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Volkswagen Environmental Mitigation Trust

Certain NOx Mitigation Projects may Qualify for Part of Trust’s $209 Million

Governor Greg Abbott has selected the Texas Commission on Environmental Quality as the lead agency responsible for the administration of funds received from the Volkswagen State Environmental Mitigation Trust (Trust). Once Texas is certified as a beneficiary of this Trust, a minimum of $209 million dollars will be made available for projects that reduce nitrogen oxides (NOx) in the environment.

The Trust is part of a settlement agreement in the litigation between the United States Environmental Protection Agency (EPA), the State of California, and Volkswagen (VW) and its related entities. The EPA and the State of California filed suit in the U.S. District Court for the Northern District of California against VW alleging that VW violated provisions of the federal Clean Air Act. The suit alleged that approximately 590,000 light-duty 2.0-liter and 3.0-liter diesel vehicles manufactured by VW and its subsidiaries contain emission defeat devices. These devices cause the emissions control system of those vehicles to perform differently during emissions testing compared to performance during normal vehicle operation and use. The subject vehicles emit NOx at a level above required standards during normal vehicle operation and use.

The EPA, California, and VW have resolved this case through three partial settlements (Amended 2.0 Liter Partial Consent Decree Adobe Acrobat PDF Document, 3.0 Liter Second Partial Consent Decree Adobe Acrobat PDF Document, Third Partial Consent Decree Adobe Acrobat PDF Document.) As part of the settlement agreements, VW must pay approximately $2.9 billion into the environmental mitigation Trust referenced above. The 50 States, the District of Columbia, and Puerto Rico may elect to become a beneficiary to receive an allocation from the trust. An Indian Tribe Mitigation Trust has been established separate from the state mitigation trust. The funds in the Trust are allocated based on the number of affected vehicles registered within the boundaries of each beneficiary. Beneficiaries have between three and ten years to spend their allocated funds on specific types of projects as outlined in the Trust documents. These projects are intended to fully mitigate the total lifetime excess NOx emissions from the affected vehicles.

On March 15, 2017, the Court appointed Wilmington Trust, N.A. to serve as the trustee for the Trust. The final Trust agreement Adobe Acrobat PDF Document was filed and became effective on October 2, 2017. Each state must file a certification form Adobe Acrobat PDF Document to become a beneficiary and receive its allocation under the Trust agreement. Texas filed its certification form on November 21, 2017. Once Texas is certified as a beneficiary, which is expected to occur by early February 2018, it must create a beneficiary mitigation plan that summarizes how it plans to use its allocated funds. This plan will be publicly available and must be submitted to the trustee at least thirty days prior to the first funding request from the TCEQ.

Any comments pertaining to the use of the Trust funds may be submitted by email to VWsettle@tceq.texas.gov or to the following addresses:

Regular Mail:
Texas Commission on Environmental Quality
Air Quality Division
Implementation Grants Section, MC-204
P.O. Box 13087
Austin, TX 78711-3087
ATTN: VW Settlement

Express Mail:
Texas Commission on Environmental Quality
Air Quality Division
Implementation Grants Section, MC-204
12100 Park 35 Circle
Austin, TX 78753
ATTN: VW Settlement

Please continue to check this webpage for updates as this program moves forward.