Washington State Volkswagen Federal Settlement Grant Program

The Washington State Volkswagen Federal Settlement Grant Program is administered by the Washington State Department of Ecology’s Air Quality Program. This grant initiative is funded through the state’s allocation from the federal Volkswagen (VW) settlement, which designated Washington as a beneficiary of the Environmental Mitigation Trust. Washington has received over $112 million from the settlement to mitigate environmental harm caused by excessive nitrogen oxide emissions from violating VW diesel vehicles. This program focuses on reducing diesel emissions from medium- and heavy-duty vehicles and equipment, specifically targeting vehicles such as switcher locomotives, tugboats, emergency response vehicles, paratransit, and local freight trucks. The goal is to replace or repower these diesel-powered units with all-electric alternatives to improve air quality and reduce public health risks associated with diesel pollution. The program places a strong emphasis on serving overburdened communities that are disproportionately impacted by air pollution. It leverages environmental justice tools like the Diesel and Disproportionate Impact score and the Environmental Health Disparities map to prioritize funding. Eligible applicants include organizations licensed in Washington State, including private entities, nonprofits, and investor-owned utilities, as well as state, local, and tribal government agencies. Vehicles must meet specific criteria such as being diesel-powered, within certain weight classes (Class 4–8), and having been in operation and licensed in Washington for at least two years. The new electric vehicles must operate within the state for at least five years. Funding is available up to $25 million in total, with award amounts varying by project type—for example, up to $9 million for tugboat repowers and $3.5 million for freight switcher locomotives. Applicants must apply through the EAGL (Ecology’s Administration of Grants and Loans) online portal. Each vehicle application must be submitted separately, and those applying for more than five vehicles should contact the VW team for additional access. Required submission components include a detailed project description, quotes, timelines, budgets, fleet details, community engagement plans, and site-host agreements where applicable. Applications are due by January 8, 2026, at 5 PM PST. Proposals will be scored using several criteria including location-based air quality burdens, fuel consumption, vehicle age, and applicant type. Awards will be announced by March 2026, with projects required to be completed by October 31, 2027. Recipients must meet numerous conditions such as destruction of old vehicles, installation of charging infrastructure, cultural resource reviews, quarterly reporting, and final project closeout documentation. Reimbursements are contingent upon submission of required documentation and compliance with all grant conditions.

Target census tracts with high diesel pollution; emphasize public health benefits and readiness to implement.