New Mexico
Environment Department

Contact Information:
(505) 827-2855 MAIN // 1-800-219-6157 (toll free)
Environmental Emergencies:
505-827-9329 (24 hrs)

Air Quality Bureau

Diesel Emissions Reduction Act

New Mexico Environment Department Clean Diesel Program Grant Funding Opportunity

The NMED is soliciting proposals for DERA projects that reduce emissions from heavy-duty diesel-fueled vehicles. Potential projects may include, but are not limited to: idle reduction technologies, aerodynamic technologies, and the retrofit or replacement of diesel vehicles and equipment throughout the state. Eligible vehicles may include school buses and municipal fleets (city buses, refuse vehicles, etc.), commercial transportation vehicles (trucks, etc.) and non-road equipment (agricultural and construction machinery, boats, etc.). The grant funds will be used for the purchase and installation of EPA or California Air Resources Board verified/certified technologies in accordance with DERA funding guidelines.

While projects from the entire state will be accepted, special consideration will be given to projects near and adjacent to non-attainment areas, Class I areas, areas subject to a high volume of diesel-fueled vehicles, and economically disadvantaged areas. Priority will be given to projects that will result in a decrease in diesel emissions from school buses.

This Request for Applications opens April 26, 2021, with proposals due by June 11, 2021.

In 2005, the U.S. Congress passed the Diesel Emission Reduction Act (DERA) as an amendment to the Energy Policy Act. DERA was designed to reduce diesel emissions from existing diesel fleets that did not meet the recently adopted federal emission standards. The U.S. Environmental Protection Agency (EPA) is responsible for overseeing and distributing the DERA funds. For more information visit the EPA website at Clean Diesel and DERA Funding.

There are four different pools of funding within DERA. The four different funding pools are:

State Allocated DERA Funding

The State allocation program divides non-competitive funding among all 50 states. The states are responsible for implementing and overseeing funding. Funding must be used to develop grant or low-cost revolving loan programs to fund clean diesel projects.

New Mexico Projects

The goal of the New Mexico Clean Diesel Program is to reduce the amount of air pollution created by diesel-fueled heavy-duty trucks and buses to which the residents of New Mexico are exposed.

Since 2008, the Air Quality Bureau has administered grant funds for qualifying diesel emissions reduction projects. Grant funds has been used for the following projects in New Mexico:

  • Bloomfield School District – School bus retrofits
  • Central Consolidated School District – School bus retrofits
  • City of Deming – Early off-road vehicle replacement (partial funding)
  • Farmington School District – School bus retrofits
  • Gallup/McKinley County School District – School bus retrofits
  • New Mexico Association of Food Banks – Dock outlets for trailer refrigeration units, aerodynamic fairings, and low rolling resistance tires
  • Taos County – Early vehicle replacement (partial funding)
  • City of Santa Fe – Early vehicle replacement of diesel vehicles with natural gas vehicles (partial funding)
  • Albuquerque Public Schools-Early vehicle replacement of diesel to gasoline vehicles (partial funding)


What Is a Retrofit?

Typically, a diesel retrofit involves the installation of an emission control device to reduce emissions from engine exhaust and the installation of equipment to reduce engine idling.

Why Retrofit?

Installing retrofit equipment has significant public health benefits. The installation of diesel emission reduction equipment will have immediate and lasting results in protecting New Mexico residents, children, and other sensitive populations from harmful emissions including fine particles, ozone and air toxics that can exacerbate asthma and other respiratory symptoms.

Measured benefits from reducing diesel exhaust emissions include:

  • Fewer incidences and reduced severity of illnesses such as asthma and other chronic respiratory illness
  • Fewer lost school days and work days
  • Fewer hospital visits due to respiratory illness
  • Reduced cancer risks for occupational levels of exposure and from ordinary outdoor air exposure

Volkswagen Settlement

The Environment Department is the lead agency in New Mexico for the Volkswagen Environmental Mitigation Trust Agreement. Please go to the Volkswagen Settlement website for additional information. Can Be found here

Please contact Neal Butt at (505) 476-4317 or by email at for additional information regarding potential funding for qualified projects.