Minnesota’s plan

Minnesota will receive a total of $47 million from the national VW settlement over the course of 10 years, beginning in 2018. MPCA is using funds from the VW settlement to clean up air pollution in Minnesota today and invest in a cleaner transportation system for our future.

Air pollution from vehicles creates negative health impacts for our communities and contributes to climate change. The VW settlement offers an opportunity for us to tackle both of these problems by reducing harmful emissions — including greenhouse gases — from vehicles and equipment in our state.

Under the terms of the settlement, we can accomplish this in two primary ways:

  1. Fund vehicle replacements. Taking older, more polluting diesel vehicles off the roads and replacing them with newer, cleaner models improves air quality and community health. Each vehicle replacement reduces nitrogen oxides (pollution that causes ground-level ozone, or smog), fine particle pollution (a particular health risk), and greenhouse gases (pollution that causes climate change).
  2. Invest in electric vehicle (EV) technology. MPCA may use a portion of funds (up to 15%) to install EV charging stations, and can fund vehicle replacements for new electric models in multiple categories.

Minnesota’s plan provides more details on the types of projects to be funded, expected emissions reductions, and how the projects will advance environmental justice. We recognize that vehicle and equipment technology are continually evolving, and Minnesota’s needs and desires may change over time, so MPCA will distribute settlement funds across three phases:

  • Phase 1 (2018-2019): $11.75 million (25% of overall funds)
  • Phase 2 (2020-2023): $23.5 million (50%)
  • Phase 3 (2024-2027): $11.75 million (25%)

This structure provides opportunities for MPCA to get feedback after each phase, incorporate lessons learned, consider new technologies, and make changes as needed.

Phase 2 (2020-2023)

In Phase 2 (2020-2023), MPCA has earmarked 65% of available funds to support electrifying our transportation sector. MPCA will invest approximately $7 million in eligible heavy-duty EVs like trucks and transit buses, $4.7 million in electric school buses, and $3.5 million in EV charging stations.

Across Minnesota, we see that our cities, counties, local utilities, and other industry leaders have already started installing infrastructure to support our growing EV market. We can build on that work by continuing to spend the maximum amount the settlement allows on EV charging infrastructure. Our planned investment in EV fast-charging stations along highway corridors in Greater Minnesota will expand the statewide charging network by more than 2,500 miles.

The remaining 35% will fund cleaner heavy-duty on-road vehicles, heavy-duty off-road equipment, and school buses. These grant programs will continue our commitment to achieve substantial emissions reductions by replacing older, more polluting diesel-powered vehicles and equipment with newer, cleaner technology that uses a variety of fuel types. Including a variety of fuel types allows businesses and communities across Minnesota to purchase the vehicles that best fit their needs and budget.

With these investments in Phase 2, MPCA expects to reduce:

  • Nitrogen oxides by 4,110 to 6,975 tons
  • Fine particles by 145 to 444 tons
  • Greenhouse gases by 64,074 to 94,848 tons

The chart and table below illustrate MPCA's proposal for distributing funds in Phase 2:

Pie chart showing MPCA proposal to distribute phase 2 VW funds. Full information is in table below.

Grant programs (2020-2023) Settlement category Eligible fuels Targeted percent* Targeted dollar amount
Clean heavy-duty on-road vehicles program Transit buses, class 4-8 trucks Diesel, propane, natural gas 15% $3,525,000
Clean heavy-duty off-road equipment program Switcher locomotives, ferries, tugs, port cargo handling equipment, ocean-going vessel shore power, Diesel Emissions Reduction Act (DERA) Diesel, propane, natural gas, electric 10% $2,350,000
School bus replacement program School buses Diesel, propane, natural gas 10% $2,350,000
Electric school bus program Electric school buses Electric 20% $4,700,000
Heavy-duty electric vehicle program Transit buses, class 4-8 trucks, airport ground support equipment, forklifts Electric 30% $7,050,000
Electric vehicle charging stations Zero-emission vehicle infrastructure Not applicable 15% $3,525,000
    Total: $23,500,000

*Percent of Phase 2 settlement funds targeted for these activities in 2020-2023



Questions about Minnesota's plan: Rocky Sisk, Rocky.Sisk@state.mn.us or 651-757-2173.