Sec. 60003. Rescission of funding for diesel emissions reductions | Impact

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Legislative and Policy Analysis

Section 60003: Rescission of funding for diesel emissions reductions

Executive Summary

Section 60003 rescinds the unobligated balances of Inflation Reduction Act funding made available for diesel emissions reductions under section 60104 of Public Law 117-169.[1] The affected IRA provision originally provided $60 million to the Environmental Protection Agency to support grants, rebates, and loans for reducing diesel emissions connected to goods movement in low-income and disadvantaged communities.[2]

The practical effect is a targeted clawback of remaining EPA diesel-emissions-reduction funding before it could be awarded or spent. The rescission does not repeal the broader Diesel Emissions Reduction Act program, but it removes the IRA-specific supplemental funding stream intended to reduce exposure to diesel pollution in communities already facing higher pollution burdens.[2]

The environmental and climate impact is negative. The section reduces funding for cleaner diesel replacement, retrofit, repower, and zero-emission equipment projects that would otherwise reduce particulate matter, nitrogen oxides, air toxics, greenhouse-gas emissions, and local exposure to diesel exhaust.[3]

What Section 60003 Actually Does

Section 60003 states that the unobligated balances of amounts made available to carry out section 60104 of Public Law 117-169 are rescinded.[1] Section 60104 was the IRA diesel-emissions-reductions provision, which appropriated $60 million to EPA for grants, rebates, and loans under the Energy Policy Act of 2005 diesel-emissions-reduction authority.[2]

Program or activity	Amount	What the money supports
IRA section 60104 diesel emissions reductions	$60 million originally appropriated; unobligated balances rescinded	EPA grants, rebates, and loans to identify and reduce diesel emissions related to goods movement in low-income and disadvantaged communities

The key budget point is that Section 60003 does not create a new program, impose a new fee, or amend a regulatory emissions standard. It cancels remaining budget authority. According to the Inflation Reduction Act Tracker, EPA had not awarded the IRA section 60104 funding as of January 2025, meaning the full $60 million was identified as at stake.[2]

The affected projects would have fit within the broader DERA model: replacing, repowering, retrofitting, or upgrading older diesel engines and equipment, including vehicles and equipment used in freight, ports, agriculture, construction, municipal fleets, transit, school transportation, and other goods-movement contexts.[3]

Legislative Mechanism

Section 60003 uses a rescission mechanism. A rescission cancels budget authority that Congress previously provided but that has not yet been obligated. Here, the statutory text is narrow: it rescinds unobligated balances made available for IRA section 60104 diesel-emissions reductions.[1]

That means the legal change operates through federal budget execution rather than direct regulation. EPA must identify any remaining unobligated balances in the affected account or program line. OMB and Treasury then reflect the cancellation in apportionment, account, and budget-execution controls. EPA can no longer use the rescinded balances for new awards, rebates, loans, administrative implementation, or related program activity.

The section does not appear to cancel already obligated awards. The practical harm therefore falls on projects that had not yet received legally binding obligations before the rescission took effect, including potential future grants, rebates, loans, application rounds, technical assistance, and community-focused diesel-emissions-reduction activities.

Expenditure Tracking and Reporting Protocol

The rescission should be tracked through federal budget-execution systems rather than through a new public grant-reporting mechanism. EPA would identify the unobligated IRA section 60104 balances, OMB would adjust apportionment and budget authority controls, and Treasury account reporting would reflect the rescission. Because rescinded unobligated balances are not the same thing as award outlays, the public may not see a clean project-level cancellation record in USAspending.gov unless EPA or another source separately reports affected opportunities or planned awards.

Public tracking is likely to be partly visible but difficult to isolate. The statutory rescission is clear, and outside trackers identify the affected IRA program and $60 million amount.[2] But the exact budget-execution trail may appear in aggregate EPA, OMB, Treasury, or CBO materials rather than as a simple award-by-award list. If no awards had been made, USAspending.gov may show little or no IRA section 60104 award activity, which can make the rescission look invisible at the community-project level even though the funding loss is real.

flowchart TD
    A[Section 60003 rescission] --> B[EPA identifies balances]
    B --> C[OMB adjusts controls]
    B --> D[Treasury account reporting]
    B --> E[EPA budget execution]
    E --> F[No new IRA awards]
    F --> G[Grants rebates loans reduced]
    C --> H[CBO budget effects]
    D --> I[Public budget data]
    E --> J[EPA reports]
    E --> K[USAspending if awards exist]
    E --> L[Inspector General review]
    E --> M[GAO and Congress]
    I --> N[Visibility aggregated]
    J --> N
    K --> O[Visibility limited]
    L --> P[Oversight visibility]
    M --> P

Relevant tracking channels include:

