Diesel Emissions Mitigation Grants

The Oregon Department of Environmental Quality is providing approximately $8 million in grant funding every year for five years, starting in 2021. Revenue for this program is provided by the Environmental Mitigation Trust Fund, subject to the settlement agreement between the United States and Volkswagen Group of America, Inc. In 2019, the Oregon Legislature authorized the creation of a grant program supporting businesses, governments and equipment owners in replacing older and more polluting diesel engines with new, cleaner technologies and exhaust control retrofits. These grants will be disbursed to awardees as a reimbursement of eligible project costs incurred during the project period.

Oregon DEQ received legislative direction from HB 2007 establishing the grant program and guiding the rules for awarding funding to eligible projects in Oregon. Among other priorities, these statues and rules prioritize funding for projects seeking to comply with HB 2007's vehicle phase out deadlines in Multnomah, Washington, and Clackamas counties. As a result, many of the grant awards are concentrated in this area of the state, where diesel pollution is the most severe.

Each year, the Environmental Protection Agency allocates federal Diesel Emissions Reduction Act grants to eligible states for diesel emissions reduction projects. Starting in 2023, Oregon DEQ began allocating available federal DERA State Grant dollars through the annual diesel grant process. This will allow diesel equipment owners to access additional funds through a single application process. EPA published federal guidance for this program in 2023 and 2024. DEQ will award DERA grant dollars for applications that comply with current requirements, available in EPA's Program Guide.

Additionally, in 2025, DEQ has approximately $4.8 million in federal funding from the Climate Equity and Resilience Through Action grant for a new Clean Truck Program to fund the replacement of diesel medium and heavy duty vehicles with zero-emissions vehicles. DEQ will use these funds in 2025, in parallel to our existing Diesel Emissions Mitigation Grant Program, to support businesses, governments, and equipment owners in replacing older, polluting diesel engines with zero-emissions vehicles. As a reimbursement program, the percentage of funding from the Clean Truck grants will be approximately 33% or $130,000, whichever is less.

The same Web Grants application portal will be used for the Clean Truck grants, the DEM grants, and the DERA grants. DEQ staff will evaluate all of the applications submitted and determine which of the various available grant programs is most suitable for the proposed projects.

Making a difference in Oregon: View our success stories