VW Settlement

The New Mexico Environment Department (NMED) is glad announce that $2.6 million dollars in funding is available for diesel emission reduction projects.

Applications for Volkswagen settlement funding will be accepted starting on October 16, 2025. For best consideration, applications should be received by January 13, 2026. On this day, the first evaluation period will commence, and received applications will be assessed for eligibility and suitability. Based on this review, funding recommendations will be made. If funding is completely allocated after this first period, NMED will announce the closure of the formal application window, but will accept letters of interest from that time forward. These will be kept on file if additional funding becomes available. Completed applications should be sent to neal.butt@env.nm.gov.

NMED will consider applications for projects as listed in the Eligible Mitigation Actions found in Appendix D-2 of the State Mitigation Trust Agreement [ https://www.vwcourtsettlement.com/en/docs/DOJ/Approved%20Appendix%20D-2.pdf ] , with a preference for projects located in or adjacent to those counties with levels of ozone at or above 95% of the National Ambient Air Quality Standard (NAAQS) for ozone. (i.e. Bernalillo, Doña Ana, Eddy, Lea, Sandoval, San Juan and adjacent counties).

The primary goal of the New Mexico Volkswagen Environmental Mitigation Trust Program is to offset the excess emissions of oxides of nitrogen (NO_X) emitted by affected Volkswagen light-duty vehicles registered within New Mexico. On January 4, 2016, the Department of Justice, on behalf of EPA, filed a civil enforcement case against Volkswagen. Through a Partial Consent Decree with the United States District Court for the Northern District of California, the EPA resolved allegations that Volkswagen violated the Clean Air Act (“CAA”) by selling, introducing into commerce, or importing into the United States, approximately 590,000 model year 2009 to 2016 diesel motor vehicles equipped with “defeat devices.” The EPA alleged that these vehicles were equipped with defeat devices in the form of computer software designed to cheat on federal emissions tests. Specifically, the U.S. complaint alleged that each of these vehicles contained, as part of the engine control module, certain computer algorithms and calibrations that caused the emissions control system of those vehicles to perform differently during normal vehicle operation and use than during emissions testing (e.g. engaging the exhaust aftertreatment system (NOx catalyst)). The U.S. complaint alleged that these computer algorithms and calibrations were prohibited defeat devices under the CAA, and that during normal vehicle operation and use, the cars emitted levels of NOx significantly exceeding EPA’s tailpipe emissions standards. NOx emissions are responsible for increased nitrogen dioxide and ozone concentrations, which cause adverse effects to human health and the environment and contribute to regional haze.

NM VW Environmental Trust Program 2025-2026 Funding Cycle Guidelines and Application. 

VW Vehicle Information Sheet

In 2022, the New Mexico Environment Department (NMED) awarded $7.3 million dollars towards seven diesel emission reduction replacement projects across New Mexico from the VW Settlement fund. Eligible projects included the re-power or replacement of Class 8 local freight trucks and drayage trucks; Class 4 – 8 school buses, shuttle buses, or transit buses; freight switcher locomotives; and Class 4 – 7 local freight trucks.

The successful recipients shared $7.3 million to purchase 29 new vehicles including electric transit buses, electric and alternate-fueled school buses and shuttle buses, and alternate-fueled and clean diesel solid waste and public works vehicles. The applications were evaluated based on several criteria including reduction of emissions, environmental justice and impacted population, and cost effectiveness. 

The primary goal of the Volkswagen Environmental Mitigation Trust Program is to offset excess emissions of nitrogen oxides (NOx) emitted by affected Volkswagen vehicles registered within New Mexico. The selected projects will reduce emissions of NOx by more than 15 tons in urban, rural, and Native communities in New Mexico. These projects will efficiently and cost-effectively reduce NOx emissions in areas of New Mexico that are nearing the 2015 National Ambient Air Quality Standard for ground-level ozone.

NMED considered applications for projects as listed in the Eligible Mitigation Actions found in Appendix D-2 of the State Mitigation Trust Agreement. 

Applications for this funding period were accepted from December 3, 2021, through March 15, 2022.

• NM VW Environmental Trust Program 2022 Funding Cycle Guidelines and Application.
• VW Vehicle Information Sheet
• Pre-Application Meeting Workshop – Volkswagen Settlement Funding, March 1, 2022 (1 hour 30 minutes)
• 2022 VW Settlement Project Selection describes the projects selected and funding awarded.

NMED awarded $4.6 million across 43 projects throughout state from the Volkswagen Settlement fund. Projects included electric vehicles (EV), alternate-fueled vehicles, and light-duty zero emission vehicle (LDZEV) supply equipment.

The selected projects will reduce emissions of nitrogen oxides (NOx) by more than 40 tons in urban, rural, and Native communities in New Mexico. These projects will efficiently and cost-effectively reduce NOx emissions in areas of New Mexico where residents bear a disproportionate share of NOx pollution and in areas that are nearing the 2015 National Ambient Air Quality Standard for ground-level ozone.

