What is the Volkswagen settlement?
In 2016, German car maker Volkswagen (VW) was caught cheating on emissions standards and violating the federal Clean Air Act by selling cars that emit air pollution over the legal limit.
As part of the agreement reached with the federal government, VW paid $2.9 billion into a fund called the Environmental Mitigation Trust, which we refer to as the "settlement fund" here. The settlement fund was created to help states and tribes clean up the excess air pollution emitted by the violating VW vehicles.
- Read the national settlement agreement in its entirety: Volkswagen final settlement agreement (aq-mvp2-31d)
How much money will Minnesota receive?
States and tribes receive settlement funds based on the number of violating VW vehicles registered in their jurisdiction. In total, Minnesota will receive $47 million from the settlement over the course of ten years, beginning in 2018.
Why is MPCA in charge of managing the funds?
The Minnesota Pollution Control Agency is the designated state agency responsible for managing the VW settlement funds that Minnesota will receive. Our mission is to improve the environment and human health, so MPCA is well-equipped to create and administer programs that will distribute the funds effectively to reduce air pollution and improve air quality in our state today as well as invest in a cleaner transportation system for our future.
What can MPCA do with the funds?
Overall, projects must reduce diesel emissions because the settlement was designed to clean up air pollution from diesel vehicles. The court case focused on reducing nitrogen oxides (NOx) emissions, but we can also use the funds to more broadly benefit Minnesotans and advance state priorities, including reducing greenhouse gas emissions to lessen the impacts of climate change.
Under the terms of the settlement, we can spend funds in two primary ways:
- Fund vehicle replacements. Take older, more polluting diesel vehicles off the roads and replace them with newer, cleaner models with a variety of fuel types.
- Invest in electric vehicle (EV) technology. MPCA may use a portion of funds (up to 15%) to install EV charging stations, and can fund all-electric vehicle replacements as part of #1.
Can MPCA use settlement funds to provide electric vehicle rebates, or invest in other infrastructure projects like repairing roads and bridges?
The short answer is "No."
Throughout our public engagement, we've heard a lot of interesting suggestions about what we should do with the funds, but the settlement includes specific guidelines for what kinds of projects MPCA can and cannot fund. Aside from installing EV charging stations, all money must go to replacing existing vehicles.
What is the timeline for MPCA's Volkswagen program?
Minnesota will receive its share of the settlement between 2018 and 2027, and MPCA must distribute all of the funds within this ten year period. Read more about our plan here: Minnesota's plan.