The Diesel Emissions Reduction Act (DERA) Program

Updated September 4, 2020
The Diesel Emissions Reduction Act (DERA) Program
Emissions from diesel engines—especially particulate
equal shares to each state if all 50 states qualified. If fewer
matter (PM), nitrogen oxides (NOx), sulfur oxides, and air
than 50 states qualified, the remaining funds were to be
toxics—have been shown to contribute to air pollution that
allocated among the qualifying states proportionally based
adversely impacts public health and welfare in the United
on their population.
States. Since 1970, the Clean Air Act (42 U.S.C. §7401 et
seq.) has required the federal government to limit these
Under EPAct 2005, EPA was to prioritize projects that (1)
emissions, among others, from new stationary (industrial)
maximize public health benefits; (2) are cost-effective; (3)
sources and new mobile sources. In the decades since, the
serve areas with the highest population density and the poorest
U.S. Environmental Protection Agency (EPA) has
air quality; (4) include a certified engine configuration,
promulgated emission standards for a variety of source
verified technology, or emerging technology that has a long
categories, including new heavy duty highway and nonroad
expected useful life; (5) maximize the engine’s expected
diesel engines.
useful life; (6) conserve diesel fuel; and (7) use diesel fuel
with a sulfur content of 15 parts per million or less.
EPA’s most recent set of emission standards for newly
manufactured heavy duty highway and nonroad diesel
Diesel Emissions Reduction Act of 2010
engines took effect in 2007 and 2008, respectively. At the
The Diesel Emissions Reduction Act (DERA) of 2010 (P.L.
time, the standards required a 90% and 95% reduction in
111-364) amended EPAct 2005 to authorize $100.0 million
emission levels for PM and NOx, respectively, over the
annually through FY2016 and modify provisions related to
previous standards. However, because of the long
the program. DERA 2010 defined state to include the District
operational lives of diesel engines, millions of pre-2007
of Columbia and the U.S. territories. The act authorized EPA
engines remain in use. According to EPA’s estimates in
to offer rebates in addition to grants and loans to eligible
2016, 10 million pre-2007 diesel engines remain in use in
entities, including any private individual or entity that owns a
the United States, and 1 million of those engines could still
diesel vehicle or fleet. The distribution of funds was revised
be in use in 2030. The Clean Air Act does not provide EPA
to provide not less than 95% of funds to projects using a
the authority to set new emission standards on existing, or
certified engine configuration or verified technology and not
“legacy,” diesel engines. To address concerns over legacy
more than 5% of funds for development and
diesel engines, EPA began a Voluntary Diesel Retrofit
commercialization of emerging technologies. Under the act,
Program in 2000 and a Clean School Bus Initiative in 2003,
EPA was to develop a simplified application process to
among other programs.
expedite provision of funds, taking into consideration special
circumstances affecting small fleet owners. The act expanded
Congress enacted the “Diesel Emissions Reduction”
the priority given to applications that serve areas receiving a
program in the Energy Policy Act of 2005 (EPAct 2005,
disproportionate quantity of air pollution from diesel fleets to
P.L. 109-58, Title VII, Subtitle G §§791-797; 42 U.S.C.
include construction sites and schools in addition to truck
§§16131-16137). It authorized EPA to administer a national
stops, ports, rail yards, terminals, and distribution centers.
and state-level grant and loan program to promote
emissions reductions from legacy diesel engines. Through
DERA Program Implementation
the Diesel Emissions Reduction program (as amended),
EPA’s National Clean Diesel Campaign within the Office
EPA has provided loans, grants, and rebates to projects that
of Transportation and Air Quality administers the DERA
use certified engine configurations and verified
program. In its DERA Fourth Report to Congress (July
technologies, or that develop and commercialize emerging
2019), EPA reports that it awarded more than $629.0
technologies, in order to replace legacy diesel engines.
million between FY2008 and FY2016 to retrofit or replace
67,300 engines in vehicles, vessels, locomotives, and other
Energy Policy Act of 2005
equipment. EPA estimates that the program has resulted in
EPAct 2005 authorized $200.0 million annually for
the reduction of emissions of NOx by 474,700 tons, PM by
FY2007-FY2011 for the Diesel Emissions Reduction
15,490 tons, and hydrocarbons by 17,700 tons over the
program. Of the funds appropriated, 70% were to be used
lifetime of the affected engines. Further, EPA estimates the
for national competitive grants and low-cost loans
total present value of monetized health benefits over the
administered by EPA, and 30% were to support loan and
lifetime of the affected engines as $19.0 billion, including
grant programs administered by states. Of the funds
up to 2,300 fewer premature deaths. EPA reports that since
administered by EPA, the majority was to be provided for
the inception of the program, DERA funding requests have
the benefit of public fleets, with not less than 90% going to
exceeded availability by as much as 35:1 for the rebate
projects using a certified engine configuration or verified
program and 7:1 for the national grant competition.
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

