Policy – The Transport Project

Advocating for alternative fuels.

Federal and state NGV policy deserves parity,
consistency, and clarity

Policy Recommendations

Promote all viable clean vehicle technologies

Since trucking fleet needs are not all the same, differing powertrains are required for differing real-world applications. Renewable natural gas is an immediate clean solution for difficult-to-electrify medium- and heavy-duty applications.

Focus on markets, not mandates

Don’t mandate forced electrification. Instead set aggressive emissions reductions targets and allow individual fleets the flexibility to choose the best clean vehicle technology solution for their needs. Make informed investments based on cost effectiveness and access to affordable, commercially available, ready-right-now technology to get more clean vehicles on the road faster.

Allow access to affordable energy

Limiting energy access and choice and results in higher costs for all users and product consumers, creates system bottlenecks, hampers free market competition, and results in an overreliance on energy and minerals from foreign suppliers, often from conflict regions and rogue nations.

Impact frontline communities sooner

Get more clean replacement vehicles on the road right away with cost effective NGVs fueled by RNG. Today’s NGVs are a 1-to-1 replacement for diesel in terms of performance, torque, range, and capability with immediate clean air and carbon reduction results.

Consider all costs and all emissions

Forced electrification of American transportation includes significant costs in addition to the high costs associated with eventual vehicle purchase and acquisition. These include the build out of added electricity generation, transmission, and fast-charging infrastructure. Focusing only on tailpipe emissions has proved a huge incentive for electrification but hamstrings other more cost effective and scalable technologies with similar or lower life-cycle emissions.

Make the most of limited public resources

Constrain carbon now with deployable and scalable RNG-fueled vehicles; no need to wait for technology to develop or become affordable.

Federal Policy Priorities

No one single solution can economically or practically address the vast needs of the transportation sector. This means that policies and funding should also include and support the use of gaseous fuels such as conventional natural gas, renewable natural gas, and hydrogen.

Extend the Alternative Fuel Tax Credit on a timeline equitable with other like incentives.
Unlike other clean fuel incentives and credits, this $0.50/gallon tax credit is end user focused. Awarded at the dispenser, fleets of all sizes and application benefit, public and municipal fleets included. The AFTC lowers overall fleet fueling costs, contributing to an important earlier Return on Investment (ROI) per vehicle and encouraging continued investment in clean technologies and fleet turnover.
Enact an RNG Motor Fuel Tax Credit.
This $1.00/gallon incentive for the use of RNG as a motor vehicle fuel is modeled on and works like the successful $0.50 Alternative Fuel Tax Credit for natural gas. This is the most effective way to encourage fleets to transition to more low-NOX, RNG-fueled trucks and buses.
Fairly implement the Alternative Fuel Tax Credit for Alternative Fuel Refueling Property (IRC Sec. 30C.)
The Inflation Reduction Act expanded this tax credit to provide up to 30 percent or $100,000 of the cost of each single item of qualifying refueling equipment. The IRS has finalized guidance on the geographical areas where stations can be built and take the credit but still needs to provide guidance and clarity around what qualifies as a “single item of qualifying property.”
Repeal or amend the 12% Federal Excise Tax (FET) on heavy-duty gaseous-fueled trucks.
Not only does the FET discourage the purchase of new vehicles, it discourages fleets from transitioning to cleaner, advanced technology trucks by adding a tax premium on top of their already higher cost.
Equalization of the tax treatment of LNG in marine transportation.
This discriminatory tax discourages all forms of LNG including renewable liquefied natural gas for marine use. The federal government fixed the discrepancy for on-road LNG and now needs to do the same for marine fuel.

Other important advocacy efforts

In addition to tax policy, our federal advocacy efforts include ensuring that federal funding programs including grant programs and research and development investments provide equitable and fair treatment for gaseous-fueled vehicles — conventional natural gas, renewable natural gas, and hydrogen. The Infrastructure Investments and Jobs Act (IIJA) provides billions in funding for new and existing federal programs, many targeted at accelerating the uptake of cleaner vehicle technologies. Unfortunately, the majority currently focus on zero-emissions tailpipe emissions thus leaving out other transportation solutions with extremely low or net-zero emissions.

State Policy Priorities

Incentivize Fleet Transition

Many state governments offer incentives for a variety of alternative fuel vehicles. These incentives include grants, tax deductions/credits, fuel tax reductions, reduced license fees, reduced vehicle sales taxes and lower registration fees. Some states, such as California and Arizona, permit certain alternative fuel vehicles to operate in high occupancy vehicle lanes during peak rush-hour periods. These programs may cover all alternative fuel vehicles or may provide incentives for a specific fuel.

To learn more about what your state offers, visit the Alternative Fuel Data Center’s State Laws & Incentives webpage at https://afdc.energy.gov/laws/state.

Our State Government Advocacy Committee maintains a list of proposed and recently enacted state legislative bills. To learn more about the resources provided by this committee or to join it, contact our staff.

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Include RNG in State-Specific Advanced Clean Truck, Advanced Clean Fleet, and Omnibus Rules

The Transport Project supports state efforts to decarbonize the medium- and heavy-duty transportation sector as quickly as possible while greatly reducing harmful criteria emissions that contribute to poor air quality and federal ambient air standards nonattainment.

But reliance upon sales and purchase mandates for vehicles that are not yet commercially available, affordable, or proven is a recipe for disaster. Instead, work with affected stakeholders and adopt policies that incentivize fleets to voluntarily adopt a variety of ultra-low-emission technologies that can readily be deployed today. Incentives should be leveraged and structured to maximize deployment and reduce emissions in applications where they are needed most and where they can do the most public good.

Support Clean Fuel Standards

The Transport Project supports the establishment of Clean Fuel Standard (CFS), Low Carbon Fuel Standard (LCFS), or Clean Transportation Standard (CTS) programs in the states.

CTS programs allow all transportation fuels to compete based on their carbon intensity and:

Incentivize the use of lower-carbon fuel alternatives over traditional gasoline and diesel
Reduce greenhouse gas emissions while diversifying the transportation fuel supply and improving public health
Create jobs by supporting the development and production of new clean fuels like RNG
Reduce overall vehicle life cycle emissions, not just tailpipe emissions focused on by zero emission vehicles (ZEV)
Support domestic fuel and energy independence

Effective CTS programs are technology and fuel neutral, as well as performance and market based. State budget neutral, these programs issue credits and deficits, thereby paying for itself. And CTS programs greatly lower the overall carbon content of transportation fuels used in the state by establishing an annual carbon intensity (CI) limit that reduces from the original CI limit over time. There is no evidence that the introduction of a CTS program correlates to higher gasoline prices at the pump for consumers.

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