BALTIMORE (CN) — To settle claims that its defeat-device scheme polluted Maryland, Volkswagen and its luxury affiliates Porsche and Audi reached a $33.5 million deal with the state Wednesday.
The defeat devices, first installed in model-year 2009 vehicles, consisted of a bit of computer code in the control module of diesel engines.
In real-world driving conditions, these vehicles released up to 40 times the allowed limits of nitrogen oxide gases, with emissions controls switched off to allow better acceleration and gas mileage.
But the code ensured that the vehicle’s controls would activate fully during emissions testing. By the time the U.S. Environmental Protection Agency cracked down in 2015, Volkswagen had installed the programming in about 11 million cars around the world, including 500,000 in the United States.
Maryland is one of 15 states that have adopted California’s more stringent vehicle emissions standards, which gives it a cause of action that reaches beyond the federal Clean Air Act. All the others, except New Jersey, settled with the company last year for far less money per vehicle.
“They got about $1,200 a car,” Maryland Attorney General Brian Frosh said in a phone interview. “Ours works out to about $2,300-$2,400 a car.”
If approved by the Baltimore City Circuit Court, Maryland’s could be the last state case Volkswagen must settle.
The consent decree includes a $29 million civil penalty payable to the Maryland Department of the Environment, plus a five-year agreement that the company “select a Maryland-based port facility to provide certain logistical and other support to Volkswagen Group of America, Inc.’s U.S. East Coast operations.”
That part of the deal is expected to benefit Maryland’s economy to the tune of $4.5 million.
If Volkswagen fails to meet its obligations in the port deal, it will be required to pay an additional $4.5 million to the Maryland Department of the Environment.
Finally, the settlement requires Volkswagen to increase the availability of zero-emission vehicles in the state.
“The agreement with Maryland is an important step forward for Volkswagen in resolving legacy exposure to state and local environmental claims related to the diesel matter in the United States,” Volkswagen spokeswoman Jeannine Ginivan said in an email. “Following a recent federal court ruling, we consider the few remaining environmental claims pending in state courts to be preempted by federal law.”
Maryland already nailed Volkswagen with a $15 million civil penalty in June 2016. In conjunction with related deals, the settlement provided affected consumers with minimum payments of $5,100, and it required the company to either buy back or modify the vehicles to comply with clean air standards. Frosh said the settlement also entitled Maryland to receive more than $70 million to support environmental-mitigation programs.
Unrelated to the Maryland litigation, Volkswagen agreed to a $14.7 billion settlement with federal and California state regulators that same year.
In addition to buying back up to 475,000 of the affected vehicles, the German carmaker agreed to create a $2.7 billion Environmental Mitigation Trust fund in 2016 to pay states, Native American tribes and others harmed by its cars’ illegal pollution.
Analysts have estimated the scandal will cost VW $30 billion, all told.