The Diesel Emissions Reduction Act (DERA) Program

Updated April 29, 2024

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 (CAA; 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 finalized the most recent set of emission standards for

newly manufactured heavy duty highway vehicles and

engines in January 2023 (88 FR 4296). The standards

require an approximately 80% reduction in NOx emission

levels over the previous standards, to begin in model year

(MY) 2027. However, because of the long operational lives

of diesel engines, millions of older vehicles remain in use.

The CAA does not provide EPA the authority to set new

emission standards on existing, or “legacy,” diesel engines.

To address these concerns, 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.

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.

Diesel Emissions Reduction Act of 2010

The Diesel Emissions Reduction Act of 2010 (DERA; P.L.

111-364) amended EPAct 2005 to authorize $100.0 million

annually through FY2016 and modify provisions related to

the program. DERA 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. It revised the distribution of funds

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.

In 2020, the DERA program was reauthorized through

FY2024, with no other changes, under Division S, Section

101, of the Consolidated Appropriations Act, 2021 (P.L. 116260).

DERA Program Implementation

Energy Policy Act of 2005

EPAct 2005 authorized $200.0 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.

EPA’s National Clean Diesel Campaign within the Office

of Transportation and Air Quality administers the DERA

program. In its DERA Fifth Report to Congress (August

2022), EPA reports that it awarded more than $801.0

million between FY2008 and FY2018 to retrofit or replace

73,700 engines in vehicles, vessels, locomotives, and other

equipment. EPA estimates that the program has resulted in

the reduction of emissions of NOx by 491,000 tons, PM by

16,800 tons, and carbon dioxide by 5.3 million 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 $8.0 billion, including up

to 850 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.

https://crsreports.congress.gov

The Diesel Emissions Reduction Act (DERA) Program

Appropriations

Table 1 presents requested and enacted EPA appropriations

for the DERA program—adjusted and not adjusted for

inflation (FY2023$)—for FY2007-FY2025. Funding for

DERA is provided within EPA’s State and Tribal

Assistance Grants appropriations account. As indicated in

Table 1, FY2009 enacted included $60.0 million plus an

additional $300.0 million in Title VII of Division A of P.L.

111-5, the American Recovery and Reinvestment Act of

2009. Following the $60.0 million requested for FY2011,

the Obama Administration requested no funding for

FY2012 and FY2015, citing limitations associated with

budget constraints. Both the Obama and Trump

Administrations requested reduced funding for the other

years between FY2013 and FY2021. Notwithstanding the

Administrations’ requests, Congress increasingly

appropriated funds each year for the program during this

time span.

Table 1. DERA Appropriations:

Requested and Enacted, FY2007-FY2025

($ millions; not adjusted and adjusted for inflation [FY2023$])

Requested

In FY2022, the incoming Biden Administration increased

the request for the DERA program substantially—to

$150.0 million—to support efforts “in advancing

environmental justice and tackling the climate crisis.” Under

these objectives, EPA is to “look for ways to help expedite

[the] transition [to more zero emissions options] as part of

its DERA implementation effort,” and to “target 40 percent

of the benefits of climate investments to disadvantaged

communities.” EPA’s FY2025 budget request for the

program is $100.0 million.

Enacted

Fiscal Year

Not

Adjusted

InflationAdjusted

Not

Adjusted

InflationAdjusted

2007

$49.50

$70.08

a

a

2008

$35.00

$48.55

$49.22

$68.27

2009b

$49.22

$67.58

$360.00

$494.27

2010

$60.00

$81.67

$60.00

$81.67

2011

$60.00

$80.06

$49.90

$66.59

2012

$0.00

$0.00

$29.95

$39.25

2013

$15.00

$19.31

$18.91

$24.34

2014

$6.00

$7.59

$20.00

$25.28

2015

$0.00

$0.00

$30.00

$37.54

2016

$10.00

$12.41

$50.00

$62.07

2017

$10.00

$12.21

$60.00

$73.24

2018

$10.00

$11.94

$75.00

$89.56

2019

$10.00

$11.73

$87.00

$102.01

2020

$10.00

$11.57

$87.00

$100.69

Title II of Division E of the Consolidated Appropriations

Act, 2024 (P.L. 118-42) appropriated $90.0 million for the

DERA program for FY2024.

2021

$10.00

$11.19

$90.00

$100.70

2022c

$150.00

$156.86

$152.00

$158.95

Infrastructure Investment and Jobs Act

2023

$150.00

$150.00

$100.00

$100.00

As part of the Infrastructure Investment and Jobs Act of

2021 (IIJA; P.L. 117-58), Title XI of Division G included a

Clean School Bus Program, which provides $5 billion for

FY2022-FY2026 for the replacement of existing school

buses with “clean” and zero-emission school buses and

eligible fueling and charging infrastructure. Of this funding,

$500 million annually is available to fund only zeroemission school buses and $500 million annually is

available to fund zero-emission and “clean” school buses

(clean is defined as a vehicle that “reduces emissions and is

operated entirely or in part using an alternative fuel”). EPA

administers the funding for the related but distinct Clean

School Bus Program through the National Clean Diesel

Campaign. This funding is not reflected in Table 1.

2024

$150.00

$146.10

$90.00

$87.66

2025

$100.00

$95.31

N/A

N/A

Inflation Reduction Act

As part of the 2022 budget reconciliation measure

commonly referred to as the Inflation Reduction Act (IRA;

P.L. 117-169), Section 60104 included $60 million for the

DERA program, specifically “to identify and reduce diesel

emissions resulting from goods movement facilities, and

vehicles servicing goods movement facilities, in lowincome and disadvantaged communities.” Further, IRA

Section 60101 included a related but distinct “Clean HeavyDuty Vehicles” program, which provides $1.0 billion to be

available through FY2031 and instructs EPA to implement

a program for grants and rebates to eligible recipients for

the incremental cost of zero-emission vehicle replacements,

fueling and charging infrastructure, and workforce

development. This funding is not reflected in Table 1.

Source: CRS, with data from Congress.gov, the Congressional Record;

House, Senate, conference committee reports and tables, and EPA’s

Congressional Budget Justifications, various fiscal years.

Notes: Inflation-adjusted for FY2023$ using deflators presented in

White House Office of Management and Budget, Budget of the United

States Government, Table 10.1. Adjustments for FY2024 and FY2025

are estimated.

a. $6.90 million appropriated for Clean School Bus Initiative in

FY2007.

b. FY2009 enacted includes $60.00 million plus additional

$300.00 million in Title VII of Division A of the American

Recovery and Reinvestment Act of 2009 (P.L. 111-5).

c.

FY2022 enacted includes $92.00 million from the Consolidated

Appropriations Act, 2022 (P.L. 117-103), and $60.00 million

from P.L. 117-169. Further, P.L. 117-58 provides for a Clean

School Bus Program; and P.L. 117-169 provides for a Clean

Heavy-Duty Vehicle program. Funding for these two related but

distinct programs is not reflected in this table.

Richard K. Lattanzio, Specialist in Environmental Policy

Angela C. Jones, Analyst in Environmental Policy

https://crsreports.congress.gov

IF11331

The Diesel Emissions Reduction Act (DERA) Program

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