EPA-OAR-OTAQ-26-01.pdf

Notice of Funding Opportunity

Applications Due: Friday, January 22, 2027

Office of Air and Radiation

2026 Diesel Emissions Reduction Act (DERA) National Program

Funding Opportunity Number: EPA-OAR-OTAQ-26-01

EPA-420-B-26-034

September 2026 i

Contents

1. Basic Information

A. Executive Summary B. Key Information:

C. Key Dates:

D. Funding Details:

E. Agency Contact Information:

F. Information Sessions G. Question and Answer Process

2. Eligibility

A. Eligible Applicants

(1) Other Eligibility Requirements

B. Cost Sharing

3. Program Description

A. Purpose, Priorities, and Activities

(1) Diesel Emissions Reduction Solutions

(2) Outputs and Outcomes

(3) Performance Measures

B. Program Goals and Objectives C. Statutory Authority D. Funding Type

4. Application Contents and Format

A. Application Forms B. Project Narrative Description

(1) Cover Page:

(2) Workplan:

(3) Required Attachments (not included in 14-page limit) – use “Other Attachments” form to submit

(4) Optional Attachments

C. Applicants Using Contractors D. Coalition Coverage

5. Submission Requirements and Deadlines

A. Submission Dates and Times B. Unique Entity Identifier (UEI) and System for Award Management (SAM.gov) C. Submission Instructions D. Technical Issues with Submission E. Intergovernmental Review

6. Application Review Information

A. Responsiveness Review ii

B. Review Criteria C. Review and Selection Process

(1) Other Evaluation Factors

D. Risk Review

7. Award Notices

8. Post-Award Requirements and Administration

A. Administrative and National Policy Requirements B. Reporting C. Subaward and Executive Compensation Reporting D. Post Award Project Requirements

9. Other Information

A. Additional Provisions for Applicants B. Further information Regarding Contracts, Subawards, Participant Support Costs

1. Basic Information U.S. Environmental Protection Agency

Office of Air and Radiation

2026 Diesel Emissions Reduction Act (DERA) National Program https://www.epa.gov/dera/national

A. Executive Summary This Notice of Funding Opportunity (NOFO) announces the availability of funds under the Diesel Emissions Reduction Act (DERA) Program and solicits applications from eligible entities to incentivize and accelerate the upgrade or retirement of the nation’s legacy diesel engine fleet. Eligible activities include the retrofit or replacement of existing diesel engines, vehicles, and equipment with the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) certified or verified technologies.

There are several ways DERA recipients may implement projects and fund project partners, depending on the roles and responsibilities of each. If the applicant is the owner of the target vehicles, the applicant may directly implement the project. If the applicant is partnering with diesel fleet owners, the applicant may award subawards or participant support costs (e.g., rebates). Please refer to Section 9.B. for detailed guidance on funding partnerships.

After an extensive review of the program, the EPA revamped DERA requirements to ensure alignment with the Administration’s priorities, improve the quality of projects funded, expand the availability of technology choices, and respond to stakeholder requests for a simplified program structure. Consistent with agency grants direction, updates to 2 CFR §200.204 and DERA statutory requirements, this NOFO reflects these changes and inputs when compared to previous funding notice opportunities.

This NOFO is a competitive grant program. The DERA Program has another competitive funding opportunity, DERA Tribal and Territory Program, which funds similar activities but is only open to eligible Tribal and territory applicants. Competitive funding for school bus replacement is also available through the EPA’s Clean School Bus Program. The DERA Program also provides non-competitive funding to U.S.

States and territories through the DERA State Program.

C. Key Dates:

November 24, 2026 Final Date to Submit Questions

January 22, 2027 11:59 pm ET Application Submission Deadline

May 2027 Anticipated Notification of Selection

B. Key Information:

Opportunity Number:

EPA-OAR-OTAQ-26-01

Assistance Listing:

66.039

Announcement Type:

Initial

Funding Available:

Approximately $180 million

Number of Awards:

4-12 awards per EPA Region https://www.epa.gov/dera/national https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-C/section-200.204 https://www.epa.gov/dera/tribal-and-territory https://www.epa.gov/cleanschoolbus https://www.epa.gov/dera/state

July 2027 Anticipated Award Notification

D. Funding Details:

The amount of funding is expected to be $180,000,000, depending on agency funding levels, the quality of applications received, agency priorities, and other applicable considerations. It is anticipated that 4-12 awards per EPA Region will be made under this announcement. Awards funded under this opportunity are expected to have a 2-4 year project period.

Under this announcement the EPA is combining approximately $65 million in FY 2024 funding; $62 million in FY 2025 funding; and $53 million in FY 2026 funding into one competition for a total of approximately $180 million of available funding. Amount of potential funding according to applicant region can be found in Section 2.A.(1).1.

Expenses Incurred Prior to the Project Period: Funding awarded under this NOFO cannot be used to cover expenses incurred prior to the award date, except for eligible pre-award costs as defined in 2 CFR §200.458 and as authorized by 2 CFR §200.309 and 2 CFR §1500.9.

E. Agency Contact Information:

Further information, if needed, may be obtained from the EPA contact indicated below.

Program Contact: dera@epa.gov

F. Information Sessions The EPA will host three information sessions regarding this NOFO via teleconference/webinar, based on the schedule listed on the DERA National website. The EPA encourages potential applicants to take advantage of these information sessions to learn more about the DERA Program and the grant application process. Participants will have the opportunity to have their questions answered by the EPA in a public forum. The EPA will attempt to answer any appropriate questions in these public forums. Pre-registration is not required. Webinar links and dial-in information for the information sessions can be found on the DERA National website.

