Driving Minnesota Forward: VW Settlement Opportunities

Under the recent Volkswagen Clean Air Act Civil Settlement, Midwest states stand to receive more than $420 million for local air quality efforts, including electric vehicle infrastructure and air quality mitigation efforts (targeting vehicle and equipment upgrades).

The settlement provides an opportunity to offset more than 40,400 tons of NOx pollution resulting from illegal defeat devices in VW vehicles. This creates a unique opportunity and obligation for Midwest states to modernize public vehicle fleets and infrastructure, reduce harmful air pollution, and stimulate economic development across the region.

Seizing the VW Opportunity
Minnesota has been allocated more than $46 million through the VW Settlement Mitigation Trust. These funds must be used towards 10 eligible vehicle and equipment upgrades, with a maximum of up to 15% ($7 million) for light-duty electrical vehicle infrastructure. Governor Dayton has appointed the Minnesota Pollution Control Agency (MPCA) as the lead agency to administer the VW Settlement.

Evaluating Eligible Uses of Funds:
In evaluating potential investments in eligible vehicles, equipment, and technologies, MPCA should focus on specific opportunities to minimize NOx emissions and human exposure while maximizing cost effectiveness and market impact. Mitigation investments should also seek to protect and improve quality of life for Minnesota’s most vulnerable and disproportionately affected residents, including children.

High-Impact Opportunities to Drive the Electric Vehicle Market Forward:

  • Maximizing the allowable 15% of funds for light-duty electric vehicle infrastructure and prioritizing investment in electric vehicle fast-chargers along Minnesota’s National Charging Corridor highways (I-90 & I-94)
  • Investing the remaining 85% of funds in electric vehicle upgrades for large, public fleets that operate in densely-populated areas, such as school and transit buses
  • Electric school buses can uniquely support renewable integration with the electric grid which can help Minnesota achieve its renewable portfolio standard of 26.5% by 2025

What is ELPC doing?
ELPC is supporting state efforts to maximize this opportunity to modernize public vehicle fleets, reduce harmful air pollution, and grow the Midwest’s clean transportation economy.