October 11, 2019
The Diesel Emissions Reduction Act (DERA) Program
Emissions from diesel engines—especially particulate
allocated in equal shares to each state, if all 50 states
matter (PM), nitrogen oxides (NOx), sulfur oxides, and air
qualified. If fewer than 50 states qualified, the remaining
toxics—have been shown to contribute to air pollution that
funds were to be allocated among the qualifying states
adversely impacts public health and welfare in the United
proportionally based on their population.
States. Since 1970, the Clean Air Act (CAA, 42 U.S.C.
§7401 et seq.) has required the federal government to limit
Under EPAct 2005, EPA was to prioritize projects that: (1)
these emissions, among others, from new stationary
maximize public health benefits; (2) are cost- effective; (3)
(industrial) sources and new mobile sources. In the decades
serve areas with the highest population density and the
since, the U.S. Environmental Protection Agency (EPA) has
poorest air quality; (4) include a certified engine
promulgated emission standards for a variety of source
configuration, verified technology, or emerging technology
categories, including new heavy duty highway and nonroad
that has a long expected useful life; (5) maximize the
diesel engines.
engine’s expected useful life; (6) conserve diesel fuel; and
(7) use diesel fuel with a sulfur content of 15 parts per
EPA’s most recent set of emission standards for newly
million (ppm) or less.
manufactured heavy duty highway and nonroad diesel
engines took effect in 2007 and 2008, respectively. At the
Diesel Emissions Reduction Act of 2010
time, the standards required a 90% and 95% reduction in
The Diesel Emissions Reduction Act (DERA) of 2010 (P.L.
emission levels for PM and NOx, respectively, over the
111-364) amended EPAct 2005 to reauthorize funding
previous standards. However, because of the long
through FY2016 and modify provisions related to the
operational lives of diesel engines, millions of pre-2007
program. DERA 2010 defined “state” to include the District
engines remain in use. According to EPA’s estimates in
of Columbia and the U.S. territories. The Act authorized
2016, 10 million pre-2007 diesel engines remain in use in
EPA to offer rebates in addition to grants and loans to
the United States and 1 million of those engines could still
eligible entities, including any private individual or entity
be in use in 2030. The CAA does not provide EPA the
that owns a diesel vehicle or fleet. The distribution of funds
authority to set new emission standards on existing, or
was revised to provide not less than 95% of funds to
“legacy,” diesel engines. To address concerns over legacy
projects using a certified engine configuration or verified
diesel engines, EPA began a Voluntary Diesel Retrofit
technology and not more than 5% of funds for development
Program in 2000 and a Clean School Bus Initiative in 2003,
and commercialization of emerging technologies. Under the
among other programs.
Act, EPA was to develop a simplified application process to
expedite provision of funds, taking into consideration
Congress enacted the “Diesel Emissions Reduction”
special circumstances affecting small fleet owners. The Act
program in the Energy Policy Act of 2005 (EPAct 2005,
expanded the priority given to applications that serve areas
P.L. 109-58, Title VII, Subtitle G §§791-797; 42 U.S.C.
receiving a disproportionate quantity of air pollution from
§§16131-16137). It authorized EPA to administer a national
diesel fleets to include construction sites and schools, in
and state level grant and loan program to promote
addition to truck stops, ports, rail yards, terminals, and
emissions reductions from legacy diesel engines. Through
distribution centers.
the Diesel Emissions Reduction program (as amended),
EPA has provided loans, grants, and rebates to projects that
DERA Program Implementation
use certified engine configurations and verified
EPA’s National Clean Diesel Campaign within the Office
technologies, or that develop and commercialize emerging
of Transportation and Air Quality administers the DERA
technologies, in order to replace legacy diesel engines.
program. In its DERA Fourth Report to Congress (July
2019), EPA reports that it awarded more than $629.0
Energy Policy Act of 2005
million between FY2008 and FY2016 to retrofit or replace
EPAct 2005 authorized $200 million annually for fiscal
67,300 engines in vehicles, vessels, locomotives, and other
year (FY) 2007 through FY2011 for the Diesel Emissions
equipment. EPA estimates the program has resulted in the
Reduction program. Of the funds appropriated, 70% were to
reduction of emissions of NOx by 474,700 tons, PM by
be used for national competitive grants and low-cost loans
15,490 tons, and hydrocarbons by 17,700 tons over the
administered by EPA, and 30% were to support loan and
lifetime of the affected engines. Further, EPA estimates the
grant programs administered by states. Of the funds
total present value of monetized health benefits over the
administered by EPA, the majority was to be provided for
lifetime of the affected engines as $19.0 billion, including
the benefit of public fleets, with not less than 90% going to
up to 2,300 fewer premature deaths. EPA reports that since
projects using a certified engine configuration or verified
the inception of the program, DERA funding requests have
technology, and not more than 10% for the development
exceeded availability by as much as 35:1 for the rebate
and commercialization of emerging technologies. Of the
program and 7:1 for the national grant competition.
funds administered by the states, a portion was to be
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link to page 2 link to page 2 The Diesel Emissions Reduction Act (DERA) Program
DERA Appropriations
As indicated in Table 1, following $60.0 million requested
Table 1 presents requested and enacted EPA appropriations
for FY2011, the Obama Administration proposed no
for the DERA program—adjusted and not adjusted for
funding for FY2012, citing limitations associated with
inflation (FY2018$)—for FY2007 through FY2020.
budget constraints. Reduced funding was requested for
Funding for DERA is provided within EPA’s State and
FY2013 and FY2014; no funding was requested for
Tribal Assistance Grants appropriations account.
