Michigan wants in on zero-emission funding in VW deal

Keith Laing
Detroit News Washington Bureau

Washington — Michigan leaders are seeking information about projects to boost the use of zero-emission vehicles such as electric cars that will be funded by Volkswagen as part of the German automaker’s $14.7 billion settlement with federal regulators over allegations it rigged hundreds of thousands of cars to cheat U.S. pollution standards.

The Michigan Agency for Energy issued a Request for Information on Monday about a clause in Volkswagen’s deal that requires the company to pump $2 billion into zero-emission vehicle research.

Valerie Brader, the Michigan Agency for Energy’s executive director, said “the state is seeking information on ZEV projects that will be implemented to offset the negative effects of Volkswagen’s actions in Michigan.”

Volkswagen’s settlement, which was approved by a federal judge last month, calls for the company to provide $1.2 billion for federal zero-emission vehicle research and $800 million to help fund similar efforts in California, which helped catch the German automaker in the act of cheating U.S. car pollution rules.

The funding is part of an agreement that calls for Volkswagen to pay more than $10 billion to either buy back or repair about 475,000 2-liter diesel vehicles that were sold between 2009 and 2015, and were built with devices to trick emissions testers.

Volkswagen has admitted to programming its diesels to trick emissions testers into believing the engines released far less pollution than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving the cars emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

Under the agreement, Volkswagen also will compensate owners who purchased 2-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of the car. Volkswagen will also have to pay $2.7 billion into a federal environmental mitigation trust fund.

Critics have accused regulators of forcing Volkswagen to pump funding into the U.S. electric car market at a time when sales figures show that drivers are turning to larger vehicles like SUVs.

They have also said the inclusion of funding for zero-emission vehicles in the deal could give Volkswagen a leg up in the electric-car market.

“VW may be able to obtain substantial competitive benefits, if not a monopoly on electric vehicle infrastructure, under the required investments,” U.S. House Energy and Commerce Committee Chairman Fred Upton, R-St. Joseph, said in a letter last week to the Environmental Protection Agency that was co-authored by Rep. Tim Murphy, R-Pa.

The EPA has said the zero-emission vehicle funding that is included in the Volkswagen deal is “intended to address the adverse environmental impacts.”

The Michigan Agency for Energy said Monday it intends “to work with public and private partners to solicit eligible projects to be included in a comprehensive proposal for ZEV Investment Plan funding,” along with the Michigan Department of Environmental Quality (DEQ), the Michigan Department of Transportation (MDOT), and the Michigan Economic Development Corp. (MEDC).

A webinar will be held to address project eligibility, budget and other administrative issues on Nov. 18, the agency said.


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Twitter: @Keith_Laing