Second VW Settlement Proposed with Additional Funds

December 20, 2016 – The federal government, California and automakers Volkswagen AG, Audi AG, Porsche AG and related entities (VW), have agreed to a partial settlement related to VW’s alleged use of emission test defeat devices on 83,000 model year (MY) 2009-2016 3.0-liter diesel vehicles.  This is separate from an earlier and larger partial settlement agreement pertaining to 2.0-liter diesel vehicles.  In this most recent case, for older vehicles (MY 2009-2012) VW will be required to buy back or terminate leases for the cars or offer an emissions modification, if VW proposes one and the regulators approve it.  For newer vehicles (MY 2014-2016), if VW can make the vehicles compliant with the standards, it will be required to repair them and will not have to buy them back.  Additionally, VW will provide $225 million to fund projects that will mitigate the past and future emissions of nitrogen oxide (NOx) resulting from the affected vehicles.  This is in addition to the $2.7 billion that VW is required to place into a mitigation trust fund as a result of the settlement on the 2.0-liter vehicles.  These additional funds will be placed into the same mitigation trust fund as the proceeds from the settlement from the 2.0-liter vehicles, with states, Puerto Rico, the District of Columbia and tribes eligible for specified amounts (listed in the proposed partial settlement).  The expectation is that the funds will be used for the same types of projects identified as eligible for funding under the 2.0-liter vehicle settlement.  There is a separate but related consent decree for California that was also announced, which includes special provisions for California, including Zero Emission Vehicle provisions and investments.  The proposed partial settlement agreement was filed in U.S. District Court for the Northern District of California and will be subject to a public comment period for 30 days after it is published in the Federal Register. For further information: https://www.epa.gov/sites/production/files/2016-12/documents/30literpartialconsentdecree.pdf (see last page for state mitigation fund allocations), https://www.epa.gov/enforcement/volkswagen-clean-air-act-partial-settlement and https://arb.ca.gov/msprog/vw_info/second-ca-cd-threeliter.pdf.