FY2015. EPA’s 2015 Justification of Appropriation
Estimates for the Committee on Appropriations
stated
Table 1. DERA Appropriations:
“…while DERA accelerates the pace at which dirty engines
Requested and Enacted, FY2007-FY2020.
are retired or retrofitted, pollution emissions from the
($ mil ions; not adjusted and adjusted for inflation (FY2018$))
legacy fleet will be reduced over time without additional
DERA funding as portions of the fleet turnover and are
Requested
Enacted
replaced with new engines that meet modern emissions
Fiscal Year Not
Inflation
Not
Inflation
standards.”
Adjusted
Adjusted
Adjusted Adjusted
Government Accountability Office
2007
$49.50
$59.09
*
NA
DERA 2010 required the U.S. Comptroller General to
2008
$35.00
$40.93
$49.22
$57.57
conduct an audit of federal diesel emissions loan, grant, and
rebate programs. In its report Fragmented Federal
2009 **
$49.22
$56.91
$360.00
$416.23
Programs That Reduce Mobile Source Emissions Could Be
2010
$60.00
$68.78
$60.00
$68.78
Improved (GAO-12-261; February 2012), the U.S.
Government Accountability Office (GAO) responded by
2011
$60.00
$67.43
$49.90
$56.08
examining: “(1) the extent of duplication, overlap,
fragmentation, or gaps, if any, among federal grant, rebate,
2012
$0.00
$0.00
$29.95
$33.03
and loan programs that address mobile source diesel
2013
$15.00
$16.25
$18.91
$20.48
emissions; (2) the effectiveness of federal funding for
activities that reduce mobile source diesel emissions; and
2014
$6.00
$6.38
$20.00
$21.25
(3) the extent of collaboration among agencies to fund these
2015
$0.00
$0.00
$30.00
$31.49
activities.” GAO reported that “federal grant and loan
funding activities that reduce mobile source diesel
2016
$10.00
$10.40
$50.00
$52.01
emissions are fragmented across 14 programs at the
2017
$10.00
$10.22
$60.00
$61.30
Department of Energy, Department of Transportation, and
Environmental Protection Agency,” but was unable to
2018
$10.00
$10.00
$75.00
$75.00
determine whether “unnecessary duplication exists because
2019
$10.00
$9.80
$87.00
$85.27
of limited information on program administrative costs”
and whether the funding was effective “because agencies
2020
$10.00
$9.61
NA
NA
vary in the extent to which they have established
Source: CRS using information from the Congressional Record; or
performance measures.” GAO recommended that the heads
House, Senate, conference committee reports and tables, and EPA’s
of the three agencies establish a strategy for collaboration
FY2013 Operating Plan (reflects rescissions and the sequestration).
among their programs. In 2017, GAO indicated in its Status
of GAO Recommendations Mad
e to EPA since FY2007
Notes: *$6.90 mil ion appropriated for Clean School Bus Initiative in
(GAO-17-801T, September 2017) that the
FY2007. ** FY2009 enacted includes $60.0 mil ion plus additional
recommendations made in the February 2012 report had not
$300.0 mil ion inTitle VII of Division A of P.L. 111-5, the American
been implemented.
Recovery and Reinvestment Act of 2009.
Diesel Emissions Reduction Act of 2019
As noted earlier, EPAct 2005 authorized $200.0 million
Reauthorizations for the DERA program have been
annually for the DERA program for FY2007 through
introduced in recent Congresses. In the 116th Congress, S.
FY2011. DERA 2010 authorized $100.0 million annually
747 was introduced on March 12, 2019, and H.R. 1768 was
for FY2012 through FY2016. Through FY2019, Congress
introduced on March 14, 2019. The House passed H.R.
continued to appropriate funding for DERA after
1768 on September 9, 2019. Both bills would reauthorize
authorization expired. The five-bill omnibus appropriations
the DERA program through FY2024. S. 747 would also
(H.R. 3055) as passed by the House on June 25, 2019,
modify some requirements governing how EPA must
would provide $55.0 million for DERA for FY2020.
prioritize projects and would require the unqualified state
S. 2580, as reported September 26, 2019, would provide
funds to be reallocated to the national program. Similar bills
$85.2 million. The President’s FY2020 budget request
were introduced in 2017 and 2016 (S. 1447/H.R. 3107
proposed $10.0 million for DERA, $77.5 million (88.6 %)
(115th) and S. 2816/H.R. 5913 (114th)).
below the FY2019 enacted level of $87.5 million included
in Title II of Division E of the Consolidated Appropriations
Asia Hypsher, intern, assisted with this product.
Act, FY2019 (P.L. 116-6). The FY2020 request is the same
as requested since FY2016. Of note, the 2016 Volkswagen
Richard K. Lattanzio, Specialist in Environmental Policy
(VW) “defeat device” legal settlement included an option to
Robert Esworthy, Specialist in Environmental Policy
use some of the funds paid by VW into a mitigation trust as
IF11331
a voluntary match for DERA state and tribal grants.
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The Diesel Emissions Reduction Act (DERA) Program


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