Report: Many States Spent Volkswagen Settlement Money on More Diesel Vehicles

When Volkswagen funded a $3 billion environmental mitigation trust as the result of a settlement in the cheating scandal three years ago, states could have used that money to fund things like electric buses.

2 minute read

May 28, 2019, 7:00 AM PDT

By James Brasuell @CasualBrasuell


AR Pictures / Shutterstock

"States are missing opportunities to jumpstart transportation electrification using money from the Volkswagen emissions cheating settlement, according to a report released recently by two national advocacy groups," reports Frank Jossi.

The U.S. Public Interest Research Group Education Fund and the Environment America Research & Policy Center prepared the report, assigning letter grades to depending on "how they are allocating money from the settlement. Most states earned D or F grades for allowing money to be spent on diesel and other fossil fuel vehicles," explains Jossi.

Jossi's coverage focuses on the Midwest, where no states earned good marks. "The region’s top-performing states on the scorecard — Minnesota, Michigan and Ohio — received C grades. Illinois, Indiana, Iowa, Kansas, Missouri and Nebraska earned D’s while North and South Dakota and Wisconsin were given failing marks."

In addition to the explanations of the Volkswagen settlement provided by Jossi, the U.S. PIRG posted the report online and provided the following explanation about the Environmental Mitigation Trust funds created by the settlement.

Under the terms of the settlement, states can spend their share of the Environmental Mitigation Trust funds in several different ways, including by purchasing newer diesel vehicles, natural gas vehicles, and electric vehicles, as well as repowering older diesel vehicles with newer engines or electric motors. States are also allowed to use up to 15 percent of their award on electric vehicle (EV) charging infrastructure. How each state spends its share of the funds within these allowable uses is up the state but must be set forth in a “Beneficiary Mitigation Plan” submitted to a trustee.

The report would have granted states higher grades if they'd focused this spending on electric vehicles. Instead, 37 states received a D or an F. 

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