With the return of the Clean School Bus Program reportedly still one month away, the U.S. Environmental Protection Agency (EPA) is accepting applications for approximately $180 million through the 2026 Diesel Emissions Reduction Act (DERA) national grant competition.

Eligible projects include school bus replacements powered by battery-electric, diesel, gasoline and propane as well as after-treatment retrofits and engine upgrades. The DERA funding also covers other diesel vehicles and equipment.

EPA announced the national grants on Sept. 24. Applications are due through Grants.gov by 11:59 p.m. Eastern on Jan. 22, 2027. Selection notifications are anticipated in May, with awards expected in July.

According to the Notice of Funding Opportunity, the national competition combines approximately $65 million from fiscal 2024, $62 million from fiscal 2025, and $53 million from fiscal 2026. Final awards depend on funding availability, application quality and agency priorities. EPA said it expects to award 120 entities, with the maximum amount of each award set at $12 million. No minimum dollar amount was provided.

School Bus Eligibility and DERA Funding Limits

Eligible DERA applicants include public school districts responsible for student transportation that own or operate diesel fleets, other qualifying government agencies and certain nonprofits. For-profit school bus contractors cannot apply directly but may receive support through programs administered by eligible grant recipients, including rebates.

Diesel, alternative-fuel and electric school bus replacements are eligible, subject to program requirements. For selected school bus replacement projects, federal funding is limited to 25 percent, 35 percent or 45 percent of eligible vehicle costs, depending on certified nitrogen oxides emissions. Electric replacements fall under the 45 percent limit, but charging equipment including is ineligible. EPA said charging equipment includes chargers/EVSE, electrical panels or service upgrades, wiring and conduit, design and engineering, electricity, and stationary battery storage.

Existing school buses must be operational, have at least three years of remaining life, and have been owned and operated by the participating fleet owner during the two years before the upgrade. They generally must have accumulated at least 7,000 miles annually during those years.

Replacement projects generally require scrapping or permanently disabling the old bus within 90 days after the replacement becomes operational, with limited EPA-approved alternatives.

National program webinars are scheduled for Oct. 13, Oct. 28 and Nov. 12. Questions about the competition are due Nov. 24.

DERA State Funding and Oct. 1 Webinar

Separately, EPA said last week it anticipates approximately $27 million in DERA state funding for fiscal 2025 and another $27 million for fiscal 2026 — approximately $54 million combined, subject to appropriations.

That funding is allocated by formula rather than through the national competition. Participating states and territories will receive both fiscal years’ funding in one grant to support state-administered grants and rebates. School buses are eligible.

States that match their federal base allocation with qualifying nonfederal funding can receive an additional federal incentive equal to 50 percent of that base allocation.

EPA held an Oct. 1 webinar that provided an overview of the state program. State and territorial notices of intent to participate are due Oct. 8, with final allocations scheduled for Oct. 15. Application packages are due Nov. 19.

Those deadlines apply to participating states and territories, according to EPA. School districts seeking state-administered funding should follow their state agency’s grant or rebate process.

Article written with the assistance of AI and EPA documents.

Related: Federal Grants Provide Opportunities for School Transportation Emergency Training
Related: Engine, Truck Manufacturers Support EPA Easing Derate of SCR Diesel Emissions Controls
Related: Report Highlights Shift in Federal Policy from EVs to Conventional Fuels

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While routing and infrastructure shape fuel use at a macro level, vehicle idling represents one of the most immediate and controllable sources of waste.

Most districts have idling policies that meet or exceed state requirements, with exceptions for extreme weather. Historically, however, enforcement has been inconsistent due to a lack of data.

Telematics has changed that. School districts can now track idling time by vehicle, route, and driver, making it possible to identify patterns and enforce policies more effectively.

Data-driven approaches to idling typically combine policy enforcement with education and route optimization. Rather than treating idling as a disciplinary issue, district leaders use data to identify root causes and adjust operations accordingly.

“Idling is the clearest example of a problem that was previously invisible and is now entirely measurable,” said Craig Berndt, Geotab business segment manager of people transportation. “Most districts have an idling policy. Very few, until recently, had any way to know whether it was being followed.”

Berndt noted the emerging standard across many of the school districts with which Geotab works is a two- to five-minute engine-on idle limit. It can be longer in extreme weather conditions.

“Some states have regulatory requirements that align with this,” he said. “But the policy itself only has value if it’s enforced, and enforcement requires data.”

Complicating matters is H.R. 9317, which was introduced to Congress in June. Known as the BUSES Act, short for Buses Utilizing Safety and Environmental Standards, it would amend the Clean Air Act to prohibit state and local governments from enforcing engine idling restrictions on over the road buses and school buses if the engine idles for less than 15 minutes. It would also ban lawsuits filed against school bus owners or operators for alleged idling violations. The House Energy and Commerce Committee advanced the BUSES Act on Wednesday.

Still, Berndt noted telematics enables automatic idling alerts: A notification to a supervisor when a bus has been idling beyond the threshold, with location, driver and duration.

“This shifts enforcement from reactive, a complaint from a principal about exhaust near the front entrance, to proactive. And it creates an accountability loop that changes behavior over time,” he said. “Drivers who know their idle time is visible tend to idle less, not because of punitive pressure but because the visibility makes the issue concrete rather than abstract.”

Berndt noted the cost case is straightforward: A diesel school bus burns approximately 0.8 gallons per hour at idle.

“For a 100-bus fleet idling an average of 30 excess minutes per day, that’s 40 gallons per day in waste, $80 to $120 at current prices every operating day of the year,” he said. “With telematics-driven enforcement, districts routinely cut excess idle time by 30 to 50 percent.”

Beyond fuel, the idling conversation matters for public perception in ways that are becoming more acute, noted Berndt.

“School communities are increasingly attentive to emissions around buildings and bus queues, and districts that can demonstrate they’re actively managing and measuring this are in a much better position when parents or advocacy groups raise the issue,” he said.

Related: State School Bus Idling Rules & Regulations
Related: Green Bus Resources
Related: Data, Routing Analytics for Fuel Efficiency

St. Louis (Missouri) Public Schools supports school bus and vehicle contractor Zum’s idling policy, and Zum’s engine‑on/engine‑off data helps them enforce it, said Transportation Director Kacy L. Davis.

While Zum does not publicly state its idling policy, the company limits unnecessary school bus idling and trains drivers to minimize idle time by using routing technology to reduce waiting and fuel consumption. Meanwhile, The Missouri Department of Natural Resources encourages school districts to adopt anti-idling policies for school buses. Several counties including St. Louis and the Kansas City Ozone Maintenance Area restrict bus idling to 15 minutes in any 60-minute period to maintain passenger comfort.

“Reducing idling lowers fuel costs, improves air quality around schools and reduces engine wear,” he added. “Together, these tools give us a clear picture of how routing decisions affect fuel use, maintenance, and overall operational efficiency.”

SLPS also is preparing to launch a 30‑bus electric fleet in the 2027–2028 school year through the EPA Clean School Bus Program as part of the district’s broader Future Ready initiative to modernize operations and improve the student transportation experience.

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