Updated February 1, 2023
The Diesel Emissions Reduction Act (DERA) Program
Emissions from diesel engines—especially particulate
Under EPAct 2005, EPA was to prioritize projects that
matter (PM), nitrogen oxides (NOx), sulfur oxides, and air
(1) maximize public health benefits; (2) are cost-effective;
toxics—have been shown to contribute to air pollution that
(3) serve areas with the highest population density and the
adversely impacts public health and welfare in the United
poorest air quality; (4) include a certified engine
States. Since 1970, the Clean Air Act (CAA; 42 U.S.C.
configuration, verified technology, or emerging technology
§§7401 et seq.) has required the federal government to limit
that has a long expected useful life; (5) maximize the
these emissions, among others, from new stationary
engine’s expected useful life; (6) conserve diesel fuel; and
(industrial) sources and new mobile sources. In the decades
(7) use diesel fuel with a sulfur content of 15 parts per
since, the U.S. Environmental Protection Agency (EPA) has
million or less.
promulgated emission standards for a variety of source
categories, including new heavy duty highway and nonroad
Diesel Emissions Reduction Act of 2010
diesel engines.
The Diesel Emissions Reduction Act of 2010 (DERA; P.L.
111-364) amended EPAct 2005 to authorize $100.0 million
EPA finalized the most recent set of emission standards for
annually through FY2016 and modify provisions related to
newly manufactured heavy duty highway vehicles and
the program. DERA defined state to include the District of
engines in January 2023 (88 FR 4296). The standards
Columbia and the U.S. territories. The act authorized EPA
require an approximately 80% reduction in NOx emission
to offer rebates in addition to grants and loans to eligible
levels over the previous standards, to begin in model year
entities, including any private individual or entity that owns
(MY) 2027. However, because of the long operational lives
a diesel vehicle or fleet. It revised the distribution of funds
of diesel engines, millions of older vehicles remain in use.
to provide not less than 95% of funds to projects using a
The CAA does not provide EPA the authority to set new
certified engine configuration or verified technology and
emission standards on existing, or “legacy,” diesel engines.
not more than 5% of funds for development and
To address these concerns, EPA began a Voluntary Diesel
commercialization of emerging technologies. Under the act,
Retrofit Program in 2000 and a Clean School Bus Initiative
EPA was to develop a simplified application process to
in 2003, among other programs.
expedite provision of funds, taking into consideration
special circumstances affecting small fleet owners. The act
Congress enacted the “Diesel Emissions Reduction”
expanded the priority given to applications that serve areas
program in the Energy Policy Act of 2005 (EPAct 2005;
receiving a disproportionate quantity of air pollution from
P.L. 109-58, Title VII, Subtitle G §§791-797; 42 U.S.C.
diesel fleets to include construction sites and schools in
§§16131-16137). It authorized EPA to administer a national
addition to truck stops, ports, rail yards, terminals, and
and state-level grant and loan program to promote
distribution centers.
emissions reductions from legacy diesel engines. Through
the Diesel Emissions Reduction program (as amended),
In 2020, the DERA program was reauthorized through
EPA has provided loans, grants, and rebates to projects that
FY2024, with no other changes, under Division S, Section
use certified engine configurations and verified
101, of the Consolidated Appropriations Act, 2021 (P.L. 116-
technologies, or that develop and commercialize emerging
260).
technologies, in order to replace legacy diesel engines.
Energy Policy Act of 2005
DERA Program Implementation
EPA’s National Clean Diesel Campaign within the Office
EPAct 2005 authorized $200.0 million annually for
of Transportation and Air Quality administers the DERA
FY2007-FY2011 for the Diesel Emissions Reduction
program. In its DERA Fifth Report to Congress (August
program. Of the funds appropriated, 70% were to be used
2022), EPA reports that it awarded more than $801.0
for national competitive grants and low-cost loans
million between FY2008 and FY2018 to retrofit or replace
administered by EPA, and 30% were to support loan and
73,700 engines in vehicles, vessels, locomotives, and other
grant programs administered by states. Of the funds
equipment. EPA estimates that the program has resulted in
administered by EPA, the majority was to be provided for
the reduction of emissions of NO
the benefit of public fleets, with not less than 90% going to
x by 491,000 tons, PM by
16,800 tons, and carbon dioxide by 5.3 million tons over
projects using a certified engine configuration or verified
the lifetime of the affected engines. Further, EPA estimates
technology and not more than 10% for the development and
the total present value of monetized health benefits over the
commercialization of emerging technologies. Of the funds
lifetime of the affected engines as $8.0 billion, including up
administered by the states, a portion was to be allocated in
to 850 fewer premature deaths. EPA reports that since the
equal shares to each state if all 50 states qualified. If fewer
inception of the program, DERA funding requests have
than 50 states qualified, the remaining funds were to be
exceeded availability by as much as 35:1 for the rebate
allocated among the qualifying states proportionally based
program and 7:1 for the national grant competition.
