Volkswagen Environmental Mitigation Trust

The Volkswagen (VW) Diesel Settlement required VW to establish a $2.7 billion Environmental Mitigation Trust Fund to be distributed among states to fund eligible mitigation projects designed to reduce excess nitrogen oxide (“NOx”) emissions from the transportation sector. VW established the Environmental Mitigation Trust Fund in part to settle claims that it sold vehicles with “defeat devices” designed to cheat emissions tests. The Trust became effective on October 2, 2017. Mississippi has been initially allocated $9,874,414 to fund projects designed to reduce NOx emissions and improve air quality in the state.

Mississippi Volkswagen Environmental Mitigation Program

Then-Governor, Phil Bryant, identified MDEQ as the lead agency for purposes of administering the state’s trust allocation. He submitted the Beneficiary Certification Form to formally request beneficiary status for the state and designate MDEQ as the lead agency. The Trustee certified Mississippi as a Beneficiary on January 29, 2018.  A Beneficiary Mitigation Plan (BMP), required by the Trust Agreement to be in place prior to administering funds, was developed and submitted to the Trustee by MDEQ on September 11, 2019. In order to begin implementing Mississippi’s allocation of the trust and funding projects, MDEQ released the Volkswagen Environmental Mitigation Program Project Application beginning June 11, 2021, and it was open for submissions until October 29, 2021.

Mitigation Plan and Types of Projects Eligible for Funding

As the lead agency, MDEQ submitted a Beneficiary Mitigation Plan summarizing how it plans to use the Environmental Mitigation Trust funds allocated to Mississippi. The plan is intended to provide the public with insight into the high-level vision for use of the funds and information about the specific uses for which funding is expected to be requested.

The Environmental Mitigation Trust specifies the types of mitigation actions which may be funded. The following mitigation actions are specified in both the Trust Agreement and MDEQ’s Beneficiary Mitigation Plan as eligible for funding:

  • Class 8 Local Freight Trucks and Port Drayage Trucks (Eligible Large Trucks)Class 4-8 School Buses, Shuttle Buses, or Transit Buses
  • Freight Switchers
  • Ferries and Tugs
  • Ocean Going Vessels (OGV) Shorepower
  • Class 4-7 Local Freight Trucks (Medium Trucks)
  • Airport Ground Support Equipment
  • Forklifts and Post Cargo Handling Equipment
  • Diesel Emission Reduction Act non-federal match (DERA Option).

The Environmental Mitigation Trust may fund government and non-government owned mitigation projects. The state may also use up to 15 percent of its allocation to buy, operate, and maintain zero emission supply equipment (e.g., charging stations, hydrogen dispensing equipment) for certain projects.

Round 1 Project Awards

Following receipt of the first round of applications, MDEQ has awarded over $7 million to help fund 22 projects.  See this press release for additional information.  An application for a second round of funding opportunities is expected to be released in the 3rd quarter of 2023. If you would like to receive information regarding this second round, please email Stephen Barnett with your contact information.


MDEQ provided $474,000 in VW trust funds to Union County School District to replace eight older diesel buses with new, cleaner diesel buses. Pictured from left to right are Russell Taylor, Superintendent; Windy Faulkner, Assistant Superintendent; and Charlie Forester, Head Mechanic.