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CARB approves $423M plan to mitigate harm from Volkswagen defeat devices; significant investments in heavy-duty vehicles and equipment sectors

The California Air Resources Board (CARB) approved a plan to mitigate statewide harm from more than 10,000 tons of smog-causing pollutants released in the state due to Volkswagen’s (VW) use of illegal “defeat devices” in diesel passenger cars. The National VW Environmental Trust provides California with $423 million for this purpose.

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Proposed project allocation distribution.

Over the next 10 years this plan will put in place not only tools to clean up VW’s excess emissions, but also to help achieve further reductions of smog-forming pollution for decades to come.

—CARB Chair Mary D. Nichols

The mitigation plan approved by CARB will invest primarily in zero emission replacements for heavy-duty trucks, buses and equipment. There is also money to reduce emissions at freight facilities, marine projects and light-duty vehicle charging.

Senate Bill 92, passed last year, also requires that a minimum 35% of the mitigation investment benefit disadvantaged communities. As designed, the plan approved today invests about 50% of the available funds in those communities.

The plan provides:

  • $130 million for to replace eligible Class 4-8 shuttle buses, school and transit buses with new, commercially available, zero-emission technologies. Specifically, staff proposes a maximum incentive of up to $400,000 for a battery electric school bus; up to $180,000 for a new battery electric transit bus; up to $400,000 for a new fuel cell electric transit bus; and up to $160,000 for a new battery electric shuttle bus, each including supporting infrastructure.

    These proposed amounts are expected to fund up to 95% of the cost of a battery-electric school bus; to fund the incremental costs of a zero-emission transit bus above the typical Federal Transit Administration funding; and to fund a large portion of the incremental costs for a battery-electric shuttle bus. As required by the Consent Decree, total costs per vehicle must not exceed 75% for non-government owned vehicles and 100% for government owned vehicles. For school bus incentives, staff recommends a minimum 5% match from the school district or other funding source.

  • $90 million to replace eligible Class 8 freight trucks and port drayage trucks with new zero-emission technologies. At least four additional manufacturers are expected to introduce zero-emission Class 8 commercial trucks in the next one to three years, and manufacturers representing the majority of the California truck market have publicly announced plans to launch zero-emission trucks in the next five years. While a portion of this allocation will support the early deployment of existing commercially available trucks, staff proposes 70% of the allocation be focused on expanding the market as manufacturers bring additional zero-emission trucks to market in the next 3 to 5 years. The first installment of this funding will be $27 million, and the next installment(s) will be determined during the implementation process.

    Staff proposes a maximum incentive of up to $200,000 per truck, including supportive infrastructure, in the first year, and will reevaluate incentive amounts in subsequent years, as incremental costs are expected to decline.

  • $70 million to replace eligible airport ground support equipment (GSE), forklifts, and port cargo handling equipment with new, commercially available, zero-emission technologies and to install oceangoing vessel shore power systems at port terminals. The goal of this project category is to maximize NOx reductions by funding the most cost-effective zero-emission freight or marine projects.

    Staff proposes funding airport GSE vehicles up to the full incremental cost; up to $175,000 for a heavy-lift forklift or battery electric port cargo handling equipment vehicle, including supportive infrastructure; and up to $2,500,000 for installing a portside ocean-going vessel shore power system at berths that service vessels that are not required by regulation to reduce their onboard power generation. Staff also proposes funding up to $2,500,000 for ferry or tug all-electric engine repowers, including fuel cell technology.

  • $60 million to replace eligible Class 7 and 8 freight trucks, including waste haulers, dump trucks, and concrete mixers, or their engines (1992 to 2012 model year); freight switcher locomotives or their engines (pre-Tier 1); and ferry, tugboat, and towboat engines (pre-Tier 3) with the cleanest commercially available internal combustion or hybrid technologies. For each vehicle, locomotive, or engine replaced, an existing vehicle, locomotive, or engine must be scrapped.

    The goal of this project category is to maximize NOx reductions by funding the most cost-effective, lowest emission engine projects. Specifically, staff proposes maximum funding up to $85,000 for a certified 0.02 g/bhp-hr low NOx engine truck and up to $35,000 for a non-government owned low NOx repower. Government owned vehicles may be eligible for up to $50,000 for a low NONOxx repower.

    Staff proposes up to $1.35 million for a Tier 4 freight switcher locomotive or engine repower, and up to $1 million for a Tier 4, or hybrid with Tier 4-equivalent NOx emissions, ferry, tugboat, or towboat engine repower.

  • $10 million for fueling infrastructure for light-duty zero-emission vehicles (ZEVs), with a target of $5 million for charging stations and $5 million for hydrogen fueling stations. For charging stations, staff proposes providing up to 100% of the cost of publicly accessible charging stations at government owned properties; up to 80% for public charging stations at privately owned properties; and up to 60% for non-public charging stations at workplaces and multi-unit dwellings.

    his allocation will provide funding to help purchase, install, operate, and maintain new charging stations for battery electric vehicles. For hydrogen fueling stations, staff proposes funding up to 33% of the cost to purchase, install, and maintain a new hydrogen fueling station for fuel cell electric vehicles.

  • $63 million in reserve

CARB staff estimates the proposed funding actions in aggregate will reduce about 10,000 tons of NOx over a 10-year period, which would fully mitigate the environmental harm caused by the subject VW diesel vehicles.

The plan will be submitted to the fund trustee before the first actual withdrawal from the trust fund.

Background. Beginning in model year 2008 VW sold about 600,000 2.0- and 3.0-liter diesel passenger vehicles with illegal software in the United States. 87,000 of those cars were sold in California. The illegal software, or defeat device, was specifically designed to operate emission control equipment when a vehicle is tested. The control equipment would then be shut off when the cars were actually being driven on the road.

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Map of estimated subject VW vehicle populations by air basin.

CARB engineers uncovered the defeat device and VW eventually confessed to violating US and California air quality regulations.

Excess NOx emissions are a major public health concern in California, because they are a key ingredient in formation of ozone (smog), CARB notes. More than 10 million Californians live in areas in extreme non-compliance areas for ozone. Those areas include the southern San Joaquin Valley and the Los Angeles Basin. Ozone is a contributor to asthma attacks, cardio-pulmonary disease and premature death.

The National VW Environmental Trust is intended to mitigate past and future excess NOx emissions from the subject vehicles. Under the terms of the two Consent Decrees, VW must pay about $3 billion into a national Environmental Mitigation Trust over a three-year period for specified eligible mitigation actions. California’s allocation of the trust is about $423 million.

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