National Clean Campaign ------- ------- Contents EXECUTIVE SUMMARY 3 1. INTRODUCTION 9 2. EPA's NATIONAL CLEAN DIESEL CAMPAIGN 13 Overview 13 Verifying That Emission Reduction Technologies Work 14 Tapping Into Regional Collaborates 16 Regulating Diesel Engines and Fuels 17 3. THE ENERGY POLICY ACT OF 2005, DIESEL EMISSIONS REDUCTION ACT PROGRAM 19 Background 19 The National Clean Diesel Funding Assistance Program 22 The National Clean Diesel Emerging Technologies Program 23 The SmartWay Clean Diesel Finance Program 25 The State Clean Diesel Grant and Loan Program 27 Inaugural Year Results in Impressive, Cost-Effective Reductions Across All Sectors 28 4. RESOURCES THAT SUPPORT THE NATIONAL CLEAN DIESEL CAMPAIGN 35 Diesel Emissions Quantifier 35 Agency Guidance for Calculating Cost-Effectiveness 35 Guidance on State Implementation Plans 36 Public Outreach Materials 36 NCDC Joins Forces With International Partners 37 5. REMAINING CHALLENGES .. .. 38 Contents ------- 6. LESSONS LEARNED AND NEEDS FOR THE FUTURE 40 Lessons Learned 40 Next Steps 41 APPENDIX A: NATIONAL CLEAN DIESEL FUNDING ASSISTANCE PROGRAM, FY 2008 GRANTS 43 APPENDIX B: NATIONAL CLEAN DIESEL EMERGING TECHNOLOGIES PROGRAM, FY 2008 GRANTS 47 APPENDIX C: SMARTWAY CLEAN DIESEL FINANCE PROGRAM, FY 2008 GRANTS 48 APPENDIX D: STATE CLEAN DIESEL PROGRAM, FY 2008 GRANTS 49 APPENDIX E: NATIONAL PROGRAM EVALUATION CRITERIA 52 APPENDIX F: EPA REGIONAL CLEAN DIESEL COLLABORATES 54 ACRONYMS AND ABBREVIATIONS .. ,.. 56 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Executive Summary NATIONAL CLEAN DIESEL CAMPAIGN REDUCING emissions from diesel engines is one of the most important public health challenges facing the country. Despite EPA's stringent diesel engine and fuel stan- dards taking effect over the next decade, the 20 million engines already in use will continue to emit large amounts of nitrogen oxides (NOX) and paniculate matter (PM)—both of which will contribute to serious public health problems for years to come. Fortunately, a variety of cost-effective technologies can dramatically reduce harmful emis- sions, save fuel, and help our nation meet its clean air and sustainability goals. To meet these challenges, the U.S. Environmental Protection Agency (EPA) established the National Clean Diesel Campaign (NCDC). NCDC consists of both regulatory programs to address new engines and innovative nonregulatory programs to address the millions of diesel engines already in use. EPA standards apply to new diesel engines, and because these engines can last a long time, solutions are needed to reduce harmful emissions from the existing fleet. These innova- tive approaches promote a variety of emission reduction strategies such as retrofitting, repairing, replacing, and repowering engines; reducing idling; and switching to cleaner fuels. Through a dynamic network of Regional Collaborates, whose development EPA initiated, environmen- tal groups, industry, and government were inspired and motivated—despite their sometimes conflict- ing perspectives—to unite behind a common goal. NCDC mobilized diverse and unusual partners with historic differences to work together, creating broad support based on the urgency of the public health problem and bringing new technologies into use years earlier than would otherwise have occurred. In 2008, Congress appropriated funding for the Diesel Emissions Reduction Act (DERA) Program under the Energy Policy Act of 2005 (EPAct 2005) to reduce emissions from heavy-duty diesel engines in the existing fleet. In the first year of the DERA program, EPA awarded $49.2 million for diesel emission reduction programs across the country.1 EPA gave priority to projects that: • Demonstrated a clear public health benefit in areas with high population density and poor air quality. • Fostered cost-effective strategies that maximized the useful life of a certified engine configura- tion, verified technology, or emerging technology. • Conserved diesel fuel. • Used cleaner fuels. Congress also provided $10 million for grants for cost-effective emission reduction projects for two California air quality management districts (South Coast and San Joaquin). Executive Summary ------- The fiscal year (FY) 2008 funding enabled EPA to award 119 grants, which will lead to emission reductions of approximately 46,000 tons of NOX and 2,200 tons of fine paniculate matter (PM2 5). The PM-related emission reductions translate into a significant quantifiable public health benefit of approximately $580 million to $1.4 billion. Additionally, projects funded under these grants will save 3.2 million gallons of fuel per year for a cost savings to operators of more than $8 million each year (at $2.50 per gallon). More than 14,000 diesel-powered vehicles and pieces of equipment are cleaner as a result of the first year of this program. More than two-thirds of these vehicles are trucks and school buses that were upgraded through EPA's sector outreach programs such as Clean School Bus USA. DERA directs EPA to fund two different components: a national competition and a state alloca- tion program. The national program, with 70 percent of the funding, consists of three separate competitions: 1. The National Clean Diesel Funding Assistance Program 2. The National Clean Diesel Emerging Technologies Program 3. The SmartWay Clean Diesel Finance Program The State Clean Diesel Grant and Loan Program utilizes the remaining 30 percent of the funding. National Clean Diesel Campaign Funding Structure Federal Funding Diesel Emissions Reduction Program Nationally Administered Competitions Allocation to States f t National Clean Diesel Funding Assistance Program National Clean Diesel Emerging Technologies Program SmartWay Clean Diesel Finance Program State Clean Diesel Grant and Loan Program REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- NCDC programs deploy proven technologies much earlier than would occur otherwise, accelerate the use of emerging technologies, and provide innovative financial incentives that make the business case for doing the right thing for the environment. States are key partners in the success of clean diesel programs and are given the opportunity through the state program to enhance their leadership on air quality issues. NATIONAL CLEAN DIESEL PROGRAMS National Clean Diesel Funding Assistance Program. The response to EPA's National Clean Diesel Funding Assistance Program was overwhelmingly positive. This program allows communi- ties to meet their most pressing needs to reduce harmful diesel emissions. Communities benefit by activities as diverse as retrofitting school buses so that children's exposures are reduced, repower- ing locomotives used at seaports to save fuel as well as reduce emissions in neighborhoods, and replacing high-emitting construction equipment used to build hospitals and our nation's roads. EPA's seven Regional Collaborates held grant competitions. In FY 2008, applicants nationwide submitted 236 applications, requesting more than $144 million and offering approximately $81 million in matching funds. Demand for funding under this component of DERA exceeded available funds by 5:1. The variety of needs and approaches reflects the diversity of air quality challenges facing local communities across the country. After careful evaluation and ranking, EPA awarded approximately $30 million to 60 applicants, who provided matching funds of approximately $35 million. The high level of response to this program shows the desire communities have to clean up their fleets. The response also shows the ability of federal dollars to attract funds from other partners to accelerate the introduction of cost-effective clean diesel technologies. National Clean Diesel Emerging Technologies Program. The emerging technology pro gram, for which EPA may make available up to 10 percent of the funding, fosters the deployment of cutting-edge technologies and encourages private-sector investment in innovation. The program promotes the deployment of innovative technologies (those not yet verified or certified by EPA or the California Air Resources Board) by providing funding to develop and evaluate these technolo- gies in the field. EPA received 10 eligible applications that requested $5 million and offered more than $1.1 million in matching funds. EPA ultimately awarded six grants totaling $3.7 million with $1.1 million provided as matching funds. These grants will demonstrate new technologies, including technologies that reduce NOX. This program will help expand the currently limited retrofit options for nonroad engines, such as those used in construction equipment and on marine vessels. SmartWay Clean Diesel Finance Program. For the first time, DERA gives EPA the authority to es- tablish national low-cost revolving loan and other financing programs to provide funding to fleets to re- duce diesel emissions. EPA exercised this authority by awarding grants where the recipients could provide innovative financing methods for clean diesel technologies. For the first time, partners are able to provide financial incentives (e.g., low-cost revolving loans, rebates, below-market rates) that stretch the federal dollar further. A small investment of federal funds leverages significant private investment and spurs the purchase of fuel-saving and emission reduction technologies for trucks. Under the SmartWay Clean Executive Summary ------- Diesel Finance Program competition, EPA received four grant applications requesting approximately $9.5 million that would leverage $44 million in outside funds, to establish innovative financing programs. EPA awarded three grants totaling approximately $3.4 million, leveraging $19 million. These grants establish national financing programs that provide funding to small- and medium-sized trucking companies to purchase clean diesel technologies. These trucking companies include many small businesses that would otherwise be unlikely to update their fleets with cleaner, more fuel-efficient equipment. STATE CLEAN DIESEL GRANT AND LOAN PROGRAM Recognizing that many states, such as California, Texas, Washington, Illinois, Maine, and New York, have developed successful clean diesel programs over the years, Congress included a state- only component in DERA to recognize the vital role played by states. In contrast to the national competitive program, the State Clean Diesel Grant and Loan Program is a formula allocation program. By meeting certain requirements, any state is eligible to participate. According to the statute, if adequate appropriations are available, 30 percent of any funds appropriated for DERA must be allocated to the states through this program. In the first year of the state program, all 50 states elected to participate and established new clean diesel projects. The programs responded to state needs, focusing on a variety of sectors, such as school buses, construction, freight, refuse haulers, and transit buses. Based on funding availabil- ity and the states' ability to provide matching funds, individual state grant amounts ranged from $196,880 to $492,200. EPA funded the state programs with almost $13 million. Thirty-three states matched the federal dollars by providing more than $6.3 million in matching funds altogether. COST-EFFECTIVE RESULTS OF PROVEN TECHNOLOGICAL SOLUTIONS In this report, EPA analyzes the overall cost-effectiveness of various diesel emission reduction strategies. EPA compares the amount of federal grant funds used to the lifetime tons reduced to evaluate the effectiveness of federal investments in spurring diesel emission reductions. The Agency concludes that the innovative finance provisions are an important new approach with an impressive ability to leverage significant additional resources. In the first year of funding, clean diesel strategies have proven to be about as cost-effective in reduc- ing air pollution and health impacts associated with diesel emissions as other EPA programs, as shown in the table on page 7. Under the National Clean Diesel Funding Assistance Program, EPA calculated the average cost-effectiveness of federal investment to be approximately $27,700 per ton of PM re- duced over the lifetime of the project and just under $2,000 per lifetime ton of NOX. In the SmartWay Clean Diesel Finance Program, the cost-effectiveness was about $9,000 in federal funds per lifetime ton of PM and $400 in federal funds per lifetime ton of NOX. The average cost of federal invest- ment for the state program was approximately $16,700 per lifetime ton of PM reduced and $600 per lifetime ton of NOX. These per ton costs compare very favorably with strategies used to attain national ambient air quality standards, such as stationary source standards that range from $1,000 to $20,000 and as high as $100,000 per ton of PM25 on an annualized basis.2'3 However, DERA projects are on REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- average4 less cost-effective for PM than regulatory programs designed to set emissions standards for new diesel engines, such as the 2007 Heavy-Duty Highway diesel emissions standards. EPA has esti- mated that this regulation has a cost-effectiveness of $14,200 per ton PM and $2,100 per ton N0x. Average Cost-Effectiveness of DERA Projects DERA Program National Clean Diesel Funding Assistance Program $27,700 $2,000 SmartWay Clean Diesel Finance Program $9,000 State Clean Diesel Grant and Loan Program $16,700 Regulatory Programs Heavy-Duty Engine and Highway Diesel Fuel Requirements PM NAAQS RIA $14,200 $3,000-15,000 $2,100 - Note 1: Values reported for the DERA program are for federal funds per ton pollutant reduced over project lifetime. Lifetime tons are not discounted. This report presents two different types of cost-effectiveness: federal funds per lifetime tons and total cost per ton. The comparisons for the regulatory programs are in annualized costs per ton. Note 2: Values were rounded to nearest $100. Federal funds do not include matching amounts. Note 3: The Emerging Technologies program is designed to demonstrate new technologies. At this phase in the development of these technologies, costs would be expected to be higher than when at a more fully mature commercial scale of deployment stage. Therefore, the cost comparisons with the other national program components have been omitted. The first year of implementation for the Diesel Emissions Reduction Program has been extremely suc- cessful. By harnessing overwhelming support from environmental organizations, state and local govern- ments, industry, technology vendors, and other groups, EPA has been able to magnify the available dol- lars and strategically fund important emission reduction and fuel-saving projects. In total, EPA awarded 119 grants in the first year of the DERA program. More than 14,000 vehicles and pieces of nonroad equipment in a wide array of sectors will be cleaner as a direct result of this program. New clean diesel programs have been established in every state, and technologies have been advanced for the future. In addition, the American Recovery and Reinvestment Act of 2009 (Recovery Act) provided $300 