While the industry awaits information on the remaining $2.3 billion available through the EPA Clean School Bus Program, three U.S. representatives hope to extend the program through 2031, reauthorizing another $1 billion in funding annually for five more years.

To date, the CSBP has awarded $2.7 billion to replace more than 8,500 school buses, reaching nearly every U.S. state. More than 5,200 electric school buses funded through the program have already been delivered to schools. Ninety-one percent of the new school buses applied for were electric. The remaining 9 percent consisted mostly of propane with a small number of CNG also awarded. No new CNG-powered school bus models are being manufactured.

The Clean School Bus Reauthorization Act builds on the Clean School Bus Program funding included in the Infrastructure Investment and Jobs Act, signed into law in 2021. The program was expected to award $5 billion over five years, through competitive grants and rebates. However, following President Donald Trump’s return to office, the funding has reached a standstill. The last funding opportunity from the EPA was the 2024 Clean School Bus Rebate Program, which opened September 2024. However, the EPA canceled the rebate and no organizations received awarded funds. The last round of distributed funds was the 2023 rebate program.

The new legislation would amend the Energy Policy Act of 2005 by replacing the program’s current authorization period of fiscal years 2022 through 2026 with fiscal years 2027 through 2031. Under the existing statute, the program is authorized to receive $1 billion annually, totaling $5 billion. Rep. Jahana Hays, D-Conn., introduced the bill Oct. 9 and was joined by Reps. Greg Landsman, D-Ohio, and Buddy Carter, R-Ga.

“Since I came to Congress in 2019, I have advocated for clean school bus funding. As an educator with over a decade of classroom experience, I know how damaging diesel exhaust can be for student well-being and learning. The consequences of diesel emissions extend to our environment, exacerbating the effects of greenhouse gas emissions,” Hayes said in a statement. “The Clean School Bus Reauthorization Act will help to provide cleaner and healthier air for school children in Connecticut and across the country, support clean energy jobs, and protect our environment for decades to come.”

The legislation would maintain the existing funding structure, which allocates $500 million annually for clean and zero-emission school buses and another $500 million exclusively for zero-emission school buses. Funding supports the replacement of older school buses with cleaner alternatives.

It does not establish new grant requirements or change program eligibility. Rather, it extends the existing authorization for five additional years.

According to a press release, The Clean School Bus Reauthorization Act is endorsed by the American School Bus Industry Coalition which includes Blue Bird, First Student, Beacon Mobility, National Express, Highland, Greenpower Motor Company, National School Transportation, Student Transportation of America, and IC Bus. Additional endorsers include the American Bus Association, American Asthma and Allergy Foundation (AAFA), League of Conservation Voters, Moms Clean Air Force, Sierra Club, Union of Concerned Scientists, and World Resources Institute’s (WRI) Electric School Bus Initiative.

Sue Gander, director of WRI’s Electric School Bus Initiative, stated that children’s health is not a partisan issue.

“As this bill shows, there’s real enthusiasm on both sides of the aisle to give children the clean ride to school they deserve,” she said. “This bipartisan support is no surprise, as 51 percent of school districts with electric school buses on the road or coming soon are in Congressional districts represented by Republicans.

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“The Clean School Bus Program has been a game-changer, answering school districts’ call to replace aging diesel buses with clean, zero-emissions vehicles in rural, suburban and urban communities alike,” Gander continued. “Replacing diesel buses with electric buses protects children from the dangers of diesel exhaust pollution, which disproportionately impacts low-income and Black communities.”

She added that electric school buses are popular with school districts that use them, especially the drivers behind the wheel. The number of ESBs on the road today is 12 times higher than it was five years ago, she noted.

“With diesel prices at record highs, Congress has a chance to help school districts save big on fuel costs and improve children’s health at the same time,” she said.

Meanwhile, First Student posted on Facebook that it welcomes the bipartisan introduction of the legislation.

“As the program’s largest recipient of funding, First Student has seen firsthand its importance in helping bring zero-emission school buses to our customers students and communities we serve,” the post reads. “Continued bipartisan support for this program is important to helping school districts and communities access funding for cleaner school bus technologies, including electric school buses.”

The school bus contractor added that reauthorizing the program would help preserve a pathway for Congress to continue supporting ESBs.

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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.

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