Questions and answers from these information sessions will also be posted in the question and answers document located on the DERA National website.

G. Question and Answer Process Send written questions to dera@epa.gov with the subject line “DERA National NOFO Question.”

• The EPA will answer questions about threshold eligibility, application submission/administrative issues, and clarification of NOFO language.

• EPA will post answers to all emailed questions in the online FAQ. Information from other sources may be inaccurate.

• Deadlines: Email questions by Tuesday, November 24, 2026, 11:59 p.m. ET. The final FAQ update will be posted on Friday, January 8, 2026.

All applicants should review the question and answers document posted on the DERA National website for further clarification of this NOFO.

https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRed1f39f9b3d4e72/section-200.458 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRed1f39f9b3d4e72/section-200.458 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/section-200.309 https://www.ecfr.gov/current/title-2/section-1500.9 mailto:dera@epa.gov https://www.epa.gov/dera/national https://www.epa.gov/dera/national https://www.epa.gov/dera/national mailto:dera@epa.gov https://www.epa.gov/dera/national

2. Eligibility A. Eligible Applicants Only these types of organizations may apply:

• A regional, State (including the District of Columbia), local agency, Tribal agency, or port authority, which has jurisdiction over transportation or air quality. School districts, municipalities, metropolitan planning organizations (MPOs), cities, and counties are all generally eligible entities under this grant program to the extent that they fall within this definition.

• A non-profit organization or institution that:

o Represents or provides pollution reduction or educational services to people or organizations that own or operate diesel fleets; or o Has, as its principal purpose, the promotion of transportation or air quality.

Non-profit organization, as defined by 2 CFR §200.1, means any corporation, trust, association, cooperative, or other organization that: (1) is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest; (2) is not organized primarily for profit; and (3) uses its net proceeds to maintain, improve, or expand its operations.

Note that 2 CFR Part 200 specifically excludes the following types of organizations from the definition of “non-profit organization” because they are separately defined in the regulation: (1) Institutions of Higher Education; and (2) State, local, and federally recognized Indian Tribal governments. While not considered to be a “non-profit organization(s)” as defined by 2 CFR §200.1, Institutions of Higher Education are, nevertheless, eligible to submit applications under this NOFO to the extent they fall within the definition in the eligibility requirements above.

Hospitals operated by State, Tribal, or local governments or that meet the definition of nonprofit at 2 CFR §200.1 are also eligible to apply. For-profit colleges, universities, trade schools, and hospitals are not eligible to apply.

• Eligible Tribal agencies are defined as federally recognized Indian Tribal governments, which are any Indian Tribe, band, nation, or other organized group or community (including Alaska Native Villages) certified by the Secretary of the Interior as eligible for the special programs and services provided through the Bureau of Indian Affairs, as well as any organization or intertribal consortium that represents federally recognized Tribes.

• For the purposes of this NOFO, “intertribal consortium” is defined as a partnership between two or more eligible Tribal agencies as defined above, that is authorized by the governing bodies of those Tribes to apply for and receive assistance under this program. Intertribal consortia are eligible to receive assistance under this program only if the consortium demonstrates that all members of the consortium meet the eligibility requirements for the program and authorize the consortium to apply for and receive assistance by submitting to the EPA documentation of (1) the existence of the partnership between Indian Tribal governments, and (2) authorization of the consortium by all its members to apply for and receive the assistance.

• For-profit organizations are not an eligible entity for this funding opportunity. Additionally, non-profit organizations described in Section 501(c)(4) of the Internal Revenue Code that engage in lobbying activities as defined in Section 3 of the Lobbying Disclosure Act of 1995 are not eligible to apply.

https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-A/subject-group-ECFR2a6a0087862fd2c/section-200.1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-A/subject-group-ECFR2a6a0087862fd2c/section-200.1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-A/subject-group-ECFR2a6a0087862fd2c/section-200.1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-A/subject-group-ECFR2a6a0087862fd2c/section-200.1 https://www.irs.gov/charities-non-profits/other-non-profits/types-of-organizations-exempt-under-section-501c4 https://lobbyingdisclosure.house.gov/lda.html

(1) Other Eligibility Requirements

Applications must meet the following additional criteria to be considered eligible.

1. Funding Request Limits: Applications must not request more than the regional funding cap in individual applications which request EPA grant funds above the applicable regional amounts specified in Section 1.D. (refer to Table 1). Applications over the cap are ineligible and will not be reviewed.

Each application must request funds from only one EPA regional office, based on the project location (where the affected vehicles/engines operate). Refer to the regional boundaries below.

For applications with long distance fleets, pick the single region that best fits (e.g., where the fleet is based or operates most) and briefly explain why.

Each application must clearly identify the chosen EPA region on the cover page of the Project Narrative.

A map showing Regional Collaboratives and EPA Regions is available on the EPA website.

Table 1: EPA Regional Funding Allocations

2. Substantial Compliance: Applications that do not substantially comply with the application submission instructions and requirements set forth in Section 4 of this funding opportunity will be rejected.

3. Application Submission Limit: Under this funding opportunity, applicants may submit up to two applications per EPA region, not exceeding 10 total applications. The EPA will accept the most recent applications submitted (regardless of region), up to the permitted amount.

4. Multiple Application Submission: If the applicant submits multiple applications, each application must include a different project(s) and must be submitted separately. Applicants cannot include the same project(s) in multiple applications. For example, an applicant cannot list the same piece of equipment in an application to both EPA Regions 1 and 2.

