Nevada’s Beneficiary Mitigation Plan

The NDEP submitted Nevada's Beneficiary Mitigation Plan to Wilmington Trust on March 13, 2018.

Background

Partial Settlement and Consent Decrees have been finalized between the U.S. Justice Department, the Volkswagen Corporation and its subsidiaries (collectively, VW) regarding the installation and use of emission testing defeat devices in more than 590,000 turbocharged direct injection (“TDI”) 2.0 and 3.0 liter diesel engine vehicles sold and operated in the U.S. beginning in 2009.  In addition to other requirements, the Consent Decree requires VW to invest $2.925 billion into an Environmental Mitigation Trust to fund projects intended to offset the excess emissions of nitrous oxides (NOx) caused by the subject vehicles and in general reduce NOx emissions in areas more affected by this pollutant. 

Nevada expects to receive $24.8 million from the Environmental Mitigation Trust between 2017 and 2027 ($22.25 million from the 2.0 liter consent decree and $2.6 million from the 3.0 liter consent decree).  The Nevada Division of Environmental Protection (NDEP) was selected to be the lead agency on behalf of the state and is responsible for applying to become a Beneficiary of the Mitigation Trust fund.  The NDEP must then develop and submit a Beneficiary Mitigation Plan that specifies how these funds will be distributed to eligible projects in order to achieve the maximum air quality benefits for the people of Nevada.  The NDEP must also develop the administrative structure and fiscal elements of the statewide grant program.

The Nevada Advisory Committee on the Control of Emissions from Motor Vehicles (Inspection and Maintenance Committee or, I/M Committee) served in an advisory capacity in developing a draft Beneficiary Mitigation Plan with the NDEP.  The I/M Committee formed a Subcommittee that met throughout 2017 to help develop a draft Beneficiary Mitigation Plan for Nevada.  This draft Plan established program goals and objectives that meet air quality needs and considers public input.

Mitigation Actions Eligible for Funding

Trust funds may be used to pay some or all of the cost to repower or replace eligible diesel-powered vehicles with new diesel, alternative fueled or all-electric engines or vehicles.  Both private- and government-owned fleets will be eligible to receive funding which requires that the old vehicles and their engines be scrapped.  Appendix D-2 of the Environmental Mitigation Trust Agreement for State Beneficiaries provides detail on eligible equipment categories and model years, as well as the different percentages of the matching cost that recipients of the funding must provide.  The ten categories of Eligible Mitigation Actions are:

  1. Class 8 Local Freight Trucks and Port Drayage Trucks
  2. Class 4-8 School Bus, Shuttle Bus, or Transit Bus
  3. Freight Switchers (Locomotives)
  4. Ferries/Tugs
  5. Ocean Going Vessels (OGV) Shorepower
  6. Class 4-7 Local Freight Trucks (Medium Trucks)
  7. Airport Ground Support Equipment
  8. Forklifts and Port Cargo Handling Equipment
  9. Light Duty Zero Emission Vehicle Supply Equipment
  10. Diesel Emission Reduction Act (DERA) Option

Timeline and Next Steps

On January 29, 2018, the Notice of Beneficiary Designation was filed with the United States District Court for the Northern District of California designating Nevada as a Beneficiary.

In April of 2018 the NDEP will begin working with the Nevada Governor’s Office of Energy to provide funding for the development of the Nevada Electric Highway.  It is expected that the full 15 percent (the maximum percentage allowed for Category 9 expenditures) of Nevada’s allocation will go to support the development of the Nevada Electric Highway initiative and other qualifying strategic plans for electric vehicle charging infrastructure put forth by the Office of Energy.

The NDEP has established a listserv email list for parties interested in following developments in the Nevada VW Fund program.  If you would like to join the list, please select “VW Settlement - Nevada Mitigation Fund” from the “Select a Newsletter” button at the bottom of this page.

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