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Updated January 7, 2021
The Diesel Emissions Reduction Act (DERA) Program
Emissions from diesel engines—especially particulate
allocated among the qualifying states proportionally based
matter (PM), nitrogen oxides (NOx), sulfur oxides, and air
on their population.
toxics—have been shown to contribute to air pollution that
Under EPAct 2005, EPA was to prioritize projects that (1)
adversely impacts public health and welfare in the United
maximize public health benefits; (2) are cost-effective; (3)
States. Since 1970, the Clean Air Act (42 U.S.C. §7401 et
serve areas with the highest population density and the poorest
seq.) has required the federal government to limit these
air quality; (4) include a certified engine configuration,
emissions, among others, from new stationary (industrial)
verified technology, or emerging technology that has a long
sources and new mobile sources. In the decades since, the
expected useful life; (5) maximize the engine’s expected
U.S. Environmental Protection Agency (EPA) has
useful life; (6) conserve diesel fuel; and (7) use diesel fuel
promulgated emission standards for a variety of source
with a sulfur content of 15 parts per million or less.
categories, including new heavy duty highway and nonroad
diesel engines.
Diesel Emissions Reduction Act of 2010
EPA’s most recent set of emission standards for newly
The Diesel Emissions Reduction Act (DERA) of 2010 (P.L.
manufactured heavy duty highway and nonroad diesel
111-364) amended EPAct 2005 to authorize $100.0 million
engines took effect in 2007 and 2008, respectively. At the
annually through FY2016 and modify provisions related to
time, the standards required a 90% and 95% reduction in
the program. DERA 2010 defined state to include the District
emission levels for PM and NOx, respectively, over the
of Columbia and the U.S. territories. The act authorized EPA
previous standards. However, because of the long
to offer rebates in addition to grants and loans to eligible
operational lives of diesel engines, millions of pre-2007
entities, including any private individual or entity that owns a
engines remain in use. According to EPA’s estimates in
diesel vehicle or fleet. The distribution of funds was revised
2016, 10 million pre-2007 diesel engines remain in use in
to provide not less than 95% of funds to projects using a
the United States, and 1 million of those engines could still
certified engine configuration or verified technology and not
be in use in 2030. The Clean Air Act does not provide EPA
more than 5% of funds for development and
the authority to set new emission standards on existing, or
commercialization of emerging technologies. Under the act,
“legacy,” diesel engines. To address concerns over legacy
EPA was to develop a simplified application process to
diesel engines, EPA began a Voluntary Diesel Retrofit
expedite provision of funds, taking into consideration special
Program in 2000 and a Clean School Bus Initiative in 2003,
circumstances affecting small fleet owners. The act expanded
among other programs.
the priority given to applications that serve areas receiving a
disproportionate quantity of air pollution from diesel fleets to
Congress enacted the “Diesel Emissions Reduction”
include construction sites and schools in addition to truck
program in the Energy Policy Act of 2005 (EPAct 2005,
stops, ports, rail yards, terminals, and distribution centers.
P.L. 109-58, Title VII, Subtitle G §§791-797; 42 U.S.C.
§§16131-16137). It authorized EPA to administer a national
DERA Program Implementation
and state-level grant and loan program to promote
EPA’s National Clean Diesel Campaign within the Office
emissions reductions from legacy diesel engines. Through
of Transportation and Air Quality administers the DERA
the Diesel Emissions Reduction program (as amended),
program. In its DERA Fourth Report to Congress (July
EPA has provided loans, grants, and rebates to projects that
2019), EPA reports that it awarded more than $629.0
use certified engine configurations and verified
million between FY2008 and FY2016 to retrofit or replace
technologies, or that develop and commercialize emerging
67,300 engines in vehicles, vessels, locomotives, and other
technologies, in order to replace legacy diesel engines.
equipment. EPA estimates that the program has resulted in
Energy Policy Act of 2005
the reduction of emissions of NOx by 474,700 tons, PM by
15,490 tons, and hydrocarbons by 17,700 tons over the
EPAct 2005 authorized $200.0 million annually for
lifetime of the affected engines. Further, EPA estimates the
FY2007-FY2011 for the Diesel Emissions Reduction
total present value of monetized health benefits over the
program. Of the funds appropriated, 70% were to be used
lifetime of the affected engines as $19.0 billion, including
for national competitive grants and low-cost loans
up to 2,300 fewer premature deaths. EPA reports that since
administered by EPA, and 30% were to support loan and
the inception of the program, DERA funding requests have
grant programs administered by states. Of the funds
exceeded availability by as much as 35:1 for the rebate
administered by EPA, the majority was to be provided for
program and 7:1 for the national grant competition.
the benefit of public fleets, with not less than 90% going to
projects using a certified engine configuration or verified
DERA Appropriations
technology and not more than 10% for the development and
Table 1 presents requested and enacted EPA appropriations
commercialization of emerging technologies. Of the funds
for the DERA program—adjusted and not adjusted for
administered by the states, a portion was to be allocated in
inflation (FY2019$)—for FY2007-FY2021. Funding for
equal shares to each state if all 50 states qualified. If fewer
than 50 states qualified, the remaining funds were to be