If an applicant submits more than one application that requests funding for projects that appear the same, the EPA will contact the applicant before reviewing the applications to confirm

Region Total Anticipated Funding per Region

Maximum Federal Funding Request per Application

1 $8,200,000 $3,000,000 2 $18,300,000 $4,000,000 3 $18,300,000 $5,000,000 4 $17,800,000 $4,000,000 5 $18,200,000 $8,000,000 6 $24,400,000 $3,500,000 7 $11,200,000 $5,600,000 8 $12,100,000 $3,500,000 9 $42,600,000 $12,000,000

10 $8,900,000 $4,500,000

TOTAL $180,000,000

https://www.epa.gov/dera/regional-collaboratives-epa-regions whether the projects are the same. If they are, the EPA will ask the applicant to identify which application(s) should be withdrawn from consideration. If the applicant does not respond in a timely manner to either EPA request, the EPA will review only the last timely submitted application.

5. Multiple Regions: Applicants cannot include multiple regions in a single application.

6. Eligible Projects: Applications must include one or more eligible projects listed in Section 3.A.

Eligible project costs include those costs directly related to the implementation, management, and oversight of the project, including but not limited to: recipient and subrecipient personnel and benefits; equipment; scrappage; contractual; travel; supplies; subgrants and rebates; and indirect costs.

7. Ineligible Content: Any ineligible projects, activities, or costs will be excluded and may render the entire application ineligible, depending on how integral they are.

Ineligible costs include:

a. Leasing: Funding under this NOFO cannot be used for leasing vehicles, engines, or equipment.

b. More information concerning specific ineligible equipment activities can be found in Section 3.A.

B. Cost Sharing Any form of cost share, mandatory or voluntary, must be included in the budget detail portion of the project narrative, and the application must describe how and when the applicant will obtain the cost share and how the cost share funding will be used. Applicants may use their own funds or other sources for cost share if the standards of 2 CFR Part 200 are met. If the proposed cost share is to be provided by a named project partner, a partnership letter demonstrating the specified financial commitment is required in the application. Only eligible and allowable costs may be used for cost share.

Applicants must demonstrate in their proposal how they will meet the cost share requirement to be considered eligible. Selected recipients must comply with 2 CFR §200.306 when meeting a cost share requirement. The EPA has developed an optional cost share calculator tool to assist in determining mandatory cost share requirements, which can be found on the DERA National website.

1. Mandatory Cost Share Requirement: Projects are subject to the funding limitations and mandatory cost share requirements shown below in Table 2. Cost Share Requirements.

Applications that do not demonstrate compliance with the mandatory cost share are not eligible and will not be reviewed.

• Mandatory Costs & SF-424/A: Applications that include projects with mandatory cost share requirements must demonstrate on the Standard Form 424 (SF-424) Application for Federal Assistance, on the SF-424A Budget Information for Non-Construction Programs, and in the project narrative how the applicant will be able to meet these minimum mandatory cost share requirements if they are selected for an award, or the application may be disqualified during the threshold eligibility review. Specifically, the application must indicate the mandatory cost share funds in the block in Section 15 Estimated Funding on the SF-424. The mandatory cost share funds must also be https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1 https://www.ecfr.gov/current/title-2/section-200.306 indicated on the SF-424A in Section A Column (f), Section B columns (2), (3), or (4), and Section C.

• Environmental Mitigation Funds: Please note, DERA funds may not be used to meet mandatory cost sharing requirements for projects funded with environmental mitigation funds resulting from federal settlements (e.g., Volkswagen Environmental Mitigation Trust). Furthermore, federal environmental mitigation funds may not be used to meet non-federal mandatory cost share requirements of any DERA grant.

• Territories: The Omnibus Territories Act, 48 U.S.C. Section 1469a waives any mandatory cost sharing requirements under $200,000 for the U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands.

Eligible territory applicants with applications that will require a cost share of $200,000 or more are advised to contact dera@epa.gov to determine if cost share requirements will be waived in whole or in part.

2. Voluntary Cost Sharing: Voluntary cost sharing is when an applicant voluntarily proposes to legally commit to providing costs or contributions to support the project when a cost share is not required. Voluntary committed cost sharing is a binding requirement of a Federal award.

Applicants who propose to use a voluntary cost share must include the costs or contributions for the voluntary cost share in the project budget on the SF-424 and SF-424A. Applicants will not be evaluated on the inclusion of voluntary committed cost share if they choose to propose it.

If an applicant proposes a voluntary cost share, the following applies:

• A voluntary cost share is subject to the applicable provisions in the grant regulations of 2 CFR §200.306, Cost sharing or matching.

• A voluntary cost share may only be met with eligible and allowable costs.

• The recipient may not use other sources of federal funds to meet a voluntary cost share unless the statute authorizing the other federal funding provides that the federal funds may be used to meet a cost share requirement on a federal grant or cooperative agreement.

The recipient is legally obligated to meet any proposed voluntary cost share that is included in the approved project budget. If the proposed voluntary cost share does not materialize during the performance period of the grant or cooperative agreement, the EPA may reconsider the legitimacy of the award and/or take other appropriate action as authorized by 2 CFR Part 200.

3. Federal Matching Funds: Funding under this NOFO cannot be included as a cost or used to meet cost sharing or matching requirements of any other federally financed grant, as required under 2 CFR §200.306(b)(5) and 2 CFR §200.403(f). This includes funds received under the EPA’s DERA State Program and Federal Supplemental Environmental Project funds.

