Propane Autogas Grants: Short-Term & Long-Term Assessment

In August, the Federal Transit Administration (FTA) reopened applications for the agency’s Low or No Emissions Program and bus grant funding. Applications were due Sept. 21.

To get a better understanding of the incentive to reopen this funding, as well as the impact propane autogas grants and other funding opportunities have on the propane autogas industry, BPN spoke with Nicholas Edward, grants and agency engagement manager at the National Propane Gas Association (NPGA). Ahead, Edward shares his insights.

Understanding Current Propane Autogas Grants

BPN: Can you explain the recent reopening of 2026 applications for the FTA’s Low-No Program and bus infrastructure grants? What led to reopening this funding?

Edward: The 2026 notice of funding opportunity (NOFO) for the Low and No Emissions Program (Low-No) and Buses and Bus Facilities Program are, in part, reflective of 2025’s extensive number of applications. The FTA selected 165 projects for funding, totaling about $2.03 billion in 2025. Then in February 2026, Congress allocated roughly $1 billion for the year. Rather than immediately opening the NOFO for each program soon thereafter, the FTA reallocated 2026’s funding to support programs from the 2025 application cycle, roughly $390 million of the bus program’s budget to fund 34 additional projects; that’s why the Buses program is significantly reduced this cycle.

Additionally, 2026 is the second year that the Trump administration has had the opportunity to influence grant funding. Transportation Secretary Sean Duffy has made a significant effort to reprioritize low-emission projects over zero-emission projects to the maximum extent permitted by law after four years of intensive funding for nonfossil-fuel projects and climate initiatives during the Biden administration. 

That matters for the industry as the current NOFO expressly lists propane as a propulsion option, and the application criteria give applicants an opportunity to compete under the administration’s revised priorities. Electric buses and their infrastructure will now not be given priority over low-emission fuel alternatives — which will save applicants millions of dollars, putting more buses with more reliable fueling options on the road quicker than ever.

How do the two funding programs differ? Who could apply for each?

Both programs are open to applications from designated recipients, states, local government entities and federally recognized tribes with special eligibility to private nonprofit organizations engaged in public transportation to participate as subrecipients of a public entity. Unlike other opportunities, the Low-No and Buses programs must support general public transportation projects, rather than school buses or other limited-use cases.

The two programs overlap, but they have different purposes and eligibility rules. The Low-No program specifically funds the purchase or lease of low- and zero-emission transit buses and the facilities and equipment needed to support them. The Buses and Bus Facilities Program is broader; it can fund the purchase, lease or rehabilitation of buses regardless of propulsion or emissions, as well as related equipment and bus facilities. For propane specifically, Low-No is the more targeted opportunity, because the FTA expressly classifies propane buses as eligible low-emission buses and at least 25% of Low-No awards must go to nonzero-emission projects. 

Are there other funding programs propane and autogas distributors should keep an eye on for the rest of 2026 and moving forward into 2027?

Things are going to be very theoretical until after the midterm elections this November, and Congress can’t predict the landscape for 2027’s budget battles. Many of the current funding opportunities for transportation and infrastructure stem from the 2021 Infrastructure Investment and Jobs Act (IIJA), which were continued through 2025 and 2026, and they enjoy wide support from municipalities, states and organizations alike. 

Propane as a fuel and trade commodity is very well situated to mesh with the administration’s goals of boosting domestic economic security, increasing exports and reorganizing public spending away from environmental justice projects with huge price tags. Grants are going to continue to support public infrastructure and municipal progress for the next few years at least.

The Department of Transportation definitely has the largest cadre of funding opportunities that benefits propane. Five grants — Strengthening Mobility and Revolutionizing Transportation; Rural Opportunities to Use Transportation for Economic Success; Better Utilizing Investments to Leverage Development; Hazardous Materials, Pipeline Safety and Damage Prevention; and the Port Infrastructure Development Program — represent billions of dollars in funding that have proven award records supporting public, private and nonprofit propane-related projects. Like most opportunities, it’s best to start preparing an application as soon as possible in order to maximize time and energy, even if there’s no word on when these opportunities will open in 2027.

Provided the agency continues to receive funding stemming from IIJA authorizations, the Environmental Protection Agency’s Diesel Emissions Reduction Act, Clean School Bus Program, Pollution Prevention Grant Program and research opportunities will all be boons to the propane industry for governmental and private entities alike. 

Likewise, the Department of Energy (DOE) has a significant impact across various programs. In 2025 and 2026, DOE supported $50 million for energy security among Native American tribes (who utilize propane for off-grid electricity and heating), billions of dollars in NOFOs to support the energy and minerals supply chain through new technology, and expansion of operations and reprioritization of energy transmission for the data center market, which is expanding at a breakneck pace across the country using a variety of diesel, natural gas and propane backup generators when the electrical grid runs short of juice.

Making the Case for Propane Autogas

What are the top selling points autogas distributors should be making to bus fleets and other end users when it comes to these funding opportunities?

