The VW Settlement: How to Identify the Best State-Specific Incentives for Your Projects

February 15, 2018

The VW settlement is providing an unprecedented opportunity for states to accelerate deployments of advanced clean transportation technologies and reduce harmful emissions. Almost daily, we are seeing states release plans for their portion of VW funds. Time is of the essence for technology providers, fuel suppliers and fleet managers to strategically identify which incentives are a good fit for their clean transportation projects.

How did we get here?

To recap, Volkswagen finalized the last of three settlements with the U.S. Department of Justice, which resulted from the German automaker’s use of “defeat devices” in their 2.0 and 3.0 liter diesel vehicles. While the majority of the funds will address civil claims, $2.925 billion is being directed to the Environmental Mitigation Trust, which will fund state-level clean transportation grant programs. These funds present the greatest opportunity for fleets and equipment owners to purchase new trucks, buses, vessels, locomotives, and other non-road equipment.

States are now in control of designing grant programs to distribute the settlement funds.

In October 2017, Wilmington Trust was designated as the VW settlement trustee, empowering the bank with the responsibility to manage the distribution of the Environmental Mitigation Trust funds to the states. Now that each state has received certification to use VW funds, the states are now in control of designing the grant programs to distribute the settlement funds.

What’s next?

Each state now has to release their Beneficiary Mitigation Plans. Many states have already begun releasing their draft plans and the remaining are expected to release theirs in the coming weeks and months.

Opportunity for engagement with these states still exist as each state is required to solicit feedback from stakeholders on their funding priorities. However, these public comment periods are closing rapidly.

States are developing their plans based on their unique funding priorities. For example, Nevada is designating 80% of its funds to on-road usage and prioritizing projects that align with the Nevada Electric Highway Initiative. Pennsylvania, on the other hand, is designating 45% of their funds for rail and tug replacement projects that and prioritizing projects based on NOx cost-effectiveness.

Funds are expected to begin flowing over the next several months and will continue for the next 15 years.

Funds are expected to begin flowing over the next several months and will continue for the next 15 years. In 2028, there will be a 10-year redistribution, where states with 80% or more expenditure may receive additional funding. The closeout will happen in 2033, where remaining funds will be returned to the Trustee and distributed to Federal agencies.

How do you effectively monitor and identify VW funds?

To date, there are 633 densely packed pages in the three partial consent decrees and various attachments describing the rules, requirements, and stipulations of the settlement funds; 101 dockets filed in the United States District Court across various federal, state, and local government websites; and over 70 state agencies that have published their own information about the Volkswagen settlement. There is an overwhelming amount of information. There is an overwhelming amount of information, to say the least.

Fortunately, GNA’s Funding 360 team has researched, read and distilled down all of the important VW settlement details so fleet managers, technology providers, and fuel suppliers can identify the best incentives for their projects.

With the new VW Funding 360 Portal, users will have access to state-specific intelligence and will receive timely emails when states have released or updated their VW funding programs.

GNA has launch a new VW funds tracking tool and project competitiveness calculator to help stakeholders identify the best incentives for their projects.

In addition, GNA and has also released its VW Funding Project Competitiveness Calculator, which is a free tool for stakeholders to evaluate their project’s competitiveness for VW settlement funding. The tool provides users with customized information such as, who the state beneficiary is, how much funding is available in the state, what the status is of the state’s VW plan, and their project’s eligibility and viability.

The VW Settlement process has been a couple of years in the making. The time has finally come now where we can see the horizon of tangible dollars funding tangible projects.