Table 2: Cost Share Requirements Eligible Technologies EPA Funding Limit Recipient

Cost Share Highway Vehicle Replacement with certified engine meeting:

0.20-0.11 g NOx/bhp-hr emission limit1 25% 75%

1 0.20 g NOx/bhp-hr is from the EPA’s heavy-duty engines standard at 40 CFR 86.007-11(a)(1)(i)(A).

https://uscode.house.gov/view.xhtml?req=(title:48%20section:1469a%20edition:prelim) mailto:dera@epa.gov https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/section-200.306 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/section-200.306 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200?toc=1 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/section-200.306 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-D/section-200.306 https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRea20080eff2ea53/section-200.403 https://www.ecfr.gov/current/title-40/chapter-I/subchapter-C/part-86/subpart-A/section-86.007-11

Eligible Technologies EPA Funding Limit Recipient Cost Share

0.10-0.036 g NOx/bhp-hr emission limit2 35% 65%

0.035 g NOx/bhp-hr or lower emission limit3 45% 55% Highway Engine Replacement with certified engine meeting:

0.20-0.11 g NOx/bhp-hr emission limit 40% 60% 0.10-0.036 g NOx/bhp-hr emission limit 50% 50%

0.035 g NOx/bhp-hr or lower emission limit 60% 40% Nonroad/Locomotive/Marine Replacement Nonroad equipment, locomotive or vessel replacement with certified engine 25% 75%

Engine replacement with certified engine or zero emission power source 35% 65%

Nonroad, with unregulated or Tier 1 engine, equipment replacement with current (Tier 4) certified engine or zero emission power source

40% 60%

EPA certified remanufacture systems 80% 20% Idle Reduction EPA Verified Highway Vehicle Idle Reduction Technologies when combined with new or previously installed exhaust after-treatment retrofit

100% 0%

EPA Verified Locomotive Idle Reduction Technologies 40% 60% EPA Verified Electrified Parking Space Technologies 30% 70% EPA Verified Highway Idle Reduction Technologies without new exhaust after-treatment retrofit 25% 75%

EPA Verified Marine shore connection systems 25% 75% Verified Retrofit Technologies EPA or CARB Verified Exhaust After-treatment Retrofits 100% 0% EPA Verified Engine Upgrade Retrofits 100% 0% EPA Verified Aerodynamics and Low Rolling Resistance Tires when combined with new exhaust after-treatment retrofit 100% 0%

EPA Verified Hybrid Retrofit Systems 60% 40% Alternative Fuel Conversion 40% 60%

EPA Verified Fuel and Additive Retrofits when combined with new retrofit, upgrade, or replacement

Cost differential between conventional diesel fuel

0%

Identifying emissions to determine eligibility: NOx emissions for highway engines and vehicles should be estimated at the time of application by identifying the NOx standard an engine was certified to. An authorized dealer may be able to provide this information. Otherwise, it can be located in either an

2 0.10 g NOx/bhp-hr is the highest of three NOx emission limits an original equipment manufacturer (OEM) could certify an engine to under CARB’s Optional Low NOx rule. These rules have essentially been superseded since model year 2024.

3 0.035 g NOx/bhp-hr is from the EPA’s heavy-duty 2027 rule (“HD27”) at 40 CFR 1036.104(a)(1) https://www.ecfr.gov/current/title-40/chapter-I/subchapter-U/part-1036/subpart-B/section-1036.104 issued CARB Executive Order or by locating the engine in the EPA’s certification data table following the instructions below.

1. Navigate to the EPA’s Annual Certification Data website.

2. Download the most recent Heavy-Duty Highway Gasoline and Diesel Certification Data.

3. On the “Family Info” tab, locate the vehicle’s EPA engine family name in the “Engine Family” column by searching using CTRL+f.

4. Determine the correct row by locating “Nitrogen Oxides” in the “Pollutant name” column.

5. If a value is listed in the “Transient FEL” column, that is the engine’s applicable NOx emission standard. If no value is listed in that column, the applicable standard is in the “Transient Standard” column.

Applicants will need to know the engine installed in a highway vehicle to be able to determine the applicable NOx emission standard for the new highway vehicle. If uncertain of a highway engine’s EPA engine family name, the EPA recommends speaking with an authorized dealer of the vehicle or engine that is being applied for. Applicants are also able to find an EPA engine’s family name using the EPA’s interactive certificate data report on its annual certification data website by searching for it using the engine’s model name. Prior model year engines or vehicles may be used at the time of application to provide an estimate of the NOx emissions from the engine or vehicle that will be purchased after selection.

Applicants who do not identify a projected EPA engine family name at the time of application will only be able to apply for the lowest cost share for their highway project, as listed in Table 2. For more detailed instructions, reference the guidance on identifying a certified highway engine’s certified Nitrogen Oxides (NOx) emissions limit on the DERA National website.

3. Program Description A. Purpose, Priorities, and Activities

(1) Diesel Emissions Reduction Solutions

The EPA is seeking applications that propose projects that upgrade existing eligible diesel vehicles and equipment using the diesel emissions reduction solutions defined in Table 4. Any ineligible costs, tasks, or activities included in an application will render that portion ineligible for funding and may disqualify the entire application, depending on the extent to which the ineligible costs impact the application.

1. Diesel Vehicles, Engines, and Equipment: Projects may include in-use medium- and heavy-duty diesel-powered highway vehicles and diesel-powered nonroad equipment, as defined below in Table 3.