on their population.
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link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 link to page 2 The Diesel Emissions Reduction Act (DERA) Program
Appropriations
Table 1. DERA Appropriations:
Table 1 presents requested and enacted EPA appropriations
Requested and Enacted, FY2007-FY2023
for the DERA program—adjusted and not adjusted for
($ mil ions; not adjusted and adjusted for inflation [FY2021$])
inflation (FY2021$)—for FY2007-FY2023. Funding for
DERA is provided within EPA’s State and Tribal
Requested
Enacted
Assistance Grants appropriations account. As indicated in
Not
Inflation
Not
Inflation
Table 1, FY2009 enacted included $60.0 million plus
Fiscal Year
Adjusted Adjusted Adjusted Adjusted
additional $300.0 million in Title VII of Division A of P.L.
111-5, the American Recovery and Reinvestment Act of
2007
$49.50
$62.80
a
a
2009. Following the $60.0 million requested for FY2011,
the Obama Administration requested no funding for
2008
$35.00
$43.50
$49.22
$61.17
FY2012 and FY2015, citing limitations associated with
2009b
$49.22
$60.56
$360.00
$442.92
budget constraints. Both the Obama and Trump
Administrations requested reduced funding for the other
2010
$60.00
$73.18
$60.00
$73.18
years between FY2013 and FY2021.
2011
$60.00
$71.74
$49.90
$59.66
In FY2022, the incoming Biden Administration increased
2012
$0.00
$0.00
$29.95
$35.16
the request for the DERA program substantially—to
$150.0 million—to support efforts “in advancing
2013
$15.00
$17.30
$18.91
$21.80
environmental justice and tackling the climate crisis.” Under
2014
$6.00
$6.79
$20.00
$22.62
these objectives, EPA is to “look for ways to help expedite
[the] transition [to more zero emissions options] as part of
2015
$0.00
$0.00
$30.00
$33.55
its DERA implementation effort,” and to “target 40 percent
2016
$10.00
$11.09
$50.00
$55.46
of the benefits of climate investments to disadvantaged
communities.”
2017
$10.00
$10.90
$60.00
$65.38
Title II of Division G of the Consolidated Appropriations
2018
$10.00
$10.65
$75.00
$79.86
Act, 2023 (P.L. 117-328), appropriated $100.0 million for
the DERA program for FY2023.
2019
$10.00
$10.44
$87.00
$90.87
Infrastructure Investment and Jobs Act
2020
$10.00
$10.31
$87.00
$89.67
As part of the Infrastructure Investment and Jobs Act of
2021
$10.00
$10.00
$90.00
$90.00
2021 (IIJA; P.L. 117-58), Title XI of Division G included a
Clean School Bus Program, which provides $5 billion for
2022c
$150.00
$144.36
$152.00
$146.28
FY2022-FY2026 for the replacement of existing school
2023
$150.00
$141.28
$100.00
$94.18
buses with clean and zero-emission school buses and
Source: CRS, with data from Congress.gov, the Congressional Record;
eligible fueling and charging infrastructure. Of this funding,
House, Senate, conference committee reports and tables, and EPA’s
$500 million annually is available to fund only zero-
FY2013 Operating Plan (reflects rescissions and the sequestration).
emission school buses and $500 million annually is
Notes: Inflation adjusted for FY2021$ using deflators presented in
available to fund zero-emission and clean school buses
White House Office of Management and Budget, Budget of the United
(clean is defined as a vehicle that “reduces emissions and is
operated entirely or in part using an alternative fuel”). EPA
States Government, Table 10.1. Adjustments for FY2022 and FY2023
are estimated.
administers the funding for the related but distinct Clean
a. $6.90 mil ion appropriated for Clean School Bus Initiative in
School Bus Program through the National Clean Diesel
FY2007.
Campaign. This funding is not reflected in Table 1.
b. FY2009 enacted includes $60.00 mil ion plus additional
Inflation Reduction Act
$300.00 mil ion in Title VII of Division A of the American
As part of the 2022 budget reconciliation measure
Recovery and Reinvestment Act of 2009 (P.L. 111-5).
commonly referred to as the Inflation Reduction Act (IRA;
c. FY2022 enacted includes $92.00 mil ion from the Consolidated
P.L. 117-169), Section 60104 included $60 million for the
Appropriations Act, 2022 (P.L. 117-103), and $60.00 mil ion
DERA program, specifically “to identify and reduce diesel
from the budget reconciliation measure commonly referred to
emissions resulting from goods movement facilities, and
as the Inflation Reduction Act (P.L. 117-169). Further, beginning
vehicles servicing goods movement facilities, in low-
in FY2022 and continuing through FY2026, the Infrastructure
income and disadvantaged communities.” Further, IRA
Investment and Jobs Act of 2021 (P.L. 117-58) provides
Section 60101 included a related but distinct “Clean Heavy
$1.00 bil ion annual y for a Clean School Bus Program for
Duty Vehicles” program, which provides $1.0 billion to be
FY2022-2026. Also, beginning in FY2022 and available through
available through FY2031 and instructs EPA to implement
FY2031, the Inflation Reduction Act provides $1.00 bil ion in
a program for grants and rebates to eligible recipients for
total for a Clean Heavy Duty Vehicle program. Funding for these
the incremental cost of zero-emission vehicle replacements,
two related but distinct programs is not reflected in this table.
fueling and charging infrastructure, and workforce

development. EPA is in the process of establishing the
Clean Heavy Duty Vehicle program. This funding is not
Richard K. Lattanzio, Specialist in Environmental Policy
reflected in Table 1.
IF11331


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The Diesel Emissions Reduction Act (DERA) Program


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