What are DEF derates, and what does their elimination imply?

DEF derates are limitations on engine performance when the diesel exhaust fluid (DEF) system is not functioning properly. Their elimination suggests that the proposed changes will remove these performance restrictions.

How might the easing of warranty requirements affect manufacturers?

Easing warranty requirements could potentially reduce the burden on manufacturers by allowing for more flexibility in warranty terms and potentially lowering costs associated with warranty claims.

Why is the retention of current NOx emissions standards significant?

Retaining the current NOx emissions standards indicates that the EPA does not plan to make these regulations stricter, which might be significant for manufacturers seeking stability in emissions regulations.

When are these changes expected to take effect?

These changes are proposed for the 2027 heavy-duty engine rules, meaning they are anticipated to take effect in the year 2027.

EPA Unveils Proposed Changes to 2027 Heavy-Duty Engine Rules

The federal agency has proposed changes to next year’s targets that would eliminate DEF derates, ease warranty requirements, and retain current NOx emissions standards.

Staff Writer・Editorial

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July 11, 2026

The proposal keeps nitrogen oxide (NOx) emissions standards in place while rolling back previous compliance requirements that manufacturers argued would increase costs and reduce reliability. Among the biggest changes: eliminating mandatory diesel exhaust fluid deratements for new heavy-duty vehicles and reducing emissions warranty requirements.

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School Bus Fleet

4 min to read

The EPA has proposed eliminating DEF derates in its 2027 heavy-duty engine rule changes.
Proposed changes include easing warranty requirements for heavy-duty engines.
The current NOx emissions standards would be retained under the new proposal.

*Summarized by AI

As the federal administration has already rolled back several environmental regulations and clean energy standards affecting the sale and use of heavy-duty vehicles, including school buses, one question loomed: What changes would we see to the EPA’s 2027 engine requirements?

Yesterday, the U.S. Environmental Protection Agency (EPA) and Administrator Lee Zeldin released details on its proposal, which would amend certain compliance and tests for model-year 2027 and beyond highway engines. Essentially, it would eliminate diesel exhaust fluid (DEF) speed deratements triggered by system failures and scale back warranty requirements.

The changes reverse the Biden administration's 2023 rulings and aim to give fleet operators more flexibility, make systems easier to repair, and save operating costs.

About the Proposed Changes

In short, the EPA isn't changing the 2027 NOx emissions limits. Instead, it proposes changing how diesel engines comply with them, eliminating DEF-related speed derates, scaling back warranty requirements, and giving manufacturers more flexibility.

In August 2025, EPA issued new guidance calling on engine and equipment manufacturers to revise DEF system software in existing vehicles and equipment.

Now, it seeks to completely remove deratements and vehicle speed restrictions for newly manufactured highway engines and vehicles. Under the proposal, new heavy-duty vehicles would no longer be required to enter severe power derates or speed restrictions following certain DEF system failures. Instead, drivers would receive audible and visual warnings so repairs can be scheduled without immediately sidelining the vehicle.

“EPA understands that sudden speed losses and shutdowns caused by DEF system failures compromise safety and productivity and are unacceptable,” it said in a press release.

They estimate a total of $12 billion in potential savings, including up to $6,000 per new vehicle, for vehicle operators from the change.

What This Means for School Bus Fleets

If finalized, school districts and contractors operating new diesel buses beginning with the 2027 model year could see fewer unplanned stops due to system failures, warnings instead of speed restrictions, and potentially lower warranty-related costs for manufacturers.

It’s important to note that the EPA is not getting rid of DEF itself or exhaust requirements.

What stays the same?

NOx emissions limits
The requirement to use emissions-control systems
The 2027 model-year implementation timeline

What would change?

DEF-induced speed derates
Warranty requirements
Useful life timelines
Manufacturer compliance flexibility

The agency is also proposing to scale back the emissions warranty requirements. Specifically, it would shorten the expanded emissions warranty periods that were scheduled to begin under the 2023 rule, arguing the previous requirements would increase costs without corresponding benefits.

The EPA does intend to maintain the underlying emission standards, including nearly 90% of the nitrogen oxide (NOx) reductions. These standards require heavy-duty commercial vehicles to limit emissions to 0.035 grams per horsepower-hour during normal operation and 10.0 grams at idle.

Additionally, EPA is proposing additional lead time before the longer regulatory useful life requirements from the Biden-era rule take effect. The proposal delays the longer useful life requirements until MY 2030. It says this will allow manufacturers to ensure new technologies perform reliably under real-world conditions rather than rushing products to market.

Additionally, EPA is proposing longer regulatory useful life requirements (the number of years and miles for which manufacturers certify that their emissions systems will continue to meet federal standards). The agency believes the additional lead time will give manufacturers more time to validate new technologies before the stricter durability requirements take effect.

There would be nonconformance penalties for certain heavy-duty diesel engines that temporarily cannot meet the new NOx standards, it said. “This will provide flexibility to comply and allow sales to continue, helping prevent supply disruptions and supporting a stable transition to new technologies,” EPA said.

However, the EPA notes that it still expects companies “to work expeditiously to meet requirements within a reasonable timeframe.”

Industry Reactions to the Proposal

The transit bus and motorcoach industry celebrated the proposal.

According to School Bus Fleet’s March 2026 maintenance survey, repairing and maintaining emissions and electrical components was the second-highest challenge in school bus shops. This update will likely ease some of that burden.

But not everyone agrees that the proposal strikes the right balance.

CALSTART expressed concern over the uncertainty this would create, urging the EPA to reconsider the amendments and work with the industry to address concerns. “EPA’s decision to retain the current stringency of the NOx emissions program for heavy-duty vehicles is a strong testament to the hard work the agency undertook in 2022,” said CEO Michael Berube. “Unfortunately, EPA’s latest proposed changes risk introducing confusion and additional market uncertainty for the heavy-duty truck and engine manufacturers and the fleets that depend on reliable vehicle operation. Weakening the durability, warranty, and inducement provisions that support real-world performance could jeopardize long-term emissions reductions, increase danger to public health, and undermine confidence in the technologies needed to deliver cleaner freight today.”

School Bus Fleet reached out to several industry manufacturers and groups to gauge their reaction to the news. As more share their take on the impact of the proposal, we’ll update this page.