We analyze what 188 school districts shared in a survey about fuel prices, the impact of world events and the upcoming Clean School Bus Program, timely discussion planned for STN EXPO West in July, and a California school bus driver recognized by the state.
With 10 years’ experience in the industry, Griffin Scott, supervisor of fleet advisory and analytics at RTA: The Fleet Success Company, discusses technology and AI trends, fleet management solutions, the impact of bell times, electrification developments and more.
At this writing, the U.S. Environmental Protection Agency had yet to announce the final award round for the Clean School Bus Program. At the same time, could the school bus industry be bracing for the end of the Diesel Emissions Reduction Act?
Since 2008, DERA has been responsible for replacing over 8,500 older operating school buses with cleaner alternatives. The Trump administration last month released its fiscal year 2027 budget request and asked Congress to cut over 52 percent of EPA’s discretionary funding. Included is a call on Congress to cancel DERA, which for nearly two decades has funneled hundreds of millions of dollars to the school bus industry via national grants, rebates and Tribal government awards.
Any attempt to end DERA at least in the Oval Office is unlikely. Congress still must pass its own budget appropriations. And a bipartisan DERA reauthorization bill has been in the works for the past year, which would extend the program at $100 million a year through fiscal year 2029. But the attempt demonstrates ongoing scrutiny over fiscal spending and, more aptly, funding alternative energy.
The $5 billion Clean School Bus Program was going to sunset one way or another after this year. But placing DERA funding in the crosshairs is the last headwind the industry needs on school bus replacements, a consultant shared with me. Another consultant noted that about a decade ago at an industry conference he asked the audience how willing they would be to continue to buy electric school buses if DERA funding dried up. Not one hand raised.
The question remains a good one today, since the electric school bus cost discrepancy is still two or three times that of diesel school buses. It was never attractive to pay upwards of $475,000 for a large electric school bus, and that’s before factoring in the charging infrastructure. If the Clean School Bus Program and DERA both end, where is the incentive to go green outside of a handful of states?
The cost of everything has gone up. At STN EXPO East in North Carolina earlier this spring, an attendee told me new diesel school bus purchases were running over $150,000 each. That includes a surcharge of $12,000 to $20,000 to pay for the warranties on the 2027-compliant engines. (The EPA continues to re-evaluate and finalize a new proposed Phase 3 GHG rule, but OEMs have already completed all necessary R&D and manufacturing to comply with the low NOx emissions levels.)
The Iran war and blockage on the Strait of Hormuz have also created substantial uncertainty for district budgets. While locking in bulk diesel prices creates insulation from price volatility, a gallon was selling at 30-percent premium after the war began. Meanwhile, April’s national average at-the-pump price exceeded $5.40 per gallon. In California, it’s well over $7 a gallon.
We also learned at STN EXPO East that the price of propane also increased, but by about 20 cents per gallon, when the fuel was already a fraction of the cost of diesel. Despite that silver lining, the question remains, how many propane school buses can and will be made available to the market?
School districts and bus companies cannot take for granted federal funds to help them purchase new school buses. Instead, already-strapped local and state budgets will be relied upon. School transportation professionals and their leaders need to increasingly make the case with voters that new school buses are necessary to keep up with service levels.
At the same time, however, public school enrollments are falling. The Brookings Institute found that U.S. public schools lost 1.2 million students from 2019 to 2023, and they aren’t coming back. Parents are homeschooling their children. They are sending them to charter and private schools. And increasingly they as well as school districts are using non-school bus vehicles to do it.
How willing will voters be to approve millions of more dollars via bond measures and levies for school bus purchases? Student transportation leaders can make no assumptions.
Simply put, funding is not keeping pace with rising costs. In seeking to proactively understand and manage all these intersecting challenges, student transporters will need to lean heavily into optimizing and rethinking service models, routing and resource allocation to maintain service levels with fewer resources.
Editor’s Note: As reprinted from the May 2026 issue of School Transportation News.
