Governor awards $5.8 million from Volkswagen settlement funds 


MONTGOMERY — Gov. Kay Ivey has awarded nearly $5.8 million to several governments and public agencies and two businesses from proceeds issued to the state as part of a nationwide settlement against Volkswagen.

The grant recipients, in what is the second allocation of the settlement awards, will use the funds to buy or upgrade pollution-reducing equipment and vehicles. The goal is to reduce nitrogen oxide emissions to offset environmental damage from Volkswagen Group of America Inc.’s manipulation of emission tests.

“Safer and more fuel-efficient vehicles are traveling our highways as a result of this settlement,” Gov. Ivey said. “I commend the Alabama Department of Economic and Community Affairs for developing and executing an equitable plan for distributing these funds.”

Volkswagen was found in violation of the U.S. Clean Air Act in 2016 by installing software in about 590,000 vehicles which misled the amount of emissions the vehicles were emitting. As a result, the company agreed to a $2.9 billion nationwide settlement with some of those funds allocated to the states.

Alabama was awarded about $25 million in the settlement which will be allocated over a 10-year period.

ADECA’s Energy Division initiated the state’s plan and conducted multiple public hearings across the state to explain and obtain comments on the plan. Gov. Ivey awarded the first round of grants from the program in January 2020.

“I appreciate the confidence that Gov. Ivey has shown in ADECA through appointing our agency to handle the settlement funds,” ADECA Director Kenneth Boswell said. “Our Energy Division worked long and hard to come up with a plan that meets the specifications of the settlement and benefits the state. We are pleased to announce this second round of funds.”

Replacement vehicles and equipment will be powered by electricity, propane or cleaner burning diesel fuel. Those awarded grants are (listed alphabetically):

Alabama Forestry Commission (City of Montgomery) – $1.46 million to replace diesel transport trucks.

Alabama State Port Authority (City of Mobile)- $950,000 to repower a locomotive with a cleaner burning engine.

Cottondale Wood Products (Tuscaloosa County) – $152,056 to replace diesel forklifts with ones powered by electricity.

Foley (City of) – Two grants totaling $341,250 to replace several diesel-fueled trucks.

Gulf Distributing Holdings (Mobile)- $245,210 to replace several diesel trucks.

Huntsville (City of) – $829,725 to replace several diesel vehicles.

Mobile County Board of Education – $1.82 million to replace diesel buses with propane-fueled buses.

To obtain additional information on the settlement program and applications go to

ADECA administers a wide range of programs that support law enforcement, victim programs, economic development, water resource management, energy conservation and recreation.