link to page 2 The Diesel Emissions Reduction Act (DERA) Program
DERA is provided within EPA’s State and Tribal
budget constraints. Reduced funding was requested for
Assistance Grants appropriations account.
FY2013 and FY2014. No funding was requested for
Table 1. DERA Appropriations:
FY2015. EPA’s 2015 Justification of Appropriation
Requested and Enacted, FY2007-FY2021
Estimates for the Committee on Appropriations stated that
“while DERA accelerates the pace at which dirty engines
($ mil ions; not adjusted and adjusted for inflation [FY2019$])
are retired or retrofitted, pollution emissions from the legacy
fleet will be reduced over time without additional DERA
funding as portions of the fleet turnover and are replaced
with new engines that meet modern emissions standards.”
Fiscal Year Adjusted Adjusted Adjusted Adjusted
Government Accountability Office
DERA 2010 required the U.S. Comptroller General to
conduct an audit of federal diesel emissions loan, grant,
and rebate programs. In its report Fragmented Federal
Programs That Reduce Mobile Source Emissions Could Be
Improved (GAO-12-261, February 2012), the U.S.
Government Accountability Office (GAO) responded by
examining “(1) the extent of duplication, overlap,
fragmentation, or gaps, if any, among federal grant, rebate,
and loan programs that address mobile source diesel
emissions; (2) the effectiveness of federal funding for
activities that reduce mobile source diesel emissions; and
(3) the extent of collaboration among agencies to fund
these activities.” GAO reported that “federal grant and loan
funding activities that reduce mobile source diesel
emissions are fragmented across 14 programs at the
Department of Energy, Department of Transportation, and
Environmental Protection Agency” but was unable to
determine whether “unnecessary duplication exists because
of limited information on program administrative costs”
and whether the funding was effective, “because agencies
vary in the extent to which they have established
performance measures.” GAO recommended that the heads
of the three agencies establish a strategy for collaboration
Source: CRS using information from the Congressional Record; House,
among their programs. In 2017, GAO indicated in its
Senate, conference committee reports and tables, and EPA’s FY2013
Status of GAO Recommendations Made to EPA since
Operating Plan (reflects rescissions and the sequestration).
FY2007 (GAO-17-801T, September 2017) that the
recommendations made in the February 2012 report had
a. $6.90 mil ion appropriated for Clean School Bus Initiative in
not been implemented.
b. FY2009 enacted includes $60.0 mil ion plus additional $300.0
Reauthorizing Legislation
mil ion in Title VII of Division A of P.L. 111-5, the American
Reauthorizations for the DERA program have been
Recovery and Reinvestment Act of 2009.
introduced in recent Congresses. In the 116th Congress,

Section 6083 of Division E, Title LX, Subtitle G, in S.
As noted earlier, EPAct 2005 authorized $200.0 million
4049, the National Defense Authorization Act for Fiscal
annually for the DERA program for FY2007-FY2011.
Year 2021, as passed by the Senate July 23, 2020, would
DERA 2010 authorized $100.0 million annually for
reauthorize the DERA program through FY2024,
FY2012-FY2016. Of note, the 2016 Volkswagen “defeat
incorporating the language contained in S. 747 as reported
device” legal settlement included an option to use some of
May 13, 2019. As in S. 747, S. 4049, would also modify
the funds paid by Volkswagen into a mitigation trust as a
certain requirements governing how EPA must prioritize
voluntary match for DERA state and tribal grants. Congress
projects and would require the unqualified state funds to be
continued to appropriate funding for DERA after
reallocated to the national program. H.R. 1768, passed by
authorization expired. Title II of Division D of the Further
the House September 9, 2019, would also reauthorize the
Consolidated Appropriations Act, 2020 (P.L. 116-94),
DERA program through FY2024 but would not modify
appropriated $87.0 million for DERA for FY2020, the same
these requirements as in S. 747 and S. 4049.
as the FY2019 enacted appropriations (P.L. 116-6).
Division G, Title II of the Consolidated Appropriations Act,
Division S, Section 101, of the Consolidated
2021 (P.L. 116-260), would provide $90.0 million for
Appropriations Act, 2021 (P.L. 116-260), reauthorized the
DERA, compared to the $87.0 million FY2020 enacted
DERA program through 2024, with no other changes.
level and the President’s FY2021 request of $10.0 million
Asia Hypsher, intern, assisted with this product.
for DERA.
Richard K. Lattanzio, Specialist in Environmental Policy
As indicated in Table 1, following $60.0 million requested
for FY2011, the Obama Administration proposed no
funding for FY2012, citing limitations associated with

The Diesel Emissions Reduction Act (DERA) Program

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