Autogas distributors should emphasize that propane is explicitly eligible as a low-emission technology under Low-No, and FTA intends to prioritize low-emission projects over zero-emission projects to the maximum extent permitted by law. Distributors should demonstrate how propane can provide lower emissions, competitive acquisition and operating costs, reliable fueling and rapid deployment without requiring fleets to completely overhaul their operations. 

They can also strengthen applications by serving as credible project partners that provide fuel-supply plans, infrastructure solutions, cost estimates, implementation schedules and technical support. Most importantly, the pitch should connect these advantages to FTA’s priorities: cost-effective modernization, reliable transit service and tangible benefits for families and communities.

How have propane products and transit projects fared in being accepted for these programs compared to other alternative fuel options?

Historically, propane has been eligible and successful, but it has represented a smaller share of Low-No and Buses awards than battery-electric and other alternative-fuel technologies, particularly during the recent federal emphasis on zero-emission transit. Nevertheless, FTA has repeatedly funded propane projects — for example, propane buses and fueling infrastructure in South Dakota in 2022; the Seminole Nation in 2023; Florida, Kansas, Mississippi and Minnesota in 2024; and multiple propane projects in Michigan, Minnesota and Tennessee in 2025, among others. 

The outlook is stronger for 2026 because FTA explicitly identifies propane as an eligible low-emission technology and states that it intends to prioritize low-emission projects. Propane is a remarkably cheap fuel for fleet vehicles with easy retrofitting procedures, and data to support that fact will be the industry’s biggest advantage over others.

Is there anything propane distributors should encourage transit agencies to include in their applications to help boost their chances of funding?

Distributors should encourage applicants to quantify propane’s benefits with project-specific evidence — emissions and energy reductions, acquisition and operating costs, maintenance savings, reliability and comparisons with conventional and other low- or no-emission buses. 

They should also help agencies demonstrate implementation readiness, including firm vehicle and fueling-infrastructure pricing, committed matching funds, realistic schedules, reliable fuel supply and qualified
project partners. 

Importantly, the absence of propane vehicles from an applicant’s state purchasing schedule does not itself prevent an agency or municipality from using an FTA award for an eligible propane project. Applicants should consider requesting only the incremental cost of the low-emission technology, which the FTA identifies as a favorable consideration, while clearly connecting the project to reliable service and benefits for families and communities.

The Changing Federal Funding Landscape

How has the funding landscape changed in recent years, months, etc.? Are there more or less funding opportunities available for the propane sector?

The funding landscape has shifted noticeably: In the early 2020s, several major federal programs were designed specifically around zero-emission vehicles, which limited propane’s ability to compete even when it could deliver significant emissions reductions. For example, EPA’s $1 billion Clean Heavy-Duty Vehicles Program was restricted to zero-emission replacements. 

In 2026, however, federal transportation policy has shifted toward technology-neutral policies or policies explicitly favoring low-emission fuels. That creates a favorable competitive environment for propane in certain programs. Overall, I would characterize 2026–2027 as a potentially improving funding environment for propane, with the key opportunity being to identify programs where cost, reliability, emissions reductions and technology choice are replacing zero-emission status as the primary policy test.

What role does NPGA play in securing and making these kinds of grants accessible to propane and its partners?  

NPGA is playing an increasingly active role in making federal and state grant funding accessible to the propane industry by identifying opportunities, monitoring changing award criteria, advocating for technology-neutral treatment of fuel sources and providing grant-development assistance. It has also invested in tools to track thousands of live grant opportunities from local, state, federal and private organizations. 

NPGA is working with industry members and supporters to directly prepare and strengthen grant applications designed to secure funding for propane vehicles, infrastructure, safety and other projects such as workforce training and education while helping applicants navigate eligibility and program requirements. 

At the same time, NPGA is building partnerships at the municipal and state levels, connecting the propane industry with transit agencies, local governments, state and regional associations, emergency responders and other potential grant partners. The goal is not simply to alert the industry when funding becomes available, but to help develop viable projects and partnerships and carry them through the application process to strengthen the industry, the American workforce and the nation.

Is there anything else you’d like to share with BPN’s readers?

Advocacy remains essential to ensuring policymakers recognize propane as a viable, reliable fuel for transportation, residential and commercial heating, power generation and U.S. energy exports, rather than allowing narrow-minded policy to prematurely eliminate fuel choices. This is particularly important at the state and local levels, where electrification mandates and restrictions on combustion technologies continue to threaten propane’s access to key markets, putting communities at risk. 

NPGA reports monitoring such efforts in more than 260 local jurisdictions across 36 states, while 28 states have enacted energy-choice protections. The industry should continue making the case for technology-neutral policies that evaluate fuels on affordability, reliability, emissions, energy security and real-world performance, while demonstrating propane’s value as a transportation fuel and dispatchable, on-site energy resource. 

Continued engagement by propane businesses with lawmakers, regulators, municipalities and customers will be critical to ensuring that propane remains part of America’s diverse domestic energy portfolio and an important energy commodity in global markets.