Bipartisan Alternative Fuel Vehicle Bill Passes Both House and Senate

Late last week, the U.S. Senate passed the National Defense Authorization Act (NDAA) for fiscal-year 2015, which contains a provision addressing a disparity in the federal Corporate Average Fuel Economy (CAFE) program that has been disadvantageous to most bi-fuel alternative fuel vehicles.

Existing regulations allow OEMs to earn CAFE compliance credits by producing bi-fuel vehicles (also referred to as ‘flex fuel’ or ‘dual fuel’ by some automakers), subject to a cap in the number of credits an OEM can receive for given vehicle models. To date, most OEMs have produced vehicles capable of running on E85 ethanol in order to earn their credits. OEMs can also produce electric vehicle models to receive CAFE credits, but with no cap – a major advantage.

Section 318 of the NDAA – which the House passed on Dec. 4 – amends U.S. Code to include bi-fuel natural gas vehicles.

In February, Sens. Jim Inhofe, R-Okla., and Carl Levin, D-Mich., had introduced bipartisan legislation, S.B.2065, that did not move through the full legislative process this year but did form the basis for Section 318 of the NDAA.

OEMs such as GM already produce bi-fuel compressed natural gas (CNG) vehicles, including the Chevrolet Silverado 2500HD and 3500HD pickup trucks. In turn, the new CAFE rules are being lauded by NGV proponents, as these trucks and other NGVs – like Chevy's new bi-fuel CNG Impala – would also will be eligible for the credit-cap exemption with model-year 2016 vehicles.

‘Enactment of this bipartisan provision moves natural gas one step closer towards becoming a mainstream fuel for our everyday cars,’ Inhofe says. ‘Natural gas is an underutilized clean and abundant domestic energy resource for U.S. transportation, in part, due to outdated regulations.’

‘This is the most significant NGV legislation passed by the Congress in some time, and we believe it will help move the ball forward in expanding the use of natural gas as a mainstream transportation fuel,’ remarks Matthew Godlewski, president of NGVAmerica.

President Obama is expected to sign the bill.

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