The $2.7 billion trust fund set up under the proposed settlement between Volkswagen and environmental regulators would likely give priority to government fleets over their commercial brethren to eliminate diesel vehicles, according to a leading diesel group.

The Diesel Technology Forum's response was part of comments submitted as part of the Volkswagen Partial Consent Decree and Settlement that's expected to gain final approval by Oct. 18.

"As currently configured, the Volkswagen Partial Consent Decree and Settlement will fail to effectively mitigate the lifetime total emissions of nitrogen oxides (NOx) prescribed by the court due to a funding scheme that favors less effective and available technologies and approaches when compared to proven and documented benefits of advanced clean diesel technology," said Allen Schaeffer, the forum's executive director.

The partial consent decree released on June 28 outlines the details of $14.7 billion in settlements that include a $2.7-billion Environmental Mitigation Trust to "fully mitigate the total, lifetime excess NOx emissions" from vehicles that violated clean air laws by emitting 40 times the legal limit. Volkswagen used emissions cheat software on 550,000 light-duty VW diesel vehicles.

Under the terms of the trust, funds will be awarded primarily to states and other government entities to reduce diesel-engine use among public fleets. Agencies will apply to a third-party trustee for grants.

"Not that upgrading government fleet vehicles is not important, but the EMT in its current form is even more problematic in its treatment of government over private fleets, offering greater access to more dollars for government fleets over private fleets, and offering higher funding levels for investments in boutique fuels and technologies rather than mitigating NOx emissions," Schaeffer said. "Since government vehicles typically travel far fewer miles than private fleets, this in turn means that even fewer clean air benefits will be generated than from private fleets using newer technology."

The automaker agreed to the settlement with the U.S. Environmental Protection Agency and the California Air Resources Board (CARB) nine months after the cheat software was first discovered.