Volkswagen Settlement

Updates

On September 19, 2017, the U.S. District Court approved the Environmental Mitigation Trust agreement for state and related beneficiaries. On October 2, the Trust Effective Date (TED) was set, giving the Governor’s Office will have sixty days to apply for beneficiary status. Texas is in the process of designating a lead agency.

Background

In September 2015, the Environmental Protection Agency (EPA) discovered that Volkswagen vehicles were being manufactured with a “defeat device”, or software in diesel engines that could detect when they were being tested to improve results of emissions testing. Volkswagen (VW) admitted to deploying defeat devices that caused the vehicles to emit levels of Nitrogen Oxides (NOx) in excess of EPA compliance levels.

In October 2016, the U.S. District Court approved the first partial consent decree between the U.S., California, and Volkswagen. The first partial consent decree has three parts totaling $14.7 billion (Vehicle buybacks and modification, Environmental mitigation trust, Zero emission vehicle investment).

In May 2017, the Court approved a second partial consent decree adding $225 million to the Environmental Mitigation Trust fund (EMT), bringing the total EMT funds to $2.925 billion. Based on the number of affected vehicles in the state, Texas is expected to receive $209,319,164 in funding – approximately $209 million. 

On September 19, the United States District Court finalized the Environmental Mitigation Trust agreement for state and related beneficiaries, clearing the way for $209 million of clean transportation funding for Texas. The Trust Effective Date (TED) was set on October 2, 2017. Sixty days after the TED, the trust will designate beneficiaries. 210 days after the TED, the state will submit their Beneficiary Mitigation Plan (BMP).

The BMP will provide a high-level summary of how the state plans to spend their allocated funds. The BMP will prioritize certain Eligible Mitigation Actions (EMAs), such as repower or replacement of vehicles, building out Electric Vehicle (EV) infrastructure and other emissions-reduction programs.