Clean Transportation Getting Huge Boost from Major Federal Legislation


Both the U.S. Senate and House have passed the landmark Inflation Reduction Act of 2022 (IRA), which includes a number of provisions that will directly benefit the clean transportation industry.

Key among these provisions is a three-year extension of the Alternative Fuels Tax Credit (AFTC), which provides a $0.50 per gasoline gallon equivalent (GGE) credit for compressed natural gas (CNG), liquefied natural gas (LNG), propane autogas and other clean fleet fuels.

Other provisions in the bill include the Clean Fuel Production Tax Credit, Alternative Fuel Refueling Tax Credit, Clean Vehicle Credit & Used Clean Vehicle Credit, and Qualified Commercial Clean Vehicle Credit.

“By extending the AFTC through 2024, Congress signals how important clean-technology natural gas vehicles are to growing our economy, improving our air quality, and enhancing our energy security while reducing our carbon footprint,” says NGVAmerica President Daniel Gage, whose organization has championed the AFTC and other clean-fleet measures for years.

“This legislation provides the added needed incentive for fleets of all sizes – public and private – to transition to clean natural gas transportation fuel,” he adds. “Heavy-duty vehicles are the fastest growing vehicle segment and among the largest contributors of pollutant and greenhouse gas emissions in the transportation sector. Natural gas vehicles are zero-emission equivalent and can be carbon-neutral – even negative – depending on the natural gas source.”

The legislation is also a boon for the vehicle electrification segment, with provisions including the following:

  • a $4,000 tax credit for the purchase of used electric vehicles and up to a $7,500 tax credit for new EVs;
  • $3 billion for electric U.S. Postal Service vehicles;
  • $1 billion for electric heavy-duty vehicles

“We’re glad to see the House pass this hard-fought legislation,” comments Lisa Frank, executive director of Environment America’s Washington Legislative Office. “The renewable energy and electric vehicle tax incentives in the Inflation Reduction Act are a real game-changer.”

President Biden is expected to sign the bill this week.

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