Diesel Emissions Reduction Act

In 2005, the U.S. Congress passed the Diesel Emission Reduction Act (DERA) as an amendment to the Energy Policy Act. DERA was designed to reduce diesel emissions from existing diesel fleets that did not meet the recently adopted federal emission standards. The U.S. Environmental Protection Agency (EPA) is responsible for overseeing and distributing the DERA funds. For more information visit the EPA website at Clean Diesel and DERA Funding.

New Mexico Environment Department Clean Diesel Program Grant Funding Opportunity

NMED provides grant funding through the New Mexico Clean Diesel Program, for projects that reduce harmful heavy-duty diesel emissions. This program is funded by EPA through DERA. NMED is soliciting proposals for DERA projects that effectively reduce these emissions from heavy-duty diesel-fueled vehicles and equipment.

Diesel Emissions Reduction Act Workshop recording January 9, 2023 (1 hour, 14 minutes)
Diesel Emissions Reduction Act Workshop slide deck

Who may apply?

Any public or private entity or nonprofit organization, based in New Mexico, in existence for at least three consecutive years, and whose vehicles/equipment are registered, (or have an International Registration Plan if applicable) in the State of New Mexico.

What projects are eligible?

Eligible projects include, but are not limited to: idle reduction technologies, aerodynamic technologies, and the retrofit or replacement of diesel vehicles and equipment throughout the state. Eligible diesel vehicles, engines and equipment may include: buses (school and Class 5+ transit); Class 5 – Class 8 heavy-duty highway vehicles (e.g. refuse, commercial transportation); marine engines; locomotives; and nonroad engines, equipment, or vehicles such as those used in construction, handling of cargo (including at ports and airports), agriculture, mining, or energy production (including stationary generators and pumps). The existing vehicle, engine, or equipment must be fully operational. The replacement vehicle, engine or equipment should resemble the replacement in form and function. The participating fleet owner must currently own and operate the existing vehicle or equipment and have owned and operated the vehicle during the two years prior to upgrade. The existing vehicle, engine, or equipment must have at least three years of remaining life at the time of upgrade. Remaining life is the fleet owner’s estimate of the number of years until the unit would have been retired from service if the unit were not being upgraded or scrapped because of the grant funding. Funding cannot be used for the purchase of vehicles, engines, or equipment to expand a fleet.

The vehicle, engine or equipment being replaced must be scrapped or rendered permanently disabled within 90 days of being replaced. Equipment and vehicle components that are not part of the engine or chassis may be salvaged from the unit being replaced (e.g., plow blades, shovels, seats, tires, etc.). The replaced vehicle must be scrapped by drilling a three-by-three-inch hole in the engine block and disabling the chassis by cutting through the frame rails on each side. A scrappage statement signed by the vehicle owner and the dismantler is required. A sample scrappage statement can be downloaded.

The grant funds will be used for the purchase and installation of EPA or California Air Resources Board (CARB) verified/certified technologies or vehicle, engine or equipment replacement utilizing a zero-tailpipe emissions power source, in accordance with DERA funding guidelines.

Both the EPA verified technologies list for clean diesel and CARB verified technology list are available. Engine replacements utilizing all-electric technology (i.e., zero emission) do not require EPA or CARB certification. New vehicles or engines must be certified to meet the most current EPA emissions standards for on-road diesel vehicles.

Preference will be given to projects utilizing hydrogen fuel cell technology. The two options for hydrogen projects under DERA include:

Certified engine replacements – Hydrogen fuel cells are an option for engine replacements for eligible urban transit buses and drayage trucks.
Certified/Verified vehicle and equipment replacements – hydrogen fuel cell vehicles and equipment are eligible as replacements for eligible transit buses, shuttle buses, drayage trucks, terminal tractors/yard hostler, stationary generators and forklifts.

While projects from the entire state will be accepted, special consideration will be given to projects near and adjacent to non-attainment areas, Class I areas, areas subject to a high volume of diesel-fueled vehicles, and economically disadvantaged areas. Information about these types of areas can be found in the New Mexico Clean Diesel Program Guidance Document linked below.

Applications will only be accepted during an open application period that will be announced though a DERA list serve announcement. To apply, please download the documents below.

Appendices to be submitted along with application:

