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Kentucky and the Volkswagen Settlement

Kentucky and the Volkswagen Settlement

The Kentucky Energy and Environment Cabinet (EEC) has created this page to inform the public about the Volkswagen (VW) Settlement (hereafter referred to as the Settlement).  VW agreed to spend up to $14.73 billion to settle allegations of cheating emissions tests and deceiving customers.  The automaker will spend $10.03 billion to compensate consumers who purchased affected 2.0 and 3.0 liter diesel vehicles, and $4.7 billion to mitigate pollution from these vehicles and invest in zero emission vehicle (ZEV) technology and infrastructure.

1.        Consumers – Buyback or modification of vehicles.

Volkswagen worked directly with the owners of affected vehicles on buybacks, lease terminations, and repairs to engines.  For more information on the Settlement; visit for details)


2.      National Zero Emission Vehicle (ZEV) infrastructure.

The Settlement required that VW invest $2 billion ($800 million to California, leaving $1.2 billion for the remainder of the U.S.) to promote the use of zero emission vehicle (ZEV) technology across the country.  VW is required to invest these funds over four 30 month cycles, $300 million in each cycle.  For more information; see Appendix C of the Settlement; visit


3.       States -- $2.7 billion Environmental Mitigation Trust Fund

VW will also pay $2.7 billion to remediate the excess NOx emissions from affected 2.0 liter engines.  These funds will be used to establish an Environmental Mitigation Trust that will be administered through a nationwide Trustee, (Wilmington Trust) with allocations to states, territories and tribal government beneficiaries to use for specific types of diesel emission reduction projects. Kentucky’s allocation under this program is $20.3 million over the next 10 years. The allocations are based primarily on the number of Volkswagen 2.0 and 3.0 diesel vehicles registered within the jurisdictions. (For state and tribal allocations see Appendix D1 of the Settlement).

States/Territories/Tribes named as Beneficiaries under the Trust must develop and submit plans to the National Trustee on how the funds will be used in their respective jurisdictions to reduce NOx emissions.  On December 2, 2016, Governor Matt Bevin named the Kentucky Energy and Environment Cabinet as the Lead Agency in Kentucky to administer these funds for the Commonwealth. 

Kentucky was named a beneficiary under the Trust on January 30, 2017.  As a beneficiary, Kentucky must develop a Beneficiary Mitigation Plan (BMP) that provides information on how the Commonwealth plans on spending the funds.  When finalized, this plan will be submitted to the Wilmington Trust in order to have access to the funds for projects in the state.  Eligible mitigation actions under the Trust can be found in Appendix D2 of the Settlement.  Links to both Kentucky’s Draft Mitigation Plan, Appendix D2 of the Settlement, and other resources can be found below.

Since being named as beneficiary in late 2016, EEC has been conducting public outreach about the Settlement, and receiving comments from interested parties on how the mitigation funds should be spent in Kentucky.  

The Energy and Environment Cabinet has released a proposed Beneficiary Mitigation Plan outlining how Kentucky plans to use the Mitigation Trust Funds allocated to Kentucky.  Kentucky's draft plan can be accessed here.

Interested parties have several ways to submit comments on the draft plan.  

·         A Public Meeting to take comment on the plan will be held on September 5, 2018, at the offices of the         Energy and Environment Cabinet, 300 Sower Blvd., Frankfort, Kentucky from 4:00 p.m. till 6:00 p.m.         

·        Comments may be submitted directly to the Energy and Environment Cabinet, Office of Energy Policy through an electronic form. Comment Form

·         Comments may be emailed directly to the agency at:

Frequently Asked Questions Frequently Asked Questions.docxFrequently Asked Questions.docx
Link to Settlement, Settlement FAQ's


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