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Environmental Mitigation Trust Agreement

For commenting on the draft Beneficiary Mitigation Plan, please scroll down to the plan section below

Partial Consent Decrees

The U. S. Department of Justice, California and Volkswagen lodged a partial consent decree with the Northern District Court of California, which the court approved on October 25, 2016. This First Partial Consent Decree related to Volkswagen's 2.0-liter diesel vehicles covering model years (MY) 2009 through 2016. In addition, on December 20, 2016, the parties lodged a separate Second Partial Consent Decree related to emissions produced by Volkswagen's 3.0-liter diesel vehicles covering MY 2009-2016. The court has not yet approved the Second Partial Consent Decree. The partial consent decrees provide a monetary remedy for some of the economic and environmental damage caused by Volkswagen.

A primary goal of the partial consent decrees is to reduce existing NOx emissions from specified eligible categories of mobile sources to mitigate the excess unlawful emissions that were, and are still being, produced by the unlawful Volkswagen vehicles. The partial consent decrees address this goal by laying out a process to establish an Environmental Mitigation Trust Agreement to mitigate excess NOx emissions produced by unlawful vehicles.

Trust Agreement

Appendix D of the First Partial Consent Decree contains the Form of Environmental Mitigation Trust Agreement. A Trustee, Wilmington Trust, N.A., was approved by the court on March 15, 2017, pursuant to the Partial Consent Decree entered on October 25, 2016, to administer the Trust Agreement. A link to the court document is provided below. The Trust Agreement is subject to change by the Trustee, although significant changes are not anticipated. The final Trust Agreement is expected to be approved by the court in early to mid-2017. The following information is based on the current form of the trust agreement that is in the approved First Partial Consent Decree and will be updated if the Trustee makes changes. Additionally, if the Second Partial Consent Decree lodged by the parties on December 20, 2016, is approved by the court, the Trust Agreement will also apply to the subject 3.0-liter vehicles.

Pennsylvania's Role in the Environmental Mitigation Trust Agreement

Pennsylvania is allocated over $118 million in the First and Second Partial Consent Decrees. The amount of money allocated to Pennsylvania is based on the percentage of unlawful Volkswagen vehicles registered in the Commonwealth compared to the number registered nationally. The Pennsylvania Department of Environmental Protection (DEP) will apply to become certified by the court-appointed Trustee as the official state agency, or lead agency, that will receive and distribute funding from the Environmental Mitigation Trust (Mitigation Trust).

DEP has developed a draft Beneficiary Mitigation Plan that will provide an overview of how Pennsylvania's portion of the trust fund will be spent. DEP will receive public comment for how best to design and implement the Beneficiary Mitigation Plan. In general terms, DEP will receive proposals for projects and rate the projects on established and publicized criteria, such as cost effectiveness, emission reductions, and the air quality where the project is located. DEP will grade project applications and determine those projects that are the best eligible projects. Then, DEP will apply to the Trustee for approval to fund what DEP determined to be the best eligible projects.

Projects – Eligible Mitigation Actions

Under the terms of the First Partial Consent Decree, Pennsylvania is allocated over $110 million from the Mitigation Trust. If the Second Partial Consent Decree becomes court-approved, this amount would increase by $7.8 million. The Mitigation Trust can be used to fund specified categories of projects that repower diesel vehicles, engines or equipment with new engines or replace older diesel vehicles, engines or equipment with new vehicles, engines or equipment. Some projects to retrofit vehicles with control technologies may also be eligible for funding if completed under an approved state-level Diesel Emission Reduction Act (DERA) funding program.

The list of projects that are eligible for funding is provided below:

  1. Class 8 Local Trucks and Port Drayage Trucks
  2. Class 4-8 School Bus, Shuttle Bus, or Transit Bus
  3. Railroad Freight Switcher Locomotives
  4. Ferries/Tugs
  5. Ocean Going Vessels Shorepower
  6. Class 4-7 Local Freight Trucks
  7. Airport Ground Support Equipment
  8. Forklifts
  9. Light-Duty Zero Emission Vehicle Supply Equipment
  10. Matching funds for projects eligible under the Diesel Emission Reduction Act

See Appendix D-2 of the October 25, 2016, Partial Consent Decree for more details.

Timing

Several court-related activities must take place before DEP would be in a position to receive proposals for funding, or to provide funding. After the final Trust Agreement is approved by the court, Pennsylvania must become certified as a "Beneficiary" and must finalize and submit a Beneficiary Mitigation Plan before DEP can solicit applications for eligible projects.

Project Funding

Under the partial consent decrees, the lead agency will review and recommend projects to the Trustee for funding approval. The Trustee will make the final decision. If the Trustee approves the project, the Trustee will disburse Mitigation Trust funds to the lead agency, for the lead agency to distribute to the project applicant, as appropriate.

The partial consent decrees state that the Trustee may only disburse funds for Eligible Mitigation Actions, and for Eligible Mitigation Action Administrative Expenditures. Pennsylvania, when approved as a Beneficiary, will be authorized to use up to 15 percent of the Mitigation Trust funds awarded for eligible projects for Pennsylvania's actual administrative expenditures and those of any third-party contractors associated with implementing the projects.

Beneficiary Mitigation Plan

In anticipation of becoming certified as a Beneficiary, DEP has developed a draft Beneficiary Mitigation Plan that provides Pennsylvania's high-level vision for use of the mitigation fund money and information about the specific project types eligible for funding. 

DEP is now accepting public comments on the draft Beneficiary Mitigation Plan through July 5, 2017. See the Pennsylvania Bulletin notice for instructions on submitting comments. Additionally, see the webinar and listening session schedule below.

The draft Beneficiary Mitigation Plan can be viewed here.

Commentators are encouraged to register in advance of the listening sessions by calling the DEP Policy Office at (717) 783-8727.  

Tuesday, May 23, 2017 -- Pennsylvania's Draft Beneficiary Mitigation Plan Webinar

The listening session schedule is as follows: 

June 5, 2017, 10:00 a.m. – noon

Department of Environmental Protection Southcentral Regional Office
Susquehanna Room A & B
909 Elmerton Avenue,Harrisburg, PA 17110

June 7, 2017, 10:00 a.m. – noon

Department of Environmental Protection Northcentral Regional Office
Goddard Room
208 West Third Street, Suite 101, Williamsport, PA 17701-6448

June 13, 2017, 10:00 a.m. – noon

Department of Environmental Protection Southeast Regional Office
Delaware Room and Schuylkill River Room
2 East Main Street, Norristown, PA 19401

June 15, 2017, 10:00 a.m. – noon

Department of Environmental Protection Northeast Regional Office
2nd Floor Conference Rooms A and B
2 Public Square, Wilkes-Barre, PA 18711-0790

June 22, 2017, 10:00 a.m. – noon

Department of Environmental Protection Northwest Regional Office
1st Floor Main Conference Room
230 Chestnut Street, Meadville, PA 16335

June 23, 2017, 10:00 a.m. – noon

Department of Environmental Protection Southwest Regional Office
Waterfront Room A & B
400 Waterfront Drive, Pittsburgh, PA 15222-4745


Frequently Asked Questions (FAQ's)

For additional information on the Mitigation Trust, please see the EPA FAQ document.

Contact DEP

If you have questions or comments, please contact: RA-EPVWMITIGATION@pa.gov or 717-787-9495.

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