TERP: A Smart Program Helping To Bring Cleaner Air To Texas

Watching the news recently, we know that ozone season is in full swing this year as numerous counties around the state have exceeded health-based ozone concentrations– the magnitude of which the state hasn’t seen in a decade. Yesterday I testified before a Texas State House committee in support of one program in Texas that has been effective in addressing this issue and in reducing air pollution, including the pollutants that form ozone.

TERP is About Clean Air

The Texas Emissions Reduction Plan (TERP) is a smart program that provides market incentives for businesses and individuals to turn over their diesel engines at a faster pace than they would have otherwise. It was also created as a kind of trade-off for penalty measures that otherwise would have been implemented as part of the state’s air quality plan to meet the national ambient air quality standard for ozone. The penalty measures that the TERP program replaced included:

  • A limit on the use of construction and industrial equipment from 6 a.m. to 10 a.m.; and,
  • A requirement that diesel-powered equipment over 50 hp be replaced with newer engines by a certain deadline.

Why The Focus On Diesel Engines?

Emissions from diesel engines are a certified health threat; the older the engine, the more polluting it is. The World Health Organization just this year classified diesel emissions as cancer causing and reinforced calls to reduce their emissions worldwide.

Heavy duty diesel engines traveled almost 700 million miles in Texas in 2010. Combined with our increasing population – up 20 percent in the last decade – and the expansion of facilities like those along the Port of Houston ship channel, programs like TERP take on even more significance as we continue seeking air pollution solutions.

What Makes TERP Special?

TERP is effective. Through August of 2011, TERP projects reduced over 171,000 tons of nitrogen oxides (NOx), or about 65 tons per day. This is 65 tons less harmful diesel pollution that Texans are breathing, and around 20 percent more NOx reductions than the program had originally anticipated.

TERP has provided co-benefits in reducing pollutants other than NOx. The TERP program has also funded the popular Clean Bus program, administered by TCEQ. Through the end of 2011, the Clean Bus Program has retrofitted over 6,000 buses and reduced 62 tons of particulate matter. As a result, almost one million Texas children have a cleaner ride to school.

TERP provides resources for innovation. TERP funds have been used to fund research and development projects that will help make the state a leader in developing new technologies while creating new business and industry in Texas. Alternative fueling stations funded by TERP will pave the way for the most innovative engines developed.

TERP replaces other measures that were considered unpopular. If the TERP program is discontinued, then the state will have to come up with additional measures to reduce ozone-causing pollutants. The same unpopular measures that were recommended prior to TERP adoption will be revisited.

TERP has potential to expand to cover additional counties. Only equipment operating for the majority of time within 42 specific counties has been eligible to receive TERP funds. As additional counties fall out of attainment with more protective health-based air quality standards, TERP eligibility can be expanded to provide resources for emission reduction projects.

More TERP Background

TERP was established by the 77th Texas Legislature in 2001, through the enactment of Senate Bill 5. The legislation defines the TERP program objective to reduce NOx emissions from older heavy-duty on-road vehicles and non-road equipment by providing grants and rebates for voluntary upgrades and replacements.

Since NOx is a primary precursor to the formation of ground-level ozone, the TERP program targets areas of Texas designated as nonattainment for ground-level ozone under the Federal Clean Air Act (FCAA), as well as near non-attainment areas and areas having an early action compact agreement to address ozone issues.

Lowering NOX emissions from TERP-eligible sources remains a critical strategy for the Texas State Implementation Plan (SIP), which details how the state meets the FCAA.

How TERP Is Funded

Taxes on diesel equipment and motor vehicles provide funding for TERP. These include surcharges such as:

  1. Off-road Heavy Duty Diesel Equipment Surcharge- Rate: 2% of sale or lease price
  2. Motor Vehicle Surcharge- Rate: 2.5% of total price paid for 1996 or earlier year models; 1% of total price paid for 1997 and newer models
  3. Motor Vehicle Registration Surcharge- Rate: 10% of total fees due for the registration of the truck tractor or commercial motor vehicle
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