Ohio DERG 2016 Projects Finally Move Forward Following Long-Awaited Federal Action

(Columbus)—The Federal Highway Administration (FHWA) announced last week that several vehicle replacement projects funded with federal Congestion Mitigation and Air Quality (CMAQ) funding have received the go-ahead. These include 24 Ohio projects funded under the Diesel Emission Reduction Grant (DERG) program. The projects had been held up by an administrative snafu in Washington, DC based on a federal transportation rule that requires 100% domestic steel content that is intended to apply to bridges and highways.

“Ohio DERG-funded projects approved in 2016 have been held up for about a year and a half by the feds,” said Sam Spofforth, Clean Fuels Ohio Executive Director. “Now, thanks to our efforts in partnership with the Ohio Congressional delegation and our allies through Transportation Energy Partners, they can finally move forward.”

Under current law, all U.S. Department of Transportation projects are subject to Buy America laws which require that steel used must be made in America. Though the law was originally intended for road and bridge projects, vehicle projects have been caught in the bureaucratic net. Components are included in this requirement as well. Many of the small components included in a vehicle are assembled here but it’s effectively impossible to ensure that 100% of them are manufactured in the United States, which the federal rules technically require. Twenty-four Ohio DERG projects have been stalled since Q4 2016 due to these restrictions.

Clean Fuels Ohio has worked extensively to resolve this issue. As part of this process, Jason Phillips, CFO’s Policy Director, attended a meeting with Brandye Hickerson, Acting FHWA Administrator, in late February. Prior to and following this meeting, Clean Fuels Ohio also has engaged members of the Ohio Congressional Delegation on this issue, many of whom have actively supported the efforts.

The FHWA has just released guidance indicating that CMAQ projects submitted between April and December of 2016 now are being granted Buy America waivers. Ohio EPA began emailing information to notify applicants that waivers have been granted last week.

FHWA guidance does not clarify the status of CMAQ projects submitted since January 2017. FHWA has indicated they plan to review and may consider modifications in the approach for vehicle projects going forward. However, it is not clear what modifications FHWA is considering, nor what the timeframe for consideration might be. Based on this situation, Ohio EPA limited eligibility for the 2017 DERG round to only transit projects, since the Federal Transit Administration operates under different federal rules for CMAQ than FHWA. Thus, the eligibility for the 2018 round of DERG is unclear at this point. Typically, the Ohio EPA issue the DERG solicitation each fall.

Clean Fuels Ohio will continue to monitor the situation at the federal and state level. Any questions can be addressed to Jason Phillips, CFO Policy Director.

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