Volkswagen paid $3 billion for states to use for "clean" transportation projects.

Part of Volkswagen AG’s punishment for rigging its diesel engines to pass U.S. emissions tests, involved about $3 billion designed to foster clean transportation, such as improving electric vehicle infrastructure.

However, a new study by the United States Public Interest Research Group, reveals that the a significant number of states that received funding aren’t using the funds as intended with some states, ironically, using the money for diesel-based projects.

The group gave 15 states a C grade or better when it comes to policies that can increase access to clean transportation, including electric vehicle charging and electric bus fleets. Fourteen states, along with Puerto Rico, received failing scores.  

“Volkswagen breached customers’ trust and put all of our health at risk,” said Sam Landenwitsch, senior vice president for The Public Interest Network, of which U.S. PIRG and Environment America are members.

(German automakers still enduring diesel scrutiny. Click Here for the story.)

“But the Volkswagen settlement provides states with the perfect opportunity to kick-start the transition to a cleaner and healthier electric transportation system. A lot of good is coming out of how states are spending this money — but many states are not going nearly far enough.”

Washington and Hawaii earned A-pluses for spending as much as the settlement allowed on electric vehicle charging infrastructure and electrified mass transit buses and ferries. Rhode Island and Vermont received A’s for spending substantial amounts to accelerate electrification.

Earning B’s are California, Massachusetts and New York. Colorado, Georgia, Maryland, Michigan, Minnesota, New Jersey, Nevada and Ohio took home C’s. Every other state received D’s or F’s.

(Click Here to see why VW was tagged with $1B fine in Germany for diesel-cheating scandal.)

Oddly enough, the settlement with VW does not prevent states from spending the money on new diesel or compressed natural gas technology. However, it was expected states would use the funds for “clean” projects.

“Climate change is a health emergency for our families and our communities,” said Morgan Folger, director of Environment America Research & Policy Center Clean Cars Campaign.

“States have the unique opportunity to fund projects that will cut carbon pollution by electrifying our cars, trucks and buses. We all deserve clean air and a stable climate, so we should make the most of the Volkswagen settlement money and accelerate electrification.”

(Investor suit against VW AG gets underway. Click Here for the story.)