Recent actions in Oregon
The Oregon Legislative Assembly adopted SB 1008 directing DEQ to initially begin expending Environmental Mitigation Funds resulting from the VW settlement on replacing and/or retrofitting at least 450 diesel powered school buses operating in Oregon. School districts will be selected by lottery from those having diesel buses in the median model year to be determined by the most recent school bus population survey. Districts will consider receiving up to $50,000 or 30 percent of the costs of a replacement bus, whichever is less to scrap an older diesel school bus and replacing it with one powered by late model diesel engines, natural gas, propane or electricity. Districts may also choose to receive 100 percent of the costs to install high efficiency diesel exhaust filters on an existing bus.
There are several other eligible mitigation actions allowable under the terms of the settlement, including replacement or repowering of older diesel powered buses, trucks, tugboats, cargo handling equipment, locomotives, airport ground support equipment as well as light duty vehicle zero emission fueling infrastructure. We expect the Legislature to continue to review the issue of authorizing other eligible expenditures in upcoming legislative sessions.
A Trust Effective Date of October 2, 2017 has been set by the Trustee for the VW Environmental Mitigation Fund. The state of Oregon will shortly afterwards submit a certification form, signed by the governor, explaining how the state qualifies to be a beneficiary under the trust. If no objection to the state’s request for certification is filed after review by the U.S. Department of Justice, the Trustee can grant the request. Following the designation as a beneficiary, Oregon DEQ will develop a revised initial mitigation plan based on the elements outlined in SB 1008. DEQ will submit the plan to the Trustee within 30 days of the first funding request. The plan is intended as a high-level summary description of the projects the state intends to fund with the trust proceeds.
The plan will be presented for public comment. If you wish to be notified of that opportunity, sign up on the VW Settlement mailing list.
In April 2017, Oregon DEQ posted a proposal for an environmental mitigation plan for public comment and review. The proposed plan has three main goals:
- Maximize benefits for vulnerable populations;
- Prioritize pollution reduction in areas of the state with the highest emissions of nitrogen oxides and particulate matter from diesel engines; and
- Maximize pollution reduction cost effectiveness.
The original proposed plan had two major elements intended to achieve those goals including a targeted expenditure to replace at least 450 diesel school buses. The remaining funds would be disbursed among eligible mitigation actions relying on a competitive selection process using criteria intended to select projects that best met the overall goals with a focus on reducing emission impacts from legacy diesel
On Jan. 24, 2016, the United States and the State of California filed a lawsuit against Volkswagen alleging it had manufactured diesel cars with systems intended to defeat emissions tests. These systems allowed vehicles manufactured with 2.0 and 3.0 liter diesel engines to emit nitrogen oxide (NOx) pollution at levels that significantly exceeded the amounts allowed under the Clean Air Act.
On Oct. 25, 2016, a federal court approved a partial settlement of the lawsuit relating to 2.0 liter diesel cars. Later, on Dec. 20, 2016, the United States lodged a second partial settlement addressing vehicles with the 3.0 liter engines. An additional settlement has been filed resolving a criminal case but is not relevant to the terms of the settlement discussed here.
This portion of the settlement consists of three major parts: relief for owners and lessees of the Volkswagen and Audi brand noncompliant vehicles; a commitment by Volkswagen to spend $2 billion on various actions to promote the use of zero emission vehicles; and establishing an environmental mitigation fund to offset the impact from these vehicles’ excess emissions.
The mitigation fund will consist of $2.925 billion to be distributed among states based on the proportion of VW diesel vehicles registered in each jurisdiction. Under this formula Oregon is expected to receive about seventy three million dollars.
The settlement decree lists the specific actions states can for which states can use money from the mitigation fund. These actions focus on reducing NOx pollution from primarily diesel-powered trucks and buses. The types of approved actions include, generally, replacing older diesel-powered trucks, buses, industrial vehicles and other powered equipment with new, lower emissions equipment.
Volkswagen has a web page with information for vehicle owners here: VW settlement page
- DEQ’s Vehicle Inspection Program has more information about what Volkswagen did and what vehicles are affected here: DEQ VIP information
- You can find information about Volkswagen’s actions, the settlement agreement and what vehicles are affected at the U.S. Environmental Protection Agency’s web site here: EPA general information
- The federal court handling the case has a web page with court documents and other information about the case here: Federal court VW page
- The U.S. Federal Trade Commission has a general information page about the Volkswagen case here: FTC VW general information
- The U.S. Department of Justice has information about the case here: US DOJ VW page