For years, the familiar cloud of black exhaust pumped from U.S. school buses has fueled growing concerns over harmful effects of diesel emissions on students' health. Now, environmentalists say, new technologies to reduce the potency of these pollutants are helping clear the air.

So far this year, the U.S. Environmental Protection Agency (EPA) has awarded $5 million to retrofit 5,000 school buses with environmentally friendly diesel oxidation catalysts and lower emission fuels as part of its two-year-old Clean School Bus USA demonstration program.

The funds were disbursed among 21

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