Lobby groups in the US are pushing regulators to force Volkswagen to 'undo' environment damage caused by its emissions test-cheating diesel vehicles.

According to Bloomberg, environmental and consumer groups want the federal government to consider a long list of possible reparations, from a VW-funded programme to build infrastructure to power electric cars, to high fines, to cleaning up five times the amount of pollution released by the dirty diesel engines.

"The clean-air reparations must be so large that Volkswagen or other companies will never again be tempted to cheat," Frank O'Donnell, president of Clean Air Watch, an environmental group based in Washington, was quoted as saying.

History supports the request. In the 1990s, the Environmental Protection Agency (EPA) forced truck makers which had cheated on emissions tests to spend US$1bn developing cleaner engines, among other things.

Vloomberg said the EPA, in March 2015, updated its policy of accepting company actions as part of a settlement if they support key government objectives such as reducing the impact of climate change, promoting innovative technology or improving children's health.

In the US alone, about 600,000 VW and Audi cars emit as much as 40 times the legal limit of smog-forming nitrogen oxide. VW acknowledged last year that it had been rigging diesel vehicles since 2009 with "defeat devices" to pass emissions tests in the lab but they exceeded limits on the road.

The EPA and the California Air Resources Board now must decide how VW not only can bring the cars into compliance and reimburse owners of models that can't be retrofitted but what other fines or penalties the German automaker should face. 

According to Bloomberg, one criteria the EPA uses to evaluate offsetting projects is whether they provide "significant, quantifiable benefits to public health or the environment", according to a memo by Cynthia Giles, the agency's assistant administrator for enforcement and compliance assurance. The agency says it may reduce a company's penalties if it agrees to such supplemental projects.

Volkswagen is continuing to cooperate with EPA and CARB and trying to develop remedies acceptable to the agencies "as quickly as possible", company spokeswoman Jeannine Ginivan told Bloomberg. She declined to comment on specific environmental projects that could become part of the settlement. EPA spokeswoman Julia Valentine declined to comment on negotiations with VW.