Summary of Vermont’s Proposal for VW Trust

November 20, 2017

The Proposed Vermont Beneficiary Mitigation Plan (BMP) for the VW Environmental Mitigation Trust was released November 29 by the Vermont Agency of Natural Resources (VANR). The proposal outlines how Vermont’s allocation of the trust, totaling $18.7 million, will be spent on projects to reduce NOx emissions from mobile sources. The overall goal of the proposal is three-fold:

1. 1. The first part being to reduce NOx emissions in the most cost-effective way, prioritizing projects that provide the lowest cost per pound of NOx reduced.

1. 1. The second prong of the goal is to incentivize all-electric or other NOx mitigating alternatively fueled heavy-duty and transit vehicles.

1. 1. The third prong is to maximize public and private investment in electric vehicle (EV) charging infrastructure by using 15% of its of trust allocation (the maximum allowed under the Trust Agreement).

The majority of proposal’s funds (43%) will be allocated to replace on-road heavy duty diesels with new a diesel or alternative fuel engine. Another 31% of the funding is allocated to replace diesel non-road equipment, such as forklifts and airport ground support, with electric-powered equipment.  This portion of the funding can also be used towards projects under Diesel Emission Reduction Act (DERA), which allows a larger variety of emissions sources and projects to become eligible to apply for funding, such as idle reduction technologies.The plan covers up to 75% of the replacement cost for non-government and up to 100% cost for government equipment and vehicles. Since the plan prioritizes the cheapest NOx reduction per lb. rather than considering life cycle costs, new diesels may rank more competitively than other alternative fuels, unless there is a special carve out for them. The rest of the trust is allocated for light-duty electric vehicle supply equipment (15%) and for locomotives and marine vessels to be repowered with new diesel or alternative fueled engines (11%).

The proposal also gives priority to projects located in areas that receive a disproportionate quantity of air pollution from diesel fleets (e.g. truck stops, rail yards, constructions sites, etc.), and areas that are most vulnerable to negative health impacts of diesel emissions (e.g. schools, medical facilities, etc.). The specific emissions benefits from each eligible category (based on current EPA exhaust emission standards for NOx) are as follows:

• • Heavy duty highway vehicles (examples include eligible large and medium trucks, school buses and transit buses) may provide up to a 96% reduction in NOx emissions per vehicle, based on replacing a model year 1992 diesel engine with a model year 2017 diesel engine.

• • Locomotives, replacing the oldest (Tier 0) engine with the newest (Tier 4) engine may provide up to an 89% NOx reduction per engine.

• • Commercial marine vessels, an upgrade or repower of a ferry engine may provide up to an 80% NOx reduction for each vessel.

• • Non-road equipment (forklifts and airport ground support equipment) replacements may provide up to a 100% reduction in NOx tailpipe emissions per piece of equipment, based on replacing a diesel engine or piece of equipment with an all-electric model.

• • Non-road equipment (under the DERA option) replacements, depending on the type of equipment and engine power rating, may provide between a 20% and 95% reduction in NOx emissions for each engine.

• • EVSE installations will promote the expansion of the electric vehicle market in Vermont by providing the infrastructure critical to the more widespread adoption of these vehicles. This expansion will help to mitigate NOx emitted by the light duty vehicle fleet, which is the largest contributing sector in the state. Exact NOx emissions benefits from each installation will vary, depending on utilization of the installation, the type of vehicles charged and the source of the electricity used to charge the vehicles. Replacing a light-duty passenger vehicle with a Plug-in Hybrid Electric Vehicle (PHEV) or a Battery Electric Vehicle (BEV) may provide a 40 – 76% reduction in NOx emissions.

VTCCC has submitted our official written comments on the proposal. Read our letter to ANR here: VTCCC VW Letter

Update 2/20/2018: In addition to the recommendations made in our letter to ANR, we recommend that any VW monies going towards new diesel or diesel replacement has a bio-diesel warrantied engine up to a B20 blend.