The Michigan Department of Environment, Great Lakes, and Energy (EGLE) has opened the Fiscal Year 2026 Fuel Transformation Program (FTP), making up to $28 million available to reduce emissions from diesel-powered vehicles, engines, vessels, and equipment operating in Michigan. The program supports Michigan’s efforts to improve air quality, reduce greenhouse gas emissions, and modernize transportation and equipment fleets. Applications are accepted on a first-come, first-served basis until all funding is awarded.
Available Funding
- Up to $28 million available statewide.
- Projects are funded on a reimbursement basis after expenses are incurred and approved by EGLE.
- Some eligible project categories may qualify for up to 100% funding, depending on project type and applicant eligibility.
- Both public and private entities located in Michigan are eligible to apply.
Eligible Project Types
Funding is available for the replacement or repowering of eligible diesel-powered:
- On-road vehicles
- Off-road equipment
- Marine vessels
- Locomotives
- Airport equipment
- Cargo handling equipment
- Agricultural and industrial equipment
Projects must result in measurable reductions of:
- Nitrogen oxides (NOx)
- Fine particulate matter (PM2.5)
- Greenhouse gas emissions (CO₂e)
Key Requirements
- Existing diesel vehicles, engines, or equipment must be permanently decommissioned as part of the project.
- Replacement equipment must perform a similar function to the equipment being retired.
- New equipment must operate in Michigan for at least five years following project completion.
- Applicants must submit:
- Proposal Cover Sheet
- Budget Template
- Fleet Data Sheet
- Supporting project documentation
Application Timeline
- Program opened: May 5, 2026
- Application period: Ongoing
- Deadline: Applications will be reviewed and funded on a rolling basis until available funding is exhausted.
Opportunities for Biodiesel Users
While the Fuel Transformation Program primarily funds equipment replacement and repower projects rather than fuel purchases, biodiesel users may still find opportunities within the program. Fleets operating on B20, B30, B100, or other biodiesel blends can leverage biodiesel today to reduce emissions while pursuing long-term fleet modernization through FTP-funded projects. Biodiesel also remains a practical strategy for reducing lifecycle greenhouse gas emissions and petroleum consumption in existing diesel equipment that may not yet be eligible for replacement.
Organizations considering equipment upgrades are encouraged to evaluate how biodiesel and other low-carbon fuels can complement broader fleet decarbonization efforts supported through the Fuel Transformation Program.
Learn more about the Fuel Transformation Program and/or apply here.