Funding Cleaner Buses

This fact sheet provides an overview of federal and state funding resources available to transit agencies, school bus fleets, and local communities in the United States for the purchase and deployment of cleaner, advanced bus technologies and related infrastructure.

• In 2005, buses provided more than 60 percent of the 9.7 billion transit passenger trips in the United States, though 84 percent of the nation's buses and trolleys were powered by diesel.
• The Department of Transportation (DOT), including the Federal Transit Administration (FTA), Federal Highway Administration (FHWA), and Federal Aviation Agency (FAA), is the primary funding source for clean bus purchases. Some DOT grant programs offer a federal cost share of up to 90 percent.
• The FTA's Clean Fuels Grant program is the principal source of funds for clean bus purchases in non-attainment and maintenance areas for federal air quality standards, offering a 90 percent federal match.
• The Congestion Mitigation and Air Quality Improvement Program (CMAQ) provides funding for projects in air quality non-attainment and maintenance areas for ozone, carbon monoxide, and particulate matter. Approximately 45-50 percent of CMAQ funds have been used for transit-related projects, such as purchasing buses and facilities.
• The Voluntary Low Airport Low Emissions Program (VALE) allows airport sponsors to use the Airport Improvement Program (AIP) and Passenger Facility Charges (PFCs) to finance low-emission vehicles, including airport-dedicated on-road buses and shuttles.
• The EPA's Clean School Bus program awards grants to school districts to replace older diesel school buses with less-polluting models or retrofit them with emissions control technology. In 2006, Congress appropriated $7 million for this program.
• State-level programs provide targeted incentives: Texas's Emissions Reduction Plan (TERP) offsets incremental costs for reducing NOx emissions; California's Carl Moyer Program funds cleaner-than-required engines, with nearly 45 percent of funding spent on on-road vehicles; and New York's NYSERDA Clean Fueled Bus Program can cover up to 100 percent of incremental vehicle costs.
• Federal incentives can significantly reduce the cost gap between hybrid and diesel buses. For a hybrid bus costing $500,000 versus a diesel bus costing $300,000, the incremental cost to a transit agency may be reduced to only $20,000 when combining the Clean Fuels Grant Program (90% of incremental cost) and FTA purchase price coverage (up to 80%).

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} }