Funding Cleaner Buses

The document outlines various financial mechanisms to transition the U.S. bus fleet away from diesel. It details federal programs managed by the DOT, DOE, and EPA, as well as state-specific initiatives in Texas, California, and New York, emphasizing that combining different grants can significantly reduce the incremental cost of advanced technologies like hybrid-electric buses.

• The U.S. bus fleet is heavily dependent on diesel, with 84 percent of buses and trolleys and the majority of over half a million school buses powered by diesel, which contributes to smog and fine particulate matter (PM).
• The Department of Transportation (DOT) is the primary funding source for clean buses, with the Federal Transit Administration (FTA) offering several programs. The Clean Fuels Grant program is the principal source for clean bus purchases in non-attainment and maintenance areas, providing a 90 percent federal match.
• The Congestion Mitigation and Air Quality Improvement Program (CMAQ), managed by the Federal Highway Administration (FHWA), allocates funds to reduce transportation emissions in air quality non-attainment areas; approximately 45-50 percent of these funds have been used for transit-related projects like bus purchases.
• The Federal Aviation Administration (FAA) manages the Voluntary Airport Low Emissions (VALE) program, which allows airport sponsors to use Airport Improvement Program (AIP) and Passenger Facility Charges (PFC) to finance low-emission airport-dedicated vehicles and infrastructure.
• The EPA's Clean School Bus USA program provides grants to school districts to replace older diesel buses with less-polluting models or retrofit them with emissions control technology, with a 2006 appropriation of $7 million.
• Several states operate specific clean bus incentives: Texas's Emissions Reduction Plan (TERP) targets NOx emissions; California's Carl Moyer Program funds cleaner-than-required engines; and New York's NYSERDA Clean Fueled Bus Program provides up to 100 percent of incremental vehicle costs.
• Federal incentives can drastically reduce the cost gap between diesel and hybrid buses. For a hybrid bus costing $500,000 versus a diesel bus at $300,000, the combination of the Clean Fuels Grant Program and FTA purchase price coverage can reduce the agency's incremental cost from $200,000 to just $20,000.

APA

Environmental and Energy Study Institute (2006). Funding Cleaner Buses. https://www.eesi.org/files/eesi_clean_bus_061506.pdf

Chicago

Environmental and Energy Study Institute. Funding Cleaner Buses. 2006. https://www.eesi.org/files/eesi_clean_bus_061506.pdf.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=Funding Cleaner Buses |date=June 2006 |url=https://www.eesi.org/files/eesi_clean_bus_061506.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitute2006funding, author = {{Environmental and Energy Study Institute}}, title = {{Funding Cleaner Buses}}, institution = {Environmental and Energy Study Institute}, year = {2006}, month = jun, url = {https://www.eesi.org/files/eesi_clean_bus_061506.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }