Opportunity: Diesel Replacement Rebate Year 3



Program: Hawaii State Energy Office (HSEO)



Status: Available*



Project Deadline: September 30, 2026


*Approximately 2 months after program launch, HSEO will review program structure and may update the program. Updates will be announced publicly prior to going into effect.

The Hawaii State Energy Office announced that the Diesel Replacement Rebate (DRR) – Year 3 is now available. The DRR provides rebates, of up to 45%, toward the purchase of a new zero-emission vehicle to replace an existing diesel vehicle. Participants are required to scrap the existing vehicle. Projects can include the purchase of one charging unit per vehicle. An estimated $1M in funding is available for rebates.


Applications will be reviewed in the order they are received. Projects will be selected in accordance with the Diesel Emissions Reduction Act (DERA) and DRR program requirements and funding availability. Applicants will be notified individually as decisions are made, and completed projects will be posted publicly on www.energy.hawaii.gov/DRR.

Click through each tab to learn more about this opportunity.

Eligible projects:



-Buses: School, Transit, Tour, and Shuttle


-Medium-Duty or Heavy-Duty Trucks


-Nonroad Vehicles: Equipment at ports and airports, agricultural tractors



*Replacement vehicles: must be battery electric or hydrogen-powered.



*Charger: Projects can include the purchase of one charging unit per vehicle.

Process Overview:



-Organization submits project application


-Funds are reserved if project is eligible on a first come, first serve basis


-Participant signs Agreement and begins project


-Participant receives the new vehicle


-Old vehicle is scrapped*


-Participant provides final documentation and receives rebate


The current deadline for project completion is September 30, 2026.



*The existing (diesel) vehicle must be scrapped or rendered permanently disabled within ninety (90) days of the replacement being received. Participants are responsible for scrappage costs.

Additional Information:



Program Overview (PDF): For a more detailed overview of the program details, the Hawaii State Energy Office has created a DRR Program Guide.


Sample Application (PDF): If you would like to review the application before you submit it, the Hawaii State Energy Office has created a sample application for you to view.


Pre-Application Webinar (video): This 15-minute video will go over the program and the new requirements.

For more information, please see the project website: Diesel Replacement Rebate Program – Hawai‘i State Energy Office (hawaii.gov)
The Hawaii State Energy Office encourages all applicants to read the program guide prior to applying.



To stay up to date, please sign up for the VW mailing list at https://energy.hawaii.gov/what-we-do/financial-assistance-and-grants/volkswagen-settlement/ (scroll to the bottom of the page for the sign up).

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