State Submits Volkswagen Settlement Phase 1 Plan

Last Updated on August 23, 2018 10:04 am

Raleigh, NC – North Carolina has submitted its plan for the state’s $92 million share of a national settlement with Volkswagen for unlawfully cheating on vehicle emissions. The Volkswagen Mitigation Plan details how the state will invest the first 33% of the funds in Phase 1 on projects to significantly reduce NOx emissions and improve air quality.

At the direction of Governor Roy Cooper, the Department of Environmental Quality’s Division of Air Quality (DAQ) worked with stakeholders and people across the state to shape the proposed plan for Phase 1. Based on public feedback, there was overwhelming support for replacing school buses with new, more efficient models.

“Putting cleaner school buses on the road is a smart way to cut harmful pollution and improve air quality,” Gov. Cooper said. “North Carolina has a plan to invest these funds so kids get new buses to ride to school as well as cleaner air to breathe for years to come.”

The Phase 1 plan includes:

  • 40% (approx. $12.2 million) to be spent on school bus replacements
  • 20% (approx. $6 million) designated for transit bus replacements
  • 10% for heavy-duty on-road equipment replacement projects
  • 10% for heavy-duty off-road equipment replacement projects.

Phase 1 funding will focus on public sector needs.  Eligible projects can be submitted by local, state and tribal government organizations, public or private nonprofit organizations, and public/private partnerships where the lead applicant represents a public sector or a public or private non-profit.

Based on feedback from the public, North Carolina will also allocate the maximum allowance of 15% of the funds toward zero emission vehicle (ZEV) infrastructure projects. Public and private sector projects will be eligible for the approximately $4.6 million available in Phase 1.

Once the plan is accepted by the trustee of the Volkswagen Mitigation Fund, the Division of Air Quality will put out a request for proposals.  At that point, eligible organizations can submit their projects with selections scheduled for Spring/Summer of 2019.   Beginning in Fall of 2019, DAQ will provide opportunities for public involvement on the draft plan for Phase 2.

For a copy of the plan, and more information about the Volkswagen Settlement, visit If you would like to receive email updates about this topic, please send an email with the word ‘Subscribe’ in the subject line to

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