Where’s the VW Money?

April 18, 2018

The Volkswagen diesel emissions settlement will provide an unprecedented opportunity to accelerate deployments of advanced clean transportation technologies and reduce harmful emissions.

At the time of publication, five states have published their final plans. With nineteen states’ draft plans out now and another twenty-eight on the horizon, time is certainly of the essence to strategically identify which incentives are a good fit for clean transportation projects.

Understanding the Final VW Funds Plans

Colorado, Georgia, Maine, Nebraska, and Nevada have each published their final plans to make use of VW funds. These plans are no less diverse than the states themselves and their variety should be taken as the barometer for future plans – in other words, there is no simple solution or generally applicable assumptions to be made about those plans, as evidenced below.

VW funding plans display diversity in the prioritization of vehicle and fuel types.

Colorado’s updated funding plan prioritizes their $68.7 million toward private and public on-road fleets through the use of existing funding programs, such as the ALT Fuels Colorado AFV Replacement Program and the Transit Bus Replacement Program

Georgia’s plan allocates 100% of their $63.6 million in funding to eligible transit and airport shuttle buses with the intention of replacing older, higher-polluting transit buses serving citizens in the Atlanta Metropolitan Area that have historically endured a disproportionate share of the pollution burden.

Maine’s mitigation plan focuses their $21.1 million on improving air quality at ports and railyards and mitigate pollution from light-duty vehicles. The plan focuses on multimodal transportation improvements and electric vehicle supply equipment installation along designated electric corridors.

With nineteen states’ draft plans out now and another twenty-eight on the horizon, time is certainly of the essence to strategically identify which incentives are a good fit for clean transportation projects.

Nebraska establishes funding with their $12.2 million for a broad array of project types and does not set specific priorities on fuel types. There will be geographic prioritization, as funds will be focused in areas of the state that are approaching violation of federal ambient air quality standards.

Nevada is prioritizing their $24.8 million on projects that show a long-term investment in a zero emission transportation sector and that align with the Nevada Electric Highway Initiative and other similar plans. Nevada will also consider all Eligible Mitigation Actions, regardless of vehicle type or technology, through a competitive application process.

What’s Next?

As identified above, another nineteen states have released their draft Beneficiary Mitigation Plans and the remaining balance 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 VW funds plans based on their unique funding priorities.

We forecast that VW funds will become available as early as this summer and increase steeply throughout the end of the year as more and more states release solicitations.

Based on an analysis of the existing plans and expectations for the future, we forecast that VW funds will become available as early as this summer and increase steeply throughout the end of the year as more and more states release solicitations.

These funds will slow down slightly after the initial surge but remain steadily available in considerable volumes for the next three years. We see several states opting to front load their plans (i.e., use their VW funds in as soon as three years) while still other states will evenly apportion their funds over the initial ten-year term.

There is an overwhelming amount of information, to say the least. 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.

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

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.