The Tennessee Department of Environment and Conservation (TDEC) has launched a significant funding opportunity through the Volkswagen Diesel Settlement Environmental Mitigation Trust (VW EMT). This grant aims to replace or repower medium—and heavy-duty vehicles with cleaner, alternate-fueled, or all-electric options, creating healthier communities and stronger fleet operations across Tennessee.

Tennessee Clean Fuels (TNCF) is here to assist your fleet through every application step, making it as straightforward and successful as possible.

What’s Available?

TDEC is making $19.48 million available specifically for medium- and heavy-duty alternate-fueled or all-electric vehicles. Here’s a quick breakdown:

For Government-Owned Fleets:

  • All-Electric Projects: Up to $3 million per applicant, covering up to 90% of project costs.
  • Alternate Fueled Projects: Up to $1.5 million per applicant, covering up to 75% of project costs.

For Non-Government Fleets:

  • All-Electric Projects: Up to $3 million per applicant, covering up to 50% of project costs.
  • Alternate Fueled Projects: Up to $1.5 million per applicant, covering up to 25% of project costs.

Each applicant can replace or repower up to 15 vehicles, choosing from these vehicle categories:

  • Class 4-7 Local Freight Trucks
  • Class 8 Local Freight Trucks and Port Drayage Trucks
  • Class 4-8 Transit and Shuttle Buses
  • Class 4-8 School Buses

Who Can Apply?

Both government (including local governments, school districts, and tribal governments) and non-government entities with operations in Tennessee are eligible. Fleets must commit to operating these vehicles within Tennessee for at least five years.

Why Should Your Fleet Apply?

Whether you manage a public or private fleet, this program presents a meaningful opportunity to reduce costs and emissions. Government-owned fleets are eligible for 50% to 90% coverage, depending on location and fuel type, while non-government fleets can receive up to 50%.

Beyond cost savings, upgrading to all-electric or alternate-fueled vehicles can significantly improve air quality in your community by reducing harmful emissions.

Additionally, newer vehicles often have greater reliability, lower maintenance costs, and operational savings—especially when switching to electric or other alternative fuels. TNCF is available to help government and non-government fleets identify the most cost-effective and impactful projects for their needs.

What is an alternative-fueled vehicle?

An alternative-fueled vehicle or engine operates using a fuel other than, or in addition to, traditional gasoline or diesel. This includes fuels, such as compressed natural gas (CNG) and propane autogas, that reduce emissions and support cleaner transportation. For this grant program, vehicles must be fully equipped by the manufacturer or an authorized third party to operate on the alternative fuel prior to initial purchase and registration.

Application Essentials

Your application needs to describe clearly:

  • The vehicles you plan to replace or repower.
  • Details about your new vehicle purchases or repower plans, including emissions reduction projections.
  • Plans for refueling or charging infrastructure (if applicable).
  • How your project benefits your local community, especially regarding air quality and emergency preparedness.

Remember, TNCF experts are ready to help you gather all required information, complete your emissions calculations, prepare supporting documentation, and navigate the online submission process.

Applications must be submitted online through the TDEC Grant Management System (apply here) by 4:00 PM CST on June 13, 2025. Successful applicants will be announced in Q3 2025, and projects will kick off shortly afterward.

Get Hands-On Help from TNCF

Don’t navigate the grant process alone! TNCF is dedicated to helping Tennessee fleets secure funding and implement successful projects. For personalized assistance with your application, contact our TNCF Development Director, Danniel Siksay, today.

Additionally, for technical questions or detailed program information, contact Mark Finlay directly at TDEC.

Let’s Drive Forward Together!

This grant program offers a powerful chance to enhance your fleet’s capabilities, significantly reduce emissions, and demonstrate leadership in sustainability. TNCF is excited to partner with you to secure this funding and accelerate your fleet’s future—let’s get started!

[Download the full application manual for detailed guidelines.]