Indiana Volkswagen Mitigation Trust Program

On October 25, 2016, a Partial Settlement and Consent Decree was finalized between the U.S. Justice Department, the Volkswagen (VW) Corporation and its subsidiaries regarding the installation and use of emission testing defeat devices in over 500,000 vehicles sold and operated in the U.S. beginning in 2009. The settlement requires VW to pay $2.7 billion into an Environmental Mitigation Trust Fund, to offset the excess air pollution emitted by some of the VW vehicles that violated the Clean Air Act. Indiana expects to receive $40.9 million from the Trust in at least three annual installments starting in 2018, with all funds being fully disbursed by 2028. Pursuant to the terms of the Mitigation Trust, eligible projects to reduce NOx emissions from diesel-powered vehicles and equipment will include primarily replacement and repowering of existing diesel vehicles or equipment with cleaner alternatives serving the same purpose Indiana must develop and submit a state mitigation plan to the Trustee describing what types of eligible projects will be implemented to achieve reductions in diesel emissions, with a focus on NOx emissions, across Indiana. Indiana will reach out to our partners including the general public, public and private fleet owners, government entities, and transportation organizations for informal input on the development of the Indiana’s mitigation plan. This website has been developed to provide information on the Indiana Volkswagen Mitigation Trust Program and to solicit informal comments on the Indiana Beneficiary Mitigation Plan Draft Framework (see link below). The comments received through this process will be considered in the development of the final beneficiary mitigation plan submitted to the Trustee. In addition to this request for informal comments, an opportunity to provide formal comments on the Indiana Beneficiary Mitigation Plan will be provided prior to final submittal to the Trustee.

Projects Eligible for Funding under the Indiana Volkswagen Mitigation Trust Program

Trust funds may be used to pay some or all of the cost to repower or replace eligible diesel-powered vehicles with new diesel or alternative fueled or all-electric engines or vehicles. Appendix D-2 to the Partial Consent Decree spells out eligible model years and different percentages of the cost for government-owned and privately-owned vehicles, and requires that the old vehicles be scrapped.

  • Class 8 local freight trucks and port drayage trucks
  • Class 4-8 school buses, shuttle buses or transit buses
  • Class 4-7 local freight trucks
  • Pre-Tier 4 diesel switcher locomotives

Other eligible projects include:

  • Repower or upgrade of eligible diesel-powered ferries and tugs
  • Shorepower equipment for oceangoing vessels and vessels operating within the Great Lakes
  • Repower of eligible diesel-powered airport ground support equipment
  • Repower of eligible forklifts and port cargo handling equipment
  • Light duty zero emission vehicle supply equipment
  • Matching funds for DieselWise Indiana’s EPA state allocation funding under the Diesel Emission Reduction Act (DERA)

VW Settlement Timeline of Events *

* All dates are estimates and are subject to change

  • Court approves the partial settlement: October 25, 2016
  • Trust takes effect and VW deposits funds: October 2017
  • States elect to become beneficiaries of the trust: Fall/Winter 2017
  • States are notified of beneficiary designation: Winter 2018
  • States file a Beneficiary Mitigation Plan describing broadly how funds will be used: Spring/Summer 2018
  • States may request funds: Summer 2018
  • Indiana Volkswagen Mitigation Trust program releases Solicitation for Projects for first round of funding: Summer/Fall 2018

Indiana’s Beneficiary Mitigation Plan Draft Framework - Comments Requested: Fall/Winter 2017

Indiana’s Beneficiary Mitigation Plan, will be based on clean diesel projects that can produce the greatest air quality benefit in terms of diesel emission reductions, with a particular focus on NOx emission reductions. Indiana also seeks innovative projects that will have lasting impacts on not only Indiana’s air quality, but its infrastructure and economy as well. The diesel emission reductions achieved through the beneficiary mitigation plan should reduce public exposure to the pollutants in diesel exhaust, and promote clean vehicle technologies. Indiana initially expects to include all ten eligible categories of mitigation actions (listed above) in the Indiana Beneficiary Mitigation Plan, and is seeking public comments on the relative percentages of available funds to be allocated to each category.

Under the terms of the Volkswagen Mitigation Trust, Indiana may have up to approximately $13 million in grant funds available in each of the first three years of the program (2018, 2019, and 2020 presumably). If these funds are not fully expended in the first 3 years, the VW consent decree does allow for an additional 7 years to fully expend any remaining funds. One important factor in funding will be an attempt to direct funding to areas that bear a disproportionate share of the increased pollution burden. This could include densely-populated areas and communities adjacent to rail yards, shipping terminals, and distribution centers where diesel emissions are concentrated.

Indiana will continue to update this website to inform the public about the Volkswagen Settlement, and gather information and ideas from the public and stakeholders as the Indiana Volkswagen Beneficiary Mitigation Trust Plan is developed.

The Executive Order and press release from Governor Holcomb that outline steps of the Volkswagen Environmental Mitigation Trust fund are available online:

To submit formal comments regarding the Indiana Volkswagen Mitigation Trust Program, please send an email to

For questions, please contact Shawn Seals, IDEM’s Office of Air Quality, at (317) 233-0425 or