Frequently Asked Questions
Volkswagen Settlement Environmental Mitigation Trust – State of Hawaii
These Frequently Asked Questions (FAQs) pertain only to Hawaii’s participation as a Beneficiary of the Environmental Mitigation Trust. For general information about the Volkswagen (VW) Settlement please visit our Additional Resources page.
What is the Environmental Mitigation Trust?
The Environmental Mitigation Trust is one segment of the larger VW Settlement intended to mitigate the environmental damage caused by emissions from the non-compliant VW vehicles. The Settlement requires VW to invest $2.925 billion in an Environmental Mitigation Trust to be independently administered by Wilmington Trust, N.A., which will fund projects (Eligible Mitigation Actions) to reduce diesel emissions primarily from large and medium vehicles. The Eligible Mitigation Actions will be proposed and administered by the Beneficiaries subject to the requirements of the Settlement and Trust Agreement. The goal of each Eligible Mitigation Action shall be to achieve reductions of nitrous oxides (NOx) emissions in the United States from the transportation sector and collectively mitigate the total, lifetime excess emissions, mainly NOx, generated by the non-compliant VW vehicles while on the road. NOx is the major excess pollutant from these vehicles and is a significant health concern.
What is Hawaii’s allocation under the Environmental Mitigation Trust?
Hawaii’s initial allocation under the Environmental Mitigation Trust is $8,125,000. The allocations of each eligible Beneficiary are determined by the number of non-compliant model year 2009-2016 VW vehicles sold in the beneficiary’s jurisdiction. Hawaii, along with a handful of smaller states, received the minimum allocation of $8.125 million from the VW settlement. Additional funds could be added to Hawaii’s allocation in the event not all eligible beneficiaries qualify to receive their allocation and/or if beneficiaries fail to expend their entire allocations within 10 years as provided by the Trust.
Who is responsible for administering Hawaii’s Trust allocation?
The Governor of the State of Hawaii, David Ige, has designated the Department of Business, Economic Development, and Tourism (DBEDT) as the lead agency for purposes of administering the State’s Trust allocation. The Hawaii State Energy Office (HSEO), a division of DBEDT, is the primary agency charged with expending the Trust funds and executing the environmental mitigation projects funded by the Trust.
HSEO has demonstrated experience, expertise, and leadership in implementing clean transportation across Hawaii, including zero emission vehicles and charging infrastructure; which are directly contributing to reduced petroleum consumption and emissions in the transportation sector. For more information about HSEO’s clean transportation efforts, electricvehicle.hawaii.gov.
How can the State of Hawaii spend its Trust allocation?
According to Appendix D of the Settlement Consent Decree (Appendix D-2), the Trust can pay for defined eligible projects that reduce NOx. The categories of Eligible Mitigation Actions (EMAs) available under the Trust are:
- Class 8 (gross vehicle weight rating > 33,000 lbs) Local Freight Trucks and Port Drayage Trucks (Eligible Large Trucks) – includes vehicles typically used for hauling cargo to and from ports
- Class 4-8 (gross vehicle weight rating > 14,001 lbs) School Bus, Shuttle Bus, or Transit Bus (Eligible Buses) – includes certain school buses, municipal buses, and airport transport buses
- Freight Switchers – includes local motives that move rail cars around a rail yard
- Ferries/Tugs – includes vessels that push or pull vessels
- Ocean Going Vessels (OGV) Shorepower (aka ‘cold-ironing’) – enables compatible marine vessels to be powered by onshore infrastructure, which enables a vessel’s main and auxiliary engines to remain off while at berth
- Class 4-7 (gross vehicle weight rating between 14,001 lbs and 33,000 lbs) Local Freight Trucks (Medium Trucks) – includes vehicles typically used to deliver cargo and freight
- Airport Ground Support Equipment – includes baggage handling and aircraft transport vehicles
- Forklifts (> 8,000 lbs lift capacity) and Port Cargo Handling Equipment – includes forklifts, side / top loaders, gantry cranes, terminal tractors, etc.
- Light Duty Zero Emission Vehicle Supply Equipment – includes electric vehicle charging infrastructure and stations (capped at 15% of total Beneficiary Trust allocation)
- Diesel Emission Reduction Act (DERA) Option – can match state DERA grant program projects
Most EMAs require the scrappage of the older, higher-polluting heavy duty vehicles to be replaced to ensure the replacements achieve the intended emissions reductions. Recycling of scrapped vehicles, engines, and equipment is encouraged and will be pursued in Hawaii to the extent feasible.
