Federal funding can catalyze state action to decarbonize transportation

Coast to coast, dozens of states are considering, or have already adopted, the Advanced Clean Trucks rule (ACT) to help clean up the transportation sector – the largest contributor to greenhouse gas emissions in the United States. At the same time, states have access to billions of dollars in federal funding through programs included in the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA). Many of these programs can help with efficient and cost-effective implementation of the ACT rule.  

CATF recently released a resource to help state decisionmakers, businesses, communities, advocates, and other stakeholders take advantage of federal funding programs for ACT implementation by supporting auto manufacturing, procurement, charging and fueling, supply chain and workforce development, emissions reductions, community impacts, and state planning.  

These funding opportunities are unprecedented, and states can make the most of them through clear prioritization, interagency coordination, proactive planning, timely action, and good communication.  

Why should states adopt the Advanced Clean Trucks (ACT) rule?  

The Clean Air Act authorizes states to adopt sales requirements for trucks and buses, and seven states already have done so as a part of their decarbonization efforts. At least another ten states are considering adopting the ACT rule. The rule requires manufacturers that sell medium- and heavy-duty (MHD) vehicles – essentially trucks and buses over 8,500 pounds – to meet zero-emissions vehicle (ZEV) sales targets as an increasing percentage of their annual sales from 2024 to 2035.  

The ACT rule is a tool to support transportation decarbonization and a state’s overall climate goals. Reducing climate pollution and other emissions from trucks and buses also can benefit public health, improve air quality, lower operating costs for fleet operators, incentivize domestic manufacturing, and improve vehicle availability for public and private fleets. In short, there are a variety of public health, economic, and environmental benefits to adopting the ACT rule. 

How can states tap into federal funding to implement ACT rules? 

The IRA and IIJA make implementation of the ACT rule even more economical for states and businesses through a variety of financial incentives. The following list highlights the range of ACT-related priorities for which significant federal funding is available. Details about the opportunities and parameters for over 30 individual funding programs can be found in our new resource here:  

• Medium and Heavy-Duty Vehicle Manufacturing: Billions of dollars in tax credits and financing support available to build battery components, ZEVs, advanced technology vehicles, and more, including conversion of existing facilities. 

• Procurement and Bus Programs: Tens of billions of dollars available to help states, Tribes, local governments, and businesses directly offset the cost of replacing heavy-duty trucks and buses with ZEVs. 

• Charging and Fueling: Tax credits to build charging networks in rural and underserved areas, as well as to deploy hydrogen vehicle fueling facilities. Billions of dollars available for states to plan and build out charging infrastructure. 

• Supply Chain and Workforce Development: Battery and critical mineral components are integral to widespread electric vehicle (EV) adoption, as are the manufacturers, installers, and recyclers of the supply chain. Tax credits and grants offer the ability to research, develop, and reuse batteries and battery components. IRA and IIJA include many programs focused on clean energy workforce, just transition, and retraining. 

• Emissions Reductions and Monitoring: Flexible funding and planning grants to help states and communities reduce carbon pollution emissions, capture air quality data, and track real-time air quality monitoring. 

• Community Impacts: Multiple funding streams to help communities monitor air quality, increase capacity for engagement, and access technical assistance for climate related activities. 

• State Planning: Over $10 billion for states to analyze, design, and strategize their own approaches to tackling pollution. Funding can be used to implement the ACT rule and achieve other transportation decarbonization priorities. 

What’s next for states?  

Early organization and planning are critical for states to maximize federal funding and achieve environmental, economic, and public health benefits. While adopting the ACT rule isn’t required to receive IRA and IIJA funding, states can use the breadth and flexibility of available federal funding to advance their own ACT-related priorities. The following three overlapping phases are important for proactive and coordinated planning efforts:  

Phase one: Identify priorities, opportunities, and stakeholders to engage. 

1. Establish Priorities: Establish a state priority to maximize use of federal funding for ACT rule implementation. The legislature, governor, budget office director, infrastructure coordinator, or other senior state officials could establish this priority. 

2. Identify State Principals: Designate a single state official (e.g., in a governor’s office or relevant agency) to coordinate use of federal funds for ACT rule implementation. Identify principals to lead efforts from relevant parts of state government (e.g., agencies, budget office, and commissions) to secure and administer funding programs.  

3. Coordinate State Principals: Coordinate principals and tasks around federal ACT rule-related funding. Coordination and deliverables could include monthly internal coordination meetings, education about relevant programs (e.g., using this document), identification of priority ACT rule implementation topics/ programs, determining a point person for each related funding program, and identifying areas for interagency coordination (e.g., data sharing).  

4. Identify Priority Programs and Milestones: The ACT rule principals can prioritize funding programs and establish a timeline of milestones for each program. This process will help avoid missing key opportunities and deadlines, plan strategic interactions among funding programs, and ensure accountability.  

5. Identify Stakeholders: Identify key stakeholders across sectors, including private sector manufacturers and purchasers, electric utilities, labor, environmental justice leaders, transportation planning organizations, local governments, and schools.  

Phase two: Communicate with stakeholders, communities, and state officials. 

1. Communicate with Stakeholders: Communicate funding opportunities to stakeholders in a timely manner (e.g., holding early roundtables, hosting information sessions). Establish regular check-ins and standing opportunities to exchange information and updates among internal and external stakeholders.  

2. Communicate with Public: Share priorities online and in public sessions and forums, including public meetings, press conferences, and other speaking engagements by public officials. Build community knowledge and awareness, especially among environmental justice and frontline communities.  

3. Ongoing Internal Information Sharing: Share updates on grant application progress, grants awarded, formula funds awarded, and cross-cutting issues at gatherings such as cabinet meetings, other interagency meetings, and ongoing ACT rule implementation meetings. Principals share lessons learned among themselves to avoid siloed agencies and reporting chains. This could include sharing best practices across states.  

4. State Match: States can identify and secure matching funds for federal grant applications as soon as possible to increase state competitiveness.  

Phase three: Stay engaged and track guidance, update priorities, and celebrate benefits.  

1. Track Updates: Federal agencies will continue to release guidance and other information on federal funding programs. States can track federal implementation of funding streams to remain current.  

2. Update Priorities: States can update their priorities and needs list as funding is awarded. Similarly, new priorities or needs may become a higher priority depending on the circumstances in each state. 

3. Keep Learning: States can learn from and emulate one another, employing best practices from around the country. They also can learn from unsuccessful competitive grant applications to improve applications in subsequent funding rounds.  

4. Win the Win: States should publicly celebrate the benefits that federal funds bring to their residents and businesses, so the advantages of public and private investment in clean vehicle manufacturing, procurement, infrastructure, workforce, etc. are widely understood.  

Decarbonizing the transportation sector is important to reduce climate pollution and improve air quality, and strong clean trucks rules can help get us there. Visit CATF’s newest resource here, which includes detailed funding streams, grants, and programs states can access for efficient and cost-effective implementation of the ACT rule.