The Texas Commission on Environmental Quality administers environmental regulatory programs that include significant incentive programs for Texas businesses. While TCEQ is primarily a regulatory agency, its grant programs — particularly for emissions reduction — provide direct financial benefits to businesses investing in cleaner equipment and operations.
Texas Emissions Reduction Plan (TERP)
TERP is TCEQ's flagship incentive program, providing grants for projects that reduce emissions of nitrogen oxides (NOx) and other pollutants from heavy-duty vehicles and equipment:
- Diesel Emissions Reduction Incentive (DERI): Grants to replace or repower older diesel vehicles and equipment with cleaner alternatives. This is the largest TERP grant category, covering heavy-duty trucks, construction equipment, port equipment, and other diesel-powered machinery.
- Texas Clean Fleet Program (TCFP): Grants for fleets of 10 or more vehicles to replace older vehicles with newer, cleaner models
- Seaport and Rail Yard Areas Emissions Reduction (SPRY): Grants specifically for equipment operating in seaport and rail yard areas
- Texas Natural Gas Vehicle Grant Program (TNGVGP): Grants to replace older vehicles with natural gas vehicles
- Light-Duty Motor Vehicle Purchase or Lease Incentive Program (LDPLIP): Rebates for purchasing or leasing new light-duty electric, plug-in hybrid, or natural gas vehicles
TERP Eligibility and Award Amounts
- Projects must demonstrate quantifiable NOx reduction
- Grant amounts are based on the cost-effectiveness of emissions reductions — cost per ton of NOx reduced
- Eligible areas typically include counties that do not meet federal air quality standards or are near nonattainment areas
- Individual awards can reach hundreds of thousands of dollars for large equipment replacements
Supplemental Environmental Projects (SEPs)
When TCEQ settles enforcement actions, violators may fund Supplemental Environmental Projects as part of the settlement. While businesses in violation are paying, approved SEP organizations receive funding for environmental improvement projects, creating contracting opportunities for environmental services businesses.
TCEQ Pollution Prevention Programs
- Small Business and Local Government Assistance (SBLGA): Free technical assistance for small businesses navigating environmental regulations, permitting, and compliance
- Clean Texas Program: Voluntary environmental leadership program recognizing businesses that go beyond compliance
- Pollution prevention resources: Technical guidance on reducing waste, emissions, and resource consumption
Water Programs
- Clean Water State Revolving Fund (CWSRF): Low-interest loans administered jointly by TCEQ and the Texas Water Development Board for wastewater treatment projects
- Drinking Water State Revolving Fund (DWSRF): Low-interest loans for drinking water system improvements
How Texas Businesses Access TCEQ Programs
- Check TERP eligibility: Visit TCEQ's TERP website to determine if your equipment, vehicles, or location qualify for emissions reduction grants
- Contact SBLGA: Small businesses can call TCEQ's hotline for free environmental compliance assistance
- Monitor grant cycles: TERP programs have specific application periods — check tceq.texas.gov for current availability
- Apply for Clean Texas: Businesses exceeding environmental compliance can receive recognition and marketing benefits through the Clean Texas program
Bottom Line
TCEQ's TERP program is one of the most accessible grant programs for Texas businesses operating diesel equipment or vehicle fleets. If you are replacing older trucks, construction equipment, or fleet vehicles, TERP grants can cover a significant portion of the cost.
Our screening report identifies which TCEQ and other environmental programs may apply to your business. Start your free screening →