million in new funding for the Diesel Emissions Reduction Program. EPA has already awarded more than $85 million through the State Clean Diesel Grant program, and those funds are currently at work creating green jobs and reducing air pollution. EPA is in the process of awarding national competitive grants under the Diesel Emissions Reduction Program with additional goals of creating and preserving jobs and pro- moting economic recovery. In response to this competitive program, EPA received more than 600 applica- tions requesting approximately $2 billion and offering more than $2 billion in matching funds. This clearly demonstrates the high level of interest in clean diesel programs across the country. Implementation of the EPAct 200B's Diesel Emissions Reduction Program is a critical step toward reaching our national clean air goals and protecting public health and the environment for all Americans for generations to come. 2 National Ambient Air Quality Standards for Particle Pollution Regulatory Impact Assessment (PM NAAQS RIA 10-06-06, Chapter 3, pg. 3-14, Table 3.2): Compares other stationary and area sources for PM reduction. Report is available at www.epa. gov/ttn/ecas/ria.html and www.epa.gov/ttn/ecas/regdata/RIAs/Chapter%203-Controls.pdf. 3 The Cost-Effectiveness of Heavy-Duty Diesel Retrofits and Other Mobile Source Emissions Reduction Projects and Programs (EPA-420-B-07-006, May 2007, Appendix Table 3, pg. 13-15): Compares other mobile source programs cost-effectiveness for NOx/VOCs. Report is available at www.epa.gov/otaq/stateresources/policy/general/420b07006.pdf. 4 The weighted average federal cost of DERA projects is about $25,000 per ton PM and $1,500 per ton N0x. Executive Summary ------- ------- 1. Introduction Reducing Diesel Emissions Garners Broad Support FROM the farm to the interstate highway to the neighborhood grocery store, we find diesel engines in every corner of society. Diesel engines power the movement of goods across the nation and help construct the buildings in which we live and work. Diesel engines aid in building the roads on which we travel and power the buses that carry millions of children to school safely each day. While diesel engines provide the mobility and power Americans require, are more fuel-efficient than gasoline engines, and serve as the workhorse of the nation's econo- my, exhaust from these engines sullies our skies with pollutants that harm our health and damage the environment. Because of our reliance on diesel engines, reducing emissions from them is one of the most impor- tant public health challenges facing the country. Despite the U.S. Environmental Protection Agency's (EPA's) stringent diesel engine and fuel standards, which, for new engines beginning with engine model year 2007, are being phased in over the next decade, 20 million engines already in use continue to emit relatively large amounts of nitrogen oxides (N0x) and fine paniculate matter (PM25). N0x, which contributes to both ozone and paniculate formation, as well as directly emitted PM25, can lead to serious health conditions such as triggering asthma and worsening heart and lung dis- ease. In addition, diesel engines emit black carbon, which might contribute to global climate change. The problem of diesel emissions is not limited to a few discrete geographic areas or to one seg- ment of the population. Harmful diesel emissions contribute to poor air quality in much of the country. No fewer than 141 million Americans—nearly half the population of the United States— live in areas that are designated as nonattainment with the eight-hour ozone standard and/or the PM25 standard, based on the National Ambient Air Quality Standards (NAAQS).5 Due to the sheer numbers of engines in use and the volume of pollutants they emit, the health effects and environmental pollution stemming from diesel emissions could be substantial. Nation- wide, in 2009 diesel emissions from mobile sources alone will account for approximately 300,000 tons of directly emitted PM25 and 6.4 million tons of NOX, which contribute to the formation of ozone and additional fine particles. These emissions will come from approximately 20 million en- gines operating in 2009, including approximately 13 million on-highway vehicles, 7 million nonroad engines, and 47,000 locomotive and marine engines. (See Figures 1 and 2.) Reducing diesel emis- sions quickly is vital to helping communities reach their public health goals. As of December 16, 2008, there are 57 eight-hour ozone nonattainment areas (1997) that consist of 293 full or partial counties, with a total population of almost 132 million. An additional 74 counties, where 16 million people reside, show air quality values that do not meet the 2008 ozone standard. As of December 16, 2008, there are 39 PM25 nonattainment areas (1997) that consist of 208 full or partial counties, with a total population exceeding 88 million. On December 22, 2008, EPA designated nonattainment areas for the 2006 PM2 5 NAAQS. As of December 22, 2008, there are 58 PM2 5 nonattainment areas (2006) that consist of 211 full or partial counties. 1. Introduction ------- Figure 1. 2009 NOX Mobile Figure 2. 2009 Directly Emitted Source Diesel Emissions PM2 5 Mobile Source for 50 States Diesel Emissions for 50 States (6,400,000 tons) (300,000 tons) Nonroad Diesel Harbor Craft Marine Diesel 13% C3 Marine Highway Diesel Highway Diesel 36% Harbor Craft Locomotive Marine Diesel 9% 9% Fortunately, a variety of cost-effective technologies can dramatically reduce harmful emissions, save fuel, and help our nation meet its clean air and sustainability goals. In 2000, to address the concerns of both new and existing diesel engines, EPA created the National Clean Diesel Cam- paign (NCDC), a partnership program that incorporates traditional regulatory approaches and innovative nonregulatory approaches to achieve results. The regulatory aspect of the program requires new engines and their fuels to meet stringent technology-based standards to reduce the amount of emissions released. The innovative component of the program promotes the use of a variety of techniques to reduce emissions, including retrofitting, repairing, replacing, and repowering vehicles and equipment; reducing idling; and switching to cleaner fuels. To encourage these actions, NCDC cultivates the involvement of national, state, and local partners in the public and private sectors. In 2008, for the first time ever, Congress appropriated funding under the Energy Policy Act of 2005 (EPAct 2005) to reduce emissions from diesel engines in the nation's existing fleet. In the first year of the program, the EPA's NCDC distributed $49.2 million to initiate diesel emission reduction projects and programs across the country. Reflecting the goals in the statute, EPA gave priority to projects that: • Demonstrate a clear public health benefit and apply to areas with high population density and poor air quality. • Use cost-effective strategies that maximize the useful life of a certified engine configuration, verified technology, or emerging technology. • Conserve diesel fuel. • Use cleaner fuels. 10 + REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- The EPAct of 2005, Title VII, Subtitle G, Section 794, requires that the EPA Administrator submit a report to Congress evaluating the implementation of the Diesel Emissions Reduction Act (DERA) Program. This report fulfills that requirement. In the inaugural year of the program, EPA awarded 119 grants that are already achieving significant emission reductions, as detailed in Appendices A through F. As part of this effort, all 50 states have begun new state clean diesel program grants. The suite of national and state diesel emission reduction programs is a vital part of state and local efforts to reduce harmful air pollution. These first DERA grants are expected to significantly reduce emissions in communities across the country. As shown in Table 1, the total emission reductions are noteworthy. The FY 2008 funding for the Diesel Emissions Reduction Program is estimated to reduce approximately 46,000 tons of NOX and 2,200 tons of PM2 5 over the life of the program. These emission reductions translate into a significant quantifiable public health benefit of approximately $580 mil- lion to $1.4 billion in quantifiable PM-related health benefits over the life of the program.6 In addition, the FY 2008 grants will save more than 3.2 million gallons of fuel per year, which equates to a savings in fuel costs to operators of more than $8 million per year (at $2.50 per gallon). This cor- responds to 35,600 tons of carbon dioxide (C02) per year reduced. These fuel savings calculations only reflect the savings from idle reduction technologies and do not reflect the improved fuel economy that may result from engine replacements; thus the actual fuel savings might be higher than shown. Diesel Exhaust Health Effects Direct emissions from diesel engines, especially PM2 5, N0x, and sulfur oxides (S0x), contribute to health problems. In addition, N0x contributes to the formation of ozone and PM through chemical reactions. PM2 5 has been associated with an increased risk of pre- mature mortality, increased hospital admissions for heart and lung disease, and increased respiratory symptoms. Long-term exposure to components of diesel exhaust, including diesel PM and diesel exhaust organic gases, are likely to pose a lung cancer hazard. Exposure to ozone can aggravate asthma and other respiratory diseases, leading to more asthma attacks, the use of additional medication, more severe symptoms that require a doctor's attention, more lost school and work days, more visits to the emer- gency room, increased hospitalizations, and even prema- ture mortality. People in many areas of the United States experience short-term (one to three hours) and prolonged ozone exposures (six to eight hours), which have been linked to diminished lung function, greater respiratory symptoms, and increased hospital visits. Repeated exposure to ozone can increase susceptibility to respiratory infection and lung inflammation and can aggravate preexisting asthma. At suf- ficient concentrations, ozone can even cause permanent damage to the lungs, in- cluding the development of chronic respiratory illnesses. Children, outdoor workers, those who exercise outdoors, people with heart and lung disease, and the elderly are most at risk. Many of the benefits will accrue in the first five years of the program, and the benefits are discounted using a 3 percent rate. 1. Introduction 11 ------- Table 1. Estimated Air Emission Reductions of FY 2008 NCDC Programs Over Lifetime of Projects (Lifetime Tons) National Clean Diesel Funding Assistance Program 1,100 1,900 7,300 113,600 National Clean Diesel Emerging Technologies Program 600 30 30 100 SmartWay Clean Diesel Finance Program 9,600 400 BOO 1,600 238,200 State Clean Diesel Grant and Loan Program 21,000 2,000 5,700 112,900 Total 46,000 2,200 4,400 14,700 464,600 Note: Values were rounded to the nearest 100 lifetime tons or to one significant figure. Sums might not add due to rounding. Lifetime tons are not discounted. * Hydrocarbon Carbon monoxide f Does not include C02 reductions from engine replacements, repowers, or vehicle replacements. The map in Figure 3 shows the location of the projects for the first year of the program. These projects are helping communities lower their public health risks from air pollution, accelerating the use of proven technologies, making engines cleaner and more efficient, encouraging new cutting- edge technologies, and utilizing new financial incentives to reach more fleets. Figure 3. FY 2008 DERA Projects Across the Country % Carson City Salt Lake City • Bakersfield f • Diamond Bar Los Angeles Cheyenne Denver Augusta Willistonfc Montpelier ^ Manchester pigeon Albany ^Boston Buffalo. NewPaltz* -• Providence Scarsdale ^Hartford NewTork Centereach DesMoines '^uinxjnw-ueiroii Philadelphia East Brunswick ^ Chi-° Portage ^•"ZSe'r*""10" Springfield " 4 . ,. *•.. Columbu Innianapohs Derwood District of Columbia Topeka < St. Louis Indianapolis %• »»f Jefferson City Louisville Knoxville Ralei Jashville Columbia Atlanta *Charle Honolulu ^^ igfi* National Program 0 State Program 12 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- 2. EPA's National Clean Diese j ^4 First-of-Its-Kind Campaign Lives Up to Its Goals OVERVIEW EPA's NCDC responds to the national need to reduce harmful diesel emissions. In April 2000, EPA began its Voluntary Diesel Retrofit Program with a few targeted projects. Using a small sample of the existing national fleet of school buses, delivery trucks, and transit buses, EPA demonstrated emission reduction technologies and cleaner fuels likely to be used for all new engines seven years before the 2007 effective date for the new engine standards. Through this initial collaboration on retrofit projects, partners realized that they had found a way to put aside their sometimes-conflicting perspectives to unite behind a common goal. Fueled by this initial success, NCDC mobilized diverse partners with a wide range of perspectives—such as engine manufacturers, environmental groups, emission technology vendors, fuel suppliers, private fleet owners, state and local governments, and transportation officials—to work together, creat- ing awareness of the urgency of the public health problem and accelerating the use of technolo- gies years earlier than otherwise would have occurred. EPA provided seed money and technical expertise to create markets for new technologies and bring stakeholders together around an issue of mutual interest. This tiny spark caught flame. Since 2000, EPA has awarded approximately 300 demonstration grants under the Clean Air Act for diverse sectors such as transit and school buses and marine, construction, and freight vehicles and equipment. These projects reduced unnecessary idling and promoted the use of alternative and cleaner fuels, retrofitting engines and replacing old engines or equipment with new, cleaner versions. Each year additional partners have joined NCDC, adding and showcasing new technologies. EPA tailored incentives to key sectors such as school buses, marine ports, construction, freight, transit, and agriculture. These successful demonstration projects resulted in the use of ultra-low-sulfur fuel in parts of 20 states well before the EPA mandate took effect. This cleaner diesel fuel directly reduces emissions from engines and enables the use of the most effective emission control devices. Now the use of this fuel is widespread and fleets are experiencing maintenance and emissions benefits of cleaner fuels. 