State submits plan to spend remaining VW Settlement funds

The state has submitted to the trustee a proposed plan to invest the remaining VW Settlement funds, about $68 million, on projects to significantly reduce NOx emissions and improve air quality.

North Carolina Department of Environmental Quality’s Division of Air Quality has submitted the Volkswagen Mitigation Plan for Phase 2, according to an announcement Wednesday.

The VW Settlement is an agreement between the German automaker and the U.S. Department of Justice on behalf of the Environmental Protection Agency. States must develop plans for using their settlement funds and submit them for approval to the trustee, according to NCDEQ.

The state’s beneficiary mitigation plan is in three phases. The Phase 1 VW Settlement awards resulted in 172 vehicle replacements including 111 school buses, 27 DC Fast Charge stations and 78 Level 2 charging stations. The awarded projects will result in a total annual NOx reduction of more than 27.3 tons. Phase 1 disbursed 33% of the state’s $92 million share of the settlement funding.

Based on the success of Phase 1 and public feedback on the Phase 2 draft plan, the Phase 2 plan includes the following:

• 40%, or about $27.2 million, for school bus replacements.
• 20%, or about $13.6 million, for transit bus replacements.
• 20%, or about $13.6 million, for heavy-duty equipment replacement.

In Phase 2, DEQ will prioritize electric vehicle replacement projects to maximize emission reductions and public health benefits. DEQ will allocate the maximum amount allowed around $10.2 million to the Zero Emission Vehicle Infrastructure program to increase the state’s charging capacity.

Once the Phase 2 plan is accepted by the trustee of the Volkswagen Mitigation Fund, the Division of Air Quality will release the request for proposals for each program category. Specific information on the timeline and applications will be available online.  

The division will solicit input on spending priorities for Phase 3, around $30 million, and review and revise the plan before concluding Phase 2.

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