$46 Million Available to Upgrade Diesel Vehicles

Environmental Initiative’s Project Green Fleet is currently accepting applications to connect fleet owners with this funding opportunity. Application materials are due to Environmental Initiative by 4:00 p.m. CST on Friday, Feb. 26,.

The Environmental Protection Agency (EPA) is offering approximately $46 million in competitive grant funding under the Diesel Emissions Reductions Act (DERA) National Grants Program. The program is soliciting applications nationwide for projects that achieve significant reductions in diesel emissions and exposure, particularly from fleets operating in areas designated by the Administrator as poor air quality areas.

Applications will be submitted to the EPA by the deadline of March 16. Grant funds are anticipated to be available for selected fleet owners in late summer/early fall 2021.

EPA Regions Accepting Funding

  • Region 1 is accepting applications for projects located within Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont
  • Region 2 is accepting applications for projects located within New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands
  • Region 3 is accepting applications for projects located within Delaware, Maryland, Virginia, Pennsylvania, West Virginia, and the District of Columbia
  • Region 4 is accepting applications for projects located within Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee
  • Region 5 is accepting applications for projects located within Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin
  • Region 6 is accepting applications for projects located within Arkansas, Louisiana, New Mexico, Oklahoma, and Texas
  • Region 7 is accepting applications for projects located within Iowa, Kansas, Missouri, and Nebraska
  • Region 8 is accepting applications for projects located within Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming
  • Region 9 is accepting applications for projects located within California, Arizona, Nevada, Hawaii, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands
  • Region 10 is accepting applications for projects located within Washington, Oregon, Idaho, and Alaska

Eligible Uses of Funding

  • School buses
  • Class 5 – Class 8 heavy-duty highway vehicles
  • Locomotive engines
  • Marine engines
  • Nonroad engines, equipment or vehicles used in construction, handling of cargo (including at ports or airports), agriculture, mining or energy production (including stationary generators and pumps)

Primary Eligibility Specifications

  • On-road engines must have operated 7,000 miles/year for the past two years.
  • Off-road engines must have operated 500+ hr/year for the past two year.
  • Locomotive and marine engines must have operated 1,000+hr/year for the past two years.
  • Engine or vehicle replacements must be Tier IV; for marine and locomotive projects, Tier III engines may be used only if Tier IV is demonstrated to not be feasible through a best achievable technology analysis.
  • Current equipment must be fully operational, be in current and regular service, and have remaining operational life of at least three years.
  • The participating fleet owner must currently own and operate the existing vehicle or equipment and have owned and operated the equipment for the past two years.
  • New equipment must perform the same or similar function as equipment being replaced.
  • New equipment horsepower must not exceed 40% of current equipment.

Priority Projects

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

  • Areas of Poor Air Quality
    • Priority for funding is given to vehicles, engines and equipment operating in areas designated as having poor air quality. A list of counties that have been designated as priority project locations can be found at: epa.gov/dera/national#rfa. To receive points under this criterion, vehicles or equipment proposed for funding must be operated a majority of the time in one or more of the priority project locations.
  • Goods Movement Facilities
    • Ports
    • Airports
    • Rail Yards
    • Terminals
    • Distribution Centers
  • Benefits to the Community
    • Priority for funding is given to projects which address the needs and concerns of affected communities, especially any communities or populations that have faced or are facing environmental justice concerns and/or health disparities
  • Community Engagement and Partnerships
    • Applicants will be evaluated based on the extent and quality the application demonstrates input from affected communities with respect to the design and performance of the project and demonstrates that support and involvement from project partners has been obtained to more effectively perform the project. The term “affected communities” means populations, groups, and other interested parties that are affected by the environmental and/or other issues that the project is intended to address.
  • Project Sustainability
    • Priority for funding is given to projects which can demonstrate the ability of the applicant and project partners to promote and continue efforts to reduce emissions after EPA funding for this project has ended.

Application Materials

Environmental Initiative will work with fleet owners to prepare application materials.


  • At least one (1) detailed cost estimates for the proposed project
  • Information on the old vehicle to be replaced or upgraded and the new vehicle or upgrade (spreadsheet to be provided by EI). Including but not limited to:
    • Vehicle type, make, model and year
    • VIN number
    • Engine serial number
    • Fuel type
    • Horsepower
    • Annual miles driven, including idling
    • Annual usage hours
    • Annual Diesel Gallons Reduced
  • Cost Share Commitment Letter (template to be provided by EI)
    • A letter signed by the fleet owner committing to cover the cost-share portion of the project funds should their project be selected for funding, including the source of the cost-share funds (either by cash or financing)
  • Fleet Affidavit – (template to be provided by EI)
    • A letter signed by the fleet owner stating that all information provided in the vehicle spreadsheet is accurate to the best of their knowledge; that all engines, machines, and equipment therein listed in the application are of sound and working order according to regular maintenance schedule and the eligibility criteria as described in the Clean Diesel Funding Program; provide information on maintenance of the existing vehicle; and committing to the destruction of the existing vehicle or engine within 90 days of receipt of the new equipment
  • For Locomotive and Marine Projects – Mandated Measures Justification Supporting Information (template to be provided by EI)
    • A letter signed by the fleet owner stating that the equipment in the application is not subject to the Restriction for Mandated Measures. EI will consult with fleet owners should their project require a Mandated Measures Justification.

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 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).

Please follow the link to view the 2021 DERA Request for Applications document on the EPA’s website.



Eligible Technologies EPA Funding Limit Mandatory Cost-Share
Drayage Truck Replacement 50% 50%
Vehicle or Equipment Replacement with EPA Certified Engine 25% 75%
Vehicle or Equipment Replacement with CARB Certified Low NOx Engine 35% 65%
Vehicle or Equipment Replacement with Zero-tailpipe Emission Power Source 45% 55%
Engine Replacement with EPA Certified Engine 40% 60%
Engine Replacement with CARB Certified Low NOx Engine 50% 50%
Engine Replacement with Zero-tailpipe Emission Power Source 60% 40%
EPA Certified Remanufacture Systems 100% 0%
EPA Verified Highway Idle Reduction Technologies when combined with new or previously installed exhaust after- treatment retrofit 100% 0%
EPA Verified Highway Idle Reduction Technologies without new exhaust after-treatment retrofit 25% 75%
EPA Verified Locomotive Idle Reduction Technologies 40% 60%
EPA Verified Marine Shore Connection Systems 25% 75%
EPA Verified Electrified Parking Space Technologies 30% 70%
EPA Verified Exhaust After-treatment Retrofits 100% 0%
EPA Verified Engine Upgrade Retrofits 100% 0%
EPA Verified Hybrid Retrofit Systems 60% 40%
EPA Verified Fuel and Additive Retrofits when combined with new retrofit, upgrade, or replacement Cost differential between conventional diesel fuel Cost of conventional diesel fuel
EPA Verified Aerodynamics and Low Rolling Resistance Tires when combined with new exhaust after-treatment retrofit 100% 0%
Alternative Fuel Conversion 40% 60%