Volkswagen Settlement Update Nov. 8th

First Round of  Michigan VW Funding dedicated to Buses

  • Class 4 – 8 School Bus, Shuttle Bus, or Transit Bus
  • 2009 engine model year or older
  • State regulations requiring upgrades to 1992 – 2009 engine model year bus.
  • Repowered with either new diesel,  Alt.-fueled (including propane) or All-Electric engine.

Non-Government Owned Buses:


– up to 40% of cost of repower with new diesel or Alternate fueled engine (propane, CHG, Hybrid) including installation costs

– Up to 25% of cost of new diesel or Alternate Fueled vehicle (propane, CNG, Hybrid)

Government Owned Buses, Privately Owned School Buses Under Contract with a Public School District:

– up to 100% of cost of repower with new diesel or Alternate Fueled Engine (propane, CNG, Hybrid, includes install costs

– Up to 100% of cost of a new diesel or Alternate Fueled vehicle (propane, CNG, Hybrid)

In accordance with the State Trust Agreement, Michigan has developed the Michigan Volkswagen Settlement Beneficiary Mitigation Plan that outlines how it will administer $64,807,014.63 of settlement funds it was allocated.


The first request for proposals will be later this year for school buses only.  All other eligible mitigation action categories will be funded beginning in 2019.

The plan was developed with public comment, stakeholder input, statewide air quality data, and an evaluation of eligible mitigation actions.


Michigan will be funding all eligible mitigation action categories but will not be using any settlement dollars to augment its Diesel Emissions Reduction Act Clean Diesel Program.

On behalf of the Michigan Department of Environmental Quality (MDEQ), the Michigan Agency for Energy (MAE) will be administering 15%of Michigan’s allocation for projects involving light-duty zero emission vehicle supply equipment.  This includes charging stations and hydrogen dispensing infrastructure.

The plan outlining how MAE will implement its Light-Duty Zero Emission Vehicle Supply Equipment Program is included in the Michigan Volkswagen Settlement Beneficiary Mitigation Plan as Appendix 1.  For more information contact Mr. Robert Jackson at or 517-930-6163.

For more information on the Michigan Volkswagen Settlement Beneficiary Mitigation Plan, contact Ms. Debra Swartz at swartzd@michigan.govor 517-284-6903.

Volkswagen Settlement Background

In the fall of 2015, Volkswagen publicly admitted it had installed emissions control defeat devices – software designed to cheat emissions tests and deceive federal and state regulators – in certain Volkswagen-, Porsche-, and Audi-branded 2.0-liter and 3.0-liter diesel engine vehicles.  The vehicles equipped with emission testing defeat devices resulted in increases in oxides of nitrogen (NOx) emissions, up to forty times the allowable amount, violating the federal Clean Air Act.  The increased NOx emissions had adverse impacts to air quality and contributed to the formation of ground-level ozone, which has harmful effects on ecosystems and impairs lung function and cardiovascular health.

In the litigation that ensued, an Environmental Mitigation Trust (Trust) was established as part of two partial consent decrees to resolve, among other things, claims of the United States’ concerning excess oxides of nitrogen (NOx) from Volkswagen’s 2.0-liter and 3.0-liter diesel engine vehicles equipped with defeat devices.  The Trust allocates more than $2.8 billion to the U.S., Puerto Rico, and the District of Columbia to fund environmental mitigation actions that reduce NOx emissions.  The State of Michigan (Michigan) has been certified as a beneficiary of the Trust and has been allocated $64,807,014.63 of the approximate $2.8 billion.

The MDEQ was designated as the Lead Agency by Governor Rick Snyder to administer Michigan’s allocation.  The MDEQ must adhere to requirements in the Environmental Mitigation Trust Agreement for State Beneficiaries (State Trust Agreement), established pursuant to the partial consent decrees.  Those requirements include provisions for Eligible Mitigation Actions and Expenditures specified in Appendix D-2 of the State Trust Agreement.  Approximately 18,000 vehicles equipped with defeat devices were registered in Michigan.


Two Cents About Propane

“We are saving tax payers a lot of money by running these propane vehicles.”
– Kent Austin, Chairperson
Eaton County Public Safety Commission

“Filling it is so easy, it’s just like filling up your car with gas.”
– Sgt. Paul Brenton, Charlotte Police Department

“Vehicles running on propane last longer.”
– Chief Mechanic of Eaton County Transit Authority

Eaton County Running on Propane

Here’s a 60 second overview why companies and government agencies are switching to propane vehicles.

