Volkswagen Settlement Request For Information

Review a summary of public comments for how North Carolina's $92 million share of the Volkswagen Settlement should be invested to improve air quality.

The North Carolina Department of Environmental Quality (DEQ) posted a summary of comments received regarding the use of Volkswagen settlement funds in North Carolina and the shaping of North Carolina’s Beneficiary Mitigation Plan. The comment period was open from November 22, 2017 to December 31, 2017.

We received 872 total comments with project ideas totaling over $409 million. We have received a wide variety of input emphasizing the importance of various issues, needs and providing valuable suggestions. Some project ideas we received are not eligible under the provisions of the Volkswagen consent decree or Diesel Emission Reduction Act (DERA) option. The summary includes the responses to the 14 VW Program and Solicitation Design Questions from the Request for Information. The comments are divided into 11 different categories for easier browsing. A full summary of the comments received is available: View public comments.

North Carolina’s allocation of the VW Settlement is approximately $92 million, during the RFI DAQ received project descriptions totaling more than $409 million.

Key Points

Alternative Fuels

Fuels such as propane or natural gas can power many heavy-duty vehicles and equipment instead of using diesel fuel. Funds from the VW Settlement could be used to replace old diesel equipment with equipment powered by other alternative fuels.

Of the 872 comments, we received 84 identical comments (10%) in support of including propane-powered vehicles in the N.C. Mitigation Plan. Many of these same commenters are in support of propane-run fleet and freight vehicles, in addition to school buses.

Electrification Infrastructure and Electric Vehicles (EVs)

Electricity can power light-duty cars as well as some heavy-duty vehicles and equipment. Funds from the VW Settlement could be used for electric charging stations for light-duty vehicles or to replace heavy-duty vehicles and equipment with electric versions.

Of the 872 comments, we received 679 identical comments and seven unique comments (79%) in support using the full allowable 15% of funds for EV infrastructure projects. This is the highest proportion of comments received on any single topic. The 679 identical commenters also encouraged DEQ to prioritize electric vehicles and buses for replacement whenever possible with the other 85% of the settlement funds and not to use funding for natural gas, propane or diesel vehicles.

Eligible Equipment

The settlement outlines a very specific list of project types that are eligible for funding through this program. Within that list, North Carolina has the flexibility to select or emphasize project types that reflect the state’s priorities.

Some commenters stated preferences for project types that they feel will bring the most benefits to North Carolina. We received five unique comments (1%) support replacing school buses. Commenters submitted project concepts and comments for replacing old school buses with clean diesel, propane, natural gas and electric buses of which three commenters submitted project concepts for replacing existing school buses with 100% electric school buses. Fifteen commenters (2%) support funding replacement of transit buses with clean diesel, hybrid diesel, propane, natural gas and electric engines. Seven of the 15 project concepts included replacement of existing buses with 100% electric transit buses.

Commenters also supported using funds to replace diesel trucking fleets, port equipment, ferries, locomotive, agricultural, airport support and construction equipment.

Environmental Justice and Health Impacts

Seven of the comments received addressed concerns regarding inclusion with respect to air quality environmental injustice. Most of these comments focus on helping communities of concern to include fair treatment and meaningful involvement of all people regardless of race, ethnicity, color, national origin, income, age, sex, poverty level, limited English proficiency or disability.

Incorporating meaningful engagement to connect with populations that have been historically underrepresented in decision-making, who have a wide range of educational levels, literacy, or language barriers, is essential. This may include, but is not limited to, translation and/or interpretation of vital documents.

Ineligible Ideas

The commenters offered a wide range of other suggestions, some of which are not eligible for funding based on the requirements of the VW consent decree or DERA. Ideas include using funds for light rail-related projects, pedestrian and bike pathways, supporting clean energy and infrastructure development, offering rebates for the purchase and ownership of EVs, supporting research and funding to add new vehicles to existing fleets.

What is the Volkswagen Settlement?

In 2015, Volkswagen admitted that it violated the Clean Air Act by installing illegal software on some of its diesel vehicles. The vehicles with the illegal software emit up to 40 times the allowable levels of nitrogen oxides (NOx). Settlement agreements of $14.7 billion nationally were agreed upon to resolve matters related to the violations.

The Volkswagen Settlement has three parts:

Consumer Relief: The automaker will provide buy-backs and/or repairs of affected vehicles for qualified owners
Mitigation Trust Fund: Investments will reduce air pollution caused by the affected vehicles
Zero Emission Vehicle Investment Fund: Support will increase use of zero-emission vehicle technology in the United States

The RFI focuses on the Mitigation Trust Fund. To learn more about how the mitigation trust funds can be invested, visit the N.C. Volkswagen Settlement page.

What is the state currently doing?

About 18,700 of the affected vehicles are registered in North Carolina, making the state eligible to receive $92 million to reduce air pollution from mobile sources.

States and tribes are required to develop plans that show how the funds will be used. As designated by Governor Roy Cooper on Nov. 21, 2017, DEQ is developing the plan for North Carolina and is asking the public, tribes, local governments, state agencies, the business community, and public interest groups to weigh in on which of the eligible vehicle and equipment categories they think the state should invest in.

How the money can be used

The Volkswagen Settlement establishes specific requirements around the types of projects that states and tribes can fund to lessen the harm caused by the excess emissions.

The money can be used in a variety of ways but must meet the legal requirements of the consent decree, which identifies eligible vehicle and equipment categories. Plans also must consider reducing pollution in communities that have been disproportionately impacted by emissions.

North Carolina’s $92 million allocation from the Volkswagen Settlement will be invested in a variety of environmental mitigation projects. Potential projects included within the scope of the settlement include:

Class 8 local freight trucks and port drayage trucks
Class 4-8 school/shuttle/transit buses
Freight switcher locomotives
Ferries and tugboats
Ocean going vessels shorepower
Class 4-7 local trucks
Airport ground support equipment
Forklifts and cargo handling equipment at ports
Light duty zero emission vehicle supply equipment (limited to 15% of funds)
Matching funds for projects eligible under the Diesel Emission Reduction Act (DERA).

We want to know what you think

The Division of Air Quality accepted public input regarding which of the above 10 eligible categories North Carolina should include for potential funding in the state’s mitigation plan. Comments from individuals, tribes, governments and groups were due by 5 p.m. EDT, Dec. 31, 2017. Download the RFI.

To learn more about the settlement and mitigation trust, please visit the N.C. Volkswagen Settlement page.

If you have questions regarding the VW Settlement, or wish to be added to our VW Settlement Contact List, please contact us at daq.NC_VWGrants@deq.nc.gov. Be sure to add the address to your SPAM email filter.

N.C. Volkswagen Settlement Contacts

Brian C. Phillips
Mobile Sources Compliance Branch Supervisor
Phone 919-707-8426

Robin Barrows
Allied Programs Supervisor
VW Settlement Outreach
Phone 919-707-8455