The U.S. Environmental Protection Agency Office of Inspector General says lessons from the first Clean School Bus rebates and grant rounds should inform future funding, especially as $2.37 billion remains available.
EPA is expected to announce the next CSBP funding rounds later this month or in June.
Ask a transportation director what makes a clean school bus project successful, and the likely answer goes beyond the bus itself. Directors share the importance of coordinating with utilities, ensuring charging infrastructure is ready, managing vendor timelines, or tracking federal and state funds.
A new summary report from the EPA Office of Inspector General, released April 1, points to that same balancing act. The report stated that the EPA has made improvements to the CSBP since its first rebate round in 2022. Earlier weaknesses in application review, recipient verification and fund management should continue to inform how the agency awards future dollars.
The report reviewed five prior EPA Office of Inspector General reports related to the agency’s management of Infrastructure Investment and Jobs Act funding for the 2022 Clean School Bus Rebates program. It identified two overarching issues: The application and selection process, and the management of funds. The summary report does not include new recommendations, but the OIG said the findings could help guide EPA decision-making for future CSBP awards, especially as money is still on the table.
Congress provided $5 billion over five years through IIJA to replace older diesel school buses with cleaner models, including propane, compressed natural gas and zero-emission buses. EPA has described the program as a way to reduce emissions in buses, loading zones and the communities they serve.
Report Highlights Rebate, Grant Awards to Date
At the beginning of fiscal year 2026, the CSBP had $2.37 billion remaining. As of February, EPA said it intends to revamp the program and issued a Request for Information seeking input from fleet operators, manufacturers, school officials and energy producers. The comment period closed April 6. The 146 filed comments included those from all major OEMs, dozens of school districts and other concerned citizens.
As of last November, EPA had awarded $865 million through the 2022 rebate program to 368 school districts for 2,328 replacement buses. The 2023 grant program awarded $950 million to 65 recipients for 2,696 buses, while the 2023 rebate program awarded $815 million to 458 school districts for 3,241 buses. All awards leaning heavily toward electric school buses. Find the breakdown of fuel funding on STN’s Green Bus Resources page.
But the EPA Inspector General said the initial process lacked adequate controls to verify certain applicant and bus eligibility information. Prior reports found EPA did not require enough documentation to verify applicant identity or the accuracy of information submitted, and applicants were not required to directly attest to the truthfulness of their applications. The OIG also said the agency had not established verification protocols before awarding funds.
That matters for districts because federal clean bus projects often require coordination among multiple parties, including school systems, contractors, original equipment manufacturers, utilities and infrastructure providers. The OIG noted that some eligible contractors were allowed to apply or initiate applications on behalf of eligible entities without their knowledge.
Another concern centered on whether local conditions were adequately considered, particularly for zero-emission buses. Under the IIJA, EPA must consider factors such as route length and weather conditions when awarding clean school bus funds. The OIG said prior reports found EPA was not ensuring applicants seeking electric buses had suitable local conditions, and it also cited utility delays as a potential risk to timely deployment.
Fund management was another issue flagged by the OIG. The report said EPA did not adequately monitor bus deployment status or recipient use of 2022 rebate funds, despite previously committing to do so. It also found that 2022 guidance did not clearly indicated for recipients whether CSBP funds should be kept in separate accounts, whether interest could be earned on those funds, or how any interest could be used.
According to the OIG, some recipients kept CSBP awards in accounts that included other funds, which increased the risk that program money could be used for other purposes.
EPA has since made changes. For the 2023 rebate round, the agency required electric bus applicants to submit a Utility Partnership Agreement verifying that districts had notified their local utility. EPA also updated guidance to require recipients to manage funds so they would not accrue interest, keep funds in separate accounts and use them only for eligible expenses. In 2024, EPA added a School Board Awareness Certification requiring applicants to verify that school boards were notified of intended program participation.
The OIG said EPA has completed corrective actions addressing several prior recommendations and was still implementing others. The report states that the agency had completed, or was in the process of implementing, corrective actions for all 11 prior recommendations reviewed.
