Funding for the competitive grants comes from Maine’s portion of a $14.7 billion multi-state deal with Volkswagen to settle charges it designed diesel engines to cheat emissions tests.

Maine received $21 million in all from the Volkswagen settlement. This grant cycle is the second and possibly final round of $5.25 million set aside two years ago for new more efficient engines on trucks, buses and other heavy vehicles.

Eligible parties still operating a diesel engine from 2009 or earlier can apply for funding between 25 percent and 80 percent of the base price of a new vehicle. Maine Department of Transportation will start accepting applications Sept. 16 and there is a Nov. 15 deadline.

The department awarded about $2.2 million from the fund last year. The money went to school districts and municipal governments and helped pay for 18 new diesel school buses, 11 new propane school buses and one new diesel plow truck, said David Gardner, director of the Maine Department of Transportation Environmental Office.

The state’s Volkswagen settlement also dedicated $8.4 million to reduce emissions at Maine’s ports and railroad yards, $4.2 million to improve fuel efficiency in commercial fishing, farming, lumber and construction vehicles and equipment and $3.15 million to build zero-emission vehicle infrastructure such as electric car charging stations.

Maine has also set aside about $5 million from a separate Volkswagen settlement to subsidize electric vehicle purchases.