Department of the Environment Finalizes Spending Plan for Volkswagen Settlement Money

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Jay Apperson

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jay.apperson@maryland.gov

 

Department of the Environment Finalizes Spending Plan for Volkswagen Settlement Money

Maryland responds to public comment on initial proposal, increases local government funding and adds electric school bus pilot program to $75.7 million spending plan

 

BALTIMORE, MD (February 13, 2019) – The Maryland Department of the Environment, in close coordination with the Maryland Energy Administration and the Maryland Department of Transportation, has developed a spending plan that will invest over $75 million dollars in settlement money from the Volkswagen “defeat devices” case in transportation strategies and projects to improve the quality of the air that Marylanders breathe.

The plan puts a priority on the deployment of electric vehicle charging infrastructure and the replacement of old, dirty diesel engines with new, cleaner technologies. After a robust public participation process that included comments received on a draft plan released in August, Maryland  increased local government funding by more than $3 million and added an electric school bus pilot program. The electric school bus pilot program will work in concert with the Maryland Department of the Environment’s (MDE) idle reduction program to reduce emissions around schools to benefit the state’s youngest residents.

While the plan focuses on ways that Maryland can reduce nitrogen oxide (NOx) emissions that are a significant cause of smog pollution, Maryland will also experience significant co-benefits for the environment. These include reductions in particle pollution from diesel engines, reductions in emissions of greenhouse gases that contribute to climate change and reductions in pollution from volatile organic compounds that also help cause unhealthy smog.

“Maryland is proud to be a national leader in protecting our environment and promoting clean transportation,” said Governor Larry Hogan. “This comprehensive plan is further proof of our commitment to leveraging 21st century technology to advance clean cars and preserve our natural resources for generations to come.”

“Every dollar is an investment in a cleaner and greener future with a focus on transportation electrification and climate leadership,” said Maryland Environment Secretary Ben Grumbles. “The Plan is a living document that will continue to reflect the innovations and partnerships from our citizens, communities, and businesses.”

“Expanding Maryland’s EV and alternative fuel vehicles is critical in reaching our targeted emission reduction goals which will not only improve air quality, but stimulate the Maryland economy,” said Dr. Mary Beth Tung, Ph.D., J.D., Director, Maryland Energy Administration (MEA). “MEA’s charging station rebates have already helped to offset the cost of more than 2,500 systems for residential and commercial users and provided tax rebates of over $3 million dollars since 2015.”

“MDOT is taking action to reduce emissions in Maryland from reducing congestion and idling cars with the Traffic Relief Plan to investing in new electric buses at the Baltimore/Washington International Thurgood Marshall Airport,” said Transportation Secretary Pete K. Rahn.

The plan outlines how Maryland will spend the $75.7 million it received under a settlement between the U.S. Justice Department and Volkswagen. In separate actions, Maryland announced a $33.5 million settlement of its complaint against Volkswagen for violations of state environmental laws and settlements totaling more than $6 million with Fiat Chrysler Automobiles and Bosch to resolve allegations the companies engaged in and facilitated cheating diesel emissions tests.

THE VOLKSWAGEN CASE

From 2009 through 2015, certain diesel-powered Volkswagen, Audi, and Porsche vehicles were equipped with illegal “defeat devices.” These devices allow cars to meet emissions standards in a laboratory or a testing station, but during normal operation those vehicles emit nitrogen oxides at up to 40 times federal standards. About 16,000 of these illegal vehicles were sold in Maryland.

In 2015, the U.S. Environmental Protection Agency and the California Air Resources Board (CARB) issued a Notice of Violation of the Clean Air Act to Volkswagen AG (VW), Audi AG and Volkswagen Group of America, Inc. In 2016, a federal court approved a settlement that requires Volkswagen to spend $2.7 billion on emission reduction programs in the United States. Under that settlement, Maryland was awarded $75.7 million.

AIR QUALITY IMPLICATIONS

Nitrogen oxides, or NOx, contribute to the formation of ground-level ozone, or smog. Unhealthy levels of ozone can irritate the respiratory system and cause other negative health impacts. NOx air emissions are also a significant source of nutrient pollution to the Chesapeake Bay and its tributaries.

Maryland estimates that the illegal vehicles from Volkswagen and affiliated companies emitted up to 1,730 tons of excess NOx – the equivalent of an additional 375,000 vehicles on Maryland roads each day. While Maryland has made dramatic progress in cleaning up air pollution, this funding will help further achieve our goals. Ozone levels statewide meet the 2008, 75-parts-per-billion federal ozone standard, and 13 of the state’s 18 ozone monitors are measuring levels that meet the new, 2015 standard of 70 parts per billion. However, areas of Maryland do not meet the newer standard.

MARYLAND’S PLAN

The spending plan was developed by MDE, the Maryland Department of Transportation (MDOT), and the Maryland Energy Administration (MEA) in accordance with the list of eligible projects and matching fund requirements that are required under Appendix D-2 of the Settlement. In August 2018, Maryland released a draft spending plan based on input from stakeholders around the state, including members of the Maryland Climate Change Commission and the Electric Vehicle Infrastructure Council, as well as state environmental agencies and organizations from around the country.

The spending plan identifies who can receive funding, including federal and local governments as well as private businesses and highly impacted communities (areas of the state that historically and currently experience high levels of ground level ozone). Approximately 70 percent of the funding is reserved for partnerships with these groups. The majority of the money is to go to projects, with little going to administrative costs, to ensure maximum air pollution reductions for Maryland.

The plan identifies types of projects eligible for funding, including replacement of older, heavy duty diesel engines with new diesel engines that are up to 70 percent cleaner or engines that use alternative fuels. Electric buses and heavy duty equipment such as trucks, boats and locomotives are potential projects that are eligible for funding. The plan also provides flexibility for groups to work in partnership with the state on priority projects.

Electric vehicle infrastructure plays a vital role in increasing electric vehicle adoption. The plan uses the maximum 15 percent that is allowed to be used to fund electric vehicle charging infrastructure throughout Maryland.

Maryland requested public comments on the draft plan and held regional public meetings. Changes made to the draft plan in response to public comments include:

  • An increase in local government funding for strategies from $12 million to $15.6 million, with the added requirements that local governments provide a 20 percent match. Funding for MDOT projects was reduced from $22.8 million to $18.9 million.
  • The addition of a pilot program for electric school buses. Half of the program will be funded by the Volkswagen settlement and half will come from the Fiat Chrysler-Bosch settlement for a total of $1.2 million. The pilot program goes hand-in-hand with MDE’s statewide school bus idle reduction program. A total of 23 schools in eight counties and Baltimore City that have enacted anti-idling measures in their bus loading zones are the original members of that program.
  • The addition of a clean transportation project for MDE’s Emergency Response Division vehicles. Replacing these aging vehicles with newer, cleaner and more reliable vehicles will help MDE fulfill its responsibility to safeguard Maryland’s citizens and the environment.

 

The spending plan is available on MDE’s website.

 

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