Diesel Emissions Mitigation Grants

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

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

Each year, the Environmental Protection Agency allocates federal Diesel Emissions Reduction Act grants to eligible states for diesel emissions reduction projects, totaling approximately $500K in federal funds. Starting in 2023, Oregon DEQ will allocate available federal DERA State Grant dollars through the annual diesel grant process. This will allow diesel equipment owners to access additional funds through a single application process. EPA published federal guidance for this program in 2023 and 2024. DEQ will award DERA grant dollars for applications that comply with current requirements, available in EPA's Program Guide.