A federal bus grant favors gas buses over electric buses for the second year running

How a federal bus grant favors gas buses over electric buses

The Federal Transit Administration is accepting applications right now, through September 21, 2026, for 610 million dollars in bus grants. That money carries a rule under which a federal bus grant favors gas buses over electric buses, written into the notice itself. The notice says the agency intends to prioritize low emission projects over zero emission projects, to the maximum extent permitted by law. Low emission means propane, compressed natural gas and hybrid electric buses. Zero emission means battery electric, hydrogen fuel cell and overhead wire trolley buses. That sentence is not new this round. It first appeared in the notice for the fiscal year 2025 grant round, published May 15, 2025, and no such sentence appears in the notice from a year before that, published February 8, 2024. This is the second year the rule has governed real money, not the first.

What the rule actually requires

Inside the 610 million dollars, 589 million dollars sits in the Low or No Emission Program, the 1 program the prioritization rule actually governs, 96% of the whole round. Federal law, 49 U.S.C. 5339, already requires a minimum of 25% of that program money to go to low emission, not zero emission, projects. Zero emission projects carry their own added requirement, a workforce development plan worth 5% of the federal request, a standing rule unchanged since at least the fiscal year 2024 round.

The rule already shaped real money

The Federal Register record of the grants the government actually made, published January 15, 2026, states directly that FTA prioritized low emission projects over zero emission projects in the Low or No Emission Program when making these awards. That announcement covered 1,630,282,606 dollars across 103 Low or No Emission Program projects, money awarded before the fiscal year 2026 round now open ever took its first application.

The pot got smaller, not the rule

The fiscal year 2026 round offers about 59% less money than the roughly 1.5 billion dollars offered a year earlier, a calculation performed for this article from the fiscal year 2026 press release and the fiscal year 2025 notice. Inside that drop, the Low or No Emission Program itself fell about 46%, from about 1.1 billion dollars to 588,971,305 dollars. The Grants for Buses and Bus Facilities Program, the 1 part of this notice that funds a bus of any fuel type, fell harder still, about 95%, from about 398 million dollars to 21,609,192 dollars.

A 90% funding tier that does not offset the rule

The notice pays 90% of the federal cost share for equipment and facility components tied to low or zero emission buses, above the standard 80% share and the 85% share for buses that meet Clean Air Act rules or accessibility rules. Read exactly as the notice states it, that 90% tier applies equally to low emission and zero emission facility equipment. It does not single out zero emission projects for extra help, so it does not offset the scoring preference weighed against them.

FTA Acting Deputy Administrator Matthew Cahill framed the announcement around reliability rather than fuel choice.

Every day, millions of American families rely on buses to get around their communities.

Matthew Cahill, FTA Acting Deputy Administrator. Source 1.

No source read for this article has anyone at the agency stating a reason for ranking 1 fuel type above another.