VW Project Selection_22Apr20_AltFuel

VW Project Selection_22Apr20_LDZEV

In 2019, NMED released a Revised Beneficiary Mitigation Plan (BMP) that summarized how the State planned to use the $17,982,660.90 allocated to New Mexico under the Volkswagen Environmental Mitigation Trust Agreement. The BMP was revised based on NMED’s review and consideration of public comments on the draft document.

The 2019 Revised BMP directed unallocated funds toward the replacement of diesel-fueled vehicles with alternate-fueled and all-electric vehicles. The State remains committed to allocating 15% of the total funding (approximately $2.7 million) towards light duty zero-emission vehicle (LDZEV) infrastructure, and has added a goal to focus efforts on a complete statewide electric vehicle charging network. Due to an error, the amount of funding available through the Diesel Emissions Reduction Act (DERA) Option was reduced from 3% to approximately 1.8% ($317,553).

NMED is proposing to revise the BMP to correct this error. NMED must reinstate the necessary amount of funding to be set aside for the DERA option from approximately 1.8% of the total funding amount ($317,553) to 3.29% ($592,244). This is because $592,244 was already earmarked as “State matching funds” for DERA Grant funding previously awarded by EPA. (i.e., $592,244/$17,982,660.90 = 3.29%). By providing State matching funds, utilizing VW settlement funding, New Mexico’s original DERA grant amount was augmented by EPA, who provided a “match incentive” of 50% of their “base allocation,” thereby increasing their total award by 20%. EPA’s “base allocation” for FY17-18 ($274,691) + FY19 ($317,553) = $592,244. New Mexico matched this amount with VW settlement funds ($592,244), and was rewarded with a “match incentive” bonus of $296,123 [FY17-18 ($137,346) + FY19 ($158,777) = $296,123]. DERA is a Congressionally authorized program that enables the EPA to offer funding assistance for actions reducing diesel emissions.

A link to the draft BMP is shown below. Comments may be submitted to Neal Butt at neal.butt@env.nm.gov.

• Draft VW Beneficiary Mitigation Plan Revision 10/15/25
• VW Revised BMP 07.12.19 Final
• NMED Response to Comments Final 071219
• Draft VW-Revised-BMP-5.30.19

NMED was pleased to announce that the Volkswagen Steering Committee had approved funding for seven projects in the first funding cycle of New Mexico’s Volkswagen Settlement Allocation. The selected projects will reduce nitrogen oxide (NO_X) emissions by 117.8 tons in urban, rural and Native communities in New Mexico.

Thes projects included: 74 new school buses in the Gallup-McKinley and Albuquerque School Districts; a new Public Works Vehicle for San Juan County; electric ground support equipment and associated infrastructure for Southwest Airlines and the Albuquerque International Sunport; as well as compressed natural gas-powered refuse vehicles.  As a result of these projects, 113 vehicles in New Mexico were replaced or repowered.

These projects will significantly reduce the release of harmful NO_X from both on-road and off-road diesel-fueled vehicles and equipment. With $5.9 million from the Volkswagen Environmental Mitigation Trust, NMED leveraged more than $13.5 million in matching funding from project award partners to efficiently and cost-effectively reduce NO_X emissions in New Mexico.

As part of their stakeholder outreach, the NMED’s Air Quality Bureau hosted six public meetings around the state and received valuable feedback from the public throughout the development of the Beneficiary Mitigation Plan and application documents.  The NMED received 55 complete applications for projects totaling $24 million for the competitive funding cycle and began disbursement of funds in 2019.

El Departamento de Medio Ambiente de Nuevo México (NMED, por su sigla en inglés), bajo la dirección de la Gobernadora Susana Martínez, se complace en anunciar que el Comité Directivo de Volkswagen aprobó la financiación de siete proyectos en el primer ciclo de financiamiento de la Asignación de Asentamientos Volkswagen de Nuevo México. Los proyectos seleccionados reducirán las emisiones de óxido de nitrógeno (NO_X) en 117.8 toneladas en las comunidades urbanas, rurales y nativas de Nuevo México.

Los proyectos incluyen: nuevos autobuses escolares en los distritos escolares de Gallup-McKinley y Albuquerque; un nuevo vehículo para trabajo público para el condado de San Juan; equipos eléctricos de apoyo en tierra e infraestructura asociada para Southwest Airlines y Albuquerque International Sunport; así como vehículos para basura con motores de gas natural. Como resultado de estos proyectos, 113 vehículos en Nuevo México serán reemplazados o repotenciados.

Los proyectos reducirán significativamente la liberación de NOX dañinos procedente de los vehículos y equipos que funcionan con diésel tanto en carretera como fuera de ella. Con 5,9 millones de dólares del Volkswagen Environmental Mitigation Trust, NMED aprovechará más de 13,5 millones de dólares en fondos de contrapartida de los socios de adjudicación del proyecto para reducir de manera eficiente y rentable las emisiones de NOX en Nuevo México.

Como parte de la divulgación de las partes interesadas, la Oficina de Calidad del Aire de NMED organizó seis reuniones públicas en todo el estado y recibió valiosos comentarios del público a lo largo del desarrollo del Plan de Mitigación de Beneficiarios y los documentos de solicitud. NMED recibió 55 solicitudes completas para proyectos por un total de 24 millones de dólares para el ciclo de financiamiento competitivo y espera que el desembolso de fondos comience en 2019.