Appendix A- Documentation Verifying the Operating Time in New Mexico. NMED does not have a standardized template, so however the applicant is able to document the estimated number of hours and/or miles traveled in the State showing that the equipment operates within the State at least 75% of the time will be acceptable. If your vehicle does not operate outside of New Mexico, then verification is not necessary.
Appendix B- Map of the Project Locations (for fleets that travel statewide).
Appendix C- Vehicle Information Sheet.
Appendix D- Fleet Replacement Schedule. NMED does not have a standardized template. The applicant will need to outline the company’s standard procedure for vehicle replacement, this could be a company document, or just an explanation of when the specific vehicle type is normally replaced by the company. For public agencies, there are usually formalized retirement periods (e.g., statutory retirement of school buses).
Appendix E- Use of Funding Restrictions Form.
Appendix F- Diesel Emission Quantifier (DEQ) Report. NMED requires that all applicants use the USEPA Diesel Emissions Quantifier (DEQ) for the emission calculation and cost effectiveness. The applicant must provide a copy of the DEQ report as Appendix F. The applicant must complete the Total Lifetime Results and Cost Effectiveness table. The information provided in this table is for the total project, not for the individual units.
Appendix G- EJSCREEN ACS Report. NMED requires that all applicants use the Environmental Protection Agency’s EJSCREEN: Environmental Justice Screening and Mapping Tool to obtain demographic data regarding minority and low-income populations in the project area. Attach a copy of the EJSCREEN ACS report as Appendix G, and the map that shows the affected area as Appendix H. (See below)
Appendix H- Map of the Locations of Affected Facilities. (See above)
Appendix I- Map Showing the Proximity to Federal Class I Areas. New Mexico has nine mandatory Federal Class I Areas. Please visit the NMED Regional Haze Planning website for information.

There are four different pools of funding within DERA. The four different funding pools are:

State Allocated DERA Funding

The State allocation program divides non-competitive funding among all 50 states. The states are responsible for implementing and overseeing funding. Funding must be used to develop grant or low-cost revolving loan programs to fund clean diesel projects.

New Mexico Projects

The goal of the New Mexico Clean Diesel Program is to reduce the amount of air pollution created by diesel-fueled heavy-duty trucks and buses to which the residents of New Mexico are exposed.

Since 2008, the Air Quality Bureau has awarded over $2.3 million in grant funds for qualifying diesel emissions reduction projects. Grant funds have been used for the following projects in New Mexico:

