U.S. Environmental Protection Agency Diesel Emission Reduction Program

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1 U.S. Environmental Protection Agency Diesel Emission Reduction Program F a y e S w i f t D E R A G r a n t s & Po l i c y Te a m L e a d e r O f f i c e o f Tr a n s p o r t a t i o n a n d A i r Q u a l i t y O c t o b e r

2 Diesel Emissions Reduction Act DERA originally authorized under the Energy Policy Act of 2005 with bipartisan support Amended and reauthorized by the Diesel Emissions Reduction Act of 2010 (Public Law ) with unanimous bipartisan support Provides project funding, on a competitive basis, to eligible entities, to achieve significant reductions in diesel emissions in terms of pollution produced and diesel emissions exposure, particularly from fleets operating in areas designated by the Administrator as poor air quality areas 10/18/2018 2

3 How can DERA help upgrade your fleet? Projects may include heavy-duty diesel powered: Buses Class 5 8 Medium-Duty or Heavy-Duty Trucks; Marine Engines; Locomotives; and Nonroad Engines, Equipment or Vehicles used in: Construction; Handling of Cargo (including at a port or airport); Agriculture; Mining; or Energy Production (including Stationary Generators and Pumps) 10/18/2018 3

4 How can DERA help you reduce emissions? Exhaust Control Technologies 100% Diesel Oxidation Catalysts, Diesel Particulate Filters Engine Upgrades and Remanufacture Systems 40% Nonroad, Locomotive, or Marine Engines Verified Cleaner Fuels and Additives cost differential Biodiesel Idle Reduction Technologies Auxiliary Power Units, Fuel Operated Heaters, etc. 25% Locomotive Idle Reduction 40% Marine Shore Power Connection Systems 25% Electrified Parking Spaces 30% Aerodynamic Technologies & Low Rolling Resistance Tires 100% Trailer side skirts, trailer gap fairings, trailer rear fairings, dual tires and single-wide tires Must be bundled with retrofit 10/18/2018 4

5 How can DERA help you reduce emissions? Engine Replacement 40% - diesel, alternative fuel, hybrid 50% - CARB Optional Low-NOx 60% - Zero Emission Vehicle/Equipment Replacement 25% - diesel, alternative fuel, hybrid 35% - CARB Optional Low-NOx 45% - Zero Emission 50% - Drayage Truck Replacement Clean Alternative Fuel Conversion 40% Eligible certified or compliant clean alternative fuel conversions 10/18/2018 5

6 DERA Appropriation 30% State Program (Formula Grants) 70% National Program (Competitive Grants and Rebates) National RFP Tribal RFP Rebate Programs 10/18/2018 6

7 $300 $250 $200 DERA Funding By Fiscal Year in Millions DERA funding total: $803 million Number of awards to date: 1370 $150 $100 $50 $ ARRA /18/2018 7

8 DERA Funding by Program [CATEGORY NAME] $15M [CATEGORY NAME] $[VALUE]M $60M Appropriation [CATEGORY NAME] $34M [CATEGORY NAME] [CATEGORY $8M NAME] $1.5M [CATEGORY NAME] $42M [CATEGORY NAME] [CATEGORY $[VALUE]M NAME] $[VALUE]M $75M Appropriation 10/18/2018 8

9 2019 DERA Funding 2019 National Competitive Grants Open December 2018 February State Program Grants Awards made October 1, School Bus Rebate Program Opens Fall Program Open NOW! Tribal Competitive Grants Opens Fall Program Open NOW! Deadline to Apply is April 3, /18/2018 9

10 School Bus Rebate Program 1. Simple, one-page application for public and private school bus fleets to request funding to replace old, dirty diesel school buses with new, significantly cleaner, diesel and alt-fuel school buses 2. Lottery selection process 3. Fleets are reimbursed $15-20k per bus after providing proof of delivery of new buses and scrappage of old buses 10/18/

11 School Bus Rebate Program FY FY Rebates o 546 applications requesting $47 million o 138 fleets selected for $8.2 million to replace 441 buses Rebates o NOW OPEN! o Deadline to apply is Tuesday, October 30, 2018 Millionen $80 $70 $60 $50 $40 $30 $20 $10 $0 Rebate Funds Awarded and Requested $71,0 Awarded Requested $52,3 $46,6 $44,3 $32,6 $6,0 $7,2 $8,2 $3,9 $1, /18/

12 2017 School Bus Rebate Applicants and Selectees Applicants (by # of applicants) Selectees (by # of buses) 10/18/

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14 VW Environmental Mitigation Trust o Beneficiaries may use trust funds as voluntary matching funds on DERA State and Tribal grants (the "DERA Option"). o As part of the settlement, VW will provide ~$3 billion for 2.0 and 3.0 liter violating vehicles to an Environmental Mitigation Trust. o Funds from the trust will be used to remediate the excess NOx emissions from the illegal vehicles. o Beneficiaries must fund projects from a list of Eligible Mitigation Activities. These projects include funding for the replacement and/or upgrade of heavy and medium-duty trucks and buses, freight switcher locomotives, ferries and tugs, ocean going vessel shorepower, airport ground support equipment, cargo handling equipment, light duty charging infrastructure, and "the DERA Option." o Wilmington Trust is the Trustee. 10/18/

15 VW Environmental Mitigation Trust o Trust Effective Date -- October 2, 2017 o All states, DC, Puerto Rico certified as beneficiaries. Some state mitigation plans now online. o State Beneficiaries must submit their Beneficiary Mitigation Plans and then can request trust funds o Twenty-seven tribes certified as beneficiaries during the first cycle of funding (tribes may certify in the remaining years) o States and tribes can use VW mitigation funds as matching funds on their DERA grants (called DERA Option ) o EPA s role is assistance with the DERA Option 10/18/

16 VW Environmental Mitigation Trust o Eligible Mitigation Actions 1-9 may be implemented directly by the beneficiary; eligibility determinations and funding requests under EMAs 1-9 will be handled by the beneficiary. o Many types of projects are eligible under both EMAs 1-9 and the DERA Option. However, there are some differences between the options in terms of project eligibility and funding limits for certain types of projects. o Under the DERA Option, states and tribes may use mitigation trust funds as their non-federal voluntary match under their DERA grant programs. This allows beneficiaries to use VW funds on projects, with EPA oversight, that would not otherwise be eligible under the EMAs. o Beneficiaries may split their Mitigation Trust Funds between EMAs 1-9 and the DERA Option as they choose. o Mitigation trust funds cannot be used to meet the non-federal mandatory cost-share requirements of any DERA grant. 10/18/