link to page 2 link to page 2 The Diesel Emissions Reduction Act (DERA) Program
DERA Appropriations
to the $87.0 million FY2020 enacted level and the
Table 1 presents requested and enacted EPA appropriations
President’s FY2021 request of $10.0 million for DERA.
for the DERA program—adjusted and not adjusted for
inflation (FY2019$)—for FY2007-FY2021. Funding for
As indicated in Table 1, following $60.0 million requested
DERA is provided within EPA’s State and Tribal
for FY2011, the Obama Administration proposed no
Assistance Grants appropriations account.
funding for FY2012, citing limitations associated with
budget constraints. Reduced funding was requested for
Table 1. DERA Appropriations:
FY2013 and FY2014. No funding was requested for
Requested and Enacted, FY2007-FY2021
FY2015. EPA’s 2015 Justification of Appropriation
($ mil ions; not adjusted and adjusted for inflation [FY2019$])
Estimates for the Committee on Appropriations stated that
“while DERA accelerates the pace at which dirty engines
are retired or retrofitted, pollution emissions from the legacy
fleet will be reduced over time without additional DERA
Fiscal Year Adjusted Adjusted Adjusted Adjusted
funding as portions of the fleet turnover and are replaced
with new engines that meet modern emissions standards.”
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
$540.00c $519.18
vary in the extent to which they have established
Source: CRS using information from the Congressional Record; House,
performance measures.” GAO recommended that the heads
Senate, conference committee reports and tables, and EPA’s FY2013
of the three agencies establish a strategy for collaboration
Operating Plan (reflects rescissions and the sequestration).
among their programs. In 2017, GAO indicated in its
Status of GAO Recommendations Made to EPA since
FY2007 (GAO-17-801T, September 2017) that the

$6.90 mil ion appropriated for Clean School Bus Initiative in
recommendations made in the February 2012 report had
b. FY2009 enacted includes $60.0 mil ion plus additional $300.0
not been implemented.
mil ion inTitle VII of Division A of P.L. 111-5, the American
Reauthorizing Legislation
Recovery and Reinvestment Act of 2009.
Reauthorizations for the DERA program have been

The FY2021 amounts are as proposed in H.R. 7608.
introduced in recent Congresses. In the 116th Congress,
As noted earlier, EPAct 2005 authorized $200.0 million
Section 6083 of Division E, Title LX, Subtitle G, in S.
annually for the DERA program for FY2007-FY2011.
4049, the National Defense Authorization Act for Fiscal
DERA 2010 authorized $100.0 million annually for
Year 2021, as passed by the Senate July 23, 2020, would
FY2012-FY2016. Of note, the 2016 Volkswagen “defeat
reauthorize the DERA program through FY2024,
device” legal settlement included an option to use some of
incorporating the language contained in S. 747 as reported
the funds paid by Volkswagen into a mitigation trust as a
May 13, 2019. As in S. 747, S. 4049, would also modify
voluntary match for DERA state and tribal grants. Congress
certain requirements governing how EPA must prioritize
continued to appropriate funding for DERA after
projects and would require the unqualified state funds to be
authorization expired. Title II of Division D of the Further
reallocated to the national program. H.R. 1768, passed by
Consolidated Appropriations Act, 2020 (P.L. 116-94),
the House September 9, 2019, would also reauthorize the
appropriated $87.0 million for DERA for FY2020, the same
DERA program through FY2024 but would not modify
as the FY2019 enacted appropriations (P.L. 116-6).
these requirements as in S. 747 and S. 4049.
Division C in the four-bill H.R. 7608 as passed July 24,
2020, would provide $540.0 million for DERA, $90.0
Asia Hypsher, intern, assisted with this product.
million in Title II, and $450.0 million in Title V compared
Richard K. Lattanzio, Specialist in Environmental Policy

The Diesel Emissions Reduction Act (DERA) Program

Robert Esworthy, Specialist in Environmental Policy

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