Table 3: Eligible Diesel Vehicles, Engines, and Equipment School Buses A “school bus” is defined as a diesel-powered passenger motor vehicle designed to carry a driver and more than 10 passengers, that the Secretary of Transportation decides is likely to be used significantly to transport preprimary, primary, and secondary school students to or from school or an event related to school.

Transit Buses Includes diesel-powered medium-duty and heavy-duty transit buses (refer to the definition of eligible Class 5-8 vehicles below).

https://ww2.arb.ca.gov/applications/new-vehicle-and-engine-certification-executive-orders-compression-ignition-and-heavy-0 https://www.epa.gov/compliance-and-fuel-economy-data/annual-certification-data-vehicles-engines-and-equipment#Ct https://www.epa.gov/compliance-and-fuel-economy-data/annual-certification-data-vehicles-engines-and-equipment#Ct

Medium-Duty or Heavy-Duty Trucks

Includes diesel-powered medium-duty and heavy-duty highway vehicles with Gross Vehicle Weight Ratings (GVWRs) as defined below:

• Class 5 (16,001 -19,500 lb. GVWR);

• Class 6 (19,501 – 26,000 lb. GVWR);

• Class 7 (26,001 – 33,000 lb. GVWR);

• Class 8 (33,001 lb. GVWR and over).

Marine Engines Includes diesel-powered commercial Category 1, 2, and 3 marine engines and vessels.

Locomotives Includes diesel-powered line-haul, passenger, and switcher locomotives.

Nonroad Engines and Equipment

Diesel-powered nonroad engines and equipment including, but not limited to, those used in construction, handling of cargo (including at ports and airports), agriculture, mining, or energy production (including stationary generators and pumps).

2. Drayage Trucks: Eligible heavy-duty trucks include drayage trucks. A “drayage truck” means any Class 8 highway vehicle operating on or transgressing through port or intermodal rail yard property for the purpose of loading, unloading, or transporting cargo, such as containerized, bulk, or break-bulk goods. If an application for the replacement of drayage trucks is selected for funding, the grant recipient will be required to establish guidelines to ensure that any existing truck replaced with grant funds has a history of operating on a frequent basis over the prior year as a drayage truck, and to ensure any new truck purchased with grant funds is operated in a manner consistent with the definition of a drayage truck, as defined above. Sample drayage guidelines can be found on the DERA National website.

3. Transport Refrigeration Units: Eligible nonroad equipment includes transport refrigeration units (TRUs). Please refer to the Diesel Emissions Reduction Act transport refrigeration unit (TRU) factsheet found on the DERA National website for information on TRUs and eligible TRU projects.

4. Diesel Emission Reduction Solutions: Projects may upgrade existing diesel vehicles and equipment using the diesel emissions reduction solutions defined below in Table 4.

Table 4. Diesel Emission Reduction Solutions

Certified Vehicle and Equipment Replacements

Highway diesel vehicles and nonroad equipment, locomotives, and marine vessels can be replaced with newer, cleaner vehicles and equipment. Eligible replacement highway vehicles include those certified by the EPA or CARB to run on diesel or clean alternative fuel engines (including gasoline), electric generators (gensets), hybrid engines, and zero-emission power sources (i.e., grid, battery, or fuel cell). Eligible replacement nonroad equipment, locomotives, and marine vessels include those powered by EPA or CARB certified diesel or clean alternative fuel engines (including gasoline), electric generators (gensets), and hybrid engines. Nonroad equipment, locomotives, and marine vessels powered by zero-emission power sources (i.e., grid, battery, or fuel cell) do not require EPA or CARB certification.

Certified Engine Replacement

Highway diesel vehicles and nonroad equipment, locomotives, and marine vessels can have their engines replaced with newer, cleaner engines. Eligible replacement highway engines include those certified by the EPA or CARB for use with diesel or cleaner alternative fuels (including gasoline), electric generators (gensets), and hybrid engines. Eligible replacement nonroad, locomotive, and marine engines include those powered by EPA or CARB certified diesel or clean alternative fuel engines (including gasoline), electric generators (gensets), and hybrid engines. Nonroad equipment, locomotive, and marine vessel engine replacements with zero-emission power sources (i.e., grid, battery, or fuel cell) do not require EPA or CARB certification.

Certified Remanufacture Systems

Certified remanufacture systems are technologies for marine and locomotive engines, typically applied during engine rebuilds and involving the replacement of existing parts. Eligible certified manufacture systems’ projects result in an engine configuration that is a higher Tier than the original engine. Some locomotives and marine engines can be upgraded through the application of a certified remanufacture system (i.e., kit). Certified remanufacture systems may not be available for all engines, and not all certified remanufacture systems may achieve an emissions benefit. Applications for EPA certified remanufacture systems should include a discussion of the availability of a certified remanufacture system and indicate the pre- and post-project emissions standard level of the engines to demonstrate that the upgrade will result in a PM or NOx emissions benefit.

Verified Idle Reduction Technologies

An idle reduction project is generally defined as the installation of a technology or device that reduces unnecessary idling of diesel engines or is designed to provide services (such as heat, air conditioning, or electricity) to vehicles and equipment that would otherwise require the operation of the main or auxiliary engine(s) while the vehicle is temporarily parked or remains stationary. For an idle reduction technology to be considered verified, it must be a verified SmartWay Technology. EPA SmartWay verified technologies currently include options to reduce idling for school buses, TRUs, locomotives, marine vessels, and long-haul Class 8 trucks equipped with sleeper cabs.

