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                                                                                            Updated March 17, 2020

The Diesel Emissions Reduction Act (DERA) Program


Emissions from diesel engines especially particulate
matter (PM), nitrogen oxides (NOx), sulfur oxides, and air
toxics have been shown to contribute to air pollution that
adversely impacts public health and welfare in the United
States. Since 1970, the Clean Air Act (42 U.S.C. §7401 et
seq.) has required the federal government to limit these
emissions, among others, from new stationary (industrial)
sources and new mobile sources. In the decades since, the
U.S. Environmental Protection Agency (EPA) has
promulgated emission standards for a variety of source
categories, including new heavy duty highway and nonroad
diesel engines.

EPA's most recent set of emission standards for newly
manufactured heavy duty highway and nonroad diesel
engines took effect in 2007 and 2008, respectively. At the
time, the standards required a 90% and 95% reduction in
emission levels for PM and NOx, respectively, over the
previous standards. However, because of the long
operational lives of diesel engines, millions of pre-2007
engines remain in use. According to EPA's estimates in
2016, 10 million pre-2007 diesel engines remain in use in
the United States, and 1 million of those engines could still
be in use in 2030. The Clean Air Act does not provide EPA
the authority to set new emission standards on existing, or
legacy, diesel engines. To address concerns over legacy
diesel engines, EPA began a Voluntary Diesel Retrofit
Program in 2000 and a Clean School Bus Initiative in 2003,
among other programs.

Congress enacted the Diesel Emissions Reduction
program in the Energy Policy Act of 2005 (EPAct 2005,
P.L. 109-58, Title VII, Subtitle G §§791-797; 42 U.S.C.
§§16131-16137). It authorized EPA to administer a national
and state-level grant and loan program to promote
emissions reductions from legacy diesel engines. Through
the Diesel Emissions Reduction program (as amended),
EPA has provided loans, grants, and rebates to projects that
use certified engine configurations and verified
technologies, or that develop and commercialize emerging
technologies, in order to replace legacy diesel engines.


EPAct 2005 authorized $200 million annually for FY2007-
FY2011 for the Diesel Emissions Reduction program. Of
the funds appropriated, 70% were to be used for national
competitive grants and low-cost loans administered by
EPA, and 30% were to support loan and grant programs
administered by states. Of the funds administered by EPA,
the majority was to be provided for the benefit of public
fleets, with not less than 90% going to projects using a
certified engine configuration or verified technology and
not more than 10% for the development and
commercialization of emerging technologies. Of the funds
administered by the states, a portion was to be allocated in


equal shares to each state if all 50 states qualified. If fewer
than 50 states qualified, the remaining funds were to be
allocated among the qualifying states proportionally based
on their population.

Under EPAct 2005, EPA was to prioritize projects that
(1) maximize public health benefits; (2) are cost-effective;
(3) serve areas with the highest population density and the
poorest air quality; (4) include a certified engine
configuration, verified technology, or emerging technology
that has a long expected useful life; (5) maximize the
engine's expected useful life; (6) conserve diesel fuel; and
(7) use diesel fuel with a sulfur content of 15 parts per
million or less.

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The Diesel Emissions Reduction Act (DERA) of 2010 (P.L.
111-364) amended EPAct 2005 to reauthorize funding
through FY2016 and modify provisions related to the
program. DERA 2010 defined state to include the District
of Columbia and the U.S. territories. The act authorized
EPA to offer rebates in addition to grants and loans to
eligible entities, including any private individual or entity
that owns a diesel vehicle or fleet. The distribution of funds
was revised to provide not less than 95% of funds to
projects using a certified engine configuration or verified
technology and not more than 5% of funds for development
and commercialization of emerging technologies. Under the
act, EPA was to develop a simplified application process to
expedite provision of funds, taking into consideration
special circumstances affecting small fleet owners. The act
expanded the priority given to applications that serve areas
receiving a disproportionate quantity of air pollution from
diesel fleets to include construction sites and schools in
addition to truck stops, ports, rail yards, terminals, and
distribution centers.


EPA's National Clean Diesel Campaign within the Office
of Transportation and Air Quality administers the DERA
program. In its DERA Fourth Report to Congress (July
2019), EPA reports that it awarded more than $629.0
million between FY2008 and FY2016 to retrofit or replace
67,300 engines in vehicles, vessels, locomotives, and other
equipment. EPA estimates that the program has resulted in
the reduction of emissions of NOx by 474,700 tons, PM by
15,490 tons, and hydrocarbons by 17,700 tons over the
lifetime of the affected engines. Further, EPA estimates the
total present value of monetized health benefits over the
lifetime of the affected engines as $19.0 billion, including
up to 2,300 fewer premature deaths. EPA reports that since
the inception of the program, DERA funding requests have
exceeded availability by as much as 35:1 for the rebate
program and 7:1 for the national grant competition.


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