Federal judge in SF approves Volkswagen diesel car emissions settlement

Employees assemble aVolkswagenCrafter van at the newVolkswagenNutzfahrzeuge (Commercial Vehicles, VWN) factory in Wrzesnia, Poland, 24 October 2016.VolkswagenCommercial Vehicles invested roughly 800 million Euro in the 220 hectar area. Up to 3,000 employees are said to assemble the new Crafter at the factory. (EPA/RAINER JENSEN)

Judge Charles Breyer of the U.S. District Court for the Northern District of California approved on Tuesday a settlement between Volkswagen AG (VW) and U.S. owners of its cars with 2-liter diesel engines dating to 2009.

Under the terms of the settlement, the German automaker will spend up to 10.033 billion U.S. dollars to either buy the polluting vehicles with "defeat devices" back or fix them and compensate about 475,000 U.S. owners.

Volkswagen admitted last year that it programmed the vehicles to turn on emission controls during legally mandated tests and turn them off while on the road, emitting up to 40 times the legal limit of nitrogen oxide. Worldwide, about 11 million vehicles were installed with the device to fool tests.

In addition to reaching the settlement in late June, the company agreed to spend 2.7 billion dollars over three years to fund projects aimed at reducing emissions of nitrogen oxide in the states across the United States plus 2 billion dollars over 10 years to fund programs designed to promote electric vehicles or other zero-emission options.

The buyback deal covers Volkswagens with 2.0-liter, four-cylinder diesel engines, including Jetta, Beetle, Audi A3, Golf, and Passat, sold between 2009 and 2015. Owners can option to allow VW to buy back their vehicles at retail value as of September 2015, prior to the public disclosure of the emissions cheating scandal, or to get their vehicles repaired for free.

VW will begin buying back vehicles after Judge Breyer's approval, and is expected to start proposing fixes and acquire approvals from the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board in November.

According to court documents, most vehicle owners will get 5,100 to 10,000 dollars in compensation, and VW must buy back or repair 85 percent of the 475,000 vehicles by June 30, 2019, or face penalties of 100 million dollars for every percentage point it falls below 85 percent.

However, the deal does not cover more than 80,000 Volkswagen, Audi and Porsche vehicles with 3-liter, six-cylinder diesel engines sold in the United States.