EPA also reported taking additional oversight steps beginning in February 2025, including site visits to rebate recipients, reviews of concerns related to use of funds and weekly project status reports to the chief financial officer.
LAS VEGAS – As the school bus industry awaits the return and final awards of the Clean School Bus Program, propane and battery-electric continue to offer the most consistent operational cost savings.
That was the verdict of the 2026 State of Sustainable Fleets report produced by TRC Clean Transportation Companies and released this morning at the opening of ACT Expo. The published conclusions are derived from a national survey of light-, medium- and heavy-duty fleet operators across not only the school sector, but transit, refuse, delivery, freight, utility, municipal, and private contractors. The report also relied on industry interviews, market data, policy and funding analysis, and lifecycle and cost analysis.
Propane autogas — including renewable propane, which ACT News and the Propane Education and Research Council previously reported is projected to reach 300 million gallons produced by 2030 — and electric arrive at lower total cost of ownership in different ways, the report highlights.
Propane school buses traditionally cost about 10 percent more upfront to purchase than diesel counterparts. The price of EPA’s new rule expected to be updated next month would have resulted in additional costs of $8,000 to $18,000 for each new diesel vehicle. Discussions at last month’s STN EXPO East provided similar figures. But depending on how the pending 2027 federal NOx regulations update is rewritten, increased costs tied to diesel warranties and end-of-life provisions could be cut in half, according to a panel Monday morning on EPA27, with speakers Andrea Lukas of Cummins and David Hillman of International.
The speakers noted that the low NOx requirement of 0.035 g/brake-hp-hr remains with the effective date of Jan. 1, 2027 still ineffect. The separate issue of GHG and the prior regulation in effect mandating the use of battery-electric in California Air Resources Board states to be addressed with the new rule.
Daily operations are more immediately impacted by fuel prices amid the Iran war. The survey found that Midwest school districts were paying $1.31 to $1.90 per gasoline gallon equivalent, or 47- to 63 percent less than gasoline, to fuel their propane school buses. The U.S. Department of Energy said private propane fueling nationwide averaged $2.91 per GGE in January 2025.
Meanwhile, diesel prices at the pump fell $0.05 to a national average of $5.35 per gallon and gasoline increased by 7 cents to $4.12 per gallon, according to the U.S. Energy Information Administration. The State of Sustainable Fleets report found that propane Autogas delivers 50-percent lower daily fuel costs than diesel and 40 percent lower than gasoline.
Overall, 39 percent of the fleets surveyed recovered operational costs savings compared to vehicles replaced by propane.
In terms of GHG emissions, the responding fleets reported that propane offered a 59-percent reduction in California compared to gasoline. Like battery-electric, propane emits zero pounds of sulfur dioxides, according to the U.S. Department of Energy’s AFLEET data. However, that is where the similarities to propane end.
Electric school buses of course emit nothing from the tailpipe. In fact, they don’t have tailpipes. Electricity for charging in California offered a 59-pecent reduction in lifecycle GHG emissions last year compared to diesel. Propane, while reducing NOx by over 90 percent compared to diesel (including biodiesel blends and renewable diesel), emits nearly 640 percent more CO2. It emits slightly higher PM10 than diesel and same levels of PM2.5, the especially fine particles of soot that are most dangerous to children.
Comparative chart of emissions by fuel type. Source: U.S. Department of Energy AFLEET, via World Resources Institute Electric School Bus Initiative.
Tips for Making Battery-Electric Work
The report forecasts that medium- and heavy-duty electric vehicle registrations — which set a record last year — will fall in 2026 due to the loss of the EV tax credits and “pivots announced by manufacturers.” Registrations of electric school buses was up 60 percent, despite the absence of EPA Clean School Bus Program funding but with continued state support in California, New York and Maryland among others. And electric school bus registrations were drastically better than anemic growth in electric big trucks.
