Maryland Department of the Environment Announces Draft Spending Plan for Volkswagon Settlement Funds

BALTIMORE – The Maryland Department of the Environment, in conjunction with the Maryland Energy Administration and the Maryland Department of Transportation, has developed a draft spending plan that would invest tens of millions of dollars in settlement money from the Volkswagen “defeat devices” case toward the deployment of electric vehicle charging infrastructure and the replacement of old, dirty diesel engines with clean diesel engines and other strategies to help improve air quality.

The draft plan focuses on ways that Maryland can reduce NOx emissions. By implementing the measures in this Draft Plan, Maryland will also experience significant co-benefits for our environment, including reductions in diesel particulates, reductions in greenhouse gases, and reductions in pollution from volatile organic compounds.

The draft plan outlines how Maryland would spend the $75.7 million it received under a settlement between the U.S. Justice Department and Volkswagen. In a separate action, Maryland recently announced a $33.5 million settlement of its complaint against Volkswagen for violations of state environmental laws.

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

“The silver lining to VW’s environmental scandal is significant new funding for clean air and climate progress in Maryland,” said Maryland Department of the Environment Secretary Ben Grumbles. “This detailed plan advances our priorities and listens to citizens, communities, and businesses.”

“Maryland Energy Administration’s transportation programs have helped to displace more than 10 million gallons of petroleum over the past four years,” said Maryland Energy Administration Director Mary Beth Tung. “I am confident this plan, will lead to increased usage of EV and other alternative fuel vehicles. Furthermore, this plan will help us reach our targeted goals while improving the environment and the economy throughout our state.”

“MDOT is taking action to reduce emissions across our transportation business units by investing in clean and innovative technology, including new electric buses at the Baltimore/Washington International Thurgood Marshall Airport,” said Transportation Secretary Pete K. Rahn.

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 draft 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. It is based on input from stakeholders around the State, including members of the Maryland Climate Change Commission, the Electric Vehicle Infrastructure Council, as well as State environmental agencies and organizations from around the country. It 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 draft 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 draft 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 draft plan proposes to use the maximum 15 percent that is allowed to be used to fund electric vehicle charging infrastructure throughout Maryland.

MDE is requesting public comment through August 31, 2018. Maryland will also hold regional public meetings on the draft plan. The draft plan and additional information on the public comment process may be found on the Maryland Department of the Environment’s web site at: mde.maryland.gov/vwplan

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~ Maryland Department of the Environment