EPA Launched $180 Million Diesel Engine Upgrade Program
State and local agencies can now apply for funding to replace or retrofit heavy-duty diesel school buses and vehicles.
Updated on Sept. 25, 2026 in Electric Vehicles
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The Environmental Protection Agency has opened a $180 million funding round under the Diesel Emissions Reduction Act to support clean air initiatives nationwide. Qualified projects include the replacement or retrofitting of class 5 through 8 heavy-duty highway vehicles and school buses.
Why it matters
This initiative provides significant financial support to state and local governments looking to reduce vehicle emissions and long-duration idling. The EPA revamped the program requirements to align with current priorities and streamline the application process for eligible entities.
The EPA expects to issue between four and 12 awards per region for projects lasting two to four years. This follows previous efforts in fiscal years 2022-2023 where 12 grants replaced more than 60 school buses.
The players
Environmental Protection Agency
The federal agency responsible for protecting human health and the environment by overseeing national air quality programs.
The details
Applicants must demonstrate how their projects meet specific eligibility requirements to receive funding for engine retrofits or full replacements. The program supports the use of verified technologies to reduce long-duration idling for heavy-duty vehicles. Interested agencies and non-profits must submit their project proposals electronically through the designated federal portal.
Timeline
The DERA program was created by Congress in 2008.
Previous grants were issued during fiscal years 2022-2023.
The EPA opened the current funding round in September 2026.
Applications are due by January 22, 2027.
The Home Front
This funding round represents the latest expansion of the Diesel Emissions Reduction Act to modernize regional transportation fleets. It continues a federal trend of providing capital for local infrastructure upgrades to meet updated environmental standards.
Homeowners and parents should monitor local school district communications regarding fleet upgrades as these grants may result in cleaner, newer buses in their community. Interested parties can track regional award announcements following the January 2027 application deadline.
The takeaway
The EPA is prioritizing the reduction of heavy-duty vehicle emissions through significant infrastructure investments. Local agencies should prepare their applications before the January 22, 2027 deadline to participate in this funding cycle.
Further reading
For more information on the transition to cleaner transportation infrastructure, visit the Electric Vehicles section.
More information
Eligible entities can submit project applications through the Electronic grant application portal.
Source note: This article includes information reported by Schoolbusfleet.
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