ELECTRIC FREIGHT FUNDING OPPORTUNITIES FROM BIL AND IRA
The Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA) made historic investments in vehicle electrification, particularly for medium- and heavy-duty (MHD) trucks, by addressing the costs related to MHD vehicles and charging infrastructure.
This webpage provides an overview of the tax credits and funding opportunities in the BIL and IRA available to help private companies identify and access these funding opportunities for electrifying their operations, even if they cannot apply directly.
Based on program eligibility and purpose, there are two primary tiers of programs in BIL and IRA for freight electrification:
- Tier 1 programs are those that private companies, like shippers and carriers, are direct eligible entities, or the program’s purpose is specific to the electrification of MHD vehicles.
- Tier 2 programs are those in which private companies may be the indirect beneficiaries or the program’s purpose is not specific to freight electrification. Eligible entities for Tier 2 programs tend to be states, municipalities, tribes, and nonprofits.
TIER 1
Funding Source: IRA
Administering Agency: Internal Revenue Service
Available from: January 1, 2023 to December 31, 2032
New or existing program: New
Description: Businesses that buy a qualified commercial EV may qualify for the Commercial Vehicle Clean Vehicle Tax Credit of up to $40,000 under Internal Revenue Code 45W. The credit equals the lesser of:
- 30% of your basis in the vehicle for EVs
- The incremental cost of the vehicle (Note: additional information on the incremental cost of certain vehicles is still forthcoming as it has not been previously defined.)
The maximum credit is $40,000 for vehicles weighing 14,000 pounds or more (Class 4 to Class 8 vehicles).
Note: the form to claim the tax credit is still being finalized by the IRS
Eligible entities: Private companies are eligible to claim the tax credit. Tax-exempt entities are also eligible for the tax credit via elective/direct pay.
Relevant resources: Additional information on elective/direct pay can be found here.
Funding Source: IRA
Administering agency: Internal Revenue Service
Available from: January 1, 2023 to December 31, 2032
New or existing program: Existing
Description: The Alternative Fuel Infrastructure Credit will allow individuals to receive a tax credit of 30% of the cost of the EV charging infrastructure, with a maximum amount of $1,000. Businesses will receive a 6% tax credit for the cost of the EV charging infrastructure, with a maximum amount of $100,000 per unit of property (i.e., per charging station). If the EV charging infrastructure installed by the business meets certain prevailing wage and apprenticeship requirements, the eligible tax credit increases to 30%.
The business must be in an eligible location: a low-income community or a non-urban area. The IRS is working to provide further clarity on these eligible locations. Businesses may also elect to transfer the amount of the credit to an applicable entity (e.g., the EV charging station provider) and receive the credit instead as a point-of-sale incentive.
Eligible entities: Private companies are eligible to claim the tax credit. Tax-exempt entities are also eligible for the tax credit via elective/direct pay.
Relevant resources: View IRS Form 8911 to determine the credit for alternative fuel vehicle refueling property here. Additional information on elective/direct pay can be found here.
Funding source: IRA
Administering agency: Environmental Protection Agency
Available from: December 28, 2020 to September 30, 2031
New or existing program: Existing
Description: The DERA program helps eligible applicants improve air quality and human health by removing diesel emissions in MHD vehicles. The IRA provided an additional $60 million to the program.
Eligible entities: A portion of the funding from DERA is allocated for all 50 states and territories to establish diesel emission reduction programs. Private entities may be eligible to apply to their state-specific diesel emission reduction programs.
Relevant resources: The list of state agencies that are awarded and distribute DERA funding can be found here.
Funding Source: IRA
Administering agency: Environmental Protection Agency
Available from: December 14, 2022 to September 30, 2031
New or existing program: New
Description: EPA’s Clean Heavy-Duty Vehicle Program provides rebates and grants to eligible applicants for the incremental cost of replacing non-zero emission vehicles with EVs or installing EV charging infrastructure; for workforce development and training to support the maintenance of EV charging stations; or for planning and technical activities. However, the grants and rebates can only be used to replace Class 6 or 7 vehicles. A specific amount of funding is set aside for replacing vehicles in non-attainment areas.
