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The Texas Emissions Reduction Plan was created by the Texas Legislature in 2001 to support emissions reductions of diesel engines that are difficult or impossible to regulate through mandated programs. Approximately 70 percent of the funding for the program comes from vehicle title application fees (cars and trucks), while the remainder comes from surcharges on the sale of trucks and heavy duty diesel equipment in the state, as well as fees for truck inspections. 

TERP was originally structured very similarly to California’s Carl Moyer program but has subsequently embraced a number of differences. Most importantly, TERP is solely focused on NOx emissions and does not consider PM or ROG in its cost effectiveness evaluations. Administratively, TERP funds are distributed at the state level by the Texas Council for Environmental Quality (TECQ) as opposed to California, where funds are disbursed by individual air districts. It also includes a small business program that targets heavy duty truck and equipment owners who own fewer than two heavy duty units.

The TERP program has awarded more than $336 million in grants, funding approximately 888 projects, for a projected reduction of more than 75,500 total tons of NOx since its inception. The program’s overall cost effectiveness level is projected to be less than $4,400 per ton. To date, the largest portion of TERP funding has been awarded to off-road sector projects. By 2009, the TERP program is expected to provide more than $670 million in funds for diesel emissions reduction projects. The program is currently due to end in 2010, but is anticipated to be extended to 2013. 

In 2005 the Texas Legislature added a school bus emissions reduction program to TERP but did not appropriate any funds for its implementation. This school bus program, if funded, would provide grants primarily for PM reduction projects. Additionally, in an effort to simplify and shorten the TERP Grant Program application process, legislation was passed in 2005 requiring the Texas Commission on Environmental Quality (TCEQ) to establish a standardized ongoing rebate program. The rebate program would allow applicants to receive a set amount of funding for pre-determined emissions reductions activities, similar to an appliance rebate program. More information on these and other aspects of the TERP program can be found at: www.tceq.state.tx.us/implementation/ air/terp.