Tracking channel	What it would likely show	Visibility limitation
EPA budget execution	Internal cancellation of unobligated IRA section 60104 balances	May not be published as a stand-alone project list
OMB apportionment controls	Reduced or unavailable budget authority	Often not project-specific
Treasury account reporting	Account-level budget authority and outlay changes	May be aggregated
CBO budget estimate	Deficit or direct-spending effect of enacted rescissions	May group related provisions
USAspending.gov	Award-level data if grants, rebates, loans, or contracts were obligated	Unobligated rescissions may not appear as canceled awards
EPA reports and program pages	Program status, award history, and DERA implementation information	IRA-specific rescission may require cross-checking with law text and trackers
Inspector General, GAO, and Congress	Oversight of EPA implementation and rescission handling	Timing and specificity depend on oversight activity

Day-to-Day Government Process Changes

For EPA, Section 60003 converts a potential implementation track into a closeout and budget-control task. Instead of preparing or expanding IRA-funded diesel-emissions-reduction grants, rebates, or loans, EPA staff must identify unobligated balances, stop any remaining steps toward obligation, reconcile account data, and coordinate with OMB and Treasury.

For program staff, the most immediate operational effects are likely to include:

Process area	Before Section 60003	After Section 60003
Funding availability	IRA section 60104 balances could support future diesel-emissions-reduction awards	Unobligated balances are canceled
Grant and rebate planning	EPA could develop or continue IRA-specific funding opportunities	EPA cannot use rescinded balances for new obligations
Community outreach	EPA could communicate potential IRA-supported diesel-emissions funding	EPA must narrow or end IRA section 60104 opportunity planning
Award administration	New awards could have supported eligible diesel-emissions projects	Only already obligated funds, if any, would continue
Reporting	EPA could report awards and outcomes from funded projects	EPA instead reports budget cancellation and any remaining DERA activity through other funding streams

For state, local, tribal, nonprofit, and private fleet participants, the day-to-day change is loss of a potential funding pathway. Applicants that might have pursued IRA-supported diesel-emissions projects must look to other DERA appropriations, state clean-air funds, port programs, settlement funds, or private financing.

Effects on Consumers

The consumer impact is indirect but real. Consumers do not usually receive diesel-emissions-reduction funds directly. Instead, they benefit when older diesel engines in school buses, trucks, port equipment, construction equipment, agricultural machinery, locomotives, marine engines, and municipal fleets are replaced or upgraded.

The main consumer-facing effects are:

Consumer group	Likely effect
Residents near ports, freight corridors, warehouses, railyards, and industrial facilities	Fewer federally supported projects to reduce diesel exhaust exposure
Children, older adults, and people with asthma or heart and lung disease	Reduced potential for local air-quality and health benefits
School communities and transit riders	Fewer possible clean vehicle or engine replacement projects where goods movement and eligible fleets overlap
Taxpayers	Federal spending is reduced, but pollution-related costs may shift to households, health systems, and local communities
Low-income and disadvantaged communities	Loss is especially important because IRA section 60104 was targeted to diesel emissions connected to goods movement in those communities.[2]

EPA states that DERA grants and rebates protect human health and improve air quality by reducing harmful emissions from diesel engines.[3] Reducing the IRA-specific funding stream therefore reduces the number or scale of future projects that could have delivered those benefits.

Effects on Businesses

The business impact is mixed across sectors, but negative for businesses that expected to use federal assistance for cleaner equipment.

Businesses and nonprofit operators that own or operate eligible diesel vehicles or equipment lose a possible subsidy for replacement, retrofit, repower, or upgrade projects. That may delay fleet modernization, increase reliance on older equipment, or require businesses to use private capital for projects that might otherwise have received federal support.

Business or sector	Likely impact
Trucking and freight operators	Reduced access to IRA-supported funds for cleaner vehicle replacement or upgrades
Port and goods-movement businesses	Fewer opportunities for federally supported equipment modernization
Construction, agriculture, municipal, and industrial fleet operators	Reduced access to supplemental diesel-emissions-reduction assistance
Clean vehicle, retrofit, engine, charging, and equipment vendors	Lower potential demand from federally supported projects
Grant consultants and community implementation partners	Reduced project pipeline tied to IRA section 60104
Businesses not seeking cleaner equipment funding	Little direct compliance effect because Section 60003 does not impose new emissions standards

The section does not directly increase regulatory costs for businesses. Its effect is the opposite: it removes a public funding tool that could have helped businesses pay for cleaner equipment. That may lower federal grant availability but increase private financing burdens for entities still trying to modernize fleets.

Environmental and Climate Impact

Direction: Negative.

Section 60003 has a negative environmental and climate impact because it rescinds funding for projects designed to reduce diesel emissions, especially in low-income and disadvantaged communities affected by goods movement.[2] Diesel exhaust is linked to particulate matter, nitrogen oxides, air toxics, asthma and respiratory illness, worsened heart and lung disease, hospital visits, missed school and work, and premature deaths.[4]

The immediate legal effect is budgetary: EPA loses unobligated IRA section 60104 funding. The reasonably foreseeable implementation effect is fewer or smaller diesel-emissions-reduction projects than would have been possible with the $60 million IRA funding stream. The contingent effects depend on whether states, local governments, tribal governments, nonprofits, or private fleet owners can find replacement funding from other sources.

