The Texas Commission on Environmental Quality (TCEQ) is offering the Texas Natural Gas Vehicle Grant Program (TNGVGP) under the Texas Emissions Reduction Plan (TERP). This program aims to reduce nitrogen oxide (NOX) emissions by incentivizing the replacement or repower of on-road medium- and heavy-duty vehicles with natural gas-powered alternatives. Grants can offset the incremental costs associated with such upgrades, supporting air quality improvements in Texas.

Eligible applicants include individuals and entities with diesel or gasoline-powered vehicles registered to operate in Texas. Applicants must meet ownership, registration, and operational requirements, which include operating the vehicle in Texas for at least two years before applying. Exceptions may be granted under a waiver process for good cause. Eligible projects fall into two categories: vehicle replacement and vehicle repower. Replacement projects require scrapping the old vehicle and purchasing a new natural gas-powered vehicle, while repower projects involve replacing or converting an engine to natural gas. Vehicles and engines must meet stringent emissions standards and be certified to reduce NOX by at least 25% compared to the replaced equipment.

The program's funding levels depend on the TERP Trust Fund's revenue, with a focus on vehicles weighing 33,001 pounds or more. Grants cover up to 90% of eligible costs, including the purchase, lease, or conversion of vehicles or engines, as well as associated costs like installation and warranties. Ineligible costs include administrative expenses, insurance premiums, and any costs incurred before the program’s start date. Grantees must dispose of replaced vehicles either by destruction or permanent removal from the state, with documentation required to verify compliance.

Applications, accepted from September 18, 2024, to March 4, 2025, will be reviewed on a first-come, first-served basis. Applicants may include up to 10 vehicles per application. Submissions must include detailed documentation, such as proof of ownership, vehicle registration, and photographs. Grant amounts are calculated based on standardized tables and actual costs, minus scrappage value and other incentives.

The grant contracts mandate that vehicles operate at least 75% of the time in Texas's Clean Transportation Zone (CTZ) during the contract period. Exceptions for agricultural product transportation are available, requiring a minimum of 10% CTZ operation. Grant-funded vehicles must remain in use and compliant for at least four years or 400,000 miles, whichever occurs first. Grantees are required to submit annual usage reports and maintain all relevant records.

TCEQ evaluates applications based on compliance with program requirements, potential emissions reductions, and project readiness. Selected grantees must sign a contract and adhere to all operational and reporting obligations. The program represents a significant opportunity for fleet owners to upgrade to cleaner vehicles while contributing to statewide air quality goals. Interested parties should prepare their applications early and ensure all documentation meets the submission criteria.