The state of Nevada is awarding up to $8 million in grants to replace diesel trucks and buses with cleaner vehicles while offering a caveat to recipients: The diesel vehicles must be permanently taken out of service.

The grants are the latest round of funding from the Diesel Emission Mitigation Fund (DEMF), which was created with the state’s share of Volkswagen settlement money. The application deadline is Jan. 31. Details on applying are here.

The funds are available to public agencies and private businesses in the state to help replace diesel-powered vehicles and equipment, including medium- and heavy-duty trucks and school buses, shuttle buses, or transit buses. Forklifts, locomotive freight switchers and airport ground support equipment are also eligible.

The grant will cover the difference between the cost of a new, diesel-powered vehicle or piece of equipment and the cost of a zero-emission or alternative-fuel replacement.

Applicants who received funding in previous cycles of the DEMF are not eligible in this round, according to the Nevada Department of Environmental Protection (NDEP), which is administering the grants.

Early Retirement

One key to the grants is that they are funding only the early retirement of diesel vehicles. Proposals to replace diesel equipment or vehicles that are scheduled to be retired within the next three years will not qualify.

And once funds are awarded, the recipient must render “permanently inoperable and available for recycle” the diesel vehicle or equipment being replaced, according to an NDEP webinar on the grant opportunity.

That includes drilling a hole 3 inches or larger in the engine block and cutting the chassis in half between the front and rear axles.

“You can’t take your old piece of equipment and sell it on the used vehicle market,” Sig Jaunarajs, supervisor of the Planning and Mobile Sources Branch at NDEP, said during the webinar.

“The idea is … that piece of equipment is going to die and will not be producing emissions anymore,” Jaunarajs said. “That’s how we can count that emissions benefit.”

While NDEP will work with grant recipients in cases in which drilling a 3-inch hole in the engine block is difficult, Jaunarajs said, it won’t be enough to drill a quarter-inch hole “that you can plug very easily and that engine will come back to life.”

Documentation such as photos will be required to show that the vehicle is permanently out of service.

VW Settlement

The Diesel Emission Mitigation grants are being funded by Nevada’s share of the Volkswagen settlement.

Volkswagen pleaded guilty in 2017 in a criminal case alleging it installed “defeat devices” on diesel vehicles sold in the U.S. in order to cheat on emissions tests. In settlements of a civil case with the U.S. and California, VW created a $2.9 billion trust fund to be used to offset excess emissions of nitrogen oxides, NDEP said.

Nevada is receiving $24.8 million through the settlement, with $19.5 million going toward DEMF projects; $4.1M for the Nevada Electric Highway, an EV charging infrastructure program; and $1.2M for the Nevada Clean Diesel program.

Two previous cycles of the DEMF program issued $9.2M to fund the replacement of 29 trucks, 22 school or transit buses and 174 pieces of airport ground support equipment.

Eighty percent of the funded projects involved replacing diesel vehicles or equipment with battery-electric alternatives.

Although NDEP has about $8 million remaining in VW settlement money, officials said during the webinar that they don’t expect to use it all during this funding cycle.