For more information, contact:
Brian McManus (402) 471-4223
or Amanda Woita (402) 471-4243

June 1, 2018


Rebates Available for Diesel School Bus Replacements; Applications Due by August 3

NDEQ has announced plans to allocate 25% of Nebraska’s Volkswagen State Trust funds, or approximately $3 million, to provide rebates to replace diesel school buses. These funds will be allocated over the next two to five years. Schools across the state are being notified that the first round of applications are now being accepted, and must be received by Aug. 3, 2018 to be considered for reimbursement. NDEQ anticipates awarding 24 school bus rebates during the first year of this program. NDEQ may adjust the number of rebate awards based on the number of applications received.

Public school districts and private schools in Nebraska are eligible for this funding. Rebates will be available to replace diesel buses with new buses fueled by diesel, propane, or compressed natural gas (CNG). The new bus must replace a bus that is currently operational and in use; the replaced bus and engine must be disabled (scrapped). Each applicant may submit one application for one bus replacement rebate. Previous recipients of a Nebraska or EPA Clean Diesel School Bus Rebate (2013 or later) are eligible to apply, but preference will be given to schools that are not previous rebate recipients.

NDEQ anticipates providing public school districts with funding covering 50% of the base cost of a new cleaner-burning diesel bus (up to a maximum of $42,000), or 60% of the base cost of a new propane or CNG bus (up to a maximum of $57,000). Private schools will be eligible for a maximum reimbursement of 25% of the base cost of a new diesel, propane, or CNG bus as prescribed in the State Mitigation Trust agreement.

Rebate recipients will be selected by lottery. Applicants that are not previous rebate recipients will have two entries in the lottery, while previous recipients will have one entry. Rebate selectees may not purchase the new bus until they have signed a project agreement with NDEQ.

Source of this new funding

In October 2016, a U.S. District Court granted final approval of a $14.7 billion settlement against Volkswagen (VW) and Audi for equipping more than 500,000 of their 2.0-liter diesel vehicles to falsify vehicle emissions tests in violation of the Clean Air Act. A second partial settlement with VW filed in December 2016 addresses vehicles containing 3.0-liter engines. These court settlements require VW to establish a $2.925 billion Environmental Mitigation Trust Fund to assist states and tribes to offset the excess nitrogen oxide (NOx) pollution emitted by the offending diesel vehicles. Nebraska is eligible to receive approximately $12.25 million from the Trust, which will have a 15-year time span. No more than one-third of the available funds may be requested each year for the first three years of the Trust.
In September 2017, the Nebraska Department of Environmental Quality (NDEQ) was designated by Governor Pete Ricketts as the lead agency to administer funds allocated to the state from the Volkswagen Diesel Emissions Environmental Mitigation Trust for State Beneficiaries (VW State Trust). As directed by the VW State Trust Agreement, these funds are to be used to undertake authorized actions to reduce nitrogen oxide emissions in Nebraska. NDEQ filed forms with the court and with the Trustee to certify Nebraska as a beneficiary of the Trust; certification was received January 29, 2018.

For more information about Nebraska’s involvement in the VW State Trust, go to NDEQ’s Nebraska Diesel Emission Mitigation Program web page at Schools seeking more information about eligibility and application requirements can find more information at