Duke City Redi-Mix – Replaced five 1997 model year (MY) Kenworth concrete mixer trucks without emissions control devices installed; with 2022 MY Kenworth T880S trucks outfitted with Con-Tech Manufacturing mixer bodies, equipped with 2021 diesel engines that meet the current emission standards. Duke City Redi-Mix was awarded $252,068.75, which represents 25% of the total project cost of $1,008,275.00. Duke City Redi-Mix is located in the South Valley of Albuquerque and travels through many lower income parts of the city while on the way to the job and returning to the plant multiple times per day. This project will reduce the air pollution from outdated vehicles and will improve air quality throughout their entire area of operation, but particularly in the southern portion of Albuquerque and along 1-25 and 1-40 where their vehicles operate the most. Lifetime NOx emissions reductions are estimated to be 95.3 tons.
Estes Express Lines Inc. – Replaced four 2007 MY International, Model 8600 diesel-fueled Class 8 single axle freight hauling trucks with new, lower-emission 2022 MY International LT625 4×2 (LT62A) diesel vehicles. Estes Express Lines Inc. was awarded $95,645, which represents 25% of the total project cost of $382,580. Estes Express Lines Inc. operates mainly in the Albuquerque area, an area with ozone concentrations approaching levels considered unhealthy by the EPA. This project will have a significant impact in reducing air pollution in the area, resulting in healthier air quality for residents. Lifetime NOx emissions reductions are estimated to be 19.16 tons, which is an 88.9% reduction.
Department of Cultural Affairs – State Library – Replacing a 2009 MY Bluebird – All American school bus retrofitted to serve as a bookmobile, with a new as-built bookmobile manufactured by Matthews Specialty Vehicles. The NM State Library has been awarded $83,000, which represents 25% of the total project cost of $332,000. The “Rural Bookmobile West” operating out of Los Lunas, travels to the Western and Southwestern counties of New Mexico, serving disadvantaged communities without access to a public library facility within 20 miles. Staff provide services at 32 stops in eight counties. This project will have a significant impact in reducing air pollution in the service area, resulting in healthier air quality for residents. Lifetime NOx emissions reductions are estimated to be 79.1 tons.
Acme Iron and Metal – Replacing a 1997 MY, Tier 1, 250hp Fuchs diesel-powered, rubber-tire scrap metal material handler with a 2022 MY Sennebogen 850 “E” Electric Material Handler. Acme Iron & Metal has been awarded $564,559, which represents 45% of the total project cost of $1,254,575. This unit will operate in Albuquerque’s South Valley. Albuquerque has ozone concentrations approaching levels considered unhealthy by the EPA. The shift to electric equipment immediately eliminates all local emissions associated with the combustion of diesel fuel at this site. This project has direct health benefits for equipment operators, other employees within the recycling facility operation, and residents in the community surrounding the facility.
Goodwill Industries of New Mexico –Replacing two diesel-fueled semi-truck tractors with electric. These new semi-trucks, used by Goodwill Industries for its operations and transportation hub, will not produce any tailpipe emissions. Goodwill has been awarded $518,517, which represents 45% of the total project cost of $1,152,259. The new semi-trucks will operate in the Albuquerque metro area, including Rio Rancho and Bernalillo, and the cities of Los Lunas, Santa Fe and Española.
Rehoboth Christian School –Replacing an Engine Model Year (EMY) 2007 Bluebird All American Class 8 diesel-fueled activity school bus with an EMY 2024 Blue Bird Vision propane-fueled activity school bus. Project cost is $180,592 minus $500 scrap value, for a total project cost of $180,092. Rehoboth has been awarded $45,023, which represents 25% of the total project cost of $180,092. The new bus will be used for transportation of students for school related extracurricular activities, including athletic events throughout the school year, class trips, fine arts competitions around the state, and student organization activities.
Bloomfield School District, San Juan County – $62,408 towards School bus retrofits (25 Fuel Operated Heaters (FOHs)). A Fuel Operated Heater (also known as a direct fired heater (DFH)), is a small, lightweight, low emissions heater that burns fuel from the main engine fuel supply or a separate fuel reserve. The FOHs can be programmed to pre-warm the school buses with a fraction of the fuel required for full engine idling, and the driver is supplied heat upon engine startup. These units reduce unnecessary idle time and engine wear, conserve fuel, and reduce the exposure to harmful diesel emissions generated by the diesel engines to fleet yard employees and local residents.
Central Consolidated School District – $108,009 towards School bus retrofits (55 diesel fuel-operated engine heaters (FOHs)). The District is located in the heart of the beautiful Four Corners region of San Juan County, and serves the communities of Kirtland, Ojo Amarillo, Newcomb, Naschitti, and Shiprock.
City of Deming, Luna County – $65,750.00 towards Early off-road vehicle replacement (backhoe). (partial funding)
Farmington School District, San Juan County – $80,550 towards School bus retrofits (31 Diesel Oxidation Catalyst (DOC) & 55 Closed crankcase ventilation systems (CCVS)). DOCs – exhaust after-treatment devices that reduce emission from diesel engines. Typically packaged with the engine muffler, DOCs are widely used as retrofit technology because they require little or no maintenance. Installation of DOC transforms pollutants like carbon monoxide and hydrocarbon particles to less harmful components. CCVS equipment addresses emissions that are created during the combustion process, including unburned fuel; blow-by gases; hydrocarbon vapor; diesel soot (PM); and various engine oil contaminants. Medium- and heavy-duty turbocharged diesel engines have open crankcase vents which vent to the atmosphere. CCVS are designed to collect and return emitted lube oil and to filter gases that are normally emitted directly into the air and return them to the intake system of the engine. CCVS eliminates harmful and unwanted crankcase emissions and allows the crankcase to be closed without degrading performance.
Gallup/McKinley County School District – $144,519 towards School bus retrofits (95 FOHs).
New Mexico Association of Food Banks (Roadrunner) – $186,411 towards 7 Dock outlets for trailer refrigeration units (TRU), six in Albuquerque and one in Gallup, aerodynamic fairings (six trailers fitted with side skirts; two box trucks fitted with side skirts; three long haul trucks fitted with cab fairings), and 178 low rolling resistance tires. The aerodynamic truck and trailer fairings and the low rolling resistance tires help conserve fuel, reducing diesel exhaust emission, while the vehicles are in motion. The TRU electrification dock outlets allow for the TRUs, refrigerating perishable goods stored overnight, hooking up to the electric power grid in place of running their diesel engines when parked at the facility. These units reduce unnecessary idle time and engine wear, conserve fuel and reduce the exposure to harmful diesel emissions, generated by the diesel engines, to fleet yard employees and local residents.
Taos County – $70,000 towards Early vehicle replacement (dump truck). (partial funding)
City of Santa Fe – $190,293 towards Early vehicle replacement of two solid waste diesel vehicles with natural gas vehicles (partial funding)
Albuquerque Public Schools – $380,626 towards Early vehicle replacement of five diesel-fueled school buses with gasoline-fueled school buses that meet the current EPA emissions standards for heavy-duty vehicles. (partial funding)

What Is a Retrofit?

Typically, a diesel retrofit involves the installation of an emission control device to reduce emissions from engine exhaust and the installation of equipment to reduce engine idling.

Why Retrofit?

Installing retrofit equipment has significant public health benefits. The installation of diesel emission reduction equipment will have immediate and lasting results in protecting New Mexico residents, children, and other sensitive populations from harmful emissions including fine particles, ozone and air toxics that can exacerbate asthma and other respiratory symptoms.

Measured benefits from reducing diesel exhaust emissions include:

Fewer incidences and reduced severity of illnesses such as asthma and other chronic respiratory illness
Fewer lost school days and work days
Fewer hospital visits due to respiratory illness
Reduced cancer risks for occupational levels of exposure and from ordinary outdoor air exposure

Volkswagen Settlement

The Environment Department is the lead agency in New Mexico for the Volkswagen Environmental Mitigation Trust Agreement. Please go to the Volkswagen Settlement website for additional information.

Please contact Neal Butt at (505) 629-2972 or by email at neal.butt@env.nm.gov for additional information regarding potential funding for qualified projects.