2. EPA's National Clean Diesel Campaign 13 ------- Clean School Bus USA Is Key to a Healthier Ride for Kids Due to the innovation and success of EPA's Clean School Bus USA, begun in 2003 as the flagship program of the National Clean Diesel Campaign, approximately 3 million children ride cleaner school buses today. JP CLEAN SCHOOL BUS Clean School Bus USA's goal is to significantly reduce children's exposure to harmful exhaust from diesel school buses. By establishing partnerships with local and state governments, school transportation officials, fuel providers, and equipment and engine manufacturers, EPA created a highly successful, incentive-based program to reduce the pollution from the nation's 400,000 oldest and dirtiest school buses and to protect the 24 million children who ride buses daily. As part of the program, EPA awarded 157 grants throughout six years, totaling $31 million, to demonstrate pollution control techniques. EPA has distributed its Key to a Healthier Ride educa- tional materials to more than 400 school districts nationwide, reaching more than 74,000 school bus drivers and affecting more than 83,000 diesel school buses. These school districts are also formally recognizing bus drivers who successfully reduce school bus idling. For more informa- tion, visit: www.epa.gov/otaq/schoolbus/index.htm. VERIFYING THAT EMISSION REDUCTION TECHNOLOGIES WORK Testing and evaluating the efficacy of diesel emission reduction technologies is a cornerstone of NCDC. From the beginning, fleet owners demanded to know that the technologies they wanted or were expected to use would work and would not harm their operations. State and local govern- ments wanted assurance that they could rely on these strategies now and in the future to meet their air quality goals. In response to these needs, EPA created the Retrofit Technology Verification Program in 2002 to evaluate objectively the effectiveness of emission control technologies. Through this program, EPA assures users that the actual emission benefits from retrofit technologies match those claimed by the manufacturer. The Agency also evaluates technologies that assist fleets in reducing idling. In addition, the California Air Resources Board (CARB) provides its own list of verified emission control technologies (www.arb.ca.gov/diesel/verdev/verdev.htm), which EPA recog- nizes. By verifying technologies, leading successful demonstrations, and operating recognition and education programs, these agencies have helped develop markets for new, greener technologies. Yet this was only the beginning. Congress recognized the important role the verification process plays by making it a foundation of the implementation and integrity of the Diesel Emissions Reduction Pro- gram. Thus, in the national grant program, EPA requires the use of technologies that have been veri- fied or certified by EPA or CARB when federal funds are applied. Congress also wanted to continue to spur innovation and encouraged the support and development of emerging technologies under DERA. 14 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- In establishing its verification program, EPA realized that verifying a technology only prior to its use is not enough. The technologies need "real world" testing to ensure that they maintain their performance throughout their useful life. As retrofit technologies are introduced into the market in higher volume, verifying the field performance and long-term durability of these products through in-use testing is increasingly essential. EPA requires all manufacturers to rigorously test each verified technology at two different stages during its useful life to confirm the percent of emissions reduc- tion and evaluate durability. In-use testing offers confidence that verified retrofit technologies have been proven in the real world and will maintain that performance throughout their useful lives. As a sign of the strength of the initial tests and of the technologies themselves, results from in- use testing are consistent with the original verified levels of emission reductions. In addition, EPA has been able to increase the level of reduction listed on its Web site for some of the technolo- gies, given their outstanding performance in the in-use program. To date, EPA and CARB have verified more than 50 emission control technologies. In addition, over the past seven years, EPA's SmartWay Transport Partnership has evaluated idle reduction technologies through grants, engineering analysis, and peer-reviewed reports. As of March 2009, EPA has designated six categories of idle reduction technologies as eligible for grant funding: 1) electrified parking spaces (truck stop electrification); 2) shore side power for ships, also known as cold ironing or Alternative Maritime Power; 3) auxiliary power units and generator sets; 4) fuel- operated heaters; 5) battery air-conditioning systems; and 6) thermal storage systems. Clean Ports USA Helps Marine Ports Save Money and Decrease Emissions Due to EPA's Clean Ports USA program (part of USA the National Clean Diesel Campaign), leading ^^^_^^^_ 5\/£ ^_^_ marine ports are saving fuel, increasing operational efficiency, and decreasing diesel emissions. In addition, several prominent ports have developed clean air action plans, which include greenhouse gas reduction goals, to assist them in reducing air pollution in gateway communities. In January 2005, EPA partnered with the American Association of Port Authorities to create Clean Ports USA as an outreach- and incentive-based program designed to reduce emissions from existing diesel engines operated at marine ports. EPA is working with port authorities; terminal operators; and shipping, trucking and rail companies to promote environmentally superior technologies through education, incentives, and financial assistance. For more information, visit: www.epa.gov/cleandiesel/ports. 2. EPA's National Clean Diesel Campaign ------- SmartWay Transport Partnership SmartWay Transport Partnership U.S. ENVIRONMENTAL PROTECTION AGENCY EPA developed the SmartWay Transport Partnership Program to address the environmental impact of the freight system in the United States. The Smart- Way program is a voluntary public-private initiative designed to improve the environmental performance of the freight delivery system through money-saving, market-based approaches. The goal of the program is to reduce emissions by promoting cost-effective strategies that reduce fuel consump- tion and air pollution, using such methods as eliminating unnecessary idling, installing emission control devices, and improving freight logistics. The SmartWay program works hand in hand with the National Clean Diesel Campaign to promote diesel emission reduction strategies. The SmartWay program has pioneered innovative approaches to emission reduction, such as the creation of SmartWay-approved trucks to identify trucks with superior environmental performance and the development of low-cost financing for the purchase of fuel saving and emission control devices. The innovative financial strategies offer increased access to lenders who can provide financing for SmartWay-verified technologies and provide truck owners with low-cost financing for the purchase of SmartWay Upgrade Kits (which include idle reduction technologies, advanced aerodynamic technologies, and low-rolling resistance tires) or the purchase of cleaner used diesel trucks with aftertreatment devices. The SmartWay program also recognizes partners who achieve superior environmental performance. For more information, visit: www.epa.gov/smartway. TAPPING INTO REGIONAL COLLABORATIVES With the foundation of cost-effective, reliable technologies, EPA's partners wanted to reach more fleets in more sectors to reduce harmful diesel emissions. As a next step, beginning in 2003, EPA's regions began organizing Regional Clean Diesel Collaboratives with states, local nonprofit organi- zations, private industry, and municipalities. (See Figure 4 for a map.) By tying into a network of regional stakeholders, this collaborative structure is well-suited for achieving significant emission reductions across large geographic areas. Members of these collaboratives have agreed to col- lectively leverage additional funds and take a local approach to diesel emission mitigation. These collaboratives play a vital role in EPA's proactive, incentive-based approach to achieving superior environmental results. Information on the collaboratives can be found in Appendix F. 16 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Figure 4. Regional Clean Diesel Collaboratives Northeast Midwest PA 9—' IL ,N OHMid-At REGULATING DIESEL ENGINES AND FUELS While cost-effective technology and strong coalitions of committed stakeholders form the back- bone of NCDC, another important component is a series of regulations designed to reduce pollu- tion emitted from new diesel engines and their fuels. Under the Clean Air Act, EPA developed and implements a suite of stringent regulations to mitigate emissions from new diesel engines and their fuels. These regulations apply to a variety of new engines, including those in trucks, buses, construction equipment, locomotives, harbor craft, and large ships. Over the long term, these standards will yield enormous public health and environmental benefits. When fully implemented, these regulatory programs will reduce NOX by about 7 million tons per year, PM25 by more than 300,000 tons, and SOX by about 800,000 tons. By 2030, when the regu- latory programs are fully phased in and implemented, the net public health benefits total approxi- mately $186 billion per year, including annually preventing 26,000 premature deaths, approxi- mately 20,000 hospitalizations, and more than 3.3 million days lost from work due to respiratory problems as described in EPA's Regulatory Impact Assessments. 2. EPA's National Clean Diesel Campaign 17 ------- In general, these rules require stringent standards for PM and NOX, based on levels achievable with advanced diesel aftertreatment technologies, such as diesel particulate filters (DPFs) for PM and lean NOX traps or selective catalytic reduction (SCR) for NOX. Additionally, each of these rules ultimately requires reducing fuel sulfur levels to 15 parts per million (ppm) to enable the use of advanced aftertreatment technologies. NCDC's goal is to bring these impressive benefits to the American people earlier by accelerating the adoption of proven technologies through its strategic regulatory approach. 18 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- BACKGROUND THE EPAct of 2005 provides EPA new grant and loan authority to promote diesel emission reductions and authorizes appropriations of up to $200 million per year to the Agency under the Diesel Emissions Reduction Program provisions (for FY 2007 through FY 2011). Congress appropriated funds under this statute for the first time in FY 2008, in the amount of $49.2 million. This portion of the report highlights key components of the statute and explains how EPA is imple- menting the program with state partners pursuant to Congress's direction in the statute. DERA includes a national program and a state allocation program. The national program includes 70 percent of appropriated funds, and the state program makes available 30 percent. Under this act, EPA can offer competitive grants and, for the first time, low-cost revolving loans to eligible organizations and entities on a competitive basis. To spur innovation, DERA allows for up to 10 percent of the national funds to be spent on "emerging technologies." Additionally, not less than 50 percent of the funds available for the na- tional program must be used for the benefit of public fleets. DERA requires that engine configura- tions and technologies supported by the national program be verified or certified by EPA or CARB. While the national program offers competitive grants in three categories, the state program is a single allocation program, which means that base funding is distributed to states using a specific formula based on participation, and incentive funding is also available for any states that match their base funding. Funds not claimed under this program—either if states decline to participate and/or do not match the base funding—revert to the national program. By meeting certain re- quirements, all of the 50 states and the District of Columbia are eligible to participate.7 Under the statute, EPA provides guidance to the states about the process for applications, permis- sible use of funds, and the cost-effectiveness of various emission reduction technologies. EPA es- tablished an annual deadline for submitting applications, an approval process, and a streamlined renewal process. Discretion is given to the governors for apportioning funds between grants and loans in each state. EPA published a Federal Register notice (73 FR 12728, March 10, 2008) that discussed how it intended to implement the state programs. 7 The District of Columbia is now an eligible entity for the State Clean Diesel Grant and Loan Program, but it was not eligible when EPA awarded the FY 2008 state grants. 3. The Energy Policy Act of 2005 19 ------- The Energy Policy Act of 2005 Under the EPAct 2005, EPA gives priority to those diesel emission reduction programs that: 1. Maximize public health benefits. 2. Are the most cost-effective. 3. Are in areas with high population density and poor air quality (including nonattainment areas or areas that require maintenance of national ambient air quality standards for a criteria pollutant, federal Class I areas, or areas with toxic air pollutant concerns). 4. Are in areas that receive a disproportionate quantity of air pollution from diesel fleets, including truck stops, ports, rail yards, terminals, and distribution centers, or that use a community-based multi-stakeholder collaborative process to reduce toxic emissions. 5. Include a certified engine configuration or verified technology that has a long expected useful life. 6. Maximize the useful life of any certified engine configuration or verified technology used or funded by the eligible entity. 