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Emily Rusch,
CALPIRG Education Fund

Volkswagen Settlement Funds Headed to California Could Help Accelerate All-electric Transportation Revolution

Report Finds California Could Purchase Up to 1,143 Electric Vehicle Fast Charging Stations and Use the Remaining Funds to Purchase All-electric Transit Buses
For Immediate Release

A new report from CALPIRG Education finds that $381.3 from the Volkswagen (VW) settlement is headed to California to help clean up the state’s transportation system and recommends using the funds to purchase electric vehicle fast charging stations for the state’s highways along with a targeted expansion of all-electric transit buses to replace aging, dirty, diesel buses. The report finds that this amount of investment could purchase as many as 1,143 fast charging stations and 405 all-electric, zero-emissions buses, reducing dangerous pollution and saving money, all while accelerating further market transformation to an all-electric transportation system.

“Volkswagen lied to the American people and the residents of California paid the price,” said Emily Rusch, Executive Director with CALPIRG Education Fund. “VW’s crime is now an historic opportunity to help clean up our transportation system and accelerate the transition to a cleaner, healthier, 21st century transportation network. We want to make sure these funds are not squandered on dirty, outdated technology like diesel and natural gas instead of all-electric options that can help save lives and protect the planet.” she added.

According to the terms of the VW settlement, agreed to by VW and the Department of Justice, VW will pay a total of $14.7 billion in damages for their role in violating federal clean air laws – selling more than half-a-million vehicles with its “clean diesel” marketing that actually emitted up to 40 times the legal limit of dangerous NOx pollution. 

Of the civil damages outlined in the VW settlement, roughly $10 billion will go toward compensating affected consumers, and the remaining $4.7 billion will be divided into two separate funds to mitigate the environmental damages VW caused.  Of that $4.7 billion, $2.7 billion will be placed in an Environmental Mitigation Trust (EMT) and sent directly to states based on the number of affected vehicles in that state.

California is set to receive $381.3 million dollars and Governor Brown will be able to formally request the funds and appoint one of the state’s agencies to develop and administer a plan for how they will be used to complement California’s existing transportation electrification policies and programs.

“California’s share of the Environmental Mitigation Trust, if spent wisely, can bolster efforts underway to electrify our state’s transportation system. The $381.3 million in funds could purchase as many as 1,143 electric vehicle fast charging stations for use along the state’s highways, more than enough to cover the state’s entire highway system, along with 405 zero-emissions, all-electric transit buses,” said Rusch. “These investments would drastically reduce harmful pollution, help saves lives, protect the environment, combat global warming, and accelerate the market shift toward complete electrification of our transportation system,” she noted.

The new report recommends that states use the maximum allowable amount of EMT funds, 15 percent, on the purchase and installation of fast charging stations for the state’s highways. Such chargers can fully charge a zero-emission, all-electric vehicle in fewer than 30 minutes. “Greater installation of electric vehicle charging stations has a direct and substantial correlation on further personal EV adoption,” said Rusch. “Investing in fast charging stations helps ease consumers’ fears of running out of juice while on the road, which remains one of the biggest impediments to electric vehicle adoption, even as the technology and range continue to improve and costs continue to decrease,” she remarked.

The report further recommends using the remaining EMT funds, 85 percent, to purchase all-electric transit buses to replace aging, dirty, diesel buses. The report’s analysis is based, in part, on the fact that the most unlinked passenger trips are taken on transit buses, more than any other mode of public transit. The report finds, therefore, that investing in all-electric transit buses could potentially reduce inhalation of toxic fumes for the greatest possible number of people over the broadest possible area, relative to investment in other modes. The report finds that such widespread public exposure has the potential to further accelerate the market transformation to all-electric vehicles, a key component of future success fighting air pollution and combating global warming.

“Already, seventeen California transit agencies are using electric buses along select daily routes,” said Michelle Kinman, clean energy advocate with Environment California Research & Policy Center. “Investment of VW settlement funds in all-electric buses can decrease toxic air pollution that makes us sick and contributes to dangerous global warming, all while increasing public awareness of zero-emission electric vehicles and the substantial health and environmental benefits they can provide. This will in turn prompt additional transformation of the current marketplace, increasing benefits to Californians for years to come.”

The report recommendations are consistent with California’s commitment to electrification of the transportation fleet. Senate Bill 350 (De León, 2015) directs the electric industry to “accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050.”

The remaining $2 billion in VW settlement funds will be put into a Zero Emission Vehicle trust for actions intended to increase the sales, use and adoption of electric vehicles. VW will propose how to spend those funds and the EPA (or CARB in California) will approve the plan. Complimentary use of the ZEV funds is possible.

States may also apply for matching funds through the federal Diesel Emissions Reduction Act (DERA) program.

A few days ago, it was further reported that VW will now also plead guilty to federal criminal charges for customs violations, obstruction of justice, and conspiracy to commit wire fraud and violate the Clean Air Act. VW will pay a further $4.3 billion in additional criminal and civil penalties in connection with this latest agreement.

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