Volkswagen has made national headlines for a diesel emissions cheating scandal that has resulted in a $14.7-billion settlement with the U.S. government.
The settlement has been shaped to offset the smog-forming NOx emissions from the 2L diesel vehicles sold by VW during the 2009 to 2015 timeframe. Emissions from the cars were found to be as much as 40 times above legal limits, contributing to unhealthful air.
Included in the settlement is $2.7 billion allocated for an environmental remediation fund focused on replacing older, dirtier diesel trucks, buses and stationary equipment. An additional $2-billion fund will encourage owners of older vehicles and equipment to replace engines with electric vehicle technology. The funds will be spread among all 50 states, U.S. territories, and Indian tribal lands.
With this financial incentive, the trucking industry should expect to see adoption of zero and near-zero emission vehicles ramp up more aggressively. For air quality and climate protection goals, this is a big win as trucks generate about 40% of the nitrogen oxide emissions in the U.S. To meet health and environmental goals, America’s heavy-duty transportation system needs a full transformation to the cleanest available heavy-duty vehicle technologies and fuels as soon as possible.
U.S. ports are also a prime target for settlement money and could result in some of the highest emission benefits for the nation. It has been estimated that the ports of Los Angeles, Long Beach and Oakland alone would need to spend billions of dollars to meet potential environmental rules. The money could help ports pay for newer, cleaner drayage trucks, yard equipment, rail freight switches, cranes, and other projects that reduce diesel emissions.
The settlement stipulates that it will fund 40% of a project to repower older diesel vehicles with vehicles that have new diesel, natural gas or other alternative fuel engines; 25% of the cost of a new diesel, natural gas or other alternative fuel replacement vehicle; and 75% of the cost to repower or replace older diesel vehicles with an all-electric one.
Of the $4.7 billion dedicated to environmental programs, California will receive about a quarter of that money, the largest cut from any other state or territory. About $800 million has been allocated specifically for zero-emission vehicle programs, which include infrastructure development, vehicles of all classes, transit applications, freight transport, and public education. Electric vehicle adoption in the heavy-duty market has been slow starting as the cost per vehicle has not been cost-effective for fleets, but this new funding will hopefully help lay the foundation for turning demonstration projects into scalable deployments.
Natural gas technology has seen tremendous gains in recent months with the introduction of a 0.02g low-NOx engine that has comparable emissions to that of a heavy-duty, battery-electric truck plugged into a clean electrical grid. Regardless of fuel type, the funding and eventual vehicle and engine purchase orders will signal to OEMs that cleaner, zero and near-zero technology options are what their customers are looking for.
Although VW’s settlement was brought on by a diesel emissions cheating scandal, the outcome will be a positive one for air quality and environmental goals now that fleets of all types and sizes across the U.S. will be incentivized to convert to alternative fuels and advanced technologies.
