Since July 26, 2007, construction
contractors in California have had to rethink how to manage
their fleet budgets. On that day, the California Air Resources
Board adopted sweeping regulation to reduce emissions from
off-road diesel vehicles in the state, which is expected to
lead to billions of dollars in contractor spending. Off-road
construction machines powered by an engine with a horsepower
of more the 25, must be equipped with clean-burning diesel
engines starting in 2010 for the largest fleets.
California ARB and U.S. EPA
diesel-engine standards
Many
newer machines have engines that are Tier-3 and Tier-4
compliant, so they already fit the bill. But older pieces of
equipment produce high quantities of pollutants, specifically
particulate matter and nitrogen oxide. It is those vehicles
that contractors are concerned about, as they have to be
retrofitted with new, clean-burning engines or exhaust
aftertreatments that capture pollutants. The estimated 180,000
vehicles in need of an upgrade could cost construction
companies and government agencies in California up to $13
billion.
“There’s only one state, California, that has
construction regulations,” says Alan Banwart, environmental
protection specialist with EPA Region 7. “Other than that,
there are no state regulations out there. There are some local
regulations, but most of those are on the East
Coast.”
Fortunately for California-based construction
companies, grants are available via the Carl Moyer Program, a state-funded
initiative. But for contractors in other states that are
retrofitting vehicles because of local rules or in
anticipation of future emissions-related regulations, grants
are a little tougher to come by.
According to Banwart,
EPA’s National Clean Diesel Campaign until 2008 did not
allocate federal funding to non-road clean diesel projects.
But the Campaign now offers four different methods of funding
assistance for those projects:
Innovative finance program – Loan programs
enable eligible entities to borrow federal funds at low
interest rates. Although the money has to be paid back,
those same funds can be used later for other
emissions-reduction projects.
Emerging technologies – Manufacturers
compete to develop emissions-reduction technologies not
already approved by the EPA. Contractors can partner with
manufacturers that are on EPA's approved list of emerging
technologies and then work with the manufacturer to prepare
an application for funding under the emerging technologies
umbrella. The emerging technologies program serves two
purposes: It expands the pool of retrofit technologies that
can help reduce harmful pollutants, and it forms a network
of manufacturers and contractors who can work together not
only to meet the deadlines for compliance, but also to bring
down the costs of complying. Click here for a list of emerging
technologies.
Federally funded state programs – Each
state is eligible to receive a portion of federal funds for
clean-diesel projects of their own. For instance, Kansas’
clean diesel program and Arkansas’ Go Red! Program provide
federal funds for retrofits. Construction equipment is
included in the groups that can apply for it. However, those
vehicles are competed against every other type of diesel
equipment.
National funding – Administered by each of
the EPA’s regional offices and public-private
collaboratives, the National Clean Diesel Funding Assistance
Program provides funding to U.S. regional, state, local and
other agencies that operate diesel fleets, including those
with construction equipment. For-profit businesses are not
eligible to apply for these funds, but they can partner with
the eligible entities.
The last method, coordinated
by EPA’s Clean-Diesel Collaboratives, also provides
contractors with several resources that could help fleets
upgrade their vehicles without additional funding.
For instance, the Blue Skyways
Collaborative, which combines EPA regions 6 and 7,
organizes bi-monthly calls with its members in which they
discuss regulation, funding sources and incentives pertaining
to clean-diesel work. The collaborative also helps its members
get in touch with other construction groups and local
government associations to form partnerships.
In
addition, the Blue Skyways Collaborative recognizes companies
that have demonstrated a willingness to reduce dirty
emissions, for example by conducting upgrades with their own
funds. As a result, those companies may be more likely to win
project contracst while saving money thanks to a more
energy-efficient fleet.
One Blue Skyways partner,
McAninch, an earthmoving company based in West Des Moines,
regularly repowers vehicles in its fleet on the company’s
dime, according to Banwart. Recently, McAninch began upgrading
the tier level each time they repower an engine.
“It
costs a little bit more,” says Banwart. “But it increases the
machine’s’ efficiency, and it obviously reduces their
emissions as well. When you’re already going in there to take
an engine out and repower it, it’s not that much harder to
upgrade it to another tier level.”
“Sometimes there’s
funding available, and sometimes you do it on your own,”
Banwart says. Because the first few rounds of federal
funding allocated money only to on-road projects, construction
companies have had difficulty securing grants to upgrade their
fleets. But some contractors who have taken the initiative to
search elsewhere have been successful.
