With States Pledging to Comply with Goals of Paris Agreement, New Report Finds $2.9 Billion in Volkswagen Settlement Funds Could Help Accelerate All Electric Transportation Revolution

Media Contacts
Matt Casale

Former Director, Environment Campaigns, U.S. PIRG Education Fund

Report Recommends States Use Funds to Purchase Electric Vehicle Fast Charging Stations and All Electric Transit Buses

U.S. PIRG Education Fund

A new report from the U.S. PIRG Education Fund finds that $2.9 billion from the Volkswagen (VW) settlement is headed to states to help clean up the country’s transportation system and strongly recommends using the funds to purchase electric vehicle fast charging stations for highways along with an aggressive expansion of all-electric transit buses to replace aging, dirty, diesel buses. The report finds that states throughout the country could supply between 4,350 and 8,700 additional fast charging stations, significantly improving the nation’s electric infrastructure, and could purchase over 3,000 all-electric, zero-emissions buses, reducing dangerous pollution and saving money, all while accelerating market transformation to an all-electric transportation system.

With the Trump administration’s announcement that the U.S. will be exiting the Paris Climate Agreement, states have vowed to step up, many pledging to comply with the goals of the agreement on their own. Much of that work will need to be focused on the transportation sector, which accounts for nearly 30% of the nation’s greenhouse gas emissions.

“The VW settlement money presents state governments with an historic opportunity to help clean up our transportation system and accelerate the transition to a cleaner, healthier, 21st century transportation network,” said Matthew Casale, U.S. PIRG transportation advocate. “This money can be used to significantly advance our climate goals, but we must make sure it is not squandered on dirty, outdated technologies like diesel and natural gas instead of all-electric options that can help save lives and protect the planet.” he added.

According to the terms of the VW settlement, supplemented by a second settlement agreement, agreed to by VW and the Department of Justice, VW will pay a total of up to $22 billion in damages for their role in violating federal clean air laws by selling more than half-a-million vehicles with its “clean diesel” marketing that actually emitted up to 40 times the legal limit of dangerous NOx pollution.

Of the civil damages outlined in the settlement, most of the money VW is required to spend will go toward compensating affected consumers. Another $4.9 billion will be divided into two separate funds to mitigate the environmental damages VW caused. Of that $4.9 billion, $2.9 billion will be placed in an Environmental Mitigation Trust (EMT) and sent directly to states based on the number of affected vehicles in that state.

The new report recommends that states use the maximum allowable amount of EMT funds, 15 percent, on the purchase and installation of fast charging stations for the state’s highways. Such chargers can fully charge a zero-emissions, all-electric vehicle in fewer than 30 minutes. “Greater installation of electric vehicle charging stations has a direct and substantial correlation on further personal EV adoption,” said Casale. “Investing in fast charging stations helps ease consumers’ fears of running out of juice while on the road, which remains one of the biggest impediments to electric vehicle adoption, even as the technology and range continue to improve and costs continue to decrease,” he remarked.

The report further recommends using the remaining EMT funds, 85 percent, to purchase all-electric transit buses. The report’s analysis is based, in part, on the fact that the most unlinked passenger trips are taken on transit buses, more than any other mode of public transit. The report finds, therefore, that investing in all-electric transit buses would reduce inhalation of toxic fumes for the greatest possible number of people over the broadest possible area, relative to investment in other modes. The report finds that such widespread public exposure has the potential to further accelerate the market transformation to all-electric vehicles, a key component of future success fighting air pollution and combating global warming.

“Investment of VW settlement funds in all-electric buses can decrease toxic air pollution that makes us sick and contributes to dangerous global warming, all while increasing public awareness of zero-emissions electric vehicles and the substantial health and environmental benefits they can provide. This will in turn prompt additional transformation of the current marketplace, increasing benefits for years to come,” said Casale. 

The remaining $2 billion in VW settlement funds will be put into a Zero Emission Vehicle trust for actions intended to increase the sales, use, and adoption of electric vehicles. VW will propose how to spend those funds and the EPA (or CARB in California) will approve the plan. Complimentary use of the ZEV funds is possible.

States may also apply for matching funds through the federal Diesel Emissions Reduction Act (DERA) program.

You can read the report here


U.S. PIRG is a federation of state based groups that stand up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. For decades, we’ve stood up for consumers, countering the influence of big banks, insurers, chemical manufacturers and other powerful special interests.

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