7. Conserve diesel fuel. 8. Utilize ultra-low sulfur diesel fuel (15 ppm of sulfur content) ahead of EPA's mandate (for nonroad or marine projects). Relevant sections of the EPAct 2005 that govern the DERA program are found in Title VII, Subtitle G. Section 791, "Definitions" Section 792, "National Grant and Loan Programs" Section 793, "State Grant and Loan Program" Section 794, "Evaluation and Report" Section 795, "Outreach and Incentives" Section 796, "Relationship to Clean Air Act" Section 797, "Authorization for Appropriated Funds (2007-2011)" 20 With the foundations of its successful Clean Air Act demonstration programs, verification program, sector-based focus, Regional Collaboratives, and SmartWay brand, NCDC was well-poised to deploy cost-effective diesel emission reduction strategies even more broadly under DERA. REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- EPA's goal for the first year of DERA funding was to establish diesel emission reduction programs in every state and accelerate the adoption of clean diesel technologies in the existing fleet. The EPAct 2005 statute establishes a general framework for the Diesel Emissions Reduction Program, charging EPA to develop other details for how the total program is implemented. Ultimately, EPA designed four programs: 1. The National Clean Diesel Funding Assistance Program 2. The National Clean Diesel Emerging Technologies Program 3. The SmartWay Clean Diesel Finance Program 4. The State Clean Diesel Grant and Loan Program These programs deploy proven technologies much earlier than would otherwise occur to meet critical local air quality needs. They accelerate the use of emerging technologies and provide inno- vative financial incentives that make the business case for reducing diesel emissions. Furthermore, states are key partners in the success of clean diesel programs, and the state program enhances their leadership in reducing harmful diesel emissions. Figure 5. National Clean Diesel Campaign Funding Structure Federal Funding Diesel Emissions Reduction Program Cost-Effective, Verified and Certified Technologies to Reduce Harmful Diesel Emissions Nationally Administered Competitions Allocation to States National Clean Diesel Funding Assistance Program Reducing the Most Damaging Emissions National Clean Diesel Emerging Technologies Program Moving Innovations From Concept to the Marketplace SmartWay Clean Diesel Finance Program Supporting Low-Cost Loans for High-Value Technologies State Clean Diesel Grant and Loan Program Reaching Its Goal of Programs in All 50 States 3. The Energy Policy Act of 2005 21 ------- THE NATIONAL CLEAN DIESEL FUNDING ASSISTANCE PROGRAM Reducing the Most Damaging Emissions EPA received an overwhelmingly positive response to its Requests for Proposals (RFPs) under the National Clean Diesel Funding Assistance Program. This program offered the majority of the fund- ing available, through grant competitions handled by the Agency's seven Regional Collaboratives. The Agency received 236 applications nationwide, requesting more than $144 million and offering $81 million in matching funds. Thus, applicants requested $5 for every $1 available. Applicants requested funding to address their most pressing needs, such as retrofitting school buses so that children's exposures are reduced on their way to school, repowering locomotives used at seaports to save fuel and reduce emissions in neighborhoods while still delivering freight used in every part of commerce, and replacing high-emitting construction equipment used to build hospitals and our nation's roads. After screening for eligibility and carefully ranking the applications, EPA selected 60 recipients across the coun- try in the fall and winter of 2008—within nine months of the program start date—and awarded $29,039,803 in federal dollars, attracting approximately $35 million in matching funds. The federal share included $1,476,600 from unclaimed state funds (states that did not match their base funding). Appendix E lists the ranking cri- teria, reflecting the priorities listed on page 20. Table 2 summarizes the awards by region, and Appendix A contains a comprehensive list of the awardees and grant amounts. Emissions Reduced From Nonroad Cargo Handling Equipment at Pacific Northwest Ports Through its Clean Ports USA Program, EPA awarded the Puget Sound Clean Air Agency an $850,000 grant to fund replacements and retrofits, such as diesel particu- late filters, of nonroad truck engines for cargo-handling equipment at Puget Sound ports. This grant helps the port authorities achieve the goals in their Northwest Ports Clean Air Plan. Additionally, the Ports of Seattle and Tacoma and the Puget Sound Clean Air Agency are providing matching funds totaling $318,000. CLEANPORTSUSA Illinois School Buses Reap the Benefits of DERA Grants EPA's Clean School Bus USA grants to Illinois EPA's Green Fleets Program, including school buses, totaled $678,600, plus a $654,700 match from Illinois EPA, funding a variety of clean diesel tech- nologies, including diesel oxidation catalysts, diesel paniculate filters, closed crankcase ventila- tion, and auxiliary power units. The Illinois Green Fleets Program formally recognizes businesses, governmental entities, and organizations that use clean, domestic, renewable fuel vehicles in their fleet. The program also recognizes Illinois vehicle fleets equipped with diesel retrofits. 22 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Table 2. FY 2008 Awards for the National Clean Diesel Funding Assistance Program by EPA Region Region 1 2 3 4 5 6 7 8 9 10 Collaborative Northeast Mid-Atlantic Southeast Midwest Blue Skyways Rocky Mountain West Coast Total Number of Applications 16 33 24 39 38 20 10 11 30 15 236 6 9 6 7 13 3 3 5 5 3 60 Dollars Awarded $1,970,484 $3,268,402 $3,277,166 $3,789,289 $4,879,049 $2,719,880 $1,986,802 $1,755,645 $3,953,079 $1,440,007 $29,039,803 Public Fleets Directly Benefit From DERA National Program Funds Public fleets across the nation—including transit buses, school buses, refuse haulers, municipal trucks, snowplows, and fire trucks—are emitting less pollution in towns and cities as a direct result of the Diesel Emissions Reduction Program. In FY 2008, the Agency awarded 74 percent of competitively awarded national funds to public fleets. Section 792 (b)(2) of the EPAct 2005 re- quires that no less than 50 percent of the funds for the national program be spent for the benefit of public fleets. Many partners stepped forward to deploy clean diesel technologies in public fleets to lead by example. Making the public-sector vehicles that do the nation's work the cleanest they can be creates a powerful example for other fleets to imitate. THE NATIONAL CLEAN DIESEL EMERGING TECHNOLOGIES PROGRAM Moving Innovations From Concept to Marketplace EPA's NCDC has been demonstrating new technologies and creating new demands for environmen- tally superior products since its inception. To continue to encourage new technologies to meet the needs of fleets and air quality planners, Congress recognized the need for the DERA program to promote cutting-edge advanced technologies. EPA developed the National Clean Diesel Emerging Technologies Program to respond to Section 792 (b)(3)(B)(i), which directs that "...the Administra- tor shall provide not more than 10 percent of funds available for a fiscal year under this provision to eligible entities for the development and commercialization of emerging technologies." 3. The Energy Policy Act of 2005 23 ------- In FY 2008, under the National Diesel Emerging Technologies Program, 10 applicants requested $5 million and offered more than $1 million in matching funds. EPA awarded six grants in five states for a total of $3.7 million in federal funds, with $1.1 million in matching funds. These funds supported NOX reduction technologies such as SCR systems for on-highway trucks and nonroad construction equipment, greater emission controls from a combination of diesel oxidation cata- lysts (DOCs)/DPFs and exhaust gas recirculation (EGR) systems, and new techniques for harbor craft, such as an emission upgrade kit for two types of marine engines. The criteria by which the applicants were evaluated are presented in Appendix E. The new federal dollars used for these emerging technologies are vital to spurring investment by NCDC's partners. The National Clean Diesel Emerging Technologies Program is an opportunity to advance new, cutting-edge technologies to reduce diesel emissions from the existing fleet. Building on EPA's verification program, EPA developed a process by which a manufacturer can request that its technology qualify in advance as an emerging technology. Through its collaborative network, EPA has been encouraging new technologies to reduce NOX, save fuel, and perform better on a wider array of conditions and vehicles, including nonroad equipment and marine vessels. To qualify as an emerging technology, manufacturers should be in the initial stages of the verifica- tion process with EPA or CARB and listed on EPA's Emerging Technology List. The manufacturer must also provide an approvable application for verification (including an explanation of the en- gineering principles of the technology and why the technology should be considered an emerging technology) and an approvable test plan. An emerging technology must be close to being, if not already, commercially available. Emerging Technology An emerging technology is defined in Section 791 of the Energy Policy Act to be "... a technology that is not certified or veri- fied by the Administrator or the California Air Resources Board but for which an approvable application and test plan has been submitted for verification to the Administrator or the California Air Resources Board." Once approved, emerging technologies are listed on EPA's Web site. Technologies may remain on EPA's Emerging Technology List for up to two years. During that two-year period, EPA estimates that manufactur- ers will be able to complete the necessary steps to obtain full verification. Once a technology is verified or certified, it will no longer be considered "emerg- ing" but will then be fully eligible for projects under the National Clean Diesel Funding Assistance Program and then deployed more widely. This program will accelerate the pace of introduction of new diesel emission reduction strategies and will allow the DERA program to evolve to better serve the public. 24 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Emerging Technology to Bring Large Reductions in Four Pollutants EPA awarded a grant to the South Coast Metropolitan Air Quality Management District, in California, home to approximately 16 million people, to install selective catalytic reduction technology (SCRT) on 1999 to 2002 heavy-duty Class 8 on-road diesel trucks, which will reduce PM, NOX, CO, and HC emissions by at least 90, 65, 85, and 90 percent, respectively. This project will improve the air quality of a high-population-density nonattainment area. At the same time, the project will produce useful data about the effectiveness and durability of this emerging technology. THE SMARTWAY CLEAN DIESEL FINANCE PROGRAM Supporting Low-Cost Loans for High-Value Technologies Under the SmartWay Clean Diesel Finance Program, EPA received four applications requesting $9.5 million and leveraging $44 million. Ultimately, in September 2008, EPA awarded three competitive grants totaling $3.4 million to establish a national financing program that provides funding to small- and medium-sized trucking companies to purchase clean diesel technologies, including leveraging more than $19 million in additional funding. These innovative financing programs will help smaller trucking firms lower their emissions, fuel costs, and carbon footprint by purchasing cleaner used trucks equipped with diesel exhaust filters and/or fuel-saving technologies. The program will also support idling and emission reduction tech- nologies for 2,460 trucks. Appendix E presents the criteria by which the applicants were evalu- ated. Appendix C provides additional details about the projects. DERA provided EPA with new authority to establish national grant and low-cost revolving loan programs to finance clean diesel projects. Administered by EPA's SmartWay Transport Partnership, the FY 2008 RFP for this program focused on establishing low-cost loan programs for retrofit- ting used pre-2007 highway vehicles and new or used pieces of nonroad equipment with EPA- or CARB-verified emission control and idle reduction technologies. EPA encouraged financing pro- posals to include strategies such as loan guarantees, equity investments that leverage additional funds, tax-exempt or taxable bonds to create a low-cost loan program, and revolving loan funds. 3. The Energy Policy Act of 2005 ------- Using up to 10 percent of the funds available for the national program, the SmartWay Clean Diesel Finance Program is designed to allow eligible entities to create financing mechanisms to assist fleets with the purchase of EPA-approved fuel-saving and emission reduction technologies. To date, EPA has offered grantees the opportunity to develop innovative financing projects instead of issuing direct federal loans. Loan programs are important because they enhance financial sustainability and allow the funds to be used multiple times as the loans are repaid and additional loans can be offered to purchasers of cleaner vehicles or technologies. They are able to leverage substantial nonfederal funds to increase the federal dollar's effectiveness. For example, in the case of a finance program using an equity investment, the award funds could be used to leverage additional funds from a lending institution to increase the amount available for loans. Although potentially far reaching, this program presents unique challenges that are not faced in the National Clean Diesel Funding Assistance Program. Unlike public school bus fleets, where the fleet owners have a strong motivation to reduce emissions, most private diesel truck and equipment owners do not have the same incentives and may not be as receptive to installing diesel emission reduction technologies. EPA has attempted, in previous demonstration grants, to provide retrofit technologies to truck operators and has received only minimal interest. To help manage these challenges, EPA's SmartWay program worked with a variety of stakeholders in the trucking industry including truckers, truck dealers, truck finance companies, and trucking associations. EPA con- cluded that the best incentive to install retrofit technolo- gies on older trucks is to provide lower cost financing to purchase newer trucks already equipped with these technologies. In fact, the assessment shows that truck- ers will purchase cleaner diesel trucks equipped with advanced air pollution control devices if the monthly finance charge is $100 to $200 less than traditional trucks without these technologies. The federal grant funds can be used to lower the monthly finance cost by either extending the terms of the loans or reducing the interest rates. Grant Offers Low-Interest Loans for SmartWay Upgrades Using new authority to issue grants for loans and other innovative financing mechanisms, EPA awarded $1.13 million to the Community Develop- ment Transportation Lending Services, Inc. to estab- lish a revolving loan fund for the purchase of used trucks that have SmartWay upgrades or will receive SmartWay upgrade kits. The program uses the grant to provide a lower inter- est rate than borrowers would otherwise be able to get—in this case, 5.5 to 8.5 percent, based on each applicant's business history, available collateral, cash flow, credit score, and other factors. The loan payback period is three to six years. 