Verified Retrofit Technologies

Diesel engine retrofits include engine exhaust after-treatment technologies, such as Diesel Oxidation Catalyst (DOC), Diesel Particulate Filter (DPF), Crankcase Ventilation (CCV), and Selective Catalytic Reduction (SCR) systems. For a retrofit technology to be considered verified it must be on the EPA’s Verified Technologies List for Clean Diesel or CARB’s similar list of Verified Diesel Emission Control Strategies. Manufacturer engine upgrades, which achieve specific levels of emission reductions by applying a package of components, have been verified as retrofits for some nonroad and marine engines. Several systems which convert a conventional diesel engine configuration to a hybrid-electric system have also been verified as retrofits for some nonroad and marine engines. Some cleaner fuels and additives have been verified as retrofits by the EPA or CARB to achieve emissions reductions when applied to an existing diesel engine. Older, heavy-duty diesel vehicles that will not be retired for several years are good candidates for verified retrofit technologies. The EPA suggests that applicants proposing to install verified retrofit technologies consult with suppliers to confirm that the proposed vehicles/engines and their duty-cycles are good candidates for the technology.

https://www.epa.gov/verified-diesel-tech/smartway-technology https://www.epa.gov/verified-diesel-tech/verified-technologies-list-clean-diesel https://www.epa.gov/verified-diesel-tech/verified-technologies-list-clean-diesel https://ww2.arb.ca.gov/diesel/verdev/vt/cvt.htm https://ww2.arb.ca.gov/diesel/verdev/vt/cvt.htm

Clean Alternative Fuel Conversions

Existing highway diesel engines can be altered to operate on alternative fuels such as propane and natural gas by applying a clean alternative fuel conversion kit.

Verified Aerodynamic Technologies and Low Rolling Resistance Tires

To improve fuel efficiency, long-haul Class 8 trucks can be equipped with verified aerodynamic devices or low rolling resistance (LRR) tires. To be considered verified, the aerodynamic device or low resistance tires must be on SmartWay’s Verified Lists for Aerodynamic Devices or LRR New and Retread Tire Technologies.

Table 5: Medium- and Heavy-Duty Truck, Transit Bus, and School Bus Project Eligibility

Current Engine Model

Year (EMY)

Verified Retrofit Technologies

Verified Idle

Reduction, Tires, or

Aero-dynamics

Vehicle or Engine

Replacement:

EMY 2024+

(2019+ for Drayage)

Zero- Emission4 or

Low-NOx

Vehicle or Engine

Replacement:

EMY 2024+

Clean Alternative

Fuel Conversion

DOC

CCV

DPF SCR

Older - 2006 Yes Yes Yes Yes Yes Yes Yes

2007 - 2009 No No Yes Yes6 Yes Yes Yes

2010 - newer No No No Yes6 No Yes Yes

Acronyms: DOC = Diesel Oxidation Catalyst; CCV = Closed Crankcase Ventilation; DPF = Diesel Particulate Filter; EMY = Engine Model Year; SCR = Selective Catalytic Reduction

Table 6: Nonroad Engine Project Eligibility

Current Engine Tier

Nonroad Equipment Replacement Verified Retrofit

Technologies Compression Ignition Spark

Ignition Zero-

Emission 7 Tier 0-2 Tier 3-4i Tier 4 Tier 2

Unregulated – Tier 2 No No Yes Yes Yes Yes Tier 3 No No Yes Yes Yes Yes Tier 4 No No No No Yes No

4 Eligible zero-emission projects utilizing fuel cell technology are limited to vehicle replacement projects for eligible transit buses, shuttle buses, and drayage trucks.

5 Engines are Low-NOx if they are certified to 0.10g NOx/bhp-hr or lower. Refer to the guidance on identifying a certified highway engine’s certified nitrogen oxides (NOx) emissions limit on the DERA National website 6 Auxiliary power units and generators are not eligible technologies for vehicles with EMY 2007 or newer.

7 Eligible zero emission projects utilizing fuel cell technology are limited to nonroad equipment replacements for eligible terminal tractors/yard hostlers, stationary generators, and forklifts.

https://www.epa.gov/verified-diesel-tech/smartway-verified-list-aerodynamic-devices https://www.epa.gov/verified-diesel-tech/smartway-verified-list-low-rolling-resistance-lrr-new-and-retread-tire https://www.epa.gov/verified-diesel-tech/smartway-verified-list-low-rolling-resistance-lrr-new-and-retread-tire

Current Engine Tier

Nonroad Engine Replacement Verified Engine

Upgrade Compression Ignition Spark

Ignition Zero-

Emission 8 Tier 0-2 Tier 3-4i Tier 4 Tier 2

Unregulated – Tier 2 No Yes9 Yes Yes Yes Yes

Tier 3 No No Yes Yes Yes Yes Tier 4 No No No No Yes No

Table 7: Marine Engine Project Eligibility

Engine Category

Engine Horse-power

Current Engine Tier

Engine & Vessel Replacement Certified Remanuf acture System10

Verified Engine

Upgrade

Compression Ignition Spark

Ignition

Zero- Emission

11 Tier 1- 2 Tier 3 Tier 4

C1, C2 <803 Unregulat ed – Tier 2 No Yes No12 Yes Yes Yes Yes

C1, C2 ≥804 Unregulat ed – Tier 2 No Yes13 Yes Yes Yes Yes Yes

C1, C2 <803 Tier 3 No No No9 Yes Yes No No

C1, C2 ≥804 Tier 3 No No Yes Yes Yes No No

C1, C2 ≥804 Tier 4 No No No No No No No

C3 All Unregulat ed – Tier 2 No Yes No9 No No No No

C3 All Tier 3 No No No9 No No No No

8 Engine replacement with a fuel cell technology is not eligible.

9 Tier 3 and Tier 4i engines may be used for engine replacement projects only with an approved best achievable technology analysis.

