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Rebate Grants Program

A simplified first-come, first-served grant program to upgrade or replace diesel heavy-duty vehicles and/or equipment.

A Program of the Texas Emissions Reduction Plan (TERP)

No Longer Accepting Applications

The Rebate Grants Program is no longer accepting applications for the FY23 grant round. Join our TERP Hot Topics email listExit the TCEQ to get updates.

Program Information

Application & Funding Updates

Last Updated: December 1, 2022

Total Applications Received: 699

Total Applications Awarded: 108

Total available funding: $75,000,000

Total funds requested: $181,139,025

Small Business

Available funding: $20,000,000

Funds requested: $41,564,534

New Purchase

Available funding: $10,000,000

Funds requested: $24,978,186

All Other Projects

Available funding: $45,000,000

Funds requested: $156,160,839

The total amount to be awarded under this grant program will depend upon the amount of revenue received in the TERP Trust Fund but is initially anticipated to be $75 million. Depending on demand and the requested grant amounts of eligible applications received, TCEQ may redistribute these allocations to best meet the purposes of the Rebate program. This may include, but is not limited to, redistributing funds within this grant program, moving funds to another grant program, or allocating additional funds to this grant program.

Contact Information

How to Apply

Applicants should review the following documents for detailed requirements for each project type and information about applicant eligibility:

Eligible Applicants

Eligible applicants are individuals, state and local governments, corporations, or any other legal entity. All business entities such as corporations or partnerships must have an active registration with the Texas Secretary of State by no later than the program opening date listed on the cover page of the RFGA. If awarded a contract, businesses must maintain an active registration during the contract period.

Eligible Equipment

On-Road Vehicles (old vehicle)

An on-road vehicle eligible for replacement or repower must:

  • be a heavy-duty on-road vehicle with a gross vehicle weight rating (GVWR) greater than 8,500 pounds (lbs.) and be certified to or have a diesel engine certified to the United States (US) Environmental Protection Agency (EPA) heavy-duty engine emissions standards.
  • have been owned, leased, or otherwise commercially financed and registered and operated by the applicant in Texas for at least the two years immediately preceding the application signature date;
  • have been used in its primary function in the routine operations of the applicant in Texas for at least the two years immediately preceding the application signature date; and
  • be in operating condition with at least five years of useful life remaining.
Non-Road Equipment (old equipment)

Non-road equipment eligible for replacement or repower must:

  • be powered by a diesel engine rated at 25 horsepower (hp) or greater;
  • have an engine that is certified to the EPA emissions standards for non-road engines;
  • have been continuously owned and operated by the applicant in Texas for at least the two years immediately preceding the application signature date;
  • have been used in its primary function in the routine operations of the applicant in Texas for at least the two years immediately preceding the application signature date; and

Eligible Project Categories

Replacement Projects

The replacement of eligible on-road vehicles or non-road equipment with newer models.

Replacement On-Road Vehicles (new vehicle)

The replacement on-road vehicle must:

  • be certified to emit at least 25% less nitrogen oxides (NOx) than the old vehicle;
  • have a vehicle model year no more than three years older than the calendar year in which it was purchased; and
  • be of the same type, weight category, and body and axle configuration as the vehicle being replaced unless otherwise agreed to by TCEQ. The replacement vehicle must be configured and intended for use in the same application or vocation as the vehicle being replaced. TCEQ may accept vehicles of a different type, weight category, or body and axle configuration to account for the latest technology or vehicle type used in a specific vocation.
  • Unless the vocational type of the new vehicle is exempt from registration requirements, the vehicle must be registered for operation in Texas.
Replacement Non-Road Equipment (new equipment)

The replacement non-road equipment must:

  • be certified to emit at least 25% less nitrogen oxides (NOx) than the old equipment;
  • have an engine model year no more than three years older than the calendar year in which it was purchased; and
  • be of the same type and intended for the same use in the same application or vocation.
Repower Projects

The replacement (repower) of an existing eligible on-road vehicle or a piece of non-road equipment with a new, rebuilt, or remanufactured engine. The existing on-road vehicle or a piece of non-road equipment must have at least two years of useful life remaining to be eligible.

