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.


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