Eligible entities: Eligible recipients of the funds allocated under this program include states, local governments, Indian tribes, and nonprofit school transportation associations. Private companies may be able to access funding from this bill depending on how eligible recipients utilize their awarded funding. For example, Nevada recently enacted a law that would allow the relevant state agency to apply for funding made available by the Clean Heavy-Duty Vehicle Program to provide supplemental funding to the proposed Nevada Clean Trucks and Buses Incentive Program, which would provide rebates for the purchase of zero-emission Class 3-8 vehicles.
Funding Source: IRA
Administering agency: Distributed by the Environmental Protection Agency
Available from: October 1, 2022 to September 30, 2027
New or existing program: Existing
Description: The Clean Ports Program provides eligible applicants funding for climate and air quality planning and deployment of zero-emission technologies, including electric port equipment, vehicles, and charging infrastructure. A total of $3 billion will be awarded in a single funding round through the Zero-Emission Technology Deployment Competition and the Climate and Air Quality Planning Competition notices of funding opportunity. Eligible entities are allowed and encouraged to apply to both competitions. Eligible projects through the Zero-Emission Technology Deployment Competition include battery electric and hydrogen fuel equipment, their supporting infrastructure, and zero-emission technology deployment support activities. Eligible projects through the Climate and Air Quality Planning Competition include emissions inventory and accounting exercise (required), strategy analysis and goal-settling, stakeholder collaboration and communication, and resilience planning.
Applications are due on May 28, 2024 at 11:59 p.m ET.
Eligible entities: Private companies may be eligible to apply for the grants made available by the EPA. To qualify, private companies must (1) apply in partnership with a port authority; state, regional, local, or Tribal agency; or air pollution control agency and (2) own, operate, or uses the facility, cargo-handling equipment, transportation equipment, or related technology at the port.
Relevant resources: The Electrification Coalition’s Top 15 Takeaways of the Clean Ports Program can be found here.
Funding Source: BIL
Administering Agency: Federal Highway Administration
Available from: August 26, 2022 to September 30, 2026
New or existing program: Existing
Description: CMAQ provides funding to eligible recipients for transportation projects and programs that reduce congestion and improve air quality for areas designated as non-attainment and maintenance areas for ozone, carbon monoxide, and/or particulate matter under the Clean Air Act. The BIL added four new eligibilities, one being the purchase of diesel replacement or MHD zero-emissions vehicles and related charging equipment.
Eligible entities: Funds from the CMAQ programs are awarded to states and local governments. Private companies may be eligible to directly apply for funding made available under this program so long as they enter into a public-private partnership with an eligible public entity. Additionally, states and local governments may make this funding available for private companies for eligible projects.
Relevant resources: Additional information can be found here. Additional CMAQ public-private partnership information can be found here.
Funding Source: BIL
Administering Agency: Maritime Administration
Available from: October 1, 2022 to September 30, 2026
New or existing program: Existing
Description: The Port Infrastructure Development Program supports planning and technical assistance to improve the safety, efficiency, or reliability of the movement of goods at ports. Eligible projects include port electrification or electrification master planning, idling reduction infrastructure, EV charging infrastructure for electric drayage vehicles and MHD EVs, worker training to support electrification, and related grid upgrades.
Eligible entities: Private companies may be eligible to apply for grant funding. A private company must apply jointly with a port authority or other eligible public entity to qualify.
Relevant resources: Applications are currently open for FY24 and the application deadline is May 10, 2024. Additional information can be found here.
Funding Source: BIL
Administering Agency: Federal Highway Administration
Available from: October 1, 2021 to September 30, 2026
New or existing program: New
Description: The Reduction of Truck Emission at Port Facilities grant program provides funding to study truck idling and zero-emission alternatives at ports. Additionally, the program will fund eligible entities for deployment projects in or adjacent to ports that reduce port emissions.
Eligible projects must reduce emissions from truck idling at ports and may include:
- Development of port-related infrastructure
- Usage of on-truck technologies
- Usage of low- or zero-emissions powertrains or fuels
- Reduction of congestion in or adjacent to ports
- Electrification or improvement in efficiency of port operations
Eligible entities: Eligible entities are those that 1) have authority over, operate, or utilize port facilities, 2) have authority over areas within or adjacent to ports, or 3) test/evaluate technologies that reduce truck emissions at ports.