EVs are showing improved TCO. Fifty-seven percent of the fleets surveyed reported operational cost savings on medium-duty electric vehicles compared to the vehicles they replaced. The biggest savings occur on routes that fit electric duty cycles, managing vehicle charging and limiting maximum loads. For example, the report found that fleets can also save 30 percent by shifting to off-peak charging cycles, and doubling or tripling charging windows can cut capital and fueling costs by more than half.
Additional best practices include right-sizing charging equipment, maximizing charging windows and charging multiple vehicles per station.
Costly charging infrastructure remains a challenge, but funding assistance continues, despite the termination of the federal EV credit. The report cited a $6 billion investment by electric utility member companies of the Edison Electric Institute to support charging infrastructure through consulting services, customer rebates, make-ready infrastructure, and end-to-end charging solutions.
Overall, 54 percent of the fleets surveyed said the plan is to increase usage of EVs in the next two years. In the school bus sector, the report cites S&P Global Mobility data showing that 2,289 new electric school buses were registered last year, a 59-percent increase from 2024.
The U.S. Environmental Protection Agency had yet to announce the latest and final funding opportunities under the five-year, $5-billion Clean School Bus Program at this writing. But the remaining $2.7 billion to be awarded will result in more electric school bus orders over the coming years, as well as propane and likely diesel. In addition to California and New York, which have large funding programs to try and meet their mandates that school buses be all-electric over the next two decades, the report cites increased state funding elsewhere, such as new programs in Illinois, Michigan, New Jersey and New Mexico.
Despite the Lion Electric bankruptcy and consolidation of operations to solely serve Quebec, the State of Sustainable Fleets reported positive news for electric school bus manufacturing. It cited Blue Bird’s all-time record revenue and profit posted in the fourth quarter and full year of 2025. Thomas Built Buses also announced its first Type D electric school bus, which is now available to order. IC Bus continues manufacturing and selling its CE Series electric and is offering bundled consulting, financing and maintenance services.
Diesel Continues On
The State of Sustainable Fleets report cited an American Trucking Associations blog in November that the EPA Clean Trucks Plan, which was set to reduce NOx by more than 80 percent and PM by 50 percent for 2027 model year engines, will remain largely unchanged.
A final rule was expected this spring but no announcement had been made at this writing.
“All major manufacturers have developed at least one HD engine capable of meeting those requirements,” the report states.
The report at ACT Expo suggests the final rule may remove warranty and useful life provisions that are expected to increase new diesel vehicle costs in the range of $8,000 to $18,000, with the Cummins-International session earlier Monday again indicating those figures could be less. The new final rule from EPA will eventually result in more specific cost figures.
Still, a “pre-buy, no-buy” dynamic is expected this year and next. The report states that manufacturers are already selling out new build slots for the third and fourth quarters of 2026.
As the industry awaits the Clean School Bus Program announcement and its expected incentives for using biodiesel and renewable diesel, the report found 56 percent of fleets used one of these drop-in fuels, more than double the number from 2023. Twenty-one percent reported utilizing both biodiesel and RD.
Benefits of using RD, the report confirmed, are improved cold-weather performance over biodiesel and fewer diesel particulate filter changes while realizing maintenance savings of approximately $0.015 to $0.02 per mile.
The report also covered CNG, hydrogen and hybrids. But CNG is no longer manufactured as an option for the school bus sector, and hydrogen as yet to be offered as a viable power plant. The school bus industry did test the applicability of hybrids a decade ago and shortly thereafter abandoned those efforts. But hybrid is showing some promise for tractor-trailer trucks, the report notes.
“Adoption of a new technology is almost always driven by a combination of regulation, economic savings and incentives,” Patrick Couch, senior vice president of technical services for TRC Clean Transportation Solutions, told School Transportation News last week. “For hybrid technologies, OEMs will be focused on high-fuel use applications and applications where they are allowed by regulations and operationally more suitable than alternatives. School buses may be a secondary or tertiary focus for hybrid product offerings.”