'SM vvSmartWay Transport Partnership U.S. ENVIRONMENTAL PROTECTION AGENCY 26 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- THE STATE CLEAN DIESEL GRANT AND LOAN PROGRAM Reaching Its Goal of Programs in All 50 States As a telling indication of the need for and interest in diesel emission reductions throughout the United States, all 50 states elected to participate in the FY 2008 State Clean Diesel Grant and Loan Program. EPA apportioned a base amount of $196,880 to each state.8 In addition, as another sign of the nationwide support for diesel emission reduction programs, 32 states were able to match the base funding, providing more than $6.3 million, and therefore received ad- ditional incentive funding, as allowed by DERA. For these states, EPA established a total grant of $492,200 (with $295,320 in federal funds and at least $196,880 in state funds). With this money, each state established a clean diesel program within its air agency and worked in consultation with EPA to develop an effective work plan and application. The projects varied and utilized a number of emission reduction strategies. A total of 21 states concentrated their efforts on school buses; nine focused on the construction sector; and other states focused on agriculture, transit buses, marine ports, rail, or trucking. Several states that have never initiated a state clean diesel program before are starting new programs. Appendix D presents a list of projects. EPA issued a Federal Register notice (73 FR 12728; March 10, 2008) that announced the funding opportunity and explained the main provisions of the State Clean Diesel Grant and Loan Program. The state program is not a competition but, rather, an allocation process in which the states indicate their interest in participating and applying for the funds, and EPA awards a specific allocation based on the total number of states whose applications are approved. Any state wishing to participate receives funding if the state submits an approv- able work plan. Early on, the EPA Administrator sent a letter to the governor of each state out- lining the goals of the State Clean Diesel Grant and Loan Program. Provisions for State Uses of State Clean Diesel Grant and Loan Program Funds States had significant flexibility in their proposed work plan. States were encouraged to use funds for EPA- and/or CARB- verified or certified technologies, although there were cases where emerging technologies or other cost-effective strategies were allowed, as they advanced the goals of the program. States could use funds to select various state fleets or projects for funding. States were encouraged not to use funds for emission reduc- tions that are mandated under federal, state, or local law (similar to Section 792 (d)(2), "Use of Funds—Regulatory Programs"). States could use up to 15 percent for administrative costs. The District of Columbia is now an eligible entity for the State Clean Diesel Grant and Loan program, but it was not eligible when EPA awarded the FY 2008 state grants. 3. The Energy Policy Act of 2005 27 ------- INAUGURAL YEAR RESULTS IN IMPRESSIVE, COST-EFFECTIVE REDUCTIONS ACROSS ALL SECTORS Receiving significant levels of funding changes the complexion of possibilities for communities struggling with ways to reduce harmful diesel pollution. Instead of small demonstrations, entire fleets can take advantage of proven technologies. Federal investments can attract private capital through low-cost loans under the new DERA provisions. Financially strapped states can move forward to maximize public health programs and improve air quality for their citizens. In the first year of DERA funding, EPA's programs achieved what they set out to do. More than 14,000 diesel-powered vehicles and pieces of nonroad equipment became cleaner as an immedi- ate and direct result of this work. DERA Funding Supported Reductions Across All Sectors. As shown in Figure 6, the FY 2008 grants supported a wide array of projects in numerous sectors, from agriculture and con- struction to marine and seaports to rail to transit. Collectively, the power of many small actions across the range of commercial, municipal, and private endeavors yielded significant emission reductions. State of Delaware Expands Its Program to Cover More Municipal Vehicles EPA awarded the Delaware Department of Natural Resources and Environmental Control with a state clean diesel grant to retrofit 1998 Class 7 refuse haulers. Because the state put some of its own resources toward the program, EPA allocated additional incentive funding as well. This proj- ect is an excellent example of how the DERA funds allocated toward state programs can benefit the air quality of each state that opts into the program. 28 + REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Figure 6. FY 2008 National Grants—Types and Numbers of Vehicles and Equipment 5,392 City/County Delivery Vehicle Truck Airports Marine Rail Sector Totals Refuse Hauler Short Haul School Bus Transit Bus DERA Funding Supported a Wide Range of Technologies and Fuels. As shown in Figure 7, the FY 2008 projects represent a wide variety of verified technologies, cleaner fuels, and certi- fied engine configurations, such as repowers, replacements, idle reduction technologies (e.g., auxiliary power units [APUs], shore power, truck stop electrification), biodiesel, alternative fuels, lower-sulfur fuels in nonroad equipment, and retrofit devices such as diesel oxidation catalysts and diesel paniculate filters. 3. The Energy Policy Act of 2005 29 ------- Figure 7. Technologies Employed in FY 2008 DERA Grants 4,500 4,000 4,034 2 ^00 2'461 ? nnn snn 164 tlj 0 • 661 45 29 456 12 6 32 /*' ///V y T .w .ACS /^ .^ DERA Funding Helped Reduce the Amount of Diesel Fuel Used. Table 3 shows the impressive amount of diesel fuel conserved by the idle reduction programs DERA funded. Taken together, the FY 2008 NCDC grants will save more than 3.2 million gallons of fuel per year, which corresponds to reducing 35,600 tons of C02 per year. This savings equates to more than $8 mil- lion a year in fuel savings for fleet operators (assuming $2.50 per gallon fuel). For comparison, freight trucks and locomotives consume 35 billion gallons of diesel fuel annually. Burning this fuel produces more than 350 million metric tons of carbon dioxide annually. Table 3. Diesel Fuel Conserved Annually by FY 2008 DERA Projects With Idle Reduction Technologies Program CO., (annual tons) National Clean Diesel Funding Assistance Program 8,200 Diesel Conserved (annual gallons) 736,000 National Clean Diesel Emerging Technologies Program SmartWay Clean Diesel Finance Program 18,700 1,683,100 State Clean Diesel Grant and Loan Program 3,800 Total 35,600 3,207,900 Note: Values were rounded to the nearest 100 or to one significant figure. Sums may not add due to rounding. Calculation of C02 does not include C02 savings from engine repowers, replacements, or upgrades. 30 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- DERA Funding Results Are Relatively Cost-Effective. In addition to being successful in meeting their core goal, which is to reduce emissions, EPA's clean diesel programs are also cost- effective uses of federal funds, as shown in Table 4. As NCDC has developed over the years, clean diesel projects have become more cost-effective as the technology has developed, as more vendors are competing, and as stakeholders have become more experienced in implementing projects. Table 4. Projected Cost-Effectiveness Program Recipient Fe Funding Amount Federal costs per lifetime ton National Clean Diesel Funding Assistance Program SmartWay Clean Diesel Finance Program State Clean Diesel Grant and Loan Program National Clean Diesel Emerging Technologies Program Federal grant dollars per lifetime ton for three programs combined Total dollars per lifetime ton*** for three programs combined $2,000 $400 $600 $1,000 $27,700 $9,000 $16,700 $20,600 $15,300 $7,300 $6,600 $10,500 $4,000 $2,100 $2,300 $3,100 oer lifetime ton $300 $10 $100 $29,039,803 $3,390,000 $12,994,080 $3,776,117 $100 $34,749,839 $19,100,000** $6,300,160 $1,130,927 $1,600 $33,300 $16,900 $5,000 $200 Note 1: Values were rounded to the nearest $100 or to one significant figure. Sums may not add due to rounding. Lifetime tons are not discounted. * C02 was calculated for idle reduction technologies only and does not include reductions for repowers or replacements. ** Leveraged amounts; no matching was included in the grants, and this dollar amount is not included in the figure below. *** Where cost includes federal funding, plus match, minus administrative costs assumed to be 15 percent, excluding leveraged amounts and the Emerging Technologies program. Note 2: The Emerging Technologies program is designed to demonstrate new technologies. At this phase in the development of these technologies, costs would be expected to be higher than at a more fully mature commercial scale of deployment stage. Therefore, the costs comparisons with the other national program components shown in Table 4 have been omitted. In a series of studies, EPA analyzed clean diesel strategies generally and evaluated the cost- effectiveness of using add-on retrofits on buses, trucks, and nonroad equipment using a standard set of assumptions.9 Specifically, in these studies, EPA evaluated the cost-effectiveness of retrofit- ting school buses, freight trucks, and bulldozers with DOCs and catalyzed DPFs, two of the most common PM emission reduction technologies for diesel engines. The Cost-Effectiveness of Heavy-Duty Diesel Retrofits and Other Mobile Source Emission Reduction Projects and Programs (EPA- 420-B-07-006, May 2007)—Tables 3 and 4 provide comparisons of cost-effectiveness of other mobile source programs; and Diesel Retrofit Technology: An Analysis of the Cost-Effectiveness of Reducing Particu/ate Matter and Nitrogen Oxides Emissions Erom Heavy-Duty Nonroad Diesel Engines Through Retrofits (EPA-420-R-07-OOB, May 2007). The full reports are available on the EPA Web site: www.epa.gov/otaq/diesel/publications.htm. 3. The Energy Policy Act of 2005 31 ------- • For nonroad equipment retrofit device cost-effectiveness: PM: DOCs and DPFs for nonroad equipment ranged from $18,700 to $87,600 per ton of PM25 reduced. NOX: SCR systems and engine upgrade kits were calculated to range from $1,900 to $19,000 per ton of NOX reduced. • For on-highway applications, such as school buses and trucks cost-effectiveness: PM: DOCs ranged from $11,100 to $67,700 per ton of PM25 reduced and DPFs retrofits ranged from $12,100 to $69,900 per ton of PM25 reduced. NOX: Truck stop electrification ranged from $1,400 to $2,000 per ton of NOX re- duced, and APUs ranged from $2,700 to $3,500 per ton of NOX reduced. These estimates of cost-effectiveness for retrofit devices depend on a number of factors such as equipment activity, survival rates, effectiveness of the system, and costs. For early retirements of vehicles and engine replacements or repowers, the new engines must meet EPA's more stringent regulations and thus are significantly cleaner. Cost-effectiveness esti- mates were made to support EPA's Clean Air Act regulatory programs. • For nonroad vehicles: PM: For EPA's Tier 1/Tier 2 standards, the cost-effectiveness is estimated at $2,000 per ton of PM25 reduced. - NOX: • For EPA's Nonroad Tier 4 standards, the cost-effectiveness is estimated at $1,010 per ton (NOX + nonmethane hydrocarbons [NMHC]). • For the locomotive and marine standards, the cost-effectiveness is $30 to $190 per ton (NOX +NMHC). These PM-related original equipment manufacturer costs are comparable to or lower than those of installing retrofit technologies on an existing vehicle because of economies of scale in mass production and related factors. Depending on the age of the engine being retired, replacements and repowers can also improve fuel efficiency. Replacements can be cost-effective strategies for the oldest vehicles and vessels in the fleet, but there is often a significant financial barrier, because EPA grants only offset a portion of the overall cost of the vehicle. Several of the FY 2008 grants take advantage of the very cost-effective NOX and PM reductions possible with locomotive and marine repowers. Similarly, EPA anticipates that as emerging technologies become commercialized and more widely available, their cost-effectiveness too will be comparable to other verified technologies; however, at this early stage in their development, comparisons can be somewhat misleading, so they are not included in the analysis. 32 + REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- For comparison, for the PM NAAQS Regulatory Impact Assessment, for PM25 reductions: • The annualized cost for electrostatic precipitators for utility boilers was $3,000 to $15,000 per ton of PM2 5 and $1,000 to $20,000 per ton for industrial boilers. • The cost of fabric filters for these same units ranged from $2,000 to $100,000 per ton of PM25. • Area source controls' annualized costs are less than $100 per ton of PM25. When analyzing the effectiveness of the federal plus matching costs of the FY 2008 DERA proj- ects, EPA found that they were within the expected range of cost-effectiveness. The average full program cost of the national, state, and SmartWay finance programs is about $33,300 per ton of PM25 (including the matching amounts and assuming an upper limit on administrative costs of 15 percent, excluding leveraged amounts). EPA analyzed the way in which federal dollars were leveraging other funding to achieve emission reductions. The reductions achieved over the lifetime of the FY 2008 DERA grants are being financed in different manners. In some cases, for instance, the fed- eral share of the grant might pay for the entire cost of the retrofit device. In other cases, the federal share of the grant might provide a small amount, coupled with state incentive funds or private in- vestment. In the SmartWay Clean Diesel Finance grants and in the other program grants that used the new loan provisions, relatively small federal investments on a per-unit basis attracted large pri- vate investment, especially where additional economic benefit in terms of fuel savings or the value of a newer vehicle was involved. For the federal competitive national program: • National Clean Diesel Funding Assistance Program: The average federal cost was estimated at $27,700 per ton of PM2 5 reduced over the lifetime of the project and just under $2,000 per ton of NOX reduced over the project lifetime. • SmartWay Clean Diesel Finance Program: The average federal cost was estimated at $9,000 per ton of PM2 5 reduced over the lifetime of the project and $400 per ton of NOX reduced over the project lifetime. Federal funds leveraged significant private sector funding and fuel savings in this new approach. For the State Clean Diesel Grant and Loan Program: • The average federal cost was estimated at $16,700 per ton of PM2 5 and $600 per ton of NOX over the lifetime of the project. State program costs are lower than national program costs because many states have established programs that are generally more limited to specific lower-cost vehicle categories or have leveraged amounts not captured here. 3. The Energy Policy Act of 2005 33 ------- For the three programs together: • The grants will reduce approximately 46,000 tons of NOX and 2,240 tons of PM2 5 over the programs' lifetimes in addition to substantial reductions in HC and other pollutants. • The weighted average federal cost is about $25,000 per ton of PM2 5 and $1,500 per ton of NOX reduced over the lifetime of the program. DERA Funding Is Yielding Tangible Public Health Benefits. The DERA programs reduce emissions that affect people's everyday lives, especially for sensitive populations such as children, the elderly, those with heart and lung disease, outdoor workers, and people who exercise outdoors. The diesel emission reductions resulting from the FY 2008 grants for NOX and PM will total approximately 46,000 and 2,200 tons, respectively, by 2031, yielding a variety of health benefits. Fewer emissions leads to less air pollution, resulting in fewer respiratory symptoms, reduction in the use of medication for asthma, and fewer visits to emergency departments or health care providers. Parents miss fewer work days caring for their children or their own respiratory symptoms. • The health benefits from the FY 2008 grant projects will range from a net present value of $580 million to $1.4 billion (2006 dollars), assuming a 3-percent discount rate throughout the lifetime of the program. • These benefits include an estimated 95 to 240 avoided premature deaths.10 Ozone-related health benefits, cancer risk, and other welfare effects were not quantified in this analysis. 