Repower of On-Road Vehicles and Non-Road Equipment (new engine)

The new, rebuilt, or remanufactured engine must:

  • be certified or verified to emit 25% less nitrogen oxides (NOx) than the engine being repowered or replaced. TCEQ requires “Certification” or verification by either the EPA, the CARB, or another entity that has been deemed acceptable by TCEQ;
  • be certified or verified to meet the same category of emission standards as the original engine (e.g., on-road or non-road); and
  • use only components procured from the original engine manufacturer (OEM) or an authorized reseller unless otherwise approved by the TCEQ on a case-by-case basis.
New Purchase Projects

The purchase or lease of new on-road vehicles without the requirement to destroy an old vehicle.

New purchase projects must:

  • include one of the on-road vehicle types listed as new purchase options on the Rebate Grant Tables;
  • unless the new on-road vehicle operates exclusively on electricity (e.g., hydrogen, battery-electric), be certified by the EPA or the CARB to an emission standard, including family emission limits (FEL), that is less than or equal to 0.02 grams per brakehorsepower hour (g/bhp-hr) of NOx;
  • use at least one of the following fuels: natural gas, propane, hydrogen, or electricity; and
  • be a new vehicle that has not been subject to first sale.
On-Vehicle Electrification Projects

The purchase and installation of equipment that enables an on-road vehicle or non-road piece of equipment to use electric power instead of power normally supplied by the propulsion engine or another onboard internal combustion engine (e.g., auxiliary power unit, refrigeration trailer). Project types that will be considered under this grant round include:

  • the installation of battery-powered auxiliary power units (APU) which, at a minimum, can offset 4 continuous hours of engine idle operation time;
  • the installation of a battery-powered refrigeration unit on refrigeration trucks or trailers that can accept a direct plug-in connection while parked; and
  • the installation of a heavy-duty electric hybrid power train system which can demonstrably reduce fuel consumption by at least 5%.

The on-road vehicles or non-road equipment that this equipment is installed on must:

  • have a model year no more than three years older than the calendar year in which the on-vehicle electrification equipment was purchased;
  • must be owned by the grant applicant, including the installed add-on equipment; and
  • meet all the requirements of Section 2.4 or Section 2.5 of the RFGA.
Refueling Infrastructure Projects

Applicants purchasing a qualifying vehicle or piece of equipment powered by an alternative fuel may request additional funding for onsite refueling infrastructure.

  1. Allowable alternative fuels are as follows:
    1. Electricity
    2. Hydrogen
    3. Compressed Natural Gas (CNG)
    4. Liquified Natural Gas (LNG)
    5. Propane (LPG)
    6. Methanol
  2. The refueling infrastructure must provide, at a minimum, refueling capacity to the on-road vehicles or non-road equipment purchased, replaced, or repowered through this grant program.
  3. Applicants may expand existing onsite refueling infrastructure to accommodate the additional new on-road vehicles or non-road equipment in lieu of installing new service.
  4. Applicants are required to be the owner of the site where the refueling infrastructure equipment will be installed.
  5. Applicants may only include one refueling infrastructure project site and one type of alternative fuel per application.
  6. All grant-funded refueling infrastructure must be purchased by the applicant and not leased.

Usage Requirements for Grant-Funded Equipment

  1. Not less than 55% of the grant-funded on-road vehicle or non-road equipment operation must occur in one or more of the nonattainment areas and affected counties (see RFGA, Appendix A). Applicants may elect to increase this commitment to 80% of their operation in these same areas to receive additional grant funds.
  2. Annual operation will be considered as miles traveled, hours of engine operation, or fuel consumed. For determining the total annual operation, a single unit of measurement (e.g., miles traveled) must be used. Applicants receiving a grant should be prepared to keep and maintain records of their annual operation in the unit of measurement they choose on their application.
  3. Refueling infrastructure must be owned, operated, and maintained for the duration of its annual usage reporting requirement as defined in Section 4.7 of the RFGA.
  4. For on-vehicle electrification projects, the on-road vehicle or non-road equipment on which the grant funded equipment was installed is subject to the usage requirements detailed in (a) and (b) above.