New Jersey Turnpike (Photo by Mario Tama/Getty Images)
Four Republican members of Congress, including gubernatorial frontrunner Tom Tiffany, have introduced a bill that would exempt vehicles in southeast Wisconsin from federally mandated emissions testing.
The bill was introduced by U.S. Rep. Bryan Steil (R-Janesville) and co-sponsored by Reps. Glenn Grothman, Scott Fitzgerald and Tiffany. Tiffany, the only member whose district does not include the affected area of Milwaukee, Kenosha, Ozaukee, Racine, Sheboygan, Washington and Waukesha counties, also brought the issue up on the campaign trail late last month.
Seven Wisconsin counties, including Milwaukee, are designated ozone nonattainment areas by the EPA under the Clean Air Act, which subjects vehicle owners in the area to additional regulations such as biennial emissions testing. Federal law allows a state to apply for the waiver if it can prove air pollution originates from out-of-state.
The bill authors point to a Department of Natural Resources report that showed 10% of the ozone measured in the area comes from Wisconsin while more than a third of it comes across Lake Michigan from Illinois and Indiana.
“Because of outdated federal rules, hundreds of thousands of Wisconsin drivers in seven counties are forced to complete emissions tests every two years just to renew their registration,” Tiffany said in a statement. “Wisconsin families should not be punished with costly and time-consuming mandates because of pollution drifting in from Illinois and Indiana.”
Studies have shown the highest sources of ozone in the region come from the urban centers of Chicago and Milwaukee.
We examine the impact of the war in Iran and Clean School Bus program updates on district fuel choices, as well as a Pennsylvania school bus driver arrested after driving over 50 students while intoxicated.
We are joined by Nate Springer, vice president of market development at TRC Companies, the presenter of the upcoming Advanced Clean Transportation (ACT) EXPO. He unpacks the reasoning behind various fuel choices available to school districts today and funding options amid changes to the Clean School Bus program.
The U.S. Environmental Protection Agency (EPA) held the first of three webinars to share information on the proposed expansion of eligible fuels under the revamped Clean School Bus Program (CSBP) and to solicit comment from student transportation stakeholders.
The EPA webinar on Tuesday highlighted last week’s Request for Information, which seeks public comment on the feasibility of adding biodiesel and renewable diesel as fundable fuels. A source familiar with the program told School Transportation News following EPA’s announcement of the RFI that the inclusion of liquefied natural gas and hydrogen, which are not currently available options for school buses, satisfy language contained in the 2021 Infrastructure Investment and Jobs Act that created the CSBP.
EPA did not provide a date for the unveiling of the next CSBP funding round, but representatives indicated an announcement would be made following the public comment period, which remains open until early April.
Several webinar participants commented during the webinar on stated EPA focal points of the new funding round. One industry professional recommended that EPA limit the number of entities that are considered to be third parties allowed to work with school districts to secure grant funding. Another participant pointed out that regulatory language can confuse the terms sales order and sales receipt, as the verbiage can result in a reimbursement to a a “poor” school district that instead needs the funds up front.
A representative of school bus dealer noted that some school districts are unable to apply for Clean School Bus Program funds because they don’t have 2010 or older model-year school buses to retire, which the regulatory language calls for.
Other participants championed electric school buses in light of EPA’s new focus on funding more biofuel blends, renewable diesel and propane that increase tailpipe emissions, even if nominally. Another participant said propane makes the most sense for his district’s fleet, citing a concern for the cost of battery replacements in electric school buses.
Wednesday’s webinar is designed to give school districts and bus companies the next steps in finalizing clean school bus projects funded by the 2023 rebate program with an overview of the close out form.
A March 10 webinar will share additional information on the 2023 project close outs EPA said is necessary to complete programs “effectively and efficiently while also ensuring they meet the conditions of their funding opportunity.”
Specifically, EPA said it is targeting potential waste, fraud and abuse by sharing guidance school districts and bus companies should use as they wrap up their projects.
