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.