The U.S. Environmental Protection Agency has opened $180 million in grant funding under the 2026 Diesel Emissions Reduction Act (DERA) program, according to School Transportation News.

The solicitation makes federal dollars available for projects that cut emissions from diesel engines — including vehicle replacements, engine retrofits and scrappage of older units. DERA has historically funded school bus fleets, municipal vehicles, port equipment and off-road machinery.

The $180 million figure anchors the 2026 cycle. The program operates on a reimbursement model: grantees replace or repower qualifying diesel equipment, render old engines inoperable, and recover a share of project costs from the federal pool.

For fleet operators and the contractors who handle end-of-life equipment, DERA awards translate into a steady stream of scrappage work. Every funded replacement carries a requirement to destroy the displaced diesel engine, feeding engines, blocks and chassis into the metal recycling stream.

Applicants should treat the announcement as a live funding round rather than a pledge — the clock on submissions and awards now runs. EPA sets eligibility by equipment age, vehicle class and fleet type, and it typically prioritizes projects in areas with poor air quality.

The milestone to watch: application deadlines and final award notices, which will determine how much of the $180 million reaches fleet turnover in the 2026 cycle.