“We have a mixture of
just about every kind of vehicle you can imagine,” says Allen
Mitchell, manager of the Snohomish County fleet. “We have
equipment from large power tools all the way up to heavy
cranes, with everything in between.”
In 2005, Snohomish
began received its first round of funding: $50,000 from the Puget Sound Clean Air Agency in Washington.
Allen’s fleet was able to conduct 24 upgrades with those
funds. The county then received a large grant from the Washington State Department of Ecology’s Heavy
Duty Diesel Retrofit Program, which allowed it to upgrade
another 85 vehicles, some of which were off-road. An extension
to that grant, approved in early 2009, will enable Snohomish
to retrofit 24 more vehicles.
In total, Snohomish
County has been awarded more that $140,000 for clean-diesel
upgrades.
Obtaining grants for construction equipment
was more difficult than for other diesel machines, Mitchell
says. In order to get funding for off-road equipment, Mitchell
had to supply additional details about his construction fleet.
“There are special issues with non-road equipment
because they are all configured differently,” Mitchell says.
“The retrofits have to be configured specifically for each
particular make and model of vehicle of off-road
equipment.”
Mitchell applied online and provided
documents comprising extensive fleet data, make and model of
engine, horsepower, use-per-year for each type of equipment,
and year of purchase.
“My advice for anyone who goes
after those grants is you should have a pretty good database
with a lot of detail about engines, life and use of the
equipment,” Mitchell says.
“The state program prefers
to retrofit older equipment because those are usually the most
polluting,” he says. “If they have 20-25 year lives and are,
say, half way through the life, those are the prime
candidates. And they preferred machines over 50-60 horsepower,
so smaller equipment usually aren’t eligible.”
Mitchell
almost applied for federal funding but realized the
application was much more difficult than the state program’s.
He may decide to tap into federal funding later, he says, but
right now his fleet has enough rollover.
“For state
funding, I did the grant writing myself, being the fleet guy,
but I had never done grant writing before, so that process is
kind of daunting,” Mitchell says. “The federal-funding
applications have a lot of hoops to jump through, and normal
fleet personnel don’t necessarily have the expertise to pull
all of it together.”
“I managed to wade through
it at least on the state level, and the state tried to be user
friendly, so that was very helpful,” he says.
Texas is
another state in which construction contractors have
benefitted from state-level grants to reduce
emissions.
Modeled after California’s popular Carl Moyer emissions-reduction program, the
Texas Emissions Reduction Plan, part of the
Texas Commission on Environmental Quality, specifically aims
to reduce nitrogen-oxide emissions. Nitrogen oxides react with
sunlight to create the smog that covers several of the urban
centers in Texas.
TERP was founded in 2001 and has been
funded through Texas state appropriations. Authorized through
2013, TERP has awarded much of its funding to eligible
off-road projects in nonattainment areas and affected
counties.
According to TERP team leader Steve Dayton,
TERP receives around $150 million per fiscal year from the
state legislature, and by the end of 2009, the program will
have provided more than $670 million in grants. To date, TERP
has awarded $208.5 million to off-road projects, or about 30
percent of the total funds. Another 30 percent has been
awarded to on-road projects, many of which are managed by
construction companies.
“The program in California and
our program are the only ones with the large amount of money,”
Dayton says. “There are states that have various incentive
programs that are smaller. And although the EPA has
distributed some money to states, it’s not a lot compared to
our programs.”
To help contractors apply and receive
grants, TERP regularly holds application workshops and
assistance sessions throughout the state during each annual
grant round. The workshops, which are free and require no
registration, provide an overview of the TERP program, what
vehicles are eligible, and how much money each contractor
could receive. The application sessions allow contractors to
speak with TERP staff about the application process and get
support in completing the paperwork.
Dayton and
Banwart agree that contractors should begin applying for
emissions-reduction grants as soon as programs open up in
their areas. Under the grim prospect of deteriorating
environmental conditions, local, state, and federal regulators
are acting fast to impose limits on emissions.
“The
best time to retrofit your fleet is when funding becomes
available but before regulation comes into play,” Banwart
says, adding that the Carl Moyer program would cease funding
for certain machines once California begins enforcing its
compliance rules for off-road vehicles in 2010.
Says
Banwart: “It’s always a good idea to be proactive and to do
this on your own before it becomes required.”