10 The estimates are based on the peer-reviewed studies on the relationship between PM2 5 and premature mortality from: Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D. Krewski, K. Ito, and G.D. Thurston. 2002. Lung Cancer, Cardiopulmonary Mortality, and Long-Term Exposure to Fine Particulate Air Pollution. Journal of the American Medical Association. 287: 1132-1141. Laden, F., J. Schwartz, F.E. Speizer, and D.W. Dockery. 2006. Reduction in Fine Particulate Air Pollution and Mortality. American Journal of Respiratory and Critical Care Medicine. 173: 667-672. For more information about this approach, please see EPA's 2008 Technical Support Document: Calculating Benefit Per-Ton Estimates, Ozone NAAQS Docket #EPA-HQ-OAR-2007-0225-0284. The premature mortality estimates are generated using PM25 co-benefits data from EPA's 2006 Ozone Final Regulatory Impact Analysis (RIA), NAAQS for Particulate Matter, Chapter 5 Benefit Analysis and Results. These techniques are described in a memo to the file: Memo From Michael Wolfe, Ken Davidson, Rosalva Tapia, Kuang Wei, and Jen Went to Jim Blubaugh, Manager, Innovative Strategies Group, EPA Office of Transportation and Air Quality. March 25, 2009. Energy Policy Act of 2005 Diesel Emissions Reduction (DERA) Program FY 2008: Benefit and Cost-Effectiveness Calculation Methodologies. 34 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- m ir3 Diesel Campaign Partners Fulfill Commitments and Measure Progress T7THILE reducing diesel emissions is the first priority, producing technical and programmatic \A/ SLJPPort materials for stakeholders is a necessity as well. To ensure the successful imple- V Y mentation of NCDC, EPA developed the Diesel Emissions Quantifier (DEQ) calculator; guidance documents; public outreach materials including a dynamic Web site, an idle reduction campaign, and a Scholastic Magic School Bus book; and a Web-based tool kit for state and local programs. DIESEL EMISSIONS QUANTIFIER To help state and local governments, fleet owners, school districts, municipalities, contractors, port authorities, and others in estimating emission reductions and cost-effectiveness for clean diesel projects, EPA created an interactive, Web-based calculator tool called the DEQ. Users enter specific information about a fleet, and emission and cost-effectiveness calculations are made based on existing EPA models and guidance. The DEQ performs real-time calculations and esti- mates project-level emissions for PM25, NOX, HC, CO, and C02. To support users of this tool, EPA also created a user guide and held interactive training webinars. Ultimately, the tool became a critical component of NCDC, as most grant applicants rely on it to estimate their emission reductions. Grant applicants are required to evaluate the quantifiable and unquantifiable benefits of the emission reductions of their proposed projects in each grant ap- plication, using a methodology approved by EPA or the National Academy of Sciences. AGENCY GUIDANCE FOR CALCULATING COST-EFFECTIVENESS EPA published two peer-reviewed technical papers analyzing the cost-effectiveness of reducing emissions from both on-highway and nonroad diesel engines. (The full reports are available at: www.epa.gov/otaq/diesel/publications.htm.) • The Cost-Effectiveness of Heavy-Duty Diesel Retrofits and Other Mobile Source Emission Reduction Projects and Programs (EPA-420-B-07-006, May 2007). 4. Resources That Support the National Clean Diesel Campaign 35 ------- • Diesel Retrofit Technology: An Analysis of the Cost-Effectiveness of Reducing Paniculate Matter and Nitrogen Oxides Emissions From Heavy-Duty Nonroad Diesel Engines Through Retrofits (EPA-420-R-07-OOB, May 2007). In these papers, EPA evaluated the costs and emission benefits of retrofitting school buses, freight trucks, and bulldozers with DOCs and catalyzed DPFs, two of the most common PM emission reduction technologies for diesel engines. The findings from these studies indicate that retrofits can be a cost-effective way to reduce air pollution compared with other EPA programs. GUIDANCE ON STATE IMPLEMENTATION PLANS EPA published guidance to help state and local air quality and transportation planners satisfy three EPAct 2005 Section 795 provisions: 1) quantify the emission reductions from retrofitting die- sel vehicles, engines, and equipment; 2) appropriately include the emission reductions from diesel retrofits in state implementation plans (SIPs) to help demonstrate progress toward, attainment of, or maintenance of NAAQS; and 3) appropriately include emission reductions from diesel retrofits in transportation conformity or general conformity. • Diesel Retrofits: Quantifying and Using Their Benefits in SIPs and Conformity—Guidance for State and Local Air and Transportation Agencies (EPA-420-B-06-005, June 2006). • Truck Guidance: Guidance for Quantifying and Using Long-Duration Truck Idling Emission Reductions in State Implementation Plans and Transportation Conformity (EPA-420-B-04-001, January 2004). • Locomotive Guidance: Guidance for Quantifying and Using Long-Duration Switch Yard Locomotive Idling Emission Reductions in State Implementation Plans (EPA-420-B-04-002, January 2004). PUBLIC OUTREACH MATERIALS EPA has created a robust national Web site (www.epa.gov/cleandiesel) and myriad public out- reach materials to assist partners and others with diesel emission reduction projects. In addition, each Regional Collaborative maintains a Web site with regional priorities and resources. As a sign of the national Web site's utility, more than 80,000 users visited the site in FY 2008. The site is continually updated with vital new information and materials, tailored to meet stakeholder needs. Its design includes a searchable list of demonstration projects, case stud- ies, technology information, listservs, a trucker portal (www.epa.gov/otaq/diesel/truckers.htm), sector-specific content (www.epa.gov/cleandiesel/ports), and other helpful links, including links to Regional Collaborative Web sites. The breadth of EPA's reach in communicating information about clean diesel and NCDC to the public in FY 2008 can be measured by the following statistics: • 100 diesel conferences supported by EPA via financial sponsorships, promotion, and participa- tion, including the delivery of 12 major speeches by EPA's senior executives. 36 + REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- • 19 press releases issued highlighting clean diesel accomplishments and their benefit to the public. • 40,125 program brochures distributed to stakeholders. • 650 Clean School Bus USA idle reduction training videos in use. • 300 Clean Construction USA videos viewed. • 128,000 copies of Scholastic's The Magic School Bus Gets Cleaned Up books distributed. NCDC JOINS FORCES WITH INTERNATIONAL PARTNERS Using funding from non-DERA sources, partnering with local governments and nongovernmen- tal organizations, and supported by U.S. technology vendors, EPA led demonstration projects in Mexico City, Mexico; Bangkok, Thailand; Santiago, Chile; Beijing, People's Republic of China; and Pune, India. EPA retrofitted about 20 vehicles in each city to demonstrate the emission reductions obtainable with various devices. The projects helped educate government and nongovernment staff about clean diesel technologies and aim to build the capacity so they can conduct retrofits on their own. Following the Beijing demonstration project, the city of Beijing independently retrofitted more than 5,000 diesel vehicles in preparation for the 2008 Summer Olympics. EPA also worked with the U.S. Department of Transportation's Maritime Administration on a project with the Port of Shanghai that resulted in a broader Pacific Ports Initiative, promoting cleaner diesel technologies among key trading partners and their ports. Also on the international front, EPA launched a cooperative project among the Port of Rotterdam, the Port of New York and New Jersey, a terminal operator with facilities in both ports, and technology providers to develop hydraulic hybrid cargo handling equipment. This technology promises to dra- matically improve fuel economy while reducing PM and NOX. Lastly, EPA hosted a workshop for Canadian federal and provincial staff in June 2008. The workshop transferred knowledge and built relationships with appropriate Cana- dian government personnel so that they might learn from the NCDC efforts and be better equipped to launch their own program. These international actions are consistent with DERA Section 795(d), "Outreach and Incentives; International Markets." Tool Kit for State and Local Government Partners To support state, regional, and local governments in improving air quality and public health through diesel engine emission reduction efforts, EPA developed a Web-based tool kit that compiles examples of program components they could model (www.epa.gov/otaq/diesel/slt/basicinfo.htm). The content focuses on designing programs, communi- cating success, identifying funding, and evaluating program results. This tool kit is just one example of how NCDC operates as a shared responsibility be- tween EPA and state and local air quality agencies. 4. Resources That Support the National Clean Diesel Campaign 37 ------- 5. Remaining Challenges Adding Verified Technologies and Incentives Could Enhance Implementation EPA's advance work in developing guidance and materials, offering educational tools to partners developing clean diesel programs, and communicating consistently and clearly with partners and stakeholders was essential to the success of the first year. At the same time, the Agency's ability to troubleshoot problems that arose and working within the collaborative and sector networks to improve and adjust the program along the way ensured that it met its mission. The challenges encountered in implementing the first year of this program were relatively few. At the end of the year, however, two challenges remain: 1. The number of verified technologies for nonroad and marine engines is too few. While the list of technologies available on EPA and CARB's lists for on-highway applications is long, the technologies available for nonroad and marine applications are limited. The agencies have identified a lack of laboratory facilities and field testing instruments capable of evaluating marine technologies as the main barrier. Both agencies have been focusing their efforts on in- creasing the availability of nonroad retrofit technologies, closely working with technology manu- facturers to encourage additional technology verification for nonroad and marine equipment. There are also some important gaps in diesel retrofit technologies for older heavy-duty diesel trucks. While EPA and CARB have verified numerous heavy-duty diesel truck retrofit technolo- gies, the low-cost devices only reduce PM emissions by a limited amount, and the more effective devices might not work as well with the older trucks' duty cycles and business models. In some cases, the value of the retrofit device can exceed the remaining value of an old truck. Accordingly, EPA will continue to work with diesel retrofit manufacturers to identify cost-effective solutions for older diesel trucks. Responding to this need, EPA held a Retrofit Technology Verification Workshop in Washington, D.C., on December 13, 2007. The workshop was an overwhelming success, with nearly 100 people attending, including technology vendors, original equipment manufacturers, fuel and fuel additive makers, diesel engine technology organizations, and state and local governments such as CARB. 38 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- This workshop spurred additional verification activity among manufacturers. In 2008, EPA approved seven additional technologies for nonroad applications and 13 additional technologies for on-highway applications. In addition, EPA approved six emerging technologies (three nonroad and three on-highway applications), which will continue in the verification process and could well be verified within the next two years. Despite these gains, EPA had to remove a number of technologies from its Technology Verification List in December 2008, due to the implementation of a new, more stringent limit on the amount of unwanted nitrogen dioxide (N02) that retrofit devices are allowed to produce. EPA anticipates that some of the removed technologies will soon meet the new requirement and the Agency will be able to reinstate them. 2. New incentives are needed to retire the oldest and dirtiest engines. As EPA's Clean Diesel regulations under the Clean Air Act phase in, new engines that must meet significantly more stringent standards are increasingly available in the marketplace. The challenge is to create additional incentives for private fleet owners to replace their older diesel engines with new engines that meet the new standards. Under the current law, national program grants cannot go toward private fleet owners or to projects for which there is a federal, state, or local mandate. First, it is a challenge to encourage private fleets to apply, as they must partner with eligible entities, creating a barrier to participation especially for small businesses that may own or operate the oldest and dirtiest fleets. Second, rou- tine attrition of old vehicles is considered to be compliance activity with Clean Air Act requirements and currently is not eligible for funding. Accordingly, early replacement projects can receive federal grants, but not projects that might target the oldest, dirtiest engines that are already past their useful life and should have been replaced through normal attrition but are nevertheless still in use. These dual challenges are especially great for small business owner/operators for equipment such as drayage trucks that serve seaports, tug and tow vessels, and construction equipment. EPA will continue to work to identify incentives utilizing the innovative finance and loan provisions of the statute and our SmartWay Transport Partnership, as well as to fashion additional incentives together with our state and local government partners. 