# $180M for old diesel iron. Can a private contractor get any? > EPA's 2026 DERA round can help replace old diesel excavators and trucks, but a private contractor cannot apply on its own. Here is who can, what the fleet must meet, and the January deadline. By Elie Mendlow · Published November 11, 2026 Section: Business Funding › Grants · Series: Contractor Desk (https://mcafax.com/notebook/series/contractor-desk) Canonical: https://mcafax.com/notebook/contractor-dera-diesel-equipment-grants Source: MCAFax, The Broker's Notebook (https://mcafax.com/notebook). MCAFax is not a lender or a law firm. --- EPA expects to award about $180 million in its 2026 DERA National round. Applications are due Friday, January 22, 2027. For a private excavation or paving contractor, the deciding factor is applicant class. Only public agencies, port authorities, tribes and qualifying nonprofits can apply, so your fleet takes part through one of them. This is general information, not legal or financial advice. Verified on the EPA DERA National page and the 2026 notice on November 10, 2026. Applying through a partner is not an award. ## Who can actually apply for DERA money? Not a for-profit contractor. The 2026 DERA National notice says for-profit organizations are not eligible: https://www.epa.gov/system/files/documents/2026-09/420b26034.pdf Eligible applicants are regional, state, local or tribal agencies and port authorities with jurisdiction over transportation or air quality. Certain nonprofits also qualify: those that serve diesel fleet owners with pollution reduction or education services, or whose principal purpose is transportation or air quality. The notice says an applicant partnering with fleet owners may fund them through subawards or participant support costs, such as rebates. That is the door for a private contractor. Program page: https://www.epa.gov/dera/national Fleet and trade accounts on X have been flagging the round and its January window this fall. "Available" is not the same as "you can apply." ## What does the old machine have to meet? The notice sets ownership, usage and remaining-life tests for each unit: - It must be fully operational. - The fleet owner must have owned and operated it for the two years before the upgrade. - It must have at least three years of remaining life. - Nonroad engines should run at least 500 hours a year during those two years. - It must be scrapped or permanently disabled within 90 days after the new unit is running. Engine tier matters too. For nonroad equipment, unregulated through Tier 3 engines can be replaced with a Tier 4 engine, while Tier 4 units qualify only for zero-emission replacement. EPA's construction page has more context: https://www.epa.gov/dera/reducing-diesel-emissions-construction-and-agriculture ## How much of a replacement could DERA cover? Only part of it. In Table 2 of the notice, nonroad equipment replacement with a certified engine has an EPA funding limit of 25%, with a 75% cost share. For an unregulated or Tier 1 machine replaced with a current Tier 4 or zero-emission unit, the limit is 40%, with a 60% cost share. ### Worked example All names and numbers are made up. Granger Earthworks runs a Tier 1 excavator about 900 hours a year. A replacement Tier 4 machine is quoted at $310,000. If a county air agency includes it in a funded DERA project, EPA's limit is 40%, or $124,000. The 60% cost share is $186,000. Granger also scraps the old unit, giving up an estimated $35,000 of resale. If the agency passes the full cost share to Granger, its out-of-pocket is $186,000 plus that lost resale, against $310,000 for buying outright. Financing that share with an equipment loan or lease is a separate credit decision with its own terms. And none of it happens unless EPA selects the agency's project. ## What should a contractor do before January 22? 1. Call your state or local air quality agency, transportation agency or port authority and ask whether it is applying. 2. Ask how it would fund partners, by subaward or rebate, and how much of the cost share it expects from you. 3. Pull hour-meter records, engine tier, serial numbers and two years of ownership proof for each unit. 4. Get a written quote for the replacement machine. 5. Line up how you would fund your share, separately from the grant. EPA's deadline to submit questions is Tuesday, November 24, 2026. Selection is competitive, and EPA lists 4 to 12 awards per region. For your share of the machine, see https://mcafax.com/notebook/how-to-get-equipment-financing and https://mcafax.com/notebook/equipment-financing-vs-merchant-cash-advance . Contractor funding basics live at https://mcafax.com/notebook/construction-business-loans ## Questions readers ask **Does my state run its own DERA money?** EPA also funds states and territories through a separate, non-competitive DERA State Program. Ask your state air quality agency whether it runs a diesel replacement program and how fleets take part. **Can I keep or sell the old machine?** No. Under the 2026 national notice, the replaced unit must be scrapped or permanently disabled within 90 days after the new one is operational. Plan on losing its trade-in or resale value. **Is this the same as equipment financing?** No. A DERA partnership is a competitive federal grant run through an eligible applicant. Financing your share of the cost is a separate loan or lease decision, and neither is a merchant cash advance. **When would I hear if a project is selected?** EPA lists anticipated selection notices in May 2027 and awards in July 2027. Nothing is awarded until EPA says so.