Diesel Emissions Reduction Act

The Diesel Emissions Reduction Act (Pub.L. 111-364), or DERA (as it will be referred to for the remainder of this article), is a part of the Energy Policy Act of 2005 (Pub.L. 109-58). The law appropriated funds to federal and state loan programs to either rebuild diesel-powered vehicle engines to more stringent emission standards or install emission reduction systems, notify affected parties, and share the technological information with countries that have poor air quality standards.

The Environmental Protection Agency (EPA) was charged with distributing DERA’s funds. 70% of these available funds are to provide grants and low-cost revolving loans. These loans are issued on a competitive basis to maximize reductions in diesel emissions in terms of number of tons of pollution and emissions exposure. DERA highlights that areas with a dense population of fleet vehicles and designated by the EPA as low air quality areas should receive priority for these funds.

DERA also stipulates that at least 50% of the funds available should be distributed to public vehicle fleets. Of the total appropriated funds, 90% must be used for projects that use existing certified engine technology, or verified configuration, and that 10% should be used for developing and commercializing new technologies. Test plans for new technologies should be submitted to the EPA or California Air Resources Board (CARB).

The funds cover retrofit engine technology for buses, medium-duty trucks, heavy-duty trucks, marine engines, locomotives, off-road engines or construction vehicles, cargo handlers, agricultural equipment, mining equipment, and energy production equipment. The funds are appropriated only for voluntary reduction of emissions and cannot be used to meet the requirements of any federal, state, or local laws for emissions standards. Additionally, states cannot themselves mandate the elective emissions reductions.

In addition to national loan programs, DERA made 30% of federally appropriated funds available to support state grant and loan programs that are designed to curb diesel emissions. These funds are designed to help the states meet diesel emissions reductions through the use of certified engine configurations or verified technologies only. This does not cover research and development of new technologies as in the federal grant program. States can apply for this aid through the EPA, which reviews the application and decides if a state is eligible for a monetary allocation. If all 50 states qualify for funding, each state receives 2% of the appropriated funds for the state grant and loan program. However, if all 50 states do not qualify, each qualifying state receives 2% plus a share that is population-dependent for that state. A state that matches the funds appropriated by DERA receives an incentive payment equal to 50% of the funds allocated by the state.

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