The environmental categories most affected are:

Category	Direction of impact
Air pollution	Negative because fewer diesel-reduction projects means less reduction in particulate matter, nitrogen oxides, and air toxics
Public health	Negative because diesel exhaust exposure is associated with respiratory and cardiovascular harm
Climate	Negative because some DERA projects replace older diesel engines with cleaner or zero-emission technologies, reducing fuel use and greenhouse-gas emissions
Environmental justice	Negative because IRA section 60104 was specifically targeted to low-income and disadvantaged communities affected by goods movement
Local community exposure	Negative for communities near ports, freight routes, warehouses, railyards, distribution centers, and industrial corridors
Cumulative impacts	Negative because diesel pollution often overlaps with other transportation, industrial, and land-use pollution burdens

Existing Clean Air Act standards and the broader DERA program remain relevant, so Section 60003 does not legalize additional diesel pollution or repeal all diesel-emissions-reduction authority. But that caveat should not soften the assessment: the section changes the baseline by removing a dedicated IRA funding stream for pollution reduction. The harm is contingent in the sense that the exact lost projects depend on later funding decisions, but it is directionally negative because it makes diesel-emissions reductions less funded, less likely, and less targeted to overburdened goods-movement communities.

Impact Summary

Section 60003 is a targeted rescission of EPA diesel-emissions-reduction funding. It cancels unobligated IRA section 60104 balances, affecting a $60 million funding stream that was intended to support grants, rebates, and loans for reducing diesel emissions related to goods movement in low-income and disadvantaged communities.[2]

The government-process impact is straightforward: EPA moves from potential award implementation to budget closeout and rescission tracking. OMB, Treasury, EPA budget offices, and oversight bodies may all reflect the rescission, but public visibility may be aggregated or difficult to isolate if funds had not yet been awarded.

Consumers are affected indirectly through fewer pollution-reduction projects. Businesses that might have used federal support for cleaner trucks, engines, port equipment, municipal fleets, or other diesel equipment lose a potential financing pathway.

The environmental and climate effects are negative because the section reduces funding for projects that would otherwise cut diesel particulate matter, nitrogen oxides, air toxics, greenhouse-gas emissions, and diesel exposure in overburdened communities. The timing and project-specific magnitude are contingent, but the statutory mechanism is clearly pollution-reduction funding loss.

Key References and Sourcing

Source	Relevance
Public Law 119-21, Section 60003	Official enacted statutory text rescinding unobligated balances for IRA section 60104 diesel emissions reductions.
Inflation Reduction Act Tracker: IRA Section 60104 Diesel Emissions Reductions Grants	Summarizes the original $60 million IRA funding, eligible uses, environmental justice targeting, and rescission status.
EPA: Diesel Emissions Reduction Act Funding	Describes DERA grants and rebates and their public-health and air-quality purpose.
EPA: Learn About Impacts of Diesel Exhaust and the Diesel Emissions Reduction Act	Supports health-impact discussion for diesel exhaust exposure.
EPA: National DERA Awarded Grants	Shows the types of DERA-funded projects, including vehicle and equipment replacement across freight, port, school bus, municipal, construction, agricultural, and industrial fleets.
EPA: DERA Reports to Congress	Identifies EPA’s congressional reporting channel for DERA program benefits and implementation history.
Congressional Budget Office: Estimated Budgetary Effects of Public Law 119-21	Provides enacted-law budget-estimate context for Public Law 119-21.

[1] U.S. Government Publishing Office, “Public Law 119-21,” Section 60003, official enacted statutory text, https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm.

[2] Sabin Center for Climate Change Law, “IRA Section 60104 – Diesel Emissions Reductions Grants,” Inflation Reduction Act Tracker, program summary and rescission status, https://iratracker.org/programs/ira-section-60104-diesel-emissions-reductions-grants/.

[3] U.S. Environmental Protection Agency, “Diesel Emissions Reduction Act Funding,” DERA program description, https://www.epa.gov/dera.

[4] U.S. Environmental Protection Agency, “Learn About Impacts of Diesel Exhaust and the Diesel Emissions Reduction Act,” diesel exhaust health impacts, https://www.epa.gov/dera/learn-about-impacts-diesel-exhaust-and-diesel-emissions-reduction-act.

[5] U.S. Environmental Protection Agency, “National DERA Awarded Grants,” project examples and award categories, https://www.epa.gov/dera/national-dera-awarded-grants.

[6] U.S. Environmental Protection Agency, “Diesel Emissions Reduction Act (DERA) Reports to Congress,” DERA congressional reporting channel, https://www.epa.gov/dera/diesel-emissions-reduction-act-dera-reports-congress.

[7] Congressional Budget Office, “Estimated Budgetary Effects of Public Law 119-21, to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14, Relative to the Budget Enforcement Baseline for Consideration in the Senate,” enacted-law budget context, https://www.cbo.gov/publication/61569.