September 28, 2021 | Diesel Technology Forum
The new Carbon Reduction Program created in the IIJA, and funded at $6.4 billion over five years, gives states funding to invest in eligible technology and projects including diesel engine retrofits as well as electrification and electric vehicle charging.
The Infrastructure Investment and Jobs Act (IIJA), which passed out of the U.S. Senate in August and is now under consideration in the House of Representatives, will provide more than $350 billion for highways over the next five years with 90 percent of the funding heading directly to the states.
This funding, while providing key stability to the states and representing the largest increase in federal highway, bridge and transit funding in several decades, also signals an emphasis on carbon reduction, climate change and resilience. The investments outlined in the IIJA will facilitate repairs and improvements to roads and bridges, rail, and public transportation. The bill also focuses attention on other critical infrastructure like airports, ports, broadband, energy and water.
Infrastructure owners and operators anxiously await the final passage of the bill in order to move forward with construction and maintenance projects. The investments in the bill represent significant economic impacts, as well. In fact, the American Road & Transportation Builders Association commissioned an analysis from IHS Markit on economic impacts expected from IIJA that shows just how much each state can expect in economic outcomes. For example, the analysis shows that several states will see an impact of more than $4 billion each between 2022-2026. According to the analysis, investments in highway, bridge and transit projects will spur an increase in gross domestic product and disposable income leading to an increase in state and local sales tax receipts.
In addition to the expected economic growth, the IIJA also sets out to address climate change and resiliency by providing funding for electric vehicle charging infrastructure, creating a new formula funding program to reduce carbon, and establishing new grant programs. Specifically, these new grant programs will support enhanced resilience related to extreme weather events and mitigating potential damage, as well as investment in low/no emissions buses, rail vehicle improvements, congestion relief and reconnecting communities.
As mentioned previously, the bill provides clarity on transportation policy priorities and offers funding stability. An example is the greenhouse gas (GHG) emissions reduction components of the bill, and an expected GHG performance measure currently being developed by the Federal Highway Administration. Certainly, electrification is getting a lot of attention and significant funding has been devoted in the IIJA to an electric vehicle charging infrastructure build-out. This build-out is seen as a key component in the plan to achieve emissions reductions from the transportation sector.
However, for the states to achieve the necessary emissions reductions, they will need access to tools and technology, including diesel technology, that can be deployed right now. In fact, the new Carbon Reduction Program created in the IIJA, and funded at $6.4 billion over five years, gives states funding to invest in eligible technology and projects including diesel engine retrofits as well as electrification and electric vehicle charging.
The current transportation authorization expires at midnight on September 30, 2021. Leadership in the House of Representatives has signaled that the bill is expected to pass and will be signed by President Biden before the deadline. If not, a continuing resolution will need to be passed to keep highway programs moving forward.
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