I would say that it is used primarily used in diesel tractors.

The reason why it is not taxed is because these "off road" vehicles are just that, they dont go on the roads. This means that they are not doing any damage to the road or using the road in any way, so there is not a reason to tax it. Because we drive on the roads, we are using something that is not ours, so the government feels the need to tax us to make more money not only to fix the road (like that happens) but to have more money$$$.

It does not have anything to do with the air.