Emissions Reduction Incentive Grants Program (ERIG)

The Texas Commission on Environmental Quality (TCEQ) is offering grant funding under the Emissions Reduction Incentive Grants (ERIG) and Texas Volkswagen Environmental Mitigation Program (TxVEMP). Both programs aim to reduce nitrogen oxide (NOX) emissions in nonattainment and priority areas in Texas through funding for repowering or replacing older vehicles, marine vessels, locomotives, and other eligible equipment. These programs are part of the Texas Emissions Reduction Plan (TERP) and are managed under state and federal requirements. The ERIG program focuses on NOX reduction from various equipment categories, including non-road and stationary equipment, marine vessels, and locomotives. Eligible projects can involve the replacement or repower of older equipment or the installation of refueling infrastructure for alternative fuels such as electricity, hydrogen, and natural gas. The TxVEMP program supports similar activities but is limited to marine vessels, locomotives, and electric charging infrastructure in specific priority areas. Applicants can apply to both programs if eligible, but only one grant will be awarded per project. Eligible applicants include individuals, state and local governments, corporations, and other legal entities operating in eligible counties. Equipment must meet stringent requirements for prior ownership, usage, and emissions reductions, including a commitment to operating at least 51% (TxVEMP) or 55% (ERIG) of the time in eligible areas. Applicants must also provide proof of equipment ownership and documentation of compliance with environmental standards. The ERIG program has an anticipated funding allocation of $55 million, with grants covering up to 80% of eligible costs for replacement and repower projects, limited by a cost-per-ton (CPT) of NOX reduced. The TxVEMP program offers $13 million in funding, with governmental entities eligible for up to 100% reimbursement for incremental costs, and private entities up to 75% for all-electric projects. Additional funding may be available for infrastructure, capped at 50% of eligible costs for ERIG and 100% for governmental TxVEMP projects. Eligible costs include the purchase and installation of new equipment, infrastructure, and associated components, as well as costs for technical design, shipping, and maintenance. Ineligible costs include administrative expenses, insurance premiums, and costs incurred before the grant round’s opening date. Applicants must ensure compliance with applicable federal and state regulations and may face audits and inspections by TCEQ. Applications are due by 5 p.m. CT, Sept. 4, 2026, and must be submitted electronically or by mail as specified in the solicitation. The programs employ a scoring system based on factors such as cost-effectiveness, total emissions reductions, and compliance history. Selected applicants will enter into a contract with TCEQ, which outlines all operational and reporting requirements. Grantees must maintain the funded equipment, report usage annually (ERIG), or comply with audit requirements (TxVEMP) throughout the activity life of the project. These grants represent significant opportunities for reducing emissions and modernizing equipment in Texas. Prospective applicants should carefully review eligibility and application requirements, prioritize project readiness, and ensure all documentation is prepared to meet the submission deadline

Submit a complete application because TCEQ reviews complete and eligible applications on a first-come, first-served basis. Confirm vehicle eligibility before applying, including Texas registration, ownership or lease history, operating condition, remaining useful life, EPA certification, 25 percent NOx reduction, and natural gas power requirements. Label all vehicle documentation and photos by activity number. Do not incur costs before the program opening date. Verify CTZ usage projections and maintain mileage and location records for annual reporting.