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Fuel Transformation Program History

Volkswagen Settlement Background

In the fall of 2015, Volkswagen admitted it had installed emissions control defeat devices - software designed to cheat emissions tests and deceive federal and state regulators - in certain Volkswagen-, Porsche-, and Audi-branded 2.0-liter and 3.0-liter diesel engine vehicles.  The vehicles equipped with emission testing defeat devices resulted in increases in oxides of nitrogen (NOx) emissions, up to forty times the allowable amount, violating the federal Clean Air Act.  The increased NOx emissions had adverse impacts to air quality and contributed to the formation of ground-level ozone, which has harmful effects on ecosystems and impairs lung function and cardiovascular health.

As a result of the litigation, an Environmental Mitigation Trust (Trust) was established as part of two partial consent decrees to resolve, among other things, claims of the United States' concerning excess oxides of nitrogen (NOx) from Volkswagen's 2.0-liter and 3.0-liter diesel engine vehicles equipped with defeat devices.  The Trust allocated more than $2.8 billion to the U.S., Puerto Rico, and the District of Columbia to fund environmental mitigation actions that reduce NOx emissions. 

The State of Michigan (Michigan), a certified as a beneficiary of the Trust, was allocated $64,807,014.63 of the approximate $2.8 billion.

The Michigan Department of Environment Great Lakes and Energy (EGLE), previously the Michigan Department of Environmental Quality, is the lead agency responsible for administering Michigan's settlement allocation. 

EGLE must adhere to requirements in the Environmental Trust Agreement for State Beneficiaries, established pursuant to the partial consent decrees.  Those requirements include provisions for Eligible Mitigation Actions and Expenditures specified in Appendix D-2 of the State Trust Agreement.  Approximately 18,000 vehicles equipped with defeat devices were registered in Michigan.

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Debra Swartz