10 Some marine engine projects may be subject to the restriction on mandated measures, refer to Section 3.A.(1)13. above.

11 Zero emission projects utilizing fuel cell engine and vessel replacements are ineligible.

12 Tier 4 engines are not available for this type of engine.

13 Tier 3 engines may be used for engine replacement projects with an approved best achievable technology analysis. Over 803 horsepower (HP), Tier 3 engines are not eligible technologies for full vessel replacement projects.

Table 8: Locomotive Engine Project Eligibility

Current Locomotive Tier

Engine & Locomotive Replacement Verified Retrofit

Technologies

Idle- Reduction14 Technology

Certified Remanufacture

System15 Tier 0–2+ Tier 3 Tier 4 Zero-

Emission16 Unregulated -

Tier 2+ No Yes17 Yes Yes Yes Yes Yes

Tier 3 No No Yes Yes Yes Yes Yes

Tier 4 No No No No No Yes No

5. Best Achievable Technology (BAT): Please refer to the Diesel Emissions Reduction Act best achievable technology analysis guidance found on the DERA National website for more information on how to conduct a BAT analysis.

6. Ownership, Usage, and Remaining Life Requirements: To be eligible for funding, vehicles and equipment targeted for upgrades must meet certain ownership, usage, and remaining life requirements. Applicants should demonstrate in their application that all funded vehicles and equipment will meet the criteria defined below in a.– f.

If selected for funding, participating fleet owners must attest to each criterion in a.– f. in a signed eligibility statement which includes each vehicle make, model, year, vehicle identification number, odometer/usage meter reading, engine make, model, year, horsepower, engine ID or serial number, and vehicle/equipment registration/licensing number, and State. Grant recipients must submit this documentation as part of the award’s programmatic reporting to the EPA to verify the eligible use of grant funds. The DERA eligibility statement, also known as the burden statement for EPA form 5900-687, may be found on the DERA National website. The signed eligibility statement is not required at the time of application submittal.

a. Operational: The existing vehicle, engine, or equipment must be fully operational.

Operational equipment must be able to start, move, and have all necessary parts to be operational.

b. Ownership: The participating fleet owner must currently own and operate the existing vehicle or equipment and have owned and operated the vehicle or equipment during the two years prior to upgrade.

c. Remaining Life: The existing vehicle, engine, or equipment must have at least three years of remaining life when upgraded. Remaining life is the fleet owner’s estimate of its operational lifespan before retirement if the unit were not being upgraded or scrapped

14 Automatic engine start-stop technologies are only eligible to be installed on locomotives currently unregulated or certified to Tier 0, subject to the restriction on mandated measures.

15 Some locomotive engine projects may be subject to the restriction on mandated measures.

16 Zero emission projects utilizing fuel cell engine replacement are ineligible. However, zero emission fuel cell locomotive replacement projects are eligible for funding.

17 Tier 3 engines may only be used for an engine replacement project if Tier 4 engines are demonstrated to not be available or feasible through an approved best achievable technology analysis. Full locomotive replacement projects with Tier 3 locomotives are ineligible for funding.

because of the grant funding regardless of rebuilding or resale. This estimate considers the unit's age, condition, usage, and maintenance.

d. Highway Usage: The mileage of two or more units may be combined to reach the threshold below if those units are scrapped and replaced with a single unit.

i. To be eligible for funding, the existing certified highway engine/vehicle must have accumulated at least 7,000 miles/year during the two years prior to upgrade.

1) Exception: If an applicant can demonstrate that a certified highway engine/vehicle is being used in a predominately nonroad manner (e.g., firetrucks or utility trucks which require the vehicle’s engine to idle for long periods to power an auxiliary apparatus), engine operating hours as defined below in “nonroad usage” may be used for application eligibility purposes. If selected for award, the EPA will review and approve eligibility on a case-by-case basis.

e. Nonroad Usage: The engine operating hours of two or more units may be combined to reach the thresholds below if those units are scrapped and replaced with a single unit.

i. Agricultural Pumps: To be eligible for funding, nonroad agricultural pumps must operate at least 250 hours/year during the two years prior to upgrade.

ii. All Other Nonroad Engines: To be eligible for funding, nonroad engines should operate at least 500 hours/year during the two years prior to upgrade.

iii. Exception: If an applicant can demonstrate that a nonroad engine/piece of equipment is being used in a predominately highway manner, mileage as defined above in “highway usage” may be used for application eligibility purposes. If selected for award, the EPA will review and approve eligibility on a case-by-case basis.

f. Locomotive and Marine Usage: The engine operating hours of two or more units may be combined to reach the thresholds below if those units are scrapped and replaced with a single unit.

i. To be eligible for funding, the existing locomotive and marine engines must operate at least 1,000 hours/year during the two years prior to upgrade.