Find the Emission Standard for the equipment being replaced using the table applicable to your equipment type:

Use the following resources to help determine the engine family code and federal emission standard for your vehicle/equipment:

Replacement, Repower, and On-Vehicle Electrification Projects:

Applicants will receive up to the lesser of the following options:

  1. The grant amounts shown in the Rebate Grant Tables below; or
  2. 80% of the incremental cost (see Section 3.3 of the RFGA).

New Purchase Projects:

Applicants will receive up to the lesser of the following options:

  1. The grant amounts shown in the Rebate Grant Tables; or
  2. The incremental cost of the project (as defined in Section 3.3(c) of the RFGA).

Refueling infrastructure associated with Replacement, Repower, or New Purchase Projects:

Applicants will receive up to the lesser of the following options:

  1. $100,000 plus $100,000 for each on-road vehicle or non-road piece of equipment that is fueled by the associated infrastructure in the project;
  2. 50% of the incremental cost of the refueling infrastructure project; or
  3. $600,000

Maximum Grant Amounts

Review the grant table for your project type to determine your maximum grant amount.

Non-Road Equipment Grant Tables
On-Road Heavy-Duty Vehicles Grant Tables
New Purchase Grant Tables
On-Vehicle Electrification Grant Tables

Download and complete the project application:

The TCEQ is committed to accessibility. If you would like to request a more accessible version of the project application, please contact the TERP program at 800-919-TERP (8377).

The TCEQ requires applicants to complete the W-9 to certify their Taxpayer Identification Number (TIN). The W-9 Form must be submitted with the Application.

Applications and Required Attachments must be received by 5:00 p.m CT, December 19, 2022.

Applications will be accepted for consideration during this grant period only if received by TCEQ via electronic mail at REBATE-Apply@tceq.texas.gov or via mail at one of TCEQ’s addresses, no later than 5:00 p.m. CT on the application submission deadline listed on the cover page of the RFGA.

For applications submitted electronically, each attachment must be grouped by activity and clearly labeled with the activity number at the top of each page. It is preferable that the application and attachments be submitted as a single PDF, but it is not required.

  • Submitting Applications via Email. If submitting an application via email to REBATE-Apply@tceq.texas.gov, please use the following naming convention for your application file in the subject line: ‘FY23 Rebate and [your legal name].’ Only one application may be submitted per email at a maximum file size of 25MB.
  • Submitting Applications via TCEQ’s FTPS Server. If your application is larger than 25MB, please submit by uploading the file to TCEQ’s file transfer protocol secure (FTPS) server. Enter REBATE-Apply@tceq.texas.gov as the email address. (Read how to use TCEQ’s FTPS serverExit the TCEQ). Please note: Applications uploaded to TCEQ’s FTPS server without completing the share file(s) step will not be considered as submitted. See detailed instructions on how to share files via TCEQ’s FTPS server.Exit the TCEQ

Applications may also be submitted to one of these addresses:

Standard Mail:
Texas Commission on Environmental Quality
Air Grants Division, MC-204 (Rebate)
P.O. Box 13087
Austin, TX 78711-3087

Express Mail
Texas Commission on Environmental Quality
Air Grants Division, MC-204 (Rebate)
12100 Park 35 Circle
Building F, 1st Floor, Suite 1301
Austin, TX 78753

For questions on obtaining the Request for Grant Applications (RFGA), determining the eligibility of a project, or completing and submitting an application, please contact TERP staff at TERP@tceq.texas.gov or 800-919-TERP (8377).