigation Trust to use funds for eligible projects throughout the state that will reduce or eliminate emissions of NOx.
Phase 2 Timeline
DEQ released the Phase 2 Requests for Proposals (RFPs) from February 2022 through June 2023.
For competitive grant programs, applications must be submitted within 90 days after the release of the RFP to be considered. For programs with a noncompetitive rebate process, applications open about 45 days after the release of the RFP and remain open until funds are exhausted.
RFPs Now Available
| Program | Timeline | Request for Proposals |
|---|---|---|
| Level 2 Program: State Agency | Application opens July 3, 2023 | Download |
Phase 2 Program Awards
| Program | Timeline | Awards |
|---|---|---|
| Transit and Shuttle Bus Program | Applications CLOSED: Awards announced Aug. 2022 | Aug. 15, 2022 |
| DC Fast Program: Priority Corridors | Applications CLOSED: Awards announced Oct. 2022 | Oct. 31, 2022 |
| Level 2 Program: State Agency | Applications CLOSED: Awards announced Oct. 2022 | Oct. 17, 2022 |
| School Bus Program | Applications CLOSED: Awards announced Oct. 2022 | Oct. 17, 2022 |
| Level 2 Program: Publicly Accessible | Applications CLOSED. Awards made as eligible applications were received through March 2023. | May 3, 2023 |
| DC Fast Program: Existing Site Upgrades | Applications CLOSED: Awards announced Oct. 2022 | Oct. 25, 2022 |
| Level 2 Program: Multi-Unit Dwellings | Applications CLOSED. Awards made as eligible applications were received through March 2023. | May 3, 2023 |
| Clean Heavy-Duty Equipment & Vehicle Replacement Program | Applications CLOSED: Awards announced Nov. 2022 | Nov. 9, 2022 |
| Level 2 Program: Workplace | Applications CLOSED. Awards made as eligible applications were received through March 2023. | May 3, 2023 |
Phase 2 programs (2022 – 2024)
| NC Grant Programs (2022-2024) | Eligible Mitigation Action Category | Eligible Fuels | Targeted Percentage* | Targeted Funding Amount | ||
Diesel Bus & Vehicle Replacement Program
| School Bus Replacement Program | Class 4-8 school buses** |
All (electric, diesel, propane, natural gas)
Priority will be given to electric replacements | 40% | ||
$27,196,866
| ||||||
| Transit Bus Replacement Program | Class 4-8 transit and shuttle buses | 20% | $13,598,433 | |||
| Clean Heavy-Duty Equipment & Vehicle Replacement Program | Class 4-8 equipment and vehicles such as local freight trucks, ferries, forklifts, and switcher locomotives | 20% | $12,918,511 | |||
| Diesel Emission Reduction Act (DERA) Program | $679,922 | |||||
| ZEV Infrastructure Program | DC Fast Program | Public Access – Priority Corridors | Not Applicable | 15% | $4,997,424 | |
| Public Access – Existing Site Upgrades | $1,642,927 | |||||
| Level 2 Program | Public Access | $1,070,877 | ||||
| Workplace | $489,544 | |||||
| Multi-Unit Dwelling | $489,544 | |||||
| State Government | Level 2 – Fleet, Workplace & State Attractions Charging | |||||
$1,009,684
| ||||||
| DEQ Administrative Costs | Not Applicable | 5% | $2,749,608 | |||
| Total: | $66,593,340 | |||||
*Percentage of available settlement funds targeted in these eligible categories for 2022 – 2024.
**DEQ is prioritizing electrification with the goal of awarding at least 50% to electric school bus replacements.
Public Outreach
DEQ has developing an outreach program to help counties that historically do not have the resources to effectively identify eligible vehicles and ZEV infrastructure opportunities for grant programs and submit quality applications. Applications from these counties may also receive scoring bonuses.
As part of the Historically Under-Resourced County Outreach Program, DEQ staff will hold in-person outreach meetings in communities across North Carolina to discuss grant opportunities.
Public Involvement
DEQ is committed to using the Volkswagen Settlement funds in ways that reflect the input and interests of North Carolinians. DEQ will have an open and transparent process that includes the input of a wide range of citizens.
DEQ released a draft of the state plan and gave North Carolinians the opportunity to provide input. We received 301 comments which helped shape the final plan and requests for proposals for Phase 2. During the draft mitigation plan comment period, DEQ held four virtual public stakeholder meetings to discuss the draft plan and answer questions.
DEQ will also provide opportunities to receive input throughout the settlement program. A summary of the comments DEQ received on the draft Phase 2 mitigation plan is available here.
N.C. Volkswagen Settlement Program Contacts
Steven Rice
Mobile Sources Compliance Branch Supervisor
Level 2 Infrastructure Program
Phone 919-707-8404
Brian C. Phillips
VW Mitigation Plan
Phone 919-707-8426
Robin Barrows
Allied Programs Supervisor
VW Settlement Outreach
Phone 919-707-8445
Sheila Blanchard
School Bus Program
Phone 919-707-8423
Matthew Hoskins
Clean Heavy-Duty Equipment and Vehicle Program
Shuttle/Transit Bus Program
Phone 919-707-8424
Dave Willis
DC Fast Infrastructure Program
Phone 919-745-4322