5. Remaining Challenges + 39 ------- ». Lessons Learned and Needs for the Future Continue, Improve, and Expand Wi NILE the DERA program has achieved significant emission reductions from diesel engines in its first year, a tremendous amount of work remains, and substantial investments are needed. LESSONS LEARNED Lessons learned from the first year include the following: • EPA and others must continue efforts to utilize existing national and regional networks to further improve the program results. In order to expedite the program, EPA developed materials to communicate the program options, technologies, goals, and schedules. Providing clear information and catalyzing networks allowed all parties to engage in the process and move projects forward. As the programs grow, EPA must promote efforts that allow agencies to share experiences to encourage action. To this end, EPA will work to strengthen existing regional diesel collaboratives. • EPA must continue to cultivate state and local leadership. All 50 states elected to participate in the first year of the program. For some, this was just the beginning of their work in this program area. To ensure future success, EPA must continue to work with state agen- cies and the District of Columbia to build comprehensive clean diesel programs. The results of the program can be seen at the state and local levels where leadership from state and local agencies, nonprofit organizations, and private organizations engages interested fleets in the program and works with them to achieve results. EPA must encourage more organizations to take this role as both an environmental initiative and an economic opportunity. • EPA and other organizations must continue to involve the private sector. The private sector plays a key role in implementing the program. Organizations that supply eligible technologies must continue to work to improve their technologies and identify opportunities for fleets that are willing to take action. In addition, EPA and other agencies should encourage private fleets in priority areas to take proper steps to address the air pollution from their fleets. The SmartWay Transport Partnership, for example, has created a program for private fleets in the freight sector. In exchange for making a commitment to reduce emissions and fuel usage, EPA provides technical advice, public recognition, and the opportunity to become preferred car- riers for SmartWay shippers. Through corporate leadership to reduce emissions and reduce fuel 40 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- usage, the DERA program has a great opportunity for expansion. In order to accomplish this, corporate champions must step forward and make measurable commitments. • Organizations must continue to develop and advance verified nonroad and ma- rine technologies. Opportunities continue to arise in new program areas as the program grows. Vendors must recognize these opportunities and work to create improved options to ad- dress the multitude of emission sources covered under the legislation, especially in the nonroad and marine sectors. EPA will expand the emerging technology and verification programs to promote innovative technologies that reduce priority pollutants and conserve fuel. While the verified technologies list available on EPA's and CARB's Web sites for on-highway ap- plications is long, there are limited products verified for nonroad, marine, or older diesel trucks. There are limited products available to reduce NOX for any category of engine. Adequate labora- tory facilities and field testing instruments capable of evaluating PM emission reductions from marine technologies will be needed. EPA has been working closely with manufacturers to verify technologies and fill these gaps. The nonroad market is complicated by the number and diversity of nonroad equipment types, by the range of horsepowers and engine types involved, and by the varying usage and duty cycles of the equipment. There are many opportunities, however, to provide cost-effective diesel emission reduction technologies to meet local air quality needs. NEXT STEPS Moving forward in the program, EPA commits to the following: • Continue to work aggressively to reduce pollution from diesel engines across the country by partnering with key stakeholders to promote clean diesel strategies. • Target current PM and ozone nonattainment areas where clean diesel strategies will have the greatest public health impact. • Provide assistance to state and local governments in developing their own clean diesel pro- grams. • Continue to provide high-quality data to states that depend on the performance of diesel emis- sion reduction strategies in their air quality plans, through in-use testing. • Continue to work cooperatively with CARB and other states to provide a robust list of clean diesel technology options for partners. • Continue to confirm the emission performance of verified technologies in the field. • Continue to develop innovative financing approaches for stretching federal dollars to achieve maximum diesel emission reductions, especially where fuel savings can create a business case for low-cost loans or other financial incentives. • Develop timely educational materials to continue to build awareness of clean diesel opportunities. 6. Lessons Learned and Needs for the Future + 41 ------- In summary, the first year of implementation for the Diesel Emissions Reduction Program has been extremely successful. By harnessing broad support from environmental organizations, state and local governments, industry, technology vendors, and other groups, EPA has been able to magnify the available dollars and strategically fund important emission reduction and fuel saving projects. In total, EPA awarded 119 grants in the first year of the DERA program. More than 14,000 vehicles and pieces of nonroad equipment in a wide array of sectors will be cleaner as a direct result of this program. New clean diesel programs have been established in every state and technologies have been advanced for the future. The implementation of the EPAct 200B's Diesel Emissions Reduction Program is a critical step toward reaching our national clean air goals and protecting public health and the environment for all Americans for generations to come. 42 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- LnfelfliBJuJ Assistance Program, FY 2008 Grants State Grant Recipient EPA Award Match Sector(s) AL AZ CA CA CA CA CO CO CO CT DC FL GA ID IL IL Alabama State Port Authority City of Phoenix CALSTART, Inc. Kern County Superin- tendent of Schools Sacramento Metropolitan Air Quality Management District South Coast Air Quality Management District City and County of Denver Colorado Department of Public Health Regional Air Quality Council Connecticut Depart- ment of Environmental Protection Metropolitan Washington Council of Governments City of St. Petersburg Georgia Ports Authority Idaho Department of Environmental Quality Chicago Public Schools Illinois EPA $750,000 $553,629 $895,827 $540,000 $553,630 $1,000,000 $200,000 $400,000 $455,645 $50,000 $598,516 $666,510 $250,000 $500,000 $373,909 $678,604 $1,580,000 $732,000 $1,015,325 $540,000 $2,581,600 $7,095,900 $87,059 — — — $193,983 $5,745 $33,075 $500,000 $92,000 $654,699 Ports, Rail Utility Construction, Utility, Transit Bus School Bus Utility, School Bus Long-Haul Trucks Utility, Construction School Bus School Bus Utility, Construction Construction Utility, Construction Ports School Bus School Bus School Bus, Transit Bus, Utility Technology Types* Replacement Engine Replacement, DPF CNG, DPF, B20Fuel CNG Replacement DPF, Engine Replacement DPF Heater DOC, Closed Crankcase Ventilation (CCV) System and Engine Preheater DOC, CCV System Diesel Oxidation Catalyst, DPF, Ultra-Low Sulfur Diesel DPF, Repower, Engine Upgrade DPF, B20 Fuel DOC, CCV System DPF, Partial Flow Filter, DOC Retrofit (DOC, DPF) Retrofit (DOC, DPF, CCV System), Auxiliary Power Unit, Direct-Fired Heater, Hybrid Replacement ' Refer to page 56 for a list of acronyms and abbreviations. Continued on page 44 Appendix A 43 ------- Appendix A. National Clean Diesel Funding Assistance Program, FY 2008 Grants (continued) State Grant Recipient EPA Award Match Sector(s) Technology Types IN IN KS KY MA MA MA MD MD Ml Ml Ml Ml MN MO MO NC NH NJ NY NY NY Indiana Department of Environmental Management Northwest Indiana Forum Foundation Inc. Kansas Department of Health and Environment Kentucky Clean Fuels Coalition Massachusetts Port Authority (Massport) NESCAUM NESCAUM Maryland Environmen- tal Services Montgomery County Public Schools Lenawee Intermediate School District Michigan Clean Energy Coalition NextEnergy Center Laker School District Minnesota Environ- mental Initiative Grace Hill Settlement House Missouri Department of Natural Resources North Carolina Depart- ment of Environment and Natural Resources Manchester Transit Authority New Jersey Motor Truck Association Board of Cooperative Educational Services of Ulster County Capital District Trans- portation Authority Environmental Defense Fund $334,500 $164,032 $1,525,524 $473,939 $400,000 $400,000 $535,250 $361,951 $699,501 $154,381 $250,000 $250,000 $251,100 $400,000 $454,849 $726,227 $750,000 $229,703 $503,285 $130,690 $125,000 $400,000 $61,257 $173,432 $1,871,500 $2,160,000 $147,815 $100,000 — $25,909 $7,350 — $250,580 $650,500 $253,220 — — $621,550 — $5,652 — — — $2,025,000 Transit Bus Construction Trucks and Transit Buses Ports Ports Construction Rail Ports School Bus School Bus Construction Long Haul Trucks School Bus School Bus, Utility School Bus Construction Construction School Bus, Con- struction, Utility Long-Haul Trucks School Bus Transit Bus Utility Retrofit (DOC, DPF), APU Repower DOC w/ CCV System Vehicle Replacement Shore Power DPF Auxiliary Power Unit DPF DPF DPF Repower APU Bus Replacement; Idle Reduction Technology, B20 Fuel, Heater Retrofit (DOC, CCV System) Crankcase Filtration System (CFS) DOC, CCV System, APU, Engine Shutdown Repower, Replacement DOC, CCV System, S-Bar Heater, B20 Fuel APU, Bunk Heater, DOC, DPF Vehicle Replacement DPF Vehicle Replacement (Hybrid-Electric) 44 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Appendix A. National Clean Diesel Funding Assistance Program, FY 2008 Grants (continued) State Grant Recipient EPA Award Match Sector(s) NY NY NY NY- NJ NY- NJ OH OH OH OR PA PA SC SD TN TX TX TX UT VA VT Erie County Depart- ment of Environmental Planning Middle Country Cen- tral School District Scarsdale Union Free School District Port Authority of New York and New Jersey (PANYNJ) PANYNJ Ohio Environmental Council Ohio Indiana Clean Diesel Collaboration Stark County Educa- tional Service Center City of Portland City of Philadelphia Pennsylvania Depart- ment of Transportation South Carolina Port of Charleston Sioux Falls School District Knox County Government North Central Texas Council of Governments North Central Texas Council of Governments Texas Commission on Environmental Quality Utah Department of Air Quality Port of Norfolk Chittenden Solid Waste District $523,395 $359,305 $346,240 $280,500 $750,000 $394,589 $412,554 $465,364 $498,726 $750,000 $219,434 $735,002 $300,000 $163,871 $750,000 $750,000 $500,000 $400,000 $647,457 $205,523 $72,278 $361,305 $29,020 $80,500 $1,250,000 $29,571 $81,344 $89,905 $58,658 $2,250,000 $24,381 $963,502 $300,000 $23,056 $750,000 $1,500,000 — $4,000 $1,732,600 $616,569 School Bus School Bus School Bus Utility Ports Ports, Utility, Refuse Haulers Utility School Bus Ports, Construction Utility Rail Utility, Construction School Bus Utility, Construc- tion, Agricultural Trucks Construction School Bus School Bus Ports and Rail Utility Technology Types DOC, CCV System, Diesel-Fired Engine Warm-Up Heater Vehicle Replacement (CNG) DOC, CCV System DPF, Flow Through Filter, DOC Flow Through Filter, DPF Retrofit (DOC, DPF, CCV System); APU DPF Retrofit (DPF, CCV System, DOC), Replacement DOC, Exhaust Retrofit, Ultra-Low Sulfur Diesel CNG Vehicle Replacement APU Engine Repower, Ultra-Low Sulfur Diesel Replacement Emission Control, Ultra-Low Sulfur Diesel APU Replacement DOC, DPF, Partial Flow Filter, CCV System DOC and CCV System Engine Repower Vehicle Replacement Appendix A 45 ------- Appendix A. National Clean Diesel Funding Assistance Program, FY 2008 Grants (continued) State Grant Recipient EPA Award Match Sector(s) Technology Types WA Wl Puget Sound Clean Air Agency Wisconsin Department of Transportation Total $850,000 $750,000 $29,038,162 $318,000 $750,000 $34,749,839 Ports Construction Vehicle Replacement, DPF, Partial- Flow Filter, Crankcase Ventilation Filter, DOC Repower 46 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- -i**:' •Lt APPENDIX B: National Clean Diesel Emerging Technologies Program, FY 2008 Grants Iji—lll •vwra CA MD TX TX TX WA Grant Recipient EPA Award Match Sector(s) Vehicle Types Technology Types South Coast Metropolitan Air Quality Management District Montgomery County Maryland Center for Transportation and the Environment Texas Transportation Institute University of Houston Puget Sound Clean Air Agency Total $900,000 $400,000 $300,000 $500,000 $500,000 $700,000 $3,300,000 $858,614 $88,168 — $64,200 $119,945 — $1,130,927 • Delivery Truck Short Haul Construc- tion Construc- tion Marine m Class 6 (19,501- 26,000 Ibs) Class 8a (33,001- 60,000 Ibs) Graders Tractors, Loaders, Backhoes Marine Selective Catalytic Reduction (SCR) SCR Other Emissions Control Devices SCR SCR Engine Upgrade For the FY 2008 National Clean Diesel Emerging Technology Program competition, EPA approved six technologies, as shown below. These included two technologies for marine vessels and SCR technologies for on-highway vehicles and nonroad equipment that expand technological options to reduce NOX by approximately 65 percent. This list of EPA's emerging technologies is updated as information is submitted from manufacturers, and EPA anticipates that the types and numbers of technologies will continue to grow. Manufacturer Caterpillar, Inc. technology Applica Engine Upgrade Kit Marine ESW Canada DOC, CCV System Marine 25 70 N/A 25 95 Johnson Matthey Urea-Based SCR System, DPF On-Highway 90 85 65 Nett Technologies, Inc. Urea-Based SCR System Nonroad 20 60 65 60 90 60 Tinnerman/Shadowood Reformer, LNT, SCR, DPF On-Highway 90 90 65 Truck Emission Control Technologies Inc. DOC, DPF, EGR On-Highway 50 70 40 Appendix B 47 ------- APPENDIX C: SmartWay Clean Diesel Finance Program, FY 2008 Grants Grant Recipient Cascade Sierra Solutions Everybody Wins USA Lease Program Grant Amount: $1.13 million Project Overview Loan Interest Rate: 8% to 11%, includes 7% for financing cost, 1% collection fee, and 1% to 3% reservation loss. Loan Payback Period: Three years. Eligible Activities: Installation and leasing of EPA SmartWay or CARB-verified emission and idle reduction technologies. The truck owners will purchase the equipment for $10 at the end of the loan period. Program Goal: Establish a leasing program for the installation of emission reduction technology and idle reduction technology on 1,700 trucks. Community Development Transportation Lending Services, Inc. National Low Interest Revolving Loan Fund Grant Amount: $1.13 million Interest Rates: 5.5% to 8.5%, varies based