Search Federal and State Laws and Incentives

Clean Vehicle and Infrastructure Grants

The Texas Commission on Environmental Quality (TCEQ) administers the Emissions Reduction Incentive Grants (ERIG) Program and Rebate Grants Program as part of the Texas Emissions Reduction Plan (TERP). The ERIG Program provides grants for various types of clean air projects to improve air quality in the state's nonattainment areas and other affected counties. Eligible projects include those that involve replacement, retrofit, repower, or lease or purchase of new heavy-duty vehicles; alternative fuel dispensing infrastructure; idle reduction and electrification infrastructure; and alternative fuel use. The Rebate Grants Program provides grants to upgrade or replace diesel heavy-duty vehicles and non-road equipment. Qualifying projects must reduce emissions of nitrogen oxides or other pollutants by at least 25% as compared to baseline levels and must meet operational and fuel usage requirements. For more information, including eligibility and the application form, see the TCEQ TERP website. (Reference Texas Statutes Health and Safety Code 386 and Texas Administrative Code 114.620-114.629)

Provision for Establishment of Hydrogen Program

The Texas Department of Transportation (TxDOT) may seek funding from public and private sources to acquire and operate hydrogen vehicles and establish and operate publicly accessible hydrogen fueling stations. TxDOT must ensure that data on emissions from the vehicles, fueling stations, and related hydrogen production are monitored and compared with data on emissions from control vehicles with internal combustion engines that operate on fuels other than hydrogen. TxDOT must report the results of this monitoring, analysis, and comparison to the Texas Commission on Environmental Quality. (Reference Texas Statutes, Transportation Code 201.618)

Clean Fleet Grants

The Texas Commission on Environmental Quality (TCEQ) administers the Texas Clean Fleet Program (TCFP) as part of the Texas Emissions Reduction Plan (TERP). TCFP encourages owners of fleets containing diesel vehicles to permanently remove the vehicles from the road and replace them with alternative fuel vehicles (AFVs) or hybrid electric vehicles (HEVs). Grants are available to fleets to offset the incremental cost of such replacement projects. An entity that operates a fleet of at least 75 vehicles and commits to placing 20 or more qualifying vehicles in service for use in the Clean Transportation Zone may be eligible. Qualifying AFV or HEV replacements must reduce emissions of nitrogen oxides or other pollutants by at least 25% as compared to baseline levels and must replace vehicles that meet operational and fuel usage requirements. Neighborhood electric vehicles do not qualify. For more information, including current application periods, see the TCEQ TERP website. (Reference Texas Statutes, Health and Safety Code 386 and 392, and Texas Administrative Code 114.650-114.658)

Clean School Bus Program

Any public school district or charter school may receive a grant through the Texas Commission on Environmental Quality (TCEQ) to pay for the incremental costs to replace school buses or install diesel oxidation catalysts, diesel particulate filters, emission-reducing add-on equipment, and other emissions reduction technologies in qualified school buses. Furthermore, funds may also be used to purchase qualifying fuels, including any liquid or gaseous fuel or additive registered or verified by the U.S. Environmental Protection Agency (other than standard gasoline or diesel) that provides particulate matter emission reductions. Additional rules and conditions apply. For more information, see the TCEQ Texas Emissions Reduction Plan website. (Reference Texas Statutes, Health and Safety Code 390, and Texas Administrative Code 114.640-114.648)

Authorization of Governmental Alternative Fuel Fleet Grant Program

The Texas Commission on Environmental Quality (TCEQ) will establish and administer a grant program for governmental alternative fuel fleets to provide grants for the purchase or lease of a new vehicle and the purchase, lease, or installation of alternative fueling equipment. Eligible alternative fuels include natural gas, propane, hydrogen, and electricity. State agencies and political subdivisions are eligible to apply for a grant under the program if the entity operates a fleet of more than 15 vehicles. Mass transit and school transportation providers will also be eligible for grants.

TCEQ will establish standardized vehicle grant amounts based on the incremental costs associated with the purchase or lease of different categories of motor vehicle, including the fuel type, vehicle class, and other categories TCEQ considers appropriate. TCEQ will also establish standardized fueling equipment grant amounts.

(Reference Texas Statutes, Health and Safety Code 386.153)

Light-Duty Alternative Fuel Vehicle Rebates

The Texas Commission on Environmental Quality (TCEQ) administers the Light-Duty Motor Vehicle Purchase or Lease Incentive Program for the purchase or lease of a new light-duty vehicle powered by compressed natural gas (CNG), propane, hydrogen, or electricity. CNG and propane vehicles, including bi-fuel vehicles, are eligible for a rebate of up to $5,000. Electric drive vehicles powered by a battery or hydrogen fuel cell, including plug-in hybrid electric vehicles with a battery capacity of at least 4 kilowatt hours, are eligible for a rebate of up to $2,500. One rebate is available per eligible vehicle. Rebates are awarded on a first-come, first-served basis. For more information, including eligibility requirements and the application form, see the TCEQ Texas Emissions Reduction Plan website. (Reference Texas Statutes Health and Safety Code 386 and Texas Administrative Code 114.610-114.613)

Medium- and Heavy-Duty Grant Program

The Texas Commission on Environmental Quality (TCEQ) provides funding for eligible medium- and heavy-duty on-road alternative fuel vehicles or engine repowers and replacements, as well as for associated electric vehicle and hydrogen fueling infrastructure. Both government and non-government entities that own and operate diesel fleets and equipment are eligible for funding. This grant program is funded by Texas’ portion of the Volkswagen Environmental Mitigation Trust. For more information, including how to apply, see the TCEQ Volkswagen Environmental Mitigation Program website.