Relevant resources: Additional information can be found here and here. Funding has closed for FY23, but future rounds of funding will become available for FY24.
Funding Source: BIL
Administering Agency: Federal Highway Administration
Available from: October 1, 2021 to September 30, 2026
New or existing program: New
Description: The Carbon Reduction Program supports eligible applicants in lowering carbon emissions within their states through electrifying on-road transportation. Eligible projects must ultimately reduce transportation-related emissions from on-road highway sources and can include EV acquisition and EV charging infrastructure installation. For example, efforts to reduce the environmental and community impacts of freight movement and port electrification are specifically mentioned as eligible projects.
Eligible entities: The program allocates a certain portion of funding to each state. To access the funding, each state must submit a Carbon Reduction Strategy, developed in consultation with a metropolitan planning organization (MPO) in that state. Private companies may be able to access funding from this bill depending on how a state utilizes its funding. For example, Nevada enacted a law that will utilize a portion of the funding awarded to the state from the Carbon Reduction Program to fund the Nevada Clean Trucks and Buses Incentive Program, which will provide rebates for the purchase of zero-emission Class 3-8 vehicles.
Relevant resources: Additional information can be found here. An estimation of how much each state will receive under this program can be found here.
TIER 2
Funding Source: IRA
Administering Agency: Environmental Protection Agency
Available from: October 1, 2022 to September 30, 2026
New or existing program: New
Description: The Environmental and Climate Justice Program will support eligible applicants in enacting community-led electrification projects in disadvantaged communities. Projects can include the purchase of EVs, installation of EV charging infrastructure, and also workforce development projects. All projects must reduce greenhouse gas emissions and other air pollutants. Eligible applicants include community-based nonprofit organizations, a partnership of community-based nonprofit organizations, or a partnership between an Indian tribe, local government, an institution of higher education, and a community-based nonprofit organization.
Technical assistance to eligible applicants is also available under this program.
Eligible entities: Eligible recipients are limited to community-based nonprofit organizations and a partnership between a community-based nonprofit and another community-based nonprofit, Indian Tribe, or institution of higher education.
Relevant resources: Applications for FY24 are open until November 21, 2024. See the Notice of Funding Opportunity here.
Funding Source: BIL
Administering Agency: Federal Highway Administration
Available from: September 30, 2022 to September 30, 2027
New or existing program: New
Description: The National Electric Vehicle Infrastructure (NEVI) formula funds will go directly to states to allow for the construction of EV charging infrastructure along identified alternative fuel corridors. How each state implements the awarded funding is determined by each state’s approved NEVI plan. Businesses located along the identified alternative fuel corridors can elect to be a “site host” for the EV charging stations. Businesses must be located no more than one mile off the corridors and must also meet other parameters, such as lighting and public amenity (e.g., restroom) requirements, in addition to the power capability for the EV charging stations. Note: charging stations funded through NEVI are not exclusive to MHD EV charging.
Eligible entities: States will receive a dedicated amount via formula funding.
Relevant resources: Additional information, including the minimum charging standards, Buy American requirements, and state plans, can be found here.
Funding Source: BIL
Administering Agency: Federal Highway Administration
Available from: September 30, 2022 to September 30, 2027
New or existing program: New
Description: The Discretionary Grant Program for Charging and Fueling Infrastructure consists of $2.5 billion to complement the build-out of EV charging infrastructure along alternative fuel corridors. The program includes two funding categories: (1) Community Charging and Fueling Grants and (2) Alternative Fuel Corridor Grants. Community Grants will prioritize applicants serving rural areas, low- and middle-income areas, and areas with a high ratio of multi-unit dwellings to single-family homes. Under the Alternative Fuel Corridor Grant, statutory consideration will be given to projects that “create charging and fueling infrastructure for MHD vehicles along the National Highway Freight Network and near intermodal transfer stations.”
Currently, $700 million has been made available for FY22 and FY23. The application deadline for FY22 and FY23 has passed, but future rounds of funding will become available.