on, among other things, each applicant's business history, available collateral, cash flow, and credit score. Loan Payback Period: Three to six years, varies based on, among other things, business history, available collateral, and cash flow. Eligible Activities: Purchase used trucks to upgrade with EPA SmartWay or CARB-verified idle reduction and/or emission reduc- tion technology. Purchase used trucks that are upgraded with EPA SmartWay or CARB-verified idle reduction and/or emission reduction technology. Program Goal: Establish a revolving loan fund for the purchase of used trucks that have SmartWay upgrades or will receive SmartWay upgrades. Service Fee: 2% to 3%. Owner-Operator Independent Drivers Association Foundation Innovative Financing Grant Amount: $1.13 million Loan Interest Rate: Varies based on market Solid Waste Alterna- tive Program rate. Eligible Activities: Purchase and installation of emission reduction and idle reduction technologies verified by EPA and/or CARB. Program Goal: Offer rebates to selected applicants/truck owners to install emission reduction and/or idle reduction equipment on their trucks. The first rebate to the truck owner will be for the cost of the equipment installation. Then, every six months, depending on idle/fuel use reductions demonstrated, the truck owner will receive additional rebates until 40% of the total cost of the equip- ment is paid. 48 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- APPENDIX D: State Clean Diesel Program, FY 2008 Grants AK rant Recipien Alaska Department of Environmental Conservation Federal nding >tment $295,320 Sector(s) Construction Technology Types Research, Retrofit AL Alabama Department of Environmental Management $196,880 Rail Repower AR Arkansas Department of Environmental Quality $295,320 School Bus, Long Haul Trucks, Construction Retrofitted, Idle Reduction AZ Arizona Department of Environmental Quality $196,880 Short Haul Truck Stop Electrification CA California Air Resources Board $295,320 Long Haul Trucks Retrofit CO Colorado Department of Public Health and Environment $196,880 School Bus Retrofit CT Connecticut Department of Environmental Protection $295,320 School Bus, Long Haul Trucks Idle Reduction DE Delaware Department of Natural Resources and Environmental Control $295,320 Refuse Hauler Retrofit FL Florida Department of Environmental Protection $295,320 Long Haul Trucks, School Bus Retrofit, Idle Reduction GA Georgia Department of Natural Resources $295,320 School Bus, Construction Retrofit HI Environmental Health Administration $196,880 School Bus, Utility Retrofit IA Iowa Department of Natural Resources $196,880 School Bus Replacement ID Idaho Department of Environmental Quality $196,880 School Bus Retrofit Illinois Environmental Protection Agency $295,320 Long Haul Trucks Idle Reduction Indiana Department of Environmental Management $295,320 Long Haul Trucks Retrofit KS Kansas Department of Health and Environment $295,320 Long Haul Trucks Replacement, Idle Reduction Appendix D 49 ------- Appendix D. State Clean Diesel Program, FY 2008 Grants (continued) State KY LA MA MD ME Ml MN MO MS MT NC ND NE NH NJ NM NV NY OH OK Grant Recipient Kentucky Division for Air Quality Louisiana Department of Environmental Quality Massachusetts Department of Environmental Protection Maryland Department of the Environment Maine Department of Environmental Protection Michigan Department of Environmental Quality Minnesota Pollution Control Agency Missouri Department of Natural Resources Mississippi Department of Environmental Quality Montana Department of Environmental Quality North Carolina Department of Environment and Natural Resources North Dakota Department of Health Nebraska Department of Environmental Quality New Hampshire Department of Environmental Science New Jersey Department of Environmental Protection New Mexico Environment Department Nevada Division of Environmental Protection New York State Department of Environmental Conservation Ohio Environmental Protection Agency Oklahoma Department of Environmental Quality Total Federal Funding Sector(s) $196,880 $295,320 $295,320 $295,320 $295,320 $295,320 $295,320 $295,320 $295,320 $295,320 $295,320 $196,880 $196,880 $196,880 $295,320 $196,880 $295,320 $295,320 $295,320 $295,320 School Bus Marine Refuse Hauler, Rail, Utility Transit Bus School Bus, Long Haul Trucks School Bus School Bus, Long Haul Trucks Long Haul Trucks, Utility Utility Vehicle, School Bus School Bus, Transit Bus Transit Bus, School Bus, Rail, Construction, Refuse Haulers School Bus School Bus, Refuse Hauler, City/County Vehicle, Transit Bus, Construction Transit Bus, Con- struction, Utility Construction, School Bus School Bus School Bus Marine School Bus School Bus Technology Types Retrofit Repower Retrofit, Replacement Retrofit Idle Reduction Retrofit Retrofit, Idle Reduction Replacement, Idle Reduction Retrofit Retrofit, Repower Retrofit, Idle Reduction, Repower Replacement Retrofit Retrofit Retrofit Retrofit Retrofit Replacement Retrofit Retrofit 50 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Appendix D. State Clean Diesel Program, FY 2008 Grants (continued) State OR PA Rl SC SD TN TX UT VA VT WA Wl WV WY Grant Recipient Funding Sector(s) Oregon Department of Environmental Quality Pennsylvania Department of Environmental Protection Rhode Island Department of Environmental Management South Carolina Department of Health and Environmental Control South Dakota Department of Environment and Natural Resources Tennessee Department of Environment and Conservation Texas Commission on Environmental Quality Utah Department of Environmental Quality Virginia Department of Environmental Quality Vermont Department of Environmental Conservation Washington State Department of Ecology Wisconsin Department of Natural Resources West Virginia Department of Environmental Protection Wyoming Department of Environmental Quality Total $295,320 $295,320 $196,880 $295,320 $196,880 $196,880 $295,320 $295,320 $196,880 $196,880 $295,320 $295,320 $196,880 $196,880 $12,994,080 School Bus Ports, Airports Ports, Airports School Bus, Construction School Bus Long Haul Trucks School Bus School Bus Utility Vehicle School Bus School Bus Refuse Hauler, Construction Transit Bus School Bus Match Technology Types Retrofit Repower Retrofit Retrofit, Repower Retrofit Idle Reduction Retrofit Retrofit Retrofit Retrofit, Idle Reduction Retrofit Retrofit, Repower Replacement Repower $6,300,160 Appendix D ------- FOR the National Clean Diesel Funding Assistance Program, all grant competitions used crite- ria and points similar to those summarized in the table below, consistent with the priorities described in Section 792 of the Energy Policy Act, Subtitle G (see page 20), and with Agency policy. National Clean Diesel Funding Assistance Program For the National Clean Diesel Funding Assistance Program, the seven EPA Regional Collaborates described in Appendix F held grant competitions, following Agency policy. Regions evaluated each Regional RFP following the same general criteria, supplementing with regional priorities worth 10 points in the final criterion. EPA devoted the majority of the funding available to the National Clean Diesel Funding Assistance Program and allocated it to its 10 regional offices to award as competitive grants in support of clean diesel projects. EPA distributed funds across the regions based on a funding formula that included a base amount and considered population, diesel emission inventories, and other factors consistent with the objectives listed in the statute Section 792. EPA's regions addressed certain regional priorities in their competitions, while following a model RFP to ensure that all of EPA's actions adhered to the statutory requirements and EPA policy. National Clean Diesel Emerging Technologies Program For the National Clean Diesel Emerging Technologies RFP, EPA employed similar criteria to those in the table below; however, EPA required that the projects propose to use technologies on EPA's Emerging Technology List by the closing date of the RFP. Criterion 9 was not applicable. SmartWay Clean Diesel Finance Program For the SmartWay Clean Diesel Finance RFP, EPA used criteria similar to those in the table below; however, Criterion 9 was not applicable. 52 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Appendix E. National Program Evaluation Criteria (continued) Criteria 1. Project Summary/Approach: EPA will evaluate the quality and extent to which the narrative proposal includes a well-conceived strategy for addressing the program priorities from the statute and a well-conceived, logical strategy for achieving the anticipated environmental results associ- ated with the proposed project in a timely manner. 25 2. Programmatic Priorities: The Agency will evaluate the quality and extent to which the pro- posed project addresses the programmatic priorities. 10 3. Past Performance—Programmatic Capability and Reporting on Environmental Results: The Agency will evaluate the applicant's technical ability to successfully complete and manage the proposed project, taking into account the applicant's past performance in success- fully completing and managing federally funded assistance agreements. 10 4. Environmental Results—Outcomes and Outputs: The Agency will evaluate the effective- ness of the applicant's plan for tracking and measuring its progress toward achieving expected project outputs and outcomes. 15 5. Budget/Resources: The Agency will evaluate whether the proposed project budget is appropri- ate to accomplish the proposed goals and measurable environmental outcomes. 10 6. Clear Description of the Target Fleet: Applicants will be evaluated on the degree to which detailed information on the fleet (vessel[sj, vehicle[s], and/or equipment) is provided on the Ap- plicant Fleet Description Spreadsheet and the eligibility of technology for the fleet. 10 7. Leveraging Resources and Partnering: Applicants will be evaluated based on the extent to which they demonstrate how they will coordinate the use of EPA funding with other federal and/ or nonfederal sources of funds to leverage additional resources to carry out the proposed projects and/or how that EPA funding will complement other activities. 15 8. Staff Expertise/Qualifications: Applicants will be evaluated on staff expertise/qualifications, staff knowledge, and resources or the ability to obtain them, to successfully achieve the goals of the proposed project. 9. Regional Significance: For the National Clean Diesel Funding Assistance Program, a factor for regional significance was added. 10 Appendix E 53 ------- APPENDIX F: EPA Regional Clean Diesel Collaboratives BEGINNING in 2003, EPA's regions began organizing Regional Clean Diesel Collaboratives with their states, local nonprofit organizations, private industry, and municipalities. The Collaboratives listed below play a vital role in EPA's incentive-based approach to achieving superior environmental results. By tying into a network of regional stakeholders, this collabora- tive structure is ideal for achieving significant emission reductions across a large geographic area. Regional initiatives and state programs provide immediate and significant environmental results by working collaboratively with businesses, government and community organizations, industry, and others. Northeast Diesel Collaborative www.northeastdiesel.org The Northeast Diesel Collaborative is a local initiative that builds on a foundation of voluntary action. Developed with EPA Regions 1 and 2, the initiative encourages participants to engage in projects that will reduce transportation-related air pollution to help address the high asthma rates in the Northeast. The program partners with the Northeast States for Coordinated Air Use Management (NESCAUM). Mid-Atlantic Clean Diesel Collaborative www.dieselmidatlantic.org The Mid-Atlantic Clean Diesel Collaborative is a partnership among leaders from federal, state, and local governments; the private sector; and environmental groups in Delaware, Maryland, Virginia, Pennsylvania, West Virginia, and the District of Columbia. Midwest Clean Diesel Initiative www.epa.gov/midwestcleandiesel EPA Region B's Midwest Clean Diesel Initiative is a cooperative, public-private effort to reduce diesel emissions along major transportation corridors from various sectors including trucking, locomotive, construction, and ports, with an emphasis on urban areas in the Midwest. Southeast Diesel Collaborative www.southeastdiesel.org The Southeast Diesel Collaborative is a voluntary, public-private partnership involving leaders from federal, state, and local governments; the private sector; and other stakeholders throughout the Southeast working to reduce diesel emissions. 54 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- Rocky Mountain Clean Diesel Collaborative www.epa.gov/region8/air/rmcdc.html The Rocky Mountain Clean Diesel Collaborative is a partnership of federal, state, and local governments; nonprofit organizations; the private sector; and environmental groups in Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming. The collaborative was established in November 2006. Blue Skyways Collaborative www. b I uesky ways .0 rg The Blue Skyways Collaborative was created to encourage voluntary air emission reduction in North America's heartland. Through partnership with nonprofit and environmental groups; private industries; and international, federal, state, and local governments, Blue Skyways strives to im- prove air quality. West Coast Diesel Collaborative www.westcoastcollaborative.org EPA Regions 9 and 10 were instrumental in creating the West Coast Diesel Collaborative. This initiative is a partnership among leaders from federal, state, and local government; the private sector; and environmental groups in California, Oregon, Idaho, Washington, Alaska, Canada, and Mexico, committed to reducing diesel emissions along the West Coast. Appendix F + 55 ------- ,. v * . : .: APU Auxiliary Power Unit CARB California Air Resources Board CCV Closed Crankcase Ventilation CFS Crankcase Filtration System CNG Compressed Natural Gas CO Carbon Monoxide C02 Carbon Dioxide DEQ Diesel Emissions Quantifier DERA Diesel Emissions Reduction Act DOC Diesel Oxidation Catalyst DPF Diesel Paniculate Filter EGR Exhaust Gas Recirculation EPA U.S. Environmental Protection Agency EPAct Energy Policy Act FY Fiscal Year HC Hydrocarbon LNT Lean Nitrogen Oxides Trap NAAQS National Ambient Air Quality Standards NCDC National Clean Diesel Campaign NESCAUM Northeast States for Coordinated Air Use Management NMHC Nonmethane Hydrocarbon N02 Nitrogen Dioxide NOX Nitrogen Oxides Paniculate Matter (Fine) Parts Per Million 2.5 PPM RFP Request for Proposal RIA Regulatory Impact Analysis SCR Selective Catalytic Reduction SCRT Selective Catalytic Reduction Technology SIP State Implementation Plan S0y Sulfur Oxides A ULSD Ultra-Low-Sulfur Diesel 56 REPORT TO CONGRESS: HIGHLIGHTS OF THE DIESEL EMISSIONS REDUCTION PROGRAM ------- ------- National Clean Diesel Campaign ased inks on 100% postconsumer, process chlorine free recycle ------- |