Federal Laws and Incentives for Hydrogen

The list below contains summaries of all Federal laws and incentives related to Hydrogen.

Programs

Air Pollution Control Program

The Air Pollution Control Program assists state, local, and tribal agencies in planning, developing, establishing, improving, and maintaining adequate programs for prevention and control of air pollution or implementation of national air quality standards. Plans may emphasize alternative fuels, vehicle maintenance, and transportation choices to reduce vehicle miles traveled. Eligible applicants may receive federal funding for up to 60% of project costs to implement their plans. (Reference 42 U.S. Code 7405)

Point of Contact
U.S. Environmental Protection Agency
Phone: (202) 272-0167
http://www.epa.gov

State Energy Program (SEP) Funding

The SEP provides grants to states to assist in designing, developing, and implementing renewable energy and energy efficiency programs. Each state's energy office receives SEP funding and manages all SEP-funded projects. States may also receive project funding from technology programs in the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) for SEP Special Projects. EERE distributes the funding through an annual competitive solicitation to state energy offices. For more information, see the SEP website.

Point of Contact
U.S. Department of Energy
Phone: (202) 586-5000
Fax: (202) 586-4403
http://www.energy.gov

Clean Cities

The mission of Clean Cities is to advance the energy, economic, and environmental security of the United States by supporting local initiatives to adopt practices that reduce the use of petroleum in the transportation sector. Clean Cities carries out this mission through a network of nearly 100 volunteer coalitions, which develop public/private partnerships to promote alternative fuels and advanced vehicles, fuel blends, fuel economy, hybrid vehicles, and idle reduction. Clean Cities provides information about financial opportunities, coordinates technical assistance projects, updates and maintains databases and websites, and publishes fact sheets, newsletters, and related technical and informational materials. For more information, see the Clean Cities website.

Point of Contact
U.S. Department of Energy
Phone: (202) 586-5000
Fax: (202) 586-4403
http://www.energy.gov

Congestion Mitigation and Air Quality (CMAQ) Improvement Program

The CMAQ Program provides funding to state departments of transportation (DOTs), local governments, and transit agencies for projects and programs that help meet the requirements of the Clean Air Act by reducing mobile source emissions and regional congestion on transportation networks. Eligible activities include transit improvements, travel demand management strategies, congestion relief efforts (such as high occupancy vehicle lanes), diesel retrofit projects, and alternative fuel vehicles and infrastructure. Projects supported with CMAQ funds must demonstrate emissions reductions, be located in or benefit a U.S. Environmental Protection Agency-designated nonattainment or maintenance area, and be a transportation project. For more information, see the FAST Act CMAQ fact sheet and CMAQ Improvement Program website. (Reference Public Law 112-141, 23 U.S. Code 149, and 23 U.S. Code 151)

Clean Ports USA

Clean Ports USA is an incentive-based program designed to reduce emissions by encouraging port authorities and terminal operators to retrofit and replace older diesel engines with new technologies and use cleaner fuels. The U.S. Environmental Protection Agency's National Clean Diesel Campaign offers funding to port authorities and public entities to help them overcome barriers that impede the adoption of cleaner diesel technologies and strategies. For more information, see the Clean Ports USA website.

Point of Contact
Jennifer Keller
National Clean Diesel Campaign
U.S. Environmental Protection Agency
Phone: (202) 343-9541
keller.jennifer@epa.gov
http://www.epa.gov/cleandiesel/

Voluntary Airport Low Emission (VALE) Program

The goal of the VALE Program is to reduce ground level emissions at commercial service airports located in designated ozone and carbon monoxide air quality nonattainment and maintenance areas. The VALE Program provides funding through the Airport Improvement Program and the Passenger Facility Charges program for the purchase of low emission vehicles, development of fueling and recharging stations, implementing gate electrification, and other airport air quality improvements. For more information, see the VALE Program website. (Reference 49 U.S. Code 47139)

Clean Agriculture USA

Clean Agriculture USA is a voluntary program that promotes the reduction of diesel exhaust emissions from agricultural equipment and vehicles by encouraging proper operations and maintenance by farmers, ranchers, and agribusinesses, use of emissions-reducing technologies, and use of cleaner fuels. Clean Agriculture USA is part of the U.S. Environmental Protection Agency's National Clean Diesel Campaign, which offers funding for clean diesel agricultural equipment projects. For more information, see the Clean Agriculture USA website.

Point of Contact
Jennifer Keller
National Clean Diesel Campaign
U.S. Environmental Protection Agency
Phone: (202) 343-9541
keller.jennifer@epa.gov
http://www.epa.gov/cleandiesel/

Clean Construction USA

Clean Construction USA is a voluntary program that promotes the reduction of diesel exhaust emissions from construction equipment and vehicles by encouraging proper operations and maintenance, use of emissions-reducing technologies, and use of cleaner fuels. Clean Construction USA is part of the U.S. Environmental Protection Agency's National Clean Diesel Campaign, which offers funding for clean diesel construction equipment projects. For more information, see the Clean Construction USA website.

Point of Contact
Jennifer Keller
National Clean Diesel Campaign
U.S. Environmental Protection Agency
Phone: (202) 343-9541
keller.jennifer@epa.gov
http://www.epa.gov/cleandiesel/

Laws and Regulations

Vehicle Acquisition and Fuel Use Requirements for Federal Fleets

Under the Energy Policy Act (EPAct) of 1992, 75% of new light-duty vehicles acquired by covered federal fleets must be alternative fuel vehicles (AFVs). As amended in January 2008, Section 301 of EPAct 1992 defines AFVs to include hybrid electric vehicles, fuel cell vehicles, and advanced lean burn vehicles. Fleets that use fuel blends containing at least 20% biodiesel (B20) may earn credits toward their annual requirements. Federal fleets are also required to use alternative fuels in dual-fuel vehicles unless the U.S. Department of Energy (DOE) determines an agency's vehicle requests qualify for waivers; grounds for a waiver include lack of alternative fuel availability and cost restrictions (per EPAct 2007, section 701).

Additional requirements for federal fleets were included in the Energy Independence and Security Act of 2007, including fleet management plan requirements (Section 142), low greenhouse gas (GHG) emitting vehicle acquisition requirements (Section 141), and renewable fuel infrastructure installation requirements (Section 246). DOE is currently developing a rulemaking on the alternative fuel increase requirements (verified December 2015; Section 142