Learn more about the settlement, funding, the history of the settlement program, and how it has benefitted the state of New Mexico below.<\/p>\n\n\n
The New Mexico Environment Department (NMED) is glad announce that $2.6 million dollars in funding is available for diesel emission reduction projects.<\/p>\n\n\n\n
Applications for Volkswagen settlement funding will be accepted starting on October 17, 2025. For best consideration, applications should be received by January 14, 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<\/a>.<\/p>\n\n\n\n NMED will consider applications for projects as listed in the Eligible Mitigation Actions found in Appendix D-2 of the State Mitigation Trust Agreement<\/a>(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, Do\u00f1a Ana, Eddy, Lea, Sandoval, San Juan and adjacent counties).<\/p>\n\n\n\n The primary goal of the New Mexico Volkswagen Environmental Mitigation Trust Program is to offset the excess emissions of oxides of nitrogen (NOX<\/sub>) 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. <\/p>\n\n\n\n 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 (\u201cCAA\u201d) by selling, introducing into commerce, or importing into the United States, approximately 590,000 model year 2009 to 2016 diesel motor vehicles equipped with \u201cdefeat devices.\u201d The EPA alleged that these vehicles were equipped with defeat devices in the form of computer software designed to cheat on federal emissions tests. <\/p>\n\n\n\n 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\u2019s 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.<\/p>\n\n\n\n NM VW Environmental Trust Program 2025-2026 Funding Cycle Guidelines and Application.<\/a> <\/p>\n\n\n\n VW Vehicle Information Sheet<\/a><\/p>\n\n\n\n VW Pre-Application Meeting Workshop 12-18-2025<\/a> includes the presentation slides, and Volkswagen Settlement Funding Workshop<\/a> is a 45-minute video of the VW Pre-Application Workshop held on December 18, 2025.<\/p>\n\n\n\n<\/div><\/div> 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 \u2013 8 school buses, shuttle buses, or transit buses; freight switcher locomotives; and Class 4 \u2013 7 local freight trucks.<\/p>\n\n\n\n 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. <\/p>\n\n\n\n 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.<\/p>\n\n\n\n NMED considered applications for projects as listed in the Eligible Mitigation Actions found in Appendix D-2<\/a> of the State Mitigation Trust Agreement<\/a>. <\/p>\n\n\n\n Applications for this funding period were accepted from December 3, 2021, through March 15, 2022.<\/strong><\/p>\n\n\n\n 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.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n VW Project Selection_22Apr20_AltFuel<\/a><\/p>\n\n\n\n VW Project Selection_22Apr20_LDZEV<\/a><\/p>\n\n\n\n<\/div><\/div> 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\u2019s review and consideration of public comments on the draft document.<\/p>\n\n\n\n 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).<\/p>\n\n\n\n On November 12, 2025, NMED proposed revisions to the BMP to correct this error. No comments were received during a 30-day comment period. 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 \u201cState matching funds\u201d 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\u2019s original DERA grant amount was augmented by EPA, who provided a \u201cmatch incentive\u201d of 50% of their \u201cbase allocation,\u201d thereby increasing their total award by 20%. EPA\u2019s \u201cbase allocation\u201d 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 \u201cmatch incentive\u201d 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.<\/p>\n\n\n\n NMED was pleased to announce that the Volkswagen Steering Committee had approved funding for seven projects in the first funding cycle of New Mexico\u2019s Volkswagen Settlement Allocation. The selected projects will reduce nitrogen oxide (NOX<\/sub>) emissions by 117.8 tons in urban, rural and Native communities in New Mexico.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n These projects will significantly reduce the release of harmful NOX<\/sub> 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 NOX <\/sub>emissions in New Mexico.<\/p>\n\n\n\n As part of their stakeholder outreach, the NMED\u2019s 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.<\/p>\n\n\n\n El Departamento de Medio Ambiente de Nuevo M\u00e9xico (NMED, por su sigla en ingl\u00e9s), bajo la direcci\u00f3n de la Gobernadora Susana Mart\u00ednez, se complace en anunciar que el Comit\u00e9 Directivo de Volkswagen aprob\u00f3 la financiaci\u00f3n de siete proyectos en el primer ciclo de financiamiento de la Asignaci\u00f3n de Asentamientos Volkswagen de Nuevo M\u00e9xico. Los proyectos seleccionados reducir\u00e1n las emisiones de \u00f3xido de nitr\u00f3geno (NOX<\/sub>) en 117.8 toneladas en las comunidades urbanas, rurales y nativas de Nuevo M\u00e9xico.<\/p>\n\n\n\n Los proyectos incluyen: nuevos autobuses escolares en los distritos escolares de Gallup-McKinley y Albuquerque; un nuevo veh\u00edculo para trabajo p\u00fablico para el condado de San Juan; equipos el\u00e9ctricos de apoyo en tierra e infraestructura asociada para Southwest Airlines y Albuquerque International Sunport; as\u00ed como veh\u00edculos para basura con motores de gas natural. Como resultado de estos proyectos, 113 veh\u00edculos en Nuevo M\u00e9xico ser\u00e1n reemplazados o repotenciados.<\/p>\n\n\n\n Los proyectos reducir\u00e1n significativamente la liberaci\u00f3n de NOX da\u00f1inos procedente de los veh\u00edculos y equipos que funcionan con di\u00e9sel tanto en carretera como fuera de ella. Con 5,9 millones de d\u00f3lares del Volkswagen Environmental Mitigation Trust, NMED aprovechar\u00e1 m\u00e1s de 13,5 millones de d\u00f3lares en fondos de contrapartida de los socios de adjudicaci\u00f3n del proyecto para reducir de manera eficiente y rentable las emisiones de NOX en Nuevo M\u00e9xico.<\/p>\n\n\n\n Como parte de la divulgaci\u00f3n de las partes interesadas, la Oficina de Calidad del Aire de NMED organiz\u00f3 seis reuniones p\u00fablicas en todo el estado y recibi\u00f3 valiosos comentarios del p\u00fablico a lo largo del desarrollo del Plan de Mitigaci\u00f3n de Beneficiarios y los documentos de solicitud. NMED recibi\u00f3 55 solicitudes completas para proyectos por un total de 24 millones de d\u00f3lares para el ciclo de financiamiento competitivo y espera que el desembolso de fondos comience en 2019.<\/p>\n\n\n\n<\/div><\/div> July 24, 2018 NM Beneficiary Mitigation Plan<\/a><\/p>\n\n\n\n<\/div><\/div> On September 25, 2016 the partial Consent Decree in the lawsuit entitled In re: Volkswagen \u201cClean Diesel\u201d Marketing, Sales Practices, and Product Liability Litigation<\/a> was finalized.<\/p>\n\n\n\n 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<\/a>. The New Mexico Certification of Beneficiary Status, revised with the Attorney General\u2019s 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<\/a> on January 29, 2018.<\/p>\n\n\n\n The lawsuit addressed Volkswagen\u2019s 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 (NOX<\/sub>).<\/p>\n\n\n\n NOX<\/sub> 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.<\/p>\n\n\n\n Under the Consent Decree, New Mexico is eligible to receive over $18,000,000 to implement projects that reduce emissions of NOX<\/sub> from vehicles. Eligible mitigation projects include projects that reduce NOX<\/sub> emissions in freight trucks; school, shuttle, or transit buses; ferries and tugs; forklifts; electric or hydrogen vehicle charging stations; and airport ground support equipment.<\/p>\n\n\n\n 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:<\/p>\n\n\n\n The state’s plan to use the funding is available in the VW Beneficiary Mitigation Plan for the State of New Mexico<\/a>. Contact NMED at vw.info@env.nm.gov<\/a> or (505) 476-4300 for more information.<\/p>\n\n\n\n<\/div><\/div> New Mexico Beneficiary Certification (Appendix D-3)<\/a> \u2013 revised with Attorney General\u2019s signature, submitted to the U.S. District Court for the Northern District of California on November 28, 2017 and to the Trustee \u2013 Wilmington Trust on November 29, 2017.<\/p>\n\n\n\n Notice of Beneficiary Designation<\/a> \u2013 as filed with the U.S. District Court for the Northern District of California on January 29, 2018.<\/p>\n\n\n\n VW Settlement in Brief \u2013 updated November 2017<\/a><\/p>\n\n\n\n<\/div><\/div>Volkswagen Settlement Third Round Funding Recipients<\/h2><\/div>
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Volkswagen Settlement Second Round Funding Recipients<\/h2><\/div>
VW Settlement Revised Beneficiary Mitigation Plan<\/h2><\/div>
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NMED Approves First Round Funding for Seven Projects Related to Volkswagen Settlement Allocation<\/h2><\/div>
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El Departamento del Medio Ambiente de Nuevo M\u00e9xico Aprueba la Financiaci\u00f3n de Siete Proyectos Relacionados con la Asignaci\u00f3n Acordada con Volkswagen<\/h2><\/div>
NMED July 24, 2018 Beneficiary Mitigation Plan<\/h2><\/div>
Volkswagen Settlement<\/h2><\/div>
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NM Documents<\/h2><\/div>