Apply Now: Diesel Emissions Reduction Act

Funding available

Environmental Initiative’s Project Green Fleet is currently seeking fleet partners to apply for an upcoming Diesel Emissions Reduction Act (DERA) grant offered through the Environmental Protection Agency. The application process will begin in Fall of 2022. The DERA program solicits applications nationwide for projects that achieve significant reductions in diesel emissions and exposure through the replacement or retrofit of older diesel equipment with newer machinery. The grant may cover up to 25-60% of the total project costs.

diesel front loader scooping dirt

Equipment eligibility

  • Marine Engines: Includes diesel powered Category 1, 2, and 3 marine engines and vessels.
  • Locomotives: Includes diesel powered line-haul, passenger, and switch engines and locomotives.
  • Class 5 – 8 heavy-duty highway vehicles.
  • Off-road engines, equipment, or vehicles: Includes diesel powered engines, equipment and vehicles used in construction, handling of cargo (including at ports and airports), agriculture, mining, or energy production (including stationary generators and pumps).
  • The existing vehicle, engine, or equipment must have at least three years of remaining life at the time of upgrade. Remaining life is the fleet owner’s estimate of the number of years until the unit would have been retired from service if the unit were not being upgraded or scrapped because of the grant funding.
  • Engines must have operated 500+hr/year for the past two years (1,000+ hr/year for the past two years for locomotives and marine).
  • Current equipment must be Tier 0/Unregulated – Tier 3, for upgrade to Tier 4 diesel or hybrid. Current Tier 4 equipment is eligible for electric replacement only.
  • Current equipment must be fully operational, be in current and regular service, and have remaining operational life of at least three years.
  • New equipment must perform the same or similar function as equipment being replaced.
  • New equipment must operate in the same territory as the old equipment for at least five years post-project completion.
  • New equipment must be paid for in cash or through financing; it cannot be leased.
freight train locomotive

Priority projects

Eligible replacement or retrofit projects being prioritized in the grant opportunity include:

  • Equipment operating in areas of Environmental Justice concern for air quality.
  • Equipment operating in areas of higher vulnerability to negative health outcomes related to air pollution and/or areas of higher modeled air pollution.
  • Projects with outcomes that benefit affected communities, those that engage affected communities in the design and performance of the project, and those which demonstrate the ability to promote and continue efforts to reduce emissions after the project has ended.
  • Equipment operating in goods movement facilities such as:
    • Ports.
    • Airports.
    • Rail yards.
    • Terminals.
    • Distribution centers.
  • Equipment owned by small businesses certified as veteran, woman, or minority owned and/or located in an economically disadvantaged area.
old and new diesel marine engine on deck of tugboat

Funding percentages and cost share requirements

Vehicle or Equipment Replacement with EPA Certified Engine

  • 25% – Grant funding limit
  • 75% – Fleet owner contribution

Vehicle or Equipment Replacement with Zero-tailpipe Emission Power Source

  • 45% – Grant funding limit
  • 55% – Fleet owner contribution

Engine Replacement with EPA Certified Engine

  • 40% – Grant funding limit
  • 60% – Fleet owner contribution

Engine Replacement with Zero-tailpipe Emission Power Source

  • 60% – Grant funding limit
  • 40% – Fleet owner contribution

EPA Verified Locomotive Idle Reduction Technologies

  • 40% – Grant funding limit
  • 60% – Fleet owner contribution

EPA Verified Exhaust After-treatment Retrofits

  • 100% – Grant funding limit
  • 0% – Fleet owner contribution

Drayage Truck Replacement

  • 50% – Grant funding limit
  • 50% – Fleet owner contribution

Work with us to apply

Environmental Initiative will work with fleet owners to prepare application materials. Fleets are required to provide:

  • A detailed cost estimate for the proposed vehicle replacement or retrofit project.
  • Information on the old vehicle to be replaced or upgraded and the new vehicle or upgrade (spreadsheet to be provided by Environmental Initiative):
    • Vehicle type, make, model and year.
    • VIN number and engine serial number.
    • Fuel type and annual gallons of fuel used
    • Annual miles driven (including idling) and annual usage hours.
  • Photo of the current vehicle/equipment to be replaced/repowered.
  • Photos the current vehicle/equipment’s VIN and engine plate showing the serial number.

Terms and conditions

Selected projects are subject to the following the terms and conditions of the grant award:

  • No exchange of money can take place towards the purchase of replacement equipment until an Operating Agreement is signed between Environmental Initiative and the Fleet Owner (however, the old vehicle that has been selected for funding can continue to operate, up until the time the fleet owner takes possession of the new equipment)
  • The old equipment must be scrapped or rendered permanently disabled within 90 days of being replaced.
  • Documentation of the destruction of the vehicle and/or engine must be provided to Environmental Initiative once the destruction is complete. The following steps and materials are required for destruction:
    • Cut a three-inch by three-inch hole in the engine block (the part of the engine containing the cylinders.)
    • Disable the chassis by cutting through the frame/frame rails on each side at a point located between the front and rear axles.
    • Complete and sign a Certificate of Destruction (to be provided.)
    • Take and provide digital photos or video documentation of the engine tag (showing serial number, engine family number, and engine model year), the destroyed engine block, and cut frame rails or other cut structural components as applicable.
  • The vehicle and/or engine that is destroyed MUST be the same as that in the original application. If a different vehicle and/or engine is destroyed in place of the one in the original application without prior approval from the MPCA and EPA, the project will become ineligible for funding.

Vehicle/equipment components that are not part of the engine or chassis may be salvaged from the unit being replaced (e.g. plow blades, shovel, seats, tires and more).

Contact us

Environmental Initiative will work with interested and eligible fleet owners to prepare application materials to submit to the Minnesota Pollution Control Agency. Contact Alli Mueller today to get started.