It’s not too late to improve Texas plan for VW money. Here’s how.

Texas recently put forth a spending plan for its $209 million share of the settlement from VW’s emissions-cheating scheme, with the goals of reducing smog-forming emissions and protecting people’s health through the repower or replacement of the biggest polluters on the road.

Yet the plan’s author, Texas Commission on Environmental Quality, or TCEQ, ignored some of the oldest, dirtiest engines and equipment. That is a glaring omission because we are learning that these pollution sources—marine tugboats and switcher locomotives that operate at railyards—stay in service for much longer than previously thought. TCEQ’s plan also highlighted that the agency has failed to leverage federal funding for emissions reduction projects for several years.

The good news is that TCEQ can remedy both of these missed opportunities.

VW Environmental Mitigation Fund 101

The Environmental Protection Agency, or EPA, gave states and tribes certain requirements and a list of potential projects to guide the development of the spending plans. The projects have one thing in common: The repower or replacement of high-emitting vehicles and equipment likely to be very effective at mitigating for the pollution caused by VW.

Some of the potential projects require zero-emission technologies for cargo-handling equipment at ports and ground-support equipment at airports. Most potential projects require scrappage of either the old engine (in the case of a repower), or the old vehicle or machine (in the case of a replacement). These requirements ensure that a cleaner engine or vehicle is actually displacing more polluting engines or vehicles, instead of potentially just adding emissions (albeit cleaner) to the airshed.

EPA’s guidelines also required plans to describe how states will consider benefits to areas bearing a disproportionate share of air pollution and estimate the actual emission reductions from projects.

Texas’ plan allocated the funding into two main buckets:

  1. Electric vehicle (EV) charging infrastructure: TCEQ plans to use $31 million, or 15 percent, of the funding to install equipment to support EV charging stations. Also eligible are hydrogen stations to support fuel cell technologies. Funding for these types of projects will be available statewide.
  2. Vehicle and equipment repower/replacement projects: TCEQ plans to use $169 million, or 81 percent, for vehicle and equipment projects in seven priority areas. Eligible projects that can be proposed include replacement or repower of freight, port drayage, refuse, school buses, and transit buses; cargo-handling equipment, like forklifts, used at ports; ground support equipment, like baggage tugs, used at airports; and shoreside equipment that would allow ocean-going vessels to plug in to local grid power. Government-owned fleets can be eligible for up to 80 percent of the cost of the project, while private fleets are eligible for 25 percent to 50 percent of the project cost.

TCEQ used a three-part approach to direct funds to specific areas that included:

  • Location of non-compliant VW vehicles: TCEQ allocated $69 million based upon data that showed where non-compliant VW vehicles were in Texas. This allocation then used a pro-rata approach based upon actual numbers of vehicles in each of the identified areas. For example, the Dallas-Fort Worth region has the greatest total number of VW vehicles, so it received an allocation of $23 million. TCEQ also provided funding for the Houston-Galveston-Brazoria region, San Antonio, Austin, El Paso, Bell County, and Beaumont-Port Arthur.
  • Ozone Nonattainment Status: TCEQ also allocated an additional $10 million in funding to the Houston-Galveston-Brazoria, Dallas-Forth Worth, and San Antonio regions–areas designated by EPA as failing to meet the federal health-based standard for ground-level ozone, or smog.
  • TCEQ’s “strategic allocation”: TCEQ described this final allocation as “based on a strategic assessment of how to best use the funds to address the goals of the program.” Neither the Houston nor Dallas-Fort Worth areas received any of this funding.

TCEQ also included a framework for the process of granting funds to potential recipients. First, TCEQ will administer the funding itself, and the agency will use first-come, first-serve or competitive request for grant application, or RFGA, process. TCEQ has extensive experience with these types of processes because of the Texas Emissions Reduction Plan, or TERP.

Missed Opportunities Can Be Fixed

EDF provided comments to TCEQ on several occasions (see here and here). After seeing the final plan, we see two huge omissions from the TCEQ plan.

First, a tremendous missed opportunity is the exclusion of tug and switcher locomotive projects from the list of eligible projects. This year, EDF collaborated on a study that suggests that EPA has underestimated the useful life of some engines. These results are important for Texas because air quality planning has relied on EPA’s assumptions for how long tug and switcher engines remain in service. In fact, in nonattainment areas that are required to complete an implementation plan—to show how they will meet air quality standards—may have overestimated emission reductions achieved through fleet turnover because the fleet turnover is happening more slowly than had been assumed previously. This means that both of these sources represent key emission reduction opportunities, yet TCEQ left these important projects off the eligibility list.

TCEQ said that it omitted the marine and switcher locomotive projects because TERP adequately addresses those sources. That is not true. There have been several grant cycles in TERP’s history in which these sources received little to no funding at all. The TCEQ’s position also does not take into account the uncertainty surrounding TERP, which is set to expire in 2019 and will require action by the Texas Legislature to ensure future funding.

TCEQ can update the plan at any time, and it should include these important emission sources.

A second missed opportunity relates to the so-called “DERA option.” This refers to the Diesel Emission Reduction Act, a federal grant program administered by EPA. For the VW settlement, the “DERA option” would have allowed additional types of projects, such as construction equipment, to be eligible for funding.

In Texas, however, the “DERA option” was not even an option because Texas has opted to decline its share of the state DERA grants for the past several years. It is only one of four states in the country to leave these funds untouched. TCEQ has used the funding—typically between $100,000 and $200,000 a year—for the Clean School Bus program.

Here is the bottom line: TCEQ should not leave money on the table for pollution reductions or ignore projects that can help improve air quality when we do not have clean air every day for every Texan. TCEQ should include marine and switcher locomotive projects in the Texas plan and begin accepting state DERA funding for emission reduction projects.

The VW funding opportunity offers a tremendous chance for Texas to implement some important clean air projects quickly. Texas has a long way to go for all residents to have access to clean air, underscoring the need for targeted funding that improves air quality, while supporting a transition to zero emissions transportation technologies.



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