Volkswagen Mitigation Trust


Status of Arkansas Volkswagen Settlement Programs

On June 25, 2018, ADEQ submitted its Beneficiary Mitigation Plan to the Trustee. This plan describes four new programs that ADEQ intends to implement to reduce emissions using funding from the Volkswagen Settlement. These programs include a compressed natural gas school 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 ADEQ’s Go RED! program.

ADEQ is not yet accepting applications for ABC Pilots, Clean Fuels, EVSE Program, or SAFER. Office of Air Quality and Energy Office are in the process of developing these programs, including scoring criteria, application procedures and materials, terms and conditions, and certifications under the Trust. Information about how to apply for these programs, once ADEQ begins accepting applications, will be posted to this webpage.

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)

  • Application materials under development
  • Initial certification documents submitted to the Trustee to be withdrawn
  • Future certification documents to the Trustee to be sent on a per project basis

EVSE Program (Program Contact – Patti Springs, (501) 682-8065)

  • Level 2 EVSE rebate application materials under development
  • Revised Level 2 EVSE rebate certification documents under internal review
  • DC Fast Charge EVSE request for proposals under development
  • Revised DC Fast Charge certification documents under development

SAFER Clean Fuels (Program Contact – Deiona McKnight, (501) 682-0641)

  • Application materials under development
  • Initial certification documents submitted to the Trustee to be withdrawn
  • Future certification documents to the Trustee to be sent on a per project basis

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.

Legal Proceedings

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 ADEQ 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.

ADEQ’s plan, which was submitted on June 25, 2018, provides a framework for programs to be implemented in Arkansas. The plan includes the following elements:

  1. The goal for use of the funds allocated under the trust
  2. Eligible mitigation actions selected and the percentage of funds to be used for each action
  3. A description of how the beneficiary will consider the beneficial impact of the actions in areas that bear a disproportionate share of air pollution
  4. A general description of emissions benefits
Arkansas Beneficiary Mitigation Plan

On September 5, 2017, ADEQ issued a request for information to solicit stakeholder input on the Volkswagen Beneficiary Mitigation Plan. Responses were due by November 1, 2017. ADEQ received responses from 32 individuals and organizations. ADEQ has reviewed these responses and is in the process of producing a plan for submission to the Trustee.

RFI draft plan public process dashboard

Responses: