SACE | Southern Alliance for Clean Energy

VW Settlement: What Does it Mean for the Southeast?

electric bus

Credit: Proterra


In July 2016,Volkswagen (VW) agreed to a multiple-part settlement with the U.S. Environmental Protection Agency (EPA) as a result of the installation of ‘defeat devices’ on their diesel engines in violation of the Clean Air Act. This settlement will deliver the clean air promise VW failed to meet, and provides a huge opportunity for the Southeast to reduce diesel emissions and expand upon the rapidly growing electric vehicle infrastructure in the region.

The settlement funds will be dispersed amongst three categories. The first program will provide $10 billion directly to VW customers for vehicle buybacks and modifications. The other two programs provide funds that offer emissions reduction and electric vehicle opportunities for states as a whole:

Zero Emissions Investment Commitment – $2 billion:

VW will spend $2 billion over 10 years on actions that will support increased use of zero emission vehicle (ZEV) technology in the U.S. VW will administer the program. The investments will include three primary areas of focus:

  1. Investing in EV charging infrastructure (which includes the design, planning, construction, installation, operation and maintenance)
  2. The development of brand-neutral education and public outreach campaigns to increase awareness about EVs
  3. Programs that will increase public exposure or access to ZEVs

VW will update the investment plan every 30 months. Draft plans for the first 30-month plan is already underway, but VW will be taking suggestions and projects over the course of the 10 years. To learn more and to submit a proposal for these funds visit:

Environmental Mitigation Trust Agreement – $2.7 billion:

The purpose of these funds is to reduce nitrogen oxide (NOX) emissions where VW diesels operated. Funds are allocated among beneficiaries (states, tribes, and certain territories) based on the number of impacted VW vehicles in their jurisdictions. The Southeast is eligible to receive more than $414 million:

state funding

Eligible projects include:

  • Replacing or repowering older diesel engines (large trucks, buses, freight switchers, ferries/tugs, medium trucks, etc.) with new diesel, alternate fueled engines, or all-electric engines
  • Replacing diesel vehicles with new, alternate fueled, or all-electric vehicles
  • Installing charging infrastructure for light-duty electric vehicles (up to 15% of the funds can be spent on this)

What’s next?

In order to become a beneficiary of the settlement fund, states must file a Certification Form within 60 days of the Trust Effective Date. The Governors will designate a “lead agency,” to develop a mitigation plan to be submitted to the EPA. States should begin to receive funds at the end of 2017. A rough timeline is below:


Credit: South Carolina Department of Health and Environmental Control

What action are states in the South taking?

While the lead agencies have not been officially established, some states are taking a proactive approach, drafting preliminarily plans to best prepare for the allocation of the funds. Many state officials are already working to identify the most cost-effective projects. To stay up to date on how each state is managing the funds, visit the National Association of Clean Air Agencies website here.


Basic information on the settlement and solicitation of comments on the development of the mitigation plan can be found here. Alabama Department of Environmental Management (ADEM) is the state agency taking the lead, and their website will be updated when specific project proposals can be accepted by ADEM.


The Governor’s Office of Planning & Budget has created a website for solicitation of public comments. You can direct inquires to the website here. A state agency has not been officially designated.

North Carolina

Updates coming soon.

South Carolina

South Carolina Department of Health and Environmental Control has a website page with the VW Settlement information, but a state agency has not been officially designated.


Tennessee is currently leading the way in the Southeast. Governor Haslam has identified the Tennessee Department and Environment and Conservation (TDEC) as the lead agency. TDEC has created an online form to collect stakeholder input, and is hosting public education sessions. Their webpage provides an overview of the Settlement, links to related resources, a number of FAQs, and a Public Comment Form.


Florida Department of Environmental Protection has set up a website on the VW Settlement and Florida’s Mitigation Plan development. To stay up to date on their activities, sign up for their email alerts.