An Open Letter to EPA Administrator Michael Regan on DERA Funding

April 13, 2021

The Diesel Emissions Reduction Act (DERA) was created by Congress as part of the Energy Policy Act of 2005. DERA has been an effective program that produces substantial air quality improvements for communities around the country. Today, clean vehicle advocates see opportunities to improve the program and more strongly align it with the Biden Administration’s climate and environmental justice goals. We would welcome the opportunity to work with you and the U.S. EPA’s outstanding staff.

DERA has been an effective program that produces substantial air quality improvements for communities.

First, we appreciate much about the program. It has prioritized reducing harmful emissions in communities most negatively and disproportionately impacted from unhealthy air. This has included emissions from both on- and off-road vehicles, many of which are extremely old and emit heavy loads of toxic pollutants.

Another strength of DERA is its focus on school buses, through a popular and simple rebate program. Given strong interest in the program, EPA must use a lottery system to make awards. The system makes it easy for schools to apply and helps get older buses off the road to reduce direct health impacts on children.

EPA delegates much of the DERA administration to its regional offices. The Midwest Regional Office in Chicago does an outstanding job. They share information freely and are receptive to input during monthly meetings and other convenings. As a result, Clean Cities coalitions and states are active participants, bringing many projects forward.

Program Updates Could Align with Biden Administration Goals

Today, we see opportunities to strengthen the program. Much has changed in markets and technologies for commercial vehicles. With some updates, DERA would be better aligned with the Biden Administration’s goals, especially on climate.

There are opportunities to update the program, as much has changed in markets and technologies for commercial vehicles.

First, EPA needs to stop funding on-road projects that put new diesel trucks and buses on the road. Providing federal funding for new diesels is not consistent with the President’s new federal climate strategy, air quality, health, or environmental justice goals. New diesels don’t provide climate benefits over old ones. In-use testing of new diesels operating in urban driving conditions reveal nitrogen oxide emissions many times higher than federal standards.

Today, inherently cleaner vehicles are becoming widely available across all on-road and some off-road sectors. Electric options provide climate benefits due to much greater energy efficiency, and these benefits will increase as the grid becomes cleaner. For natural gas and propane vehicles, renewable forms have become widely available. The industry can meet EPA requirements that these lower net carbon fuels are used in vehicles funded by DERA. Complementary federal policies, including updating the Renewable Fuels Standard or adopting a low carbon fuel standard, would ensure the economics for these renewables are even more favorable, and continue to improve for EVs. Providing taxpayer dollars for new on-road diesels delays progress toward decarbonizing transportation.

Off-road Sectors Should Remain Funding Priority

Off-road vehicles and equipment present a difficult challenge. For some ports/marine, rail, construction, and agriculture applications, diesel remains the only option. Certain off-road sectors should remain a funding priority due to heavy pollution loads on communities from old diesels.

Providing federal funding for new diesels is not consistent with the President’s new federal climate strategy.

However, where practical non-diesel (electric, cleaner fuels) options, such as terminal tractors and some others exist, these should be prioritized and funded. In other situations, where practical, retrofitting old equipment would be a better choice. This would achieve pollution reduction without spending millions of dollars to lock in new diesels in sectors where fleet turnover takes several decades.

Flexibility in Rules Would Accelerate Transition to Cleaner Technologies

It’s also time for EPA to carefully reconsider some flexibility in rules requiring destruction of old diesel engines when funding replacements. In 2005 and several years following, these rules worked well and were integral to driving significant health benefits. Today, changed circumstances mean these rules can be a barrier to accelerating turnover of old diesel fleets to new cleaner, climate-friendly technologies.

For example, if a company wants to purchase a new electric terminal tractor or Class 6-8 straight truck, they must be able to destroy a pre-2009 truck. For some on-road applications, the higher polluting pre-2009 vehicles are becoming rare. If they have none in service, they must find and buy old equipment, then put it into operation for two years. They make a risky bet that they will eventually find grant dollars for a new electric truck, at which time they destroy the old truck. Also, the initial purchaser of the truck may not be the eventual owner, adding another barrier, given EPA rules. Finally, the tools used to estimate emissions still may not render accurate results for some fleet segments. Given these barriers, many just purchase new diesel trucks.

A more flexible approach on DERA rules and scoring would accelerate the transition to cleaner vehicles.

A more flexible approach on these rules and scoring, especially for on-road vehicles and some off-road, would accelerate transition to cleaner, climate friendly options. For other off-road sectors, if old diesel equipment truly has remaining useful life, engine destruction still plays an important air quality and health role.

We are excited to work with you, the Administration, and EPA managers who have long been committed to improving air quality and health. DERA has made an important and positive impact since 2005. With updates to align it with President Biden’s climate and environmental equity goals, it can be an even more effective tool.