Eligible entities: States, cities, metropolitan planning organizations, local governments, and public transportation entities like port authorities are eligible recipients and can receive funding made available through the grant program. Businesses that want to install EV charging stations should partner with local governments and cities to become a “site host” for charging infrastructure. Under this grant, the charging infrastructure must be located on a public road or in other publicly accessible locations, such as publicly accessible parking facilities owned or managed by a private entity.
Relevant resources: Additional information can be found here and here.
Funding Source: BIL
Authorizing Agency: Department of Transportation
Available from: October 1, 2021 to September 30, 2026
New or existing program: Existing
Description: The National Highway Freight Program allows states to champion the best strategies to support freight electrification across their highways. The program’s mission is to improve the performance and efficiency and freight movement in the U.S. As one goal of the NHFP is to reduce the environmental impact of the freight movement along the National Highway Freight Network, EV charging infrastructure and infrastructure planning are eligible projects.
Eligible entities: The program allocates a certain portion of funding to each state. State governments may make this funding available for private companies on eligible projects.
Relevant resources: Additional information can be found here. The implementation guidance for the program following the enactment of the BIL can be found here.
Funding Source: Inflation Reduction Act
Authorizing Agency: EPA
Available from: Now until September 30, 2031
New or existing program: New
Description: The Carbon Pollution Reduction Grant (CPRG) Program awards funding to state and local governments, agencies, and tribes to implement greenhouse gas (GHG) reduction measures targeting the transportation, electric power, building, industrial, waste, water, sustainable materials, and agricultural sectors. The program is designed in two phases: planning and implementation. The planning grants award funding to eligible entities to develop plans to reduce greenhouse, with the development of Priority Climate Action Plans (PCAP). Implementation grants award funding to state and local governments, agencies, and tribes to implement GHG reduction measures as identified in a PCAP developed under a CPRG planning grant. Eligible projects under the implementation grant include zero-emission vehicle incentives and port electrification, for example. Applications for the planning grant closed on March 1, 2024, while applications for the implementation grant closed on April 1, 2024.
Eligible Entities: Lead organizations who have been awarded under the CPRG Planning Grant and submit their PCAP by March 1, 2024, OR state and territorial agencies, municipalities, air pollution control agencies, and tribes that did not directly receive planning grant funds but seek funding to implement one or more measures included in an applicable PCAP. Ineligible applicants include applicants in Florida, Iowa, Kentucky, and South Dakota, unless covered by a PCAP by one of the 12 MSAs (pg. 19) awarded a planning grant in these states.
Relevant Resources: The Electrification Coalition’s Top 10 Takeaways of the Climate Pollution Reduction Grant can be found here.
RECOMMENDATIONS FOR APPLICANTS
The IRA and BIL make generational investments in the electrification of our transportation sector, but support and leadership from each level of government is necessary to effectively implement both laws to fully maximize the benefits of these investments.
As companies look to take advantage of these, investments, the Electrification Coalition makes the following recommendations to ensure this funding is maximized and leveraged to fully support transportation electrification nationally:
- Claim the tax credits (45W and 30C) early. The tax credits are the most direct and least competitive way for private companies to reduce the costs of the trucks and charging equipment to support freight electrification. Changes in administrations and control of the House and Senate could affect future credit requirements or eligibility.
- Be creative in how to approach applying for these grant applications. For programs private companies may not qualify for, consider partnering with other eligible entities like states, municipalities, tribes, port authorities, local communities, and nonprofits.
- Monitor and encourage state and local action on MHD vehicle electrification. Much of the funding made available for EVs from IRA and BIL is directed toward states and other public entities. As seen already, states may be able to use the funding to establish a purchase incentive program for MHD clean vehicles so that private companies can access this funding.
- Utilize tools like the Electrification Coalition’s EV Funding Finder. The tool allows users to identify and map out different federal funding opportunities for electrification projects and informs users how to access these funds. The Electrification Coalition will regularly update the tool to provide users with the most up-to-date, accurate information on each program.
- Join groups like the Electrification Coalition’s Electric Freight Consortium (EFC). The EFC is a forum among industry leaders to collaborate on strategies and actions to accelerate freight electrification at scale.
Please contact Program Associate Will Marshall at wmarshall@electrificationcoalition.org with any updates.