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EPA Diesel Emission Reduction Act (DERA) Grants

Update, March 19, 2009: EPA is pleased to announce that the Request for Applications (RFA) for Recovery Act funding for the National Clean Diesel Funding Assistance Program is now available.   >> Learn More

ICLEI Clean School Bus Resources

ICLEI USA recommends accessing the toolkits, case studies, and other resources in our Northeast Clean School Bus Initiative, created in conjunction with EPA, to prepare for the implementation of Diesel Emission Reduction Act (DERA) funding.

 

Overview

The American Recovery and Reinvestment Act (ARRA) provided the DERA program with an additional $300 million in funding on top of the existing program’s annual appropriations. The ARRA grants will have new and/or different requirements in addition to the regular DERA requirements. For example, recipients will have to report on job creation/retention, provide more frequent financial reports, set milestones for expenditures, and prepare a budget through Sept. 30, 2010. Finally, ARRA requires grants to be awarded quickly. Please see www.epa.gov/cleandiesel for more information.

 

DERA National Program

EPA-Recommended Things To Do Now

  • Prepare to implement a clean diesel project  quickly and efficiently
  • Communicate with potential partners
  • Organize fleet information
  • Develop budget
  • Begin working on Statement of Work (based on FY 08 RFP) and other grant forms

DERA is comprised of both a national program and a state component. The national program will receive 70 percent of the ARRA funding or a total of $206 million. This will be allocated to the following three smaller programs that make up the national program:

  • National Clean Diesel Funding Assistance Program Regional Grant Competitions
  • SmartWay Clean Diesel Finance Program
  • Clean Diesel Emerging Technologies Program

Local governments are eligible to apply for all three sub-programs.


National Clean Diesel Funding Assistance Program Regional Grant Competitions

The Funding Assistance Program receives a total of $156 million and is a nationwide competitive grant process.  Grants will be awarded by EPA’s Regional Clean Diesel Collaboratives. Eligible entities include regional, state, local, tribal or port agencies with jurisdiction over transportation or air quality. A nonprofit organization may also be eligible, as long as it provides pollution reduction or educational services to organizations that operate diesel fleets.

At least 50 percent of funding is dedicated to reducing diesel emissions in public fleets including private fleets contracted or leased for public purpose (i.e., private school buses). These fleets may be comprised of buses, medium or heavy duty trucks, marine engines, locomotives, stationary engines or vehicles used for construction, the handling of cargo (including at a port or airport), agriculture, mining, or energy production. Only eligible entities can apply directly for funds.

Projects will receive priority if they maximize public health benefits, are cost-effective, in high population areas or those with air quality issues, maximize the useful life of the engine, conserve diesel fuel and utilize ultra low sulfur diesel. 

Funds can be used for EPA approved idle reduction technologies  including electrified parking spaces (truck stop electrification), auxiliary power units and generator sets,  fuel operated heaters, battery heating and air conditioning systems, thermal storage systems, shore connection systems and alternative maritime power.

Funds cannot be used for reducing the cost of emissions mandated by federal, state, or local law, for emissions testing, fueling infrastructure costs such as the acquisition cost of tanks, the construction or acquisitions costs of fuel depots, or the construction or acquisition costs of biodiesel manufacturing facilities.

Funding Assistance Program Tasks
Timeline
Application Submissions
March 17-April 28
EPA Evaluations April
Project Review and Award
May
Project Implementation
June 9, 2009-Sept. 30, 2010 (can get a no-cost extension)
Note: Any funding not utilized by this program will revert to the National Funding Assistance Program.

 

SmartWay Clean Diesel Finance Program

The SmartWay Clean Diesel Finance Program receives $30 million. It is a competitive grant program intended to establish innovative finance mechanisms or loans which have better than market terms (e.g., lower interest rates, lower closing costs, greater loan approval rates, etc.).  EPA headquarters will conduct the competition and manage the grants. Everything else is the same as the national competition: same eligible entities, same eligible vehicles and equipment, and same priority projects.

Examples of innovative finance projects include a revolving loan fund, which are loan funds to diesel fleet owners to install idle reduction controls (at a lower interest rate or 0%). Repaid loan funds are then loaned again to more fleet owners.

SmartWay Clean Diesel Finance Program Tasks
Timeline
Application Submissions
March 17-April 27 (deadline not confirmed)
EPA Evaluations April
Project Review and Award
May
Project Implementation
June 9, 2009-Sept. 30, 2010 (will likely be extended as long as possible)
Note: Any funding not utilized by this program will revert to the National Funding Assistance Program.

 

Clean Diesel Emerging Technologies Program

The Clean Diesel Emerging Technologies Program receives $20 million. It is a competitive grant program for projects that will use technologies not yet verified and/or commercialized but on EPA’s Emerging Technology List. The program does not cover research and development costs. Only eligible entities can apply.

Manufacturers should partner with an eligible entity. Manufacturers must be on EPA’s emerging technologies list prior to the closing date. To get on this list, manufacturers must work with EPA to apply for verification and develop a test plan for evaluating their technology. (visit www.epa.gov/cleandiesel and select "Emerging Technologies")

Emerging Technologies Program Tasks
Timeline
Application Submissions
March 17-late April (deadline not confirmed)
EPA Evaluations May
Project Review and Award
May
Project Implementation
June 16, 2009-Sept. 30, 2010 (will likely be extended as long as possible)
Note: Any funding not utilized by this program will revert to the National Funding Assistance Program.

 

DERA State Component

The state component is allocated 30 percent or $88 million. It is a non-competitive allocation grant program for States. States are to use the funds to develop and implement grant and low-cost revolving loan programs to meet state goals relating to the reduction of diesel emissions. States can subgrant or subaward funds. Funding may go to federal, local, and/or state mandated retrofits under state program.

If all 50 states and D.C. apply for funds, each grant would be $1.73 million. Otherwise the DERA allocation population formula will apply. Under ARRA, matching incentive provision is removed under the stimulus. States can use up to 15 percent for program administration (travel, personnel, etc.). States must establish new grants with this funding. The timing of project implementation is critical and must occur quickly. Leftover funding reverts back to the national program.

State Program Tasks
Timeline
Notice of intent to apply sent out to states via e-mail Feb. 26, 2009
Work plan template and program information sent out to states by region (provided by EPA OTAQ)
Feb. 27, 2009
Notice of intent due back to EPA OTAQ
March 6, 2009
EPA OTAQ calculates final amounts for states and sends to regions; regions send funding amounts to states
March 11, 2009
Work plan, SF424, SF424A, and other required forms sent back to EPA regions
March 20, 2009
Award state grants
By April 17, 2009
Grant project and budget period
April 20, 2009-Sept. 30, 2010
Note: Any funding not utilized by this program will revert to the National Funding Assistance Program.
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