Settlement reached: In U.S. VW to pay $14.7B: A big deal for California

The controversial part of the Volkswagen diesel-engine-emissions-doctoring (read: “defeat device”) scandal, at least in the U.S. is now in the rear-view mirror. A settlement award, according to the California Environmental Protection Agency Air Resources Board (ARB) in a press statement, of $14.7 billion in restitution (compensatory relief) was approved on Oct. 25, 2016, some 13-plus months after news of the discovery of the emissions-altering scheme first went public on Sept. 18, 2015. Nearly 500,000 Volkswagen and Audi 2.0 liter diesel-engine-equipped motor vehicles are affected, namely, “‘the Jetta, Beetle and Golf, model years 2009-2015; the Audi A3, model years 2009-2015; and the Passat, model years 2014-2015,’” as reported in: “Months into VW-diesel recall and engine issue still unresolved” on Jan. 28th this year. (The preceding quote originally appeared in the earlier Air Quality Matters post: “What navigating the VW-diesel-vehicle-recall road ahead may look like”).

Meanwhile, in a Jan. 29, 2016 update in the “Months into VW-diesel recall and engine issue still unresolved” posting it was relayed from an Oct. 15, 2015 company-prepared statement that:

“‘The Volkswagen Group will recall a total of approximately 8.5 million vehicles in Europe (EU28 markets), including some 2.4 million vehicles in Germany, according to KBA.1 Outside the EU28, each individual country will clarify in detail which emissions classes of the EA 189 engine are in fact affected.’”

Settlement terms

In the Oct. 25, 2016 “Federal court approves $14.7 billion settlement in VW cheating case: Pollution mitigation and zero-emission vehicle infrastructure and outreach projects to be subject of public workshops, comment,” ARB news release, the California agency announced: “US District Judge Charles Breyer today approved a partial Consent Decree agreed upon by automaker Volkswagen (VW), the California Air Resources Board (CARB), the Environmental Protection Agency (US EPA) and the US Department of Justice (US DOJ). The $14.7 billion agreement is the largest settlement in history involving an automaker.”

Explains the air regulatory agency, “In California, VW’s cheating was particularly harmful, because our air quality is worse than anywhere else in the nation. Twenty-three million people living within the nation’s only severe nonattainment areas for ozone pollution, of which NOx [oxides of nitrogen] is a primary component, and 12 million living in areas with nation-leading levels of fine particle pollution reside in California.”

The ARB further going on in the release emphasizing, “California will receive about $1.2 billion from the approved Consent Decree for mitigation of the environmental damage caused by VW’s deception. … Approximately $800 million dollars (sic) (ZEV Investment Commitment) will be invested to advance California’s groundbreaking Zero Emission Vehicle (ZEV) programs. VW will make these payments and investments in installments over several years, and the two sums together will provide funding to mitigate all past and future environmental harm, including harm to California’s clean vehicle market, that resulted from VW’s cheating.”

Moreover, “[t]o address all past and future excess emissions of NOx from the 2.0-liter cars sold in California, under the terms of the Consent Decree, VW must pay about $381 million over a three-year period into a trust for projects to replace older and dirtier heavy duty diesel vehicles and equipment with cleaner vehicles and equipment, including advanced zero- and near-zero technologies. This provides an opportunity to focus reductions of emissions in disadvantaged communities,” the ARB announced. “California’s share of the $2.7 billion mitigation fund is proportional to its share of the total number of affected diesel cars.”

“The state will undertake a public process to allow members of the Legislature and the public to provide input and comments on potential projects to be funded by the settlement,” the ARB stated. Statewide, roughly 71,000 vehicles are affected.

Essence of emissions-cheating scandal

“Under emissions-testing procedures, the vehicles’ engines apparently met specifications, that is, absent any further technical (mechanical and/or electrical/electronic) issues. However, when not undergoing emissions testing or under normal operating conditions, that is when in regular operation, the exhaust released contained anywhere from between 10 and 40 times the acceptable amounts of oxides of nitrogen or NOx emissions depending upon vehicle. On-board vehicle software is to blame in this particular circumstance; such referred to as a ‘defeat device’ as per Clean Air Act definition” (Source: “What navigating the VW-diesel-vehicle-recall road ahead may look like”).

Notes

  1. KBA refers to The Federal Motor Transport Authority in Europe

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