“I’ve reviewed a dozen presentations on electric, natural gas and many other alternative fuel vehicles and they have not made sense from a cost stand point— Then I looked at propane and the ROI numbers work,”

says Kent Austin, Eaton County Commissioner / Board member of the Tri-County Regional Planning Commission

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Picture from right: Kent Austin Eaton County Commissioner and Tri-County Regional Planning Commission Board member, Sgt. Paul Brenton Charlotte Police Department, Donna Webb Manager at EATRAN

The Michigan Propane Gas Association and it’s propane retailer are making bold, aggressive claims about the performance of propane fueled vehicles. Organizations with fleets of cars and truck are taking notice and like Eaton County Government are buying propane vehicles. But why?

“They perform better than electric vehicles and way better than natural gas vehicles.” says the Scott Underwood the association member who is leading the charge for the MPGA.

The federal government is propping up a number of alternative fueled vehicles while propane vehicles sell themselves. Even in the absence of federal incentives for alternative fuels from the federal government propane vehicles are selling themselves.

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Executive Director of MPGA, Derek Dallin

“It’s great that states and the federal government are offering incentives for alternative vehicles but propane is proven to have the best ROI,” said Derek Dalling Executive director of the Michigan Propane Gas Association.

More than 13,000 propane propane vehicles were sold in 2017 in the U.S. These new vehicles annually consume approximately 36.8 million gallons of clean propane autogas and will be replacing fuels with high emissions like gasoline and diesel.

Mother Earth Loves Propane Vehicles

Propane vehicles, known as Autogas, outperforms gasoline and diesel in the vast majority of studies comparing environmental performance that have been conducted around the world. Emissions are especially low with respect to noxious pollutants. With respect to greenhouse gas emissions, autogas performs better than gasoline and outperforms diesel on a full-fuel-cycle basis. Propane is an environmentally green byproduct of natural gas processing plants.

Vehicle Mechanics Love Propane Vehicles

There is a strong financial incentive to choose it over a conventional fuel.

Like other alternative fuels, propane is clean burning. Because of this propane engines operate two to three times longer than gasoline and diesel engines between tune-ups.

“I’ve sat through a dozen presentations on electric, natural gas and many other alternative fuel vehicles and they didn’t made sense from a cost stand point— Then I looked at propane and the ROI numbers work,” said Kent Austin, Eaton County Commissioner and Tri-County Regional Planning Commission Board member.

So How Big is Michigan’s Propane Vehicle Market?

Michigan has over 10,000 vehicles operating on propane that can be fueled at facilities throughout the state. The U.S. Environmental Protection Agency (USEPA) recognizes propane as a clean burning alternative fuel. Tests demonstrate that propane emissions have 93% lower carbon monoxide, 73% lower hydrocarbons, and 57% lower nitrogen oxides than even the federal Clean Air Act standards.

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From right: Donna Webb is the Executive Director for EATRAN, Kent Austin, Eaton County Commissioner and Tri-County Regional Planning Commission Board member, Scott Underwood Alto Gas

Propane has more energy for each gallon of fuel compared to other alternative fuels.

When injected as liquid propane, its driving range is quite comparable to gasoline achieving over 90 percent of the driving range of gasoline. Based on equal fuel volume, propane has the longest driving range of all alternative fuels.

When Austin heard a propane vehicle presentation from Scott Underwood of Alto Gas it made him dig deeper in the ROI numbers—He liked what he saw. The results from other municipal government and private companies showed propane fuel is less expensive, cleaner burning and reduces maintenance costs.

If Eaton County converted just its small bus fleet to propane they would save approximately $100,000 year in fuel costs.

“Teslas, Volts, and Preus’ in a way get their fuel from coal burning power plants.” –Eaton County Commissioner and Board member of the Tri-County Regional Planning Commission

“Teslas, Volts, and Prius’s in a way get their fuel from coal burning power plants,” says Austin.

“I attend local government public meetings and introduced myself to local municipal leaders after the meetings. Fleet manager love it when they find out that propane is a domestic fuel and that our the propane engine conversion kits are Michigan made.” said Underwood.

Source facts/figures in the article in Supply & Demand Chain Executive magazine, Propane Education & Research Council, Michigan Propane Gas Association.