MHEDA Members Receive Clean Air Grants

Texas program rewards old forklift replacement.

California is receiving much of the attention because of its upcoming vote, but another large state also is actively pursuing clean-air standards. In 2001, Texas announced the Texas Emissions Reduction Plan (TERP) to help improve air quality in the state. The initiative includes the Emissions Reduction Incentive Grants Program, a $1 million statewide program offering incentives to companies to scrap old lift trucks and replace them with new ones that meet the latest federal emissions standards.

The program targets the 41 Texas counties that fall short of meeting federal air-quality standards and thus are eligible to receive TERP funding. The umbrella TERP program is run by the Texas Commission on Environmental Quality (TCEQ) under legislation enacted in 2001, with the Texas Railroad Commission in charge of forklift incentives. The first grant went to Sarabia's of El Paso, who received $8,510 in November of last year.

The purpose of the program was explained by the Texas Railroad Commission in a press release: “About 70 percent to 80 percent of Texas' estimated 36,000 to 45,000 propane forklifts operate in counties with air-quality challenges. If just 15 percent of these were fitted with new fuel systems, new engines, retired early or replaced with new propane forklifts, Texas could lower smog-forming nitrous oxide (NOx) emissions by a total of 7,000 to 12,000 tons. The forklift initiative is part of a much bigger strategy with dual goals: to ensure that Texas's air is safe to breathe and meets Clean Air Act standards, while also developing new technologies that create new business and industry in the state.” Texas hopes to reduce the harmful NOx emissions by 0.33 tons per forklift per year, or by 1.6 tons of NOx per forklift over the forklift's typical five-year remaining useful life.

MHEDA Members Briggs Equipment (Dallas, TX) and Sunbelt Industrial Trucks (Dallas, TX) were among the companies to receive grants.

Briggs Equipment
Briggs Equipment was the first company in the Dallas area to be awarded funds, receiving a $133,830 grant in March 2005. Briggs Equipment used the grant to buy 17 new, low-NOx forklifts fueled by clean-burning propane gas. It was estimated that the 17 new forklifts would lower nitrous oxide emissions in the Dallas area by almost 27 tons over their lifespan, the equivalent to taking more than 1,000 passenger cars off Dallas streets and highways.

All told, Briggs garnered about $200,000 in the program, according to Regional Manager Mike Winemiller. “Briggs has taken about 20 percent of the total funds appropriated in the first round of grants. We've participated heavily in this,” he says.

Briggs Equipment Regional Manager Mike Winemiller (center) receives a plaque commemorating his company's commitment to lowering forklift engine emissions from Texas Railroad Commissioner Elizabeth Jones and Joe Green of the Texas Propane Gas Association.

Winemiller believes that the program has had a significant impact on business at Briggs. “It's been a good marketing program for people who own trucks. We have about 5,000 pieces of rental equipment, and the grants have motivated us to replace some of that equipment earlier than we would normally. We've taken out rental equipment that we probably would not have replaced until a year or two from now. So it's increased our purchases of lift trucks in the state of Texas.”

Briggs Equipment also has received another benefit in the form of increased visibility. “The Railroad Commission actually advertises us as one of their dealers. Let's say you want to participate in this program, and you call the Commission to ask how to get involved. They would ask what city you're in, and in Dallas and Houston one of their referrals would be Briggs Equipment.”

Sunbelt Industrial Trucks
Sunbelt Industrial Trucks also has received some rewards from the program. Vice President Brian Harris notes, “A customer of ours had a fleet of older forklifts that were in pretty bad condition. Some of them had 10,000 hours or more on them. They ended up trading in four units that probably would have only netted them about $500 to $750 apiece, at most, on a regular trade program.” Instead, the company received a total of $24,900 to replace the four trucks.

Harris is a strong proponent of the initiative, saying that it is a significant upgrade over the state's previous attempt at a similar program. “In the past, dealers weren't as aggressive as they seem to be now. The grants weren't as high, and the paperwork was extremely tedious. Now they've streamlined the program so it's not nearly as labor-intensive. Someone who maintains their equipment already should have the records they need.”

Another difference, Harris notes, is the state requires proof that the old forklift has been scrapped. “Under the old system, some companies were going around the rules by transferring a forklift to another state and then transferring it back. So the state decided to require absolute proof. Part of the obligation of the dealership when it gets the forklift in trade is to document that the forklift has been scrapped, with things like pictures and a receipt from a scrap yard.”

How It Works
In order to receive a grant, an applicant must file paperwork illustrating facts like financial strength, forklift service history and the ability to monitor future emissions. “The customer has to supply a history of the unit for two years, prove the maintenance on it and also prove the hours through maintenance records,” Harris says. The grant is paid based on the tons of nitrous oxide that will be reduced in the atmosphere over five years, and there's a formula provided to calculate that.

Of course, there are restrictions. “Ownership has to be clearly held by the user of the lift truck,” Winemiller says. “It can't be through a third-party leasing company. Also, the funds can't exceed some ratio of the value of the truck.”

Low-usage forklifts also are likely to be overlooked by the state. “Customers with light usage probably won't qualify even though they'd like to have the grant money,” Harris says. “The state wants to get the high-usage, high-cycle, high-pollutant forklifts off the market.” He points out that although Sunbelt has only dealt with one customer's grants, other customers have expressed interest. “We've had a lot of smaller customers interested in it that just didn't qualify because they didn't have enough hours.”

Another drawback of the program is that the replacement forklifts must be powered by liquid propane. “No matter what your lift is now, it must convert to LP because there is participation from the Propane Council on it,” Winemiller says. “Even though you may get better emissions by going with a new gas-powered or diesel-powered machine, it doesn't matter. The restriction is that it has to be an LP-powered forklift.”

Even so, the program has proven successful enough that the Railroad Commission secured an additional million dollars in funding earlier this year, which allows the Commission's Alternative Fuels Division to approve applications for forklifts that have a three- to four-month lead time for delivery, without worrying that the money will run out before the vehicles are delivered.

The new funds mean the program can spread into other urban areas across the state. In July, San Antonio-based HE Butt Grocery became the first company in its city to receive a grant, $39,530 to buy five new lift trucks. State officials estimate that retiring 15 percent of older forklifts could lower Texas's nitrogen oxide emissions by 7,000 tons to 12,000 tons, which would be roughly equal to removing 260,000 to 450,000 cars from the state's roads.

“It's a well-thought-out program,” Harris says. “I think it's something that will spread to other states.”

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The MHEDA Journal • Fourth Quarter 2005 • Volume 34, No. 4 • Contents are Copyright © Data Key Communications, Inc.
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