Environmental Mitigation Trust

Under the settlements, Volkswagen (VW) agreed to establish a $2.925 billion Environmental Mitigation Trust (Trust) for its beneficiaries to pursue alternative transportation projects intended to fully mitigate the total excess NOx emitted by the non-compliant VW vehicles. All 50 states, the District of Columbia, Puerto Rico, and federally recognized Indian tribes are eligible to become beneficiaries of the Trust and will be responsible for administering their respective Trust allocations, which are based upon the number of non-compliant vehicles sold in that jurisdiction. As an eligible beneficiary, the State of Hawai‘i has been allocated $8.125 million from the Trust based on the number of non-compliant VW vehicles sold in Hawai‘i.

State of Hawai‘i – Hawai‘i State Energy Office / Department of Business, Economic Development, and Tourism

The Department of Business, Economic Development, and Tourism (DBEDT) has been designated by Governor David Ige to serve as the Lead Agency on behalf of Hawai‘i. The Hawai‘i State Energy Office (HSEO), a division of DBEDT, will administer Hawai‘i’s $8.125 million Trust allocation. As a beneficiary to the Trust, HSEO’s responsibilities include the determination and execution of eligible mitigation actions, gathering public input, developing and submitting Hawai‘i’s Beneficiary Mitigation Plan, submission of funding requests to the Trustee, semiannual reporting obligations, and maintaining and making publicly available all documentation and records submitted to the Trustee.

Eligible Mitigation Actions

The State of Hawai‘i may pursue projects from the following categories of Eligible Mitigation Actions:

  1. Class 8 (> 33,000 lbs.) Local Freight Trucks and Port Drayage Trucks (Eligible Large Trucks)
  2. Class 4-8 (> 14,000 lbs.) School Buses, Shuttle Buses, or Transit Buses
  3. Freight Switchers
  4. Ferries / Tugs
  5. Ocean-Going Vessels (OGV) Shorepower
  6. Class 4-7 (14,001 lbs. – 33,000 lbs.) Local Freight Trucks (Medium Trucks)
  7. Airport Ground Support
  8. Forklifts (> 8,000 lbs. lift capacity) and Port Cargo Handling Equipment
  9. Light-Duty Zero-Emission Vehicle (ZEV) Supply Equipment
  10. Diesel Emission Reduction Act (DERA) Option
Image Source: National Association of State Energy Officials – Volkswagen Settlement Beneficiary Mitigation Plan Toolkit 

Public Comment Period (February 20 – March 20, 2018)

HSEO gathered public comment in February 2018 on a range of eligible mitigation actions outlined in the settlement between Volkswagen and the federal government. Respondents offered their perspectives on the eligible mitigation actions through a questionnaire posted on the HSEO website. A news release was issued notifying the public of the comment period (February 20 – March 20, 2018) and directions to submit comments.

A total of 149 questionnaire responses were received from Oahu, Maui, Hawai‘i Island, Kauai, and the mainland. Respondents were asked to list the top three categories of eligible mitigation actions Hawai‘i should consider for the VW trust funding. The highest-ranking category was buses (school, shuttle, or transit), which was supported by 89 percent of respondents. The category of local freight trucks and port drayage trucks was supported by 66 percent of respondents, and the category of light-duty zero-emission vehicle charging equipment was supported by 57 percent of respondents.

Hawai‘i Beneficiary Mitigation Plan

Hawai‘i’s Beneficiary Mitigation Plan describes the project categories that will be funded from the state’s allocation of the VW Environmental Mitigation Trust. Hawai‘i’s Beneficiary Mitigation Plan was submitted to Wilmington Trust by the Hawai‘i State Energy Office on January 9, 2019, and approved by the Trustee on March 1, 2019.

The Beneficiary Mitigation Plan is intended to provide a high-level vision of how the State of Hawai‘i plans to utilize its Trust allocation based on the Eligible Mitigation Actions. The Plan must contain the following information:

  1. Beneficiary’s overall goal for the use of the funds.
  2. Categories of Eligible Mitigation Actions the beneficiary anticipates will be appropriate to achieve the stated goals.
  3. Preliminary assessment of the percentages of funds anticipated to be used for each type of Eligible Mitigation Action.
  4. Description of how the beneficiary will consider the potential beneficial impact of the selected Eligible Mitigation Actions on air quality in areas that bear a disproportionate share of the air pollution burden within its jurisdiction.
  5. General description of the expected ranges of emission benefits the beneficiary estimates would be realized by implementation of the Eligible Mitigation Actions identified in the Beneficiary Mitigation Plan.

Funding Requests

The following are the Appendix D-4 Beneficiary Eligible Mitigation Action Certifications that have been submitted by the Hawai‘i State Energy Office on behalf of the State of Hawai‘i and approved by Wilmington Trust. These funding requests have been sorted by the category of Eligible Mitigation Action and date of when they were submitted to the Trustee.

Semi-Annual Reports

As a Beneficiary of the VW Environmental Mitigation Trust, Hawai‘i shall submit to the Trustee a semiannual report no later than January 30 and July 30 of each year. The report shall describe progress of implementing each Eligible Mitigation Action for the six-month period leading up to the reporting date.