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Volkswagen (VW) Settlement Mitigation Funding

Federal Agency


Office of Enforcement


To support cleaner and/or electric vehicles (trucks, buses, light duty vehicles, etc.) and charging infrastructure that reduce NOx emissions consistent with each state's beneficiary mitigation plan. This funding comes from EPA's 2016 settlement for $14.7 billion with Volkswagen, a portion of which is allocated directly to states to distribute.

Applicant and/or Project Eligibility Requirements

Varies by state

Decarbonization Considerations

Funding may be used to support the scrapping of older vehicles as defined, the replacement of an existing engine (repowering), or the purchasing of new diesel or alternate fueled (CNG, propane, hybrid, etc.) engines and vehicles. Consider prioritizing the replacement of aging, less efficient vehicles in your bus or truck fleet. Electric vehicle supply equipment/ charging infrastructure associated with new all-electric vehicles and fuel cell vehicles is eligible as well. School and other transit buses could serve as both grid and resilience assets (both during and after their operating life) because of the predictability of their operations combined with significant downtime. Such buses could include vehicle-to-grid technology allowing them to support the regional electricity system by storing and injecting energy into the power grid when not in use.

Equity Considerations

Local governments and communities should carefully consider the environmental justice implications of electric vehicle deployment and use, including which bus routes are electrified and where charging infrastructure is located.

Helpful Tips

Interested applicants should check with their state to understand the phases and schedules of implementation. Each state is at a different point of implementation consistent with their beneficiary mitigation plan. The full list of eligible projects can be found here:

Other Notes

The percentage of each project that can be funded through the Trust are categorized into two different rates: government-owned and non-government owned. Governments can fund up to 100% of a project through the trust, whereas non-government entities can fund up to 75% of a project, depending on the category and type of engine replacement (diesel, alternate fuel, all- electric, etc). A “government” is defined in the Settlement as “a state or local government agency (including a school district, municipality, city, county, special district, transit district, joint powers authority, or port authority)... and a tribal government or native village.”

Deadline (Announced or Anticipated)

Varies by state

Funding Available

Varies by state, but total mitigation trust amounts to $2,900,000,000

Max Award Amount

Up to 100% of a project for governmental entities

Expected Allocations

Varies by state

Average Award (Estimated)

Varies by state

Matching Funds

Not required

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