Clean Fleet Enterprise Replace Aging Diesel Trucks

The Bottom Line

Colorado is rolling out a new financial incentive program to get pre-2010 heavy-duty diesel trucks off the road. If you own an aging commercial fleet, the state will help cover the upfront costs of a newer truck—as long as you let the dealer drill a hole in your old engine block so it never drives again.

What This Bill Actually Does

The core problem this legislation tackles is that old, heavy-duty diesel trucks stick around forever, and pre-2010 engines spew significantly more emissions than modern ones. Under previous law, Colorado's Clean Fleet Enterprise—a state-run fund designed to green up transportation—mostly focused on pushing public and private fleets toward electric or compressed natural gas vehicles. But for heavy-duty trucking, where electric options often lack the necessary cargo capacity or driving range, that was an impractical jump for many operators. This bill creates a pragmatic middle ground. It allows the state to use its funds to help owners replace an aging heavy-duty diesel truck (model year 2009 or earlier) with a new heavy-duty truck (model year 2018 or later), rather than forcing an immediate pivot to fully electric rigs.

The mechanics of the replacement program are strict. To get the financial help—which could come in the form of grants, rebates, or revolving loans—you have to surrender your old truck to the dealer when you buy the newer one. But the old truck does not just go to the auction block to be resold. The dealer is legally required to decommission it. The bill gets incredibly specific about how this is done: the seller must cut a three-inch hole through the wall of the engine block and cut the chassis rails in half. The goal is to ensure these high-polluting engines are permanently removed from the roads, not just passed down to another owner or shipped to a neighboring state.

Beyond the 'cash for clunkers' style program, the bill cleans up some existing timelines for alternative fuels. It repeals a fast-approaching 2027 deadline that would have limited the enterprise from funding compressed natural gas vehicles unless electric models were deemed totally unavailable. For the new diesel-to-diesel replacement program, the incentives run through December 31, 2031, giving operators several years to plan their upgrades. To make sure this program doesn't drain resources meant for other clean vehicle initiatives, the state caps the spending at 20 percent of the Clean Fleet Enterprise fund's annual income.

What It Means for You

For the average Colorado resident, this bill is mostly about the air you breathe. If you live near major freight corridors, industrial parks, or in a disproportionately impacted community where warehouse traffic is heavy, you are likely breathing in the exhaust of these older vehicles. Older diesel trucks (those built before 2010) lack the advanced particulate filters and selective catalytic reduction systems that became industry standard in later years. By incentivizing the permanent destruction of these older engines, the state is targeting a relatively small percentage of vehicles that produce an outsized share of roadside smog and soot. Removing them permanently means cleaner air in neighborhoods that see the most commercial traffic.

If you happen to be an independent owner-operator or a contractor who relies on a single heavy-duty dump truck, water truck, or hauling rig, this bill opens up a serious financial lifeline. Upgrading a heavy-duty truck—defined here as a vehicle weighing over 26,000 pounds—is a massive capital expense, often costing well into the six figures. Before this policy, if an electric rig was not practical for your specific routes, payloads, or budget, you were largely shut out of state fleet transition incentives. Now, you can get state help to buy a much more affordable, slightly used 2018 or newer diesel model, taking a lot of the sting out of upgrading your equipment.

Keep in mind, you will need to do the math to see if the state's incentive outweighs the traditional resale value of your old truck. Because the dealer is legally required to destroy your trade-in, you are not going to get standard trade-in value for the vehicle itself—the state grant or rebate is meant to bridge that gap. If you have an aging rig that is barely passing inspection, suffering from constant breakdowns, or costing you a fortune in maintenance, this program offers a clean, subsidized exit strategy that gets you into a safer, more reliable vehicle.

What It Means for Your Business

For commercial fleet operators, logistics companies, and construction firms, this legislation represents a major, practical shift in how Colorado subsidizes fleet upgrades. The state is acknowledging that a forced march to fully electric heavy-duty vehicles is not economically or operationally feasible for every business right now. If your fleet includes pre-2010 diesel trucks that operate primarily in Colorado—meaning at least 75 percent of their annual miles are driven in-state—you now have access to grants, rebates, or revolving loans to help fund the jump to 2018-or-newer models. The program runs through the end of 2031, giving you a reliable multi-year window to phase out older, maintenance-heavy assets.

Heavy-duty truck dealerships have a brand new compliance and operational role under this law. If you sell commercial trucks, you are the mandatory gatekeeper for these state-backed transactions. You must officially certify that the replacement truck meets all current state and federal safety and emissions standards for its model year. More importantly, your service department must physically decommission the trade-in. You will need to establish standard operating procedures for cutting the required three-inch hole in the engine block, slicing the chassis rails in half, and documenting the destruction for state auditors. While this adds an administrative and physical burden, it could also drive significant sales volume to authorized dealers, as buyers will need to use certified sellers rather than private party transactions to access the enterprise funds.

It is worth noting that the funding pool is legally capped—the Clean Fleet Enterprise cannot spend more than 20 percent of its annual income on this specific heavy-duty replacement program. Because of that hard cap, businesses looking to upgrade should monitor the enterprise's grant cycles closely and be prepared to apply early in the fiscal year before the allocated funds dry up. Review your fleet inventory now to identify any 2009-or-older models that fit the weight criteria, verify their in-state mileage logs to ensure they hit the 75 percent threshold, and start assessing replacement options on the 2018-and-newer market.

Follow the Money

This program does not require any new taxes or appropriations from the state's General Fund. Instead, it taps into the existing Clean Fleet Enterprise fund, which is primarily financed by environmental per-ride fees on transportation network companies (like Uber and Lyft) and retail delivery fees tacked onto online shopping orders. The state's nonpartisan fiscal note projects that the additional workload for the Department of Public Health and Environment to review these new financing requests will be minimal and easily absorbed within their current operating budget.

By capping the replacement program at 20 percent of the enterprise's annual revenue, the state ensures that the bulk of the fund remains dedicated to its original goal of advancing zero-emission vehicles. For taxpayers and local governments, it is a revenue-neutral shift in how existing environmental fee dollars are deployed, steering a designated slice of that money toward immediate, practical emissions reductions in the heavy-duty commercial trucking sector.

Where This Bill Stands

SB26-021 is currently Signed Into Law. The latest official action came on 04/20/2026: Governor Signed.

That means the legislative process is complete and the bill is now law. The remaining questions are about implementation timing and how agencies, businesses, or local governments respond.