7. Vehicle and Equipment Costs:

a. Vehicles, Engines, and Equipment: Eligible project costs include the purchase price of eligible vehicles, engines and equipment as defined in Section 2.A.1. above.

b. Ineligible Expenses for All Zero-Emission Projects: Grant funds (including cost share) cannot be used for charging infrastructure; power distribution to the property line;

electricity; operation and maintenance of electrical systems; or stationary energy storage systems such as batteries and their installation. Similarly, these funds cannot be used for on-site power generation systems, like solar or wind power equipment, and their installation.

c. Vehicle and Equipment Replacement Projects:

i. Certification: Prior to being legal for sale in the United States, regulated mobile sources must be certified by the EPA (or CARB). This requirement to be certified applies to the following internal combustion mobile sources: highway vehicles and highway, nonroad, marine, and locomotive engines. The only type of zero-emission mobile technology requiring certification is zero-emission highway vehicles. There are no certification requirements for zero-emission nonroad, marine, and locomotive engines.

As a result of these regulatory requirements, to be eligible for DERA funding, all replacement highway vehicles must be certified by the EPA (or CARB) to meet applicable emission standards. This means for projects where the replacement highway vehicle is powered using an internal combustion engine, both the vehicle and the engine must have been certified. For projects where the replacement highway vehicle is powered by a zero-emission powertrain, only the vehicle must be certified.

Similarly, all projects involving the replacement of nonroad equipment, locomotives, or marine vessels must be powered by engines certified to meet EPA (or CARB) emission standards unless the engine on the replacement nonroad equipment, locomotive, or marine vessel is a zero-emission engine.

Certification data for highway vehicles and engines can be found on the EPA’s Annual Certification Data for Vehicles, Engines, and Equipment website. More information on the EPA’s engine emission standards for mobile sources may be found on the EPA’s All EPA Emission Standards website. Engines certified by the CARB may be found by searching the CARB’s Executive Orders for Heavy-duty Engines and Vehicles, found on CARB’s New Vehicle and Engine Certification website.

ii. To be eligible for funding, replacements must be of similar types, including similar gross vehicle weight rating or horsepower as the existing vehicle or equipment.

1) Nonroad/Locomotive/Marine Projects: Horsepower increases of more than 40% require specific approval by the EPA prior to purchase, and the applicant may be required to pay the additional costs associated with the higher horsepower equipment.

2) Highway Vehicles: The replacement vehicle must not be in a larger weight class than the existing vehicle. Exceptions may be granted for vocational purposes and require specific EPA approval prior to purchase.

iii. Replacement vehicles and equipment must continue to perform similar functions and operations of the existing vehicles and equipment.

iv. Replacement vehicles must resemble the replaced vehicle in form and function.

The cost of optional components or “add-ons” that significantly increase the cost of the vehicle may not be eligible for funding under the grant.

d. Grid Electric Powered Replacement Projects:

i. Grant funds cannot be used for the purchase and installation of certain equipment required for power delivery directly related to the replacement http://www.epa.gov/compliance-and-fuel-economy-data/annual-certification-data-vehicles-engines-and-equipment https://www.epa.gov/emission-standards-reference-guide/all-epa-emission-standards https://ww2.arb.ca.gov/applications/new-vehicle-and-engine-certification-executive-orders-compression-ignition-and-heavy-0 technology; design and engineering; electrical panels; upgrades to existing electrical panels or electrical service; and wiring/conduit.

e. Engine Replacement Projects:

i. To be eligible for funding, replacement highway, nonroad, marine, and locomotive engines must be certified to meet EPA or CARB emission standards, unless the replacement is a zero-emission powertrain. Please reference the EPA’s Annual Certification Data for Vehicles, Engines, and Equipment, the EPA’s mobile source Emission Standards, and the CARB’s Executive Orders for Heavy-duty Engines and Vehicles.

ii. Eligible costs include equipment and parts included in the certified engine configuration that are necessary to ensure the effective installation and functioning of the new technology such as design and engineering, parts and materials, and installation.

iii. For engine replacement with battery, fuel cell, or grid electric, eligible costs include electric motors, electric inverters, battery assemblies, direct drive transmission/gearboxes, regenerative braking systems, vehicle control/central processing units, vehicle instrument clusters, hydrogen storage tanks, hydrogen management systems, and fuel cell stack assemblies.

iv. Funding under this NOFO cannot be used to replace cabins, axles, paint, brakes, or mufflers.

v. To be eligible for funding, the replacement engine must be of similar horsepower to the engine being replaced. Horsepower increases of more than 40% require specific approval by the EPA prior to purchase, and the applicant may be required to pay the additional costs associated with the higher horsepower equipment.

f. Certified Engine Remanufacture System Projects:

i. To be eligible for funding, remanufacture systems for locomotives and marine engines must be certified by the EPA at the time of acquisition. The list of certified remanufacture systems is available on the EPA’s Annual Certification Data for Vehicles, Engines, and Equipment website and additional information on marine engine remanufacture systems is available on the EPA’s Marine Remanufacturing Program: Maintaining Compliance when Rebuilding Category 1 and 2 Marine Diesel Engines website.

ii. Eligible costs include the associated labor costs for installation of the system.

iii. Funding under this NOFO cannot be used for the entire cost of an engine rebuild if a certified remanufacture system is applied at the time of rebuilding. The funds may only be used for the cost of the certified remanufacture system and associated labor costs for installation of the kit.

g. All Idle Reduction Projects:

i. Please refer to Table 2: Cost Share Requirements in Section 2.B. for the group of technologies considered idle reduction projects for the purpose of this NOFO.

ii. Eligible costs for idle reduction technologies that are installed on the vehicle can include the associated labor costs for installation of the…