Federal NGV Grants

In an effort to reduce America’s dependence on foreign oil, reduce urban emissions and reduce greenhouse gases, the federal government provides a number of grant programs to encourage the purchase and use of natural gas vehicles (NGVs). These include the following:

• Congestion Mitigation & Air Quality Improvement Program
• Federal Transit Authority
• Clean Cities Program
• Clean School Bus Program

• Federal Aviation Administration

Congestion Mitigation and Air Quality Improvement Program
The Congestion Mitigation and Air Quality Improvement Program (CMAQ) is one of the largest sources of funding available for alternative fuel projects, funding hundreds of millions of dollars in investments in alternative fuel projects since its inception in 1991.

Grants from this program can pay for the incremental cost of purchasing natural gas vehicles and can be used to fund alternative fuel refueling projects, although and they must have 20% local or regional co-funding, and funding is allowed for private/public partnerships.

The program is designed to help communities meet or maintain their compliance with the federal air quality standards. It was designed to realign the focus of transportation planning toward a more inclusive, environmentally-sensitive, and multimodal approach to addressing transportation problems. From 2005-2009, the program provided more than $8.6 billion in funding, including improving rail and transit services, implementing bike path programs and supporting alternative fuel projects. Grants from this program can pay for the incremental cost of purchasing natural gas vehicles and can be used to fund alternative fuel refueling projects, although and they must have 20% local or regional co-funding, and funding is allowed for private/public partnerships.

Click here for the most recent guidance on this program.

The Federal Highway Administration administers the program along with the Federal Transit Agency. The money is allocated to a state’s Department of Transportation for further allocation to local/regional Metropolitan Planning Organizations. Projects generally are coordinated with these local Metropolitan Planning Organizations or the state transportation departments. The formula for distribution of funds considers an area's population by county and the severity of its ozone and carbon monoxide problems within the nonattainment or maintenance area, with greater weight given to areas that are both carbon monoxide and ozone nonattainment/maintenance areas.

Under the law authorizing the funding, the Safe, Accountable, Flexible and Efficient Transportation Equity Act, SAFETEA-LU states and Metropolitan Planning Organization must give priority in distributing funds to cost-effective emission reduction and congestion mitigation activities that provide air quality benefits.

Federal Transit Authority
The Federal Transit Authority provides grants to help fund transit buses for local and regional public transit systems. FTA helps communities support public transportation by issuing grants to eligible recipients for planning, vehicle purchases, facility construction, operations and other purposes. Eligible recipients that must be public bodies such as states, cities, towns, regional governments and transit authorities with the legal authority to receive and dispense federal funds. Since 2005, the SAFETEA-LU programs has been a major source of financial assistance to transit systems looking to upgrade their aging fleet, and transit systems have used this funding program to provide resources to purchase natural gas vehicle. Each year Congress provides an annual appropriation which funds the programs specified in SAFETEA-LU.

Clean Cities Program
The U.S. Department of Energy’s Clean Cities Program is designed to accelerate the use of alternative fueled vehicles throughout the country. The program’s website notes that Clean Cities strives to advance the nation's and energy security by supporting local decisions to adopt practices that contribute to the reduction of petroleum consumption. Clean Cities grants have expanded the use of natural gas vehicles in a variety of applications, such as school buses, transit buses, airport vehicles, taxis and delivery fleets. Grants have also been used to build fueling infrastructure, with a focus on locations that provide public access, since this provides the opportunity to further increase the number of vehicles using natural gas.

The program works through a network of 90 volunteer coalitions headed by Clean Cities Coordinators that develop public/private partnerships. Support for the various Clean Cities coalitions is provided through the DOE's State Energy Program Special Projects, known as SEPs. States apply for these grants, which are highly competitive and highly leveraged.

Clean Cities is part of the Office of Energy Efficiency and Renewable Energy's Vehicle Technologies Program.

National Clean Diesel Campaign
The U.S. Environmental Protection Agency’s Clean School Bus Program is incorporated in the National Clean Diesel Campaign, which is designed to reduce the harmful effect of diesel emissions. This program, known as the Diesel Emission Reduction Program or DERP provides grants to assist government agencies, school districts and other interested parties to replace older diesel engines with new low-emitting ones (including natural gas engines) and to retrofit existing diesel trucks with emission reducing technologies. Repowering, and or rebuilding diesel engines and replacing them with natural gas engines is considered a retrofit for the purpose of this program. The grant program guidelines allow for 75% of the cost of repowering an existing bus and up to 50% of the cost of a new school bus replacing an older one as long as the engine meets 2010 engine standards and for building the necessary CNG infrastructure associated with the purchase of the new buses. The EPA's application also requires that the appropriate certification/verification data be provided.

The EPA distributes grants for its National Clean Diesel Campaign through seven regional collaboratives. The collaborative typically issues regional Request for Applications soon after Congress has appropriated funds, and natural gas vehicle and alternative fuels are eligible for all categories. The program was reauthorized in 2010. Funding for the program is authorized at $100 million per year but the actual annual amount will depend on each year’s funding appropriation.

The collaboratives can be contacted through:

West Coast Diesel Emissions Reductions Collaborative:
Includes California, Oregon, Washington, Alaska, Arizona, Idaho, Nevada, Hawaii, (EPA Regions 9 and 10) Canada and Mexico. 

Midwest Clean Diesel Initiative:   Includes: Ohio, Indiana, Illinois, Michigan., Minnesota, and Wisconsin (EPA Region 5).

Blue Skyways Website  Includes: Texas, Louisiana, Oklahoma, Arkansas, New Mexico, Kansas, Missouri, Nebraska, Iowa and Minnesota, (EPA regions 6 and 7) and along the borders with Canada and Mexico. 

Mid-Atlantic Diesel Collaborative: Includes: Delaware, Maryland, Virginia, Pennsylvania, West Virginia and the District of Columbia (EPA Region3). 

Northeast Diesel Collaborative (NEDC):  Includes: the Greater Boston Breathes Better (GB3) is in the Boston area, and includes, Maine, Massachusetts, New Hampshire, Vermont, Rhode Island, Connecticut, New York, and New Jersey (EPA Regions 1 and 2).  

The Rocky Mountain Clean Diesel Collaborative: Includes Montana, North and South Dakota, Wyoming, Utah, and Colorado (EPA Region 8).

The Southeast Diesel Collaborative: Includes Kentucky, Tennessee, North and South Carolina, Mississippi, Alabama, Georgia and Florida (EPA Region 4). 

Federal Aviation Administration
The agency’s Voluntary Airport Low Emission (VALE) vehicle program funds NGVs and infrastructure at the nation’s airports. VALE is a national program to reduce airport ground emissions at commercial service airports located in designated air quality nonattainment and maintenance areas. The program was established in 2003 (P.L. 108-176) and allows airport sponsors to use the Airport Improvement Program and Passenger Facility Charges to finance low emission vehicles, including natural gas powered shuttle buses, refueling stations and other airport air quality improvements. Click here to see a list of projects, including alternative fuel vehicles, funded from 2005 to 2010.