A court has approved Volkswagen’s diesel car scandal settlements, part of which is a $2.7 billion trust for emission reduction projects that can include school buses.

The funding is part of two settlements in which the German automaker has agreed to spend up to $14.7 billion to settle allegations of cheating emissions tests and deceiving customers with its 2.0-liter diesel cars.

Along with compensating owners of those automobiles and offering buybacks and lease terminations, Volkswagen is required to fund a $2.7 billion environmental mitigation trust that will pay for projects to reduce oxides of nitrogen (NOx). The goal is to compensate for the excess NOx from the Volkswagen diesel autos by cleaning up diesel emissions from other sources, including school buses, transit buses, large trucks, and freight trains.

Volkswagen will make three payments of $900 million to the mitigation trust over the course of three years. Also, any penalties that the company pays for failing to meet its car recall rate targets will go into the fund.

The court found the establishment of the mitigation trust “substantively fair.”

“Funding projects to mitigate NOx emissions furthers both the public interest and the Clean Air Act’s goals by taking steps to ensure cleaner air,” the court order said.

States, Indian tribes, Puerto Rico, and the District of Columbia can recommend candidates to serve as trustee to manage the mitigation trust, and then the court will appoint a trustee. When the trust has been established, those same governmental entities can apply to become beneficiaries of the trust.

The Environmental Protection Agency has said that the trust will likely become effective sometime during the first half of 2017. More information about how the trust will work is available here.

In addition to funding the environmental mitigation trust, Volkswagen is required to invest $2 billion in zero-emission vehicle technology over a 10-year period.

SBF will report back on this issue as more details become available.