The U.S. Environmental Protection Agency is issuing a request for information from school bus industry stakeholders as it seeks to add biodiesel, renewable diesel (RD) and liquefied natural gas (LNG) as funding options to a revised Clean School Bus Program.
EPA also said it will not be awarding funds for the 2024 CSB Rebate Program. “EPA thanks applicants for their interest and encourages them to apply for the new grant program,” EPA said in a press release Thursday. “The agency will provide more details on the 2026 grants and eligibility requirements in the near future through a Notice of Funding Opportunity.”
In a follow-up email sent by School Transportation News asking for clarification on foregoing the 2024 rebate awards and if those same applications would be recycled, EPA referred to its original statement.
Meanwhile, Thursday’s RFI also mentions hydrogen as an eligible fuel listed by the Investing in Infrastructure and Jobs Act, which created the five-year, $5 billion fund. But there are currently no hydrogen school buses in production. The same goes for liquefied natural gas, which differs from propane. The IIJA also mentions CNG, which won a handful of awards, but manufacturers don’t currently produce that fuel option, either.
Diesel-powered school buses do exist in large numbers nationwide, estimated at about 80 percent of the national fleet of approximately 450,000 vehicles. Many operate with biodiesel blended with regular diesel. The RFI specifically states EPA seeks information on B20, or 20 percent biofuel blend with diesel.
Renewable diesel, or RD, is different from biodiesel as the former is produced by a hydrotreating process, making it a hydrocarbon fuel. Because it is otherwise nearly identical to petroleum diesel, RD is a drop-in fuel alternative that diesel engine manufacturers certify for use in their engines without voiding warranties. But RD is more expensive than petroleum diesel except in California, Oregon, New Mexico and Washington, where Low Carbon Fuel Standard credits are at play.
Electric school buses are not a focus of the RFI because EPA said it has sufficient information on its infrastructure, availability and performance.
EPA added electric school buses have accounted for 90 percent of Clean School Bus Program awards to date, and the next funding round should target other allowed alternative fuels “to allow for the maximum number of affordable bus choices to fit school districts’ specific needs.”
What’s in the RFI?
EPA is asking the current availability and anticipated purchasing within the next year to five years of biodiesel, RD, E85 flex fuel, CNG, LNG, propane or any other biofuel and if those school buses are fueled at the school district facility, an offsite private fueling station, or an offsite public station. EPA also wants to know about fuel supplier arrangements.
Specifically for biodiesel and RD, EPA is asking for details on how the blends or drop-in fuels are used.
It requests information on fueling system components, pricing, construction and installation requirements, performance, domestic content, and other practical considerations.
The RFI also states EPA wants information on how it can further safeguard taxpayer dollars. The agency completed an internal review to assess financial management practices and said it uncovered inconsistent documentation, incomplete adherence to reporting an award conditions, improper or premature drawdowns of funds, and insufficient internal controls by certain awardees, including for profit recipients.
EPA said it is “evaluating additional safeguards and conditions for for-profit entities,” which includes audits of financial statements and conflict of interest policies. It is also considering verification tools or documentation to ensure appropriate bus usage and routes before funds are disbursed; milestone-based payment structures, reimbursement-only models, or phased disbursement mechanisms tied to verified delivery to reduce risk and improve accountability; and enforcement mechanisms such as repayment obligations or clawback provisions in cases of nonperformance, noncompliance, or misuse of funds.
The Clean School Bus Program is set to expire at the end of the current fiscal year, which would require the remaining $2 billion that has yet to be awarded needing to rollout over the next six months.
Public comments are due within 45 days of EPA publishing the RFI in the Federal Register. A webinar is scheduled for March 3.
The international biofuels industry has found an unlikely ally in the waste management sector. A heightened global urgency to reduce greenhouse gas emissions (GHGs) is incentivizing renewable fuels production like never before, but the International Energy Agency (IEA) recently warned of an impending feedstock shortage for biodiesel, renewable diesel and biojet (aviation fuel) production, estimated …
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