The Trust funds may not be used for construction or agricultural equipment, pleasure watercraft, recreational equipment such as dirt bikes or all-terrain vehicles, lawn and garden equipment or any other non-road equipment not specified in the list above unless the Trust funds are being used for a non-federal voluntary match under an applicable DERA program. Academic research and other studies or analysis are also not considered eligible mitigation actions.
The Trust funds may be used for renewable energy technologies that are part of the infrastructure required to power the vehicles eligible for Trust expenditures. Beneficiaries may use Trust Funds for actual administrative expenditures associated with implementing Eligible Mitigation Action(s), but not to exceed 15% of the total cost of such Eligible Mitigation Action(s).
What is the State of Hawaii’s plan to spend its Trust allocation?
The HSEO, is currently in the process of developing its Beneficiary Mitigation Plan (BMP) which will summarize how the State of Hawaii plans to utilize Hawaii’s $8.125 million allocation.
While the primary goal of the environmental mitigation trust is to reduce NOx emissions, beneficiaries may choose to consider how environmental mitigation trust funds could help achieve additional goals and policies related to economic development, health, fuel security, greenhouse gas emissions, energy, renewable portfolio standards, and benefits to vulnerable populations. The state looks to apply Trust funds to make market transformative investments that will reduce NOx emissions in the transportation sector, and reduce Hawaii’s dependency on imported fossil fuels within the transportation sector. HSEO is currently evaluating data and information to support its decision-making process and will be soliciting public comments on proposed EMAs.
According to Appendix D of the Settlement Consent Decree, the Beneficiary Mitigation Plan must contain the following:
- Beneficiary’s overall goal for the use of the funds;
- Categories of EMAs the beneficiary anticipates will be appropriate to achieve the stated goals and the preliminary assessment of the percentages of funds anticipated to be used for each type of EMA;
- Description of how the beneficiary will consider the potential beneficial impact of the selected EMAs on air quality in areas that bear a disproportionate share of the air pollution burden within its jurisdiction; and,
- General description of the expected ranges of emission benefits the Beneficiary estimates would be realized by implementation of the EMAs identified in the beneficiary Mitigation Plan.
The BMP will provide the level of detail reasonably ascertainable at the time of submission, and is intended to provide the public with insight into a beneficiary’s high-level vision for use of the mitigation funds and information about the specific uses for which funding is expected to be requested. Nothing in the Trust is intended to make the BMP binding on any beneficiary, nor does it create any rights in any person to claim an entitlement of any kind. Beneficiaries may adjust their goals and specific spending plans at their discretion and, if they do so, will need to provide the Trustee with updates to their BMP. The pursued EMAs may be determined based on numerous factors including, but not limited to NOx reductions, support for Hawaii’s clean energy goals, transportation electrification, cost-benefit (includes cost-share), timing, willing partnerships, equipment and vehicle availability, and feasibility.
How will the State of Hawaii consider the potential benefit of the selected projects on the air quality in areas with disproportionate air pollution in Hawaii?
The Trust requires each beneficiary to consider the potential beneficial impact of the selected EMAs on air quality in areas that bear a disproportionate share of the air pollution within its jurisdiction. Where the data is available, HSEO will determine if any such areas of disproportionate air pollution exist in Hawaii, and if so, whether or not any of the EMAs could help alleviate the problems. HSEO is also seeking to alleviate the pollution exposure to those vulnerable communities (i.e., elderly, children, and disabled) who rely on transportation modes eligible for alternative vehicle replacements under the Trust, such as buses, shuttles, and trolleys.
Can the public provide input on the State of Hawaii’s plan?
Members of the public and other stakeholders may submit comments or questions to HSEO at any time by emailing email@example.com. HSEO published a news release announcing the opportunity for the public to offer comments on the Eligible Mitigation Actions under consideration. Public input will be considered in the final Beneficiary Mitigation Plan that will be submitted to the Trustee. Depending on the individual project requirements, opportunity for public comment or participation may be provided through the requisite procurement and/or permitting processes. The Trustee may also require additional opportunities for public involvement and participation.
Send questions or comments to firstname.lastname@example.org