Funding Requests for 2018 Funding Cycle

2018 Funding Cycle Awardees

July 24, 2018 NM Beneficiary Mitigation Plan

On September 25, 2016 the partial Consent Decree in the lawsuit entitled In re: Volkswagen “Clean Diesel” Marketing, Sales Practices, and Product Liability Litigation was finalized.

On October 2, 2017, the Trust Effective Date was set with the approval of the United States District Court, Northern District of California, San Francisco Division of the finalized trust agreement. The New Mexico Certification of Beneficiary Status, revised with the Attorney General’s signature, were submitted to U.S. District Court of Northern California on November 28, 2017, and to the Trustee (Wilmington Trust, N.A.) on November 29, 2017. The Trustee published the Notice of Beneficial Designation on January 29, 2018.

The lawsuit addressed Volkswagen’s admission of purposely, and over a sustained period of time, employing prohibited emissions defeat devices on their diesel passenger vehicles that resulted in excess emissions of nitrogen oxides (NO_X).

NO_X emissions are responsible for increased ozone as well as increased nitrogen dioxide levels, both of which are covered by National Ambient Air Quality Standards because of their effect on human health and welfare, including environmental effects.

Under the Consent Decree, New Mexico is eligible to receive over $18,000,000 to implement projects that reduce emissions of NO_X from vehicles. Eligible mitigation projects include projects that reduce NO_X emissions in freight trucks; school, shuttle, or transit buses; ferries and tugs; forklifts; electric or hydrogen vehicle charging stations; and airport ground support equipment.

This page serves as a conduit between the New Mexico VW Settlement Team and the public.  The Team is led by the New Mexico Environment Department and includes multiple partner agencies:

• NM Department of Transportation (DOT)
• NM Energy, Minerals, and Natural Resources Department (EMNRD)
• NM Environment Department (NMED)
• NM Public Education Department (PED)

The state’s plan to use the funding is available in the VW Beneficiary Mitigation Plan for the State of New Mexico. Contact NMED at vw.info@env.nm.gov or 505-476-4300 for more information.

New Mexico Beneficiary Certification (Appendix D-3) – revised with Attorney General’s signature, submitted to the U.S. District Court for the Northern District of California on November 28, 2017 and to the Trustee – Wilmington Trust on November 29, 2017.

Notice of Beneficiary Designation – as filed with the U.S. District Court for the Northern District of California on January 29, 2018.

VW Settlement in Brief – updated November 2017

• EPA Documents contains information from EPA regarding history and implementation of the VW settlement.

NMED does not discriminate on the basis of race, color, national origin, disability, age or sex in the administration of its programs or activities, as required by applicable laws and regulations. NMED is responsible for coordination of compliance efforts and receipt of inquiries concerning non-discrimination requirements implemented by 40 C.F.R. Parts 5 and 7, including Title VI of the Civil Rights Act of 1964, as amended; Section 504 of the Rehabilitation Act of 1973; the Age Discrimination Act of 1975, Title IX of the Education Amendments of 1972, and Section 13 of the Federal Water Pollution Control Act Amendments of 1972. If you have any questions about this notice or any of NMED’s non-discrimination programs, policies or procedures, or if you believe that you have been discriminated against with respect to a NMED program or activity, you may contact: Kate Cardenas, Non-Discrimination Coordinator, NMED, 1190 St. Francis Dr., Suite N4050, P.O. Box 5469, Santa Fe, NM 87502, (505) 827-2855, nd.coordinator@env.nm.gov. You may also visit our website at /non-employee-discrimination-complaint-page/ to learn how and where to file a complaint of discrimination.

El Departamento de Medio Ambiente de Nuevo México (NMED) no discrimina por motivos de raza, color, origen nacional, discapacidad, edad o sexo en la administración de sus programas o actividades, según lo exigido por las leyes y los reglamentos correspondientes. NMED es responsable de la coordinación de los esfuerzos de cumplimiento y la recepción de consultas relativas a los requisitos de no discriminación implementados por 40 C.F.R. Partes 5 y 7, incluido el Título VI de la Ley de Derechos Civiles de 1964, según enmendada; Sección 504 de la Ley de Rehabilitación de 1973; la Ley de Discriminación por Edad de 1975, Título IX de las Enmiendas de Educación de 1972 y la Sección 13 de las Enmiendas a la Ley Federal de Control de Contaminación del Agua de 1972. Si tiene alguna pregunta sobre este aviso o alguno de los programas, políticas o procedimientos de no discriminación de NMED, puede comunicarse con:  Kate Cardenas, coordinadora de no discriminación, NMED, 1190 St. Francis Dr., Suite N4050, P.O. Box 5469, Santa Fe, NM 87502, (505) 827-2855, nd.coordinator@env.nm.gov.

Si cree que ha sido discriminado/a con respecto a un programa o actividad de NMED, puede comunicarse con la coordinadora de no discriminación identificada anteriormente.

Please contact Neal Butt at (505) 629-2972 or by email at neal.butt@env.nm.gov  for additional information regarding potential funding for qualified projects.