North Carolina Volkswagen Phase 2 Mitigation Plan

North Carolina’s Phase 2 beneficiary mitigation plan is the final phase of funding combining the previously proposed phases 2 and 3 into one final phase. This plan addresses Phase 2 (2022 - 2024) only. DEQ plans to invest the remaining funds ($66.5 million) during this period.

DEQ will manage the Volkswagen Settlement funds through two main programs: the Diesel Bus & Vehicle Replacement Program, and the Zero-Emission Vehicle (ZEV) Infrastructure Program. Each program will have several funding opportunities.

Diesel Bus & Vehicle Replacement Programs

The Diesel Bus & Vehicle Replacement Programs target funding for the replacement of older diesel vehicles with new, cleaner alternatives. These programs will prioritize funding to electrification projects.

School Bus Replacement Program

Transit and Shuttle Bus Replacement Program

Clean Heavy-Duty Equipment and Vehicle Replacement Program

• Diesel Emission Reduction Act Program

Zero-Emission Vehicle Infrastructure Programs

The ZEV Infrastructure Programs provide grants and rebates for the funding of two types of electric-vehicle charging infrastructure: DC Fast chargers and Level 2 chargers. Eligibility in each program depends on the location and purpose of the chargers.

DC Fast Infrastructure Program

• Public Access Priority Corridors Program
• Public Access Existing Site Upgrades

Level 2 Infrastructure Program

• State Agency Program
• Public Access Program
• Multi-Unit Dwelling Program
• Workplace Program

Phase 2 Plan Goals

DEQ solicited input from North Carolinians across the state on how the VW Phase 2 mitigation trust funds should be spent in the state. We used the public feedback to set goals to guide the DEQ on how to allocate the funds over the duration of the program.

Phase 2 prioritizes vehicle electrification projects. DEQ will continue to use the funds to achieve significant NOx emissions reductions across the state.

Based on the distribution of violating vehicles registered across the state, DEQ plans to allocate the funds between urban/suburban counties (68%) and rural counties (32%). DEQ will submit requests to the Trustee of the Environmental Mitigation Trust to use funds for eligible projects throughout the state that will reduce or eliminate emissions of NOx.

Phase 2 Timeline

DEQ released the Phase 2 Requests for Proposals (RFPs) from February 2022 through June 2023.

For competitive grant programs, applications must be submitted within 90 days after the release of the RFP to be considered. For programs with a noncompetitive rebate process, applications open about 45 days after the release of the RFP and remain open until funds are exhausted.

RFPs Now Available

Phase 2 Program Awards

Phase 2 programs (2022 – 2024)

*Percentage of available settlement funds targeted in these eligible categories for 2022 – 2024.

**DEQ is prioritizing electrification with the goal of awarding at least 50% to electric school bus replacements.

Public Outreach

DEQ has developing an outreach program to help counties that historically do not have the resources to effectively identify eligible vehicles and ZEV infrastructure opportunities for grant programs and submit quality applications. Applications from these counties may also receive scoring bonuses.

As part of the Historically Under-Resourced County Outreach Program, DEQ staff will hold in-person outreach meetings in communities across North Carolina to discuss grant opportunities.

Learn More

Public Involvement

DEQ is committed to using the Volkswagen Settlement funds in ways that reflect the input and interests of North Carolinians. DEQ will have an open and transparent process that includes the input of a wide range of citizens.

DEQ released a draft of the state plan and gave North Carolinians the opportunity to provide input. We received 301 comments which helped shape the final plan and requests for proposals for Phase 2. During the draft mitigation plan comment period, DEQ held four virtual public stakeholder meetings to discuss the draft plan and answer questions.

DEQ will also provide opportunities to receive input throughout the settlement program. A summary of the comments DEQ received on the draft Phase 2 mitigation plan is available here.

N.C. Volkswagen Settlement Program Contacts

Brian C. Phillips
Mobile Sources Compliance Branch Supervisor
VW Mitigation Plan
Phone 919-707-8426

Robin Barrows
Allied Programs Supervisor
VW Settlement Outreach
Phone 919-707-8445

Sheila Blanchard
School Bus Program
Phone 919-707-8423

Matthew Hoskins
Clean Heavy-Duty Equipment and Vehicle Program
Phone 919-707-8424

Brian C. Phillips (interim)
Shuttle/Transit Bus Program
Phone 919-707-8426

Dave Willis
DC Fast Infrastructure Program
Phone 919-745-4322

Steven Rice
Level 2 Infrastructure Program
Phone 919-745-4303