Volkswagen will pay U.S. diesel car owners up to $7,000 each and fund an air pollution offset program under a still-confidential, $10.2-billion settlement due to be submitted for a federal judge’s approval next week.
“This settlement will provide substantial benefits to both consumers and the environment—providing car owners and lessees fair value for their vehicles, while also removing environmentally harmful vehicles from the road,” wrote Elizabeth Cabraser, lead counsel for a plaintiffs’ steering committee.
“In addition to either fixing or buying back the affected cars, VW will provide cash payments worth between $1,000 and $7,000, depending on the vehicle’s age and other factors, to compensate consumers,” Bloomberg reports, citing unnamed sources familiar with the negotiations. Payouts will be based on each car’s value before the VW emissions scandal became public in September.
“The environmental remediation program is a key priority for regulators looking to undo the damage of 482,000 diesel cars that emit as much as 40 times the permitted amounts of smog-forming nitrogen oxides,” Bloomberg notes. Here, the company’s liability will depend on an assessment by the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board “of how much excess smog-forming gases the non-compliant diesel cars emitted going back to 2009,” the news agency explains. “They’ll also estimate how much pollution to expect going forward from consumers who don’t sell their cars back to VW or don’t follow up on the recall repairs.”
If VW can’t repair the cars to the EPA’s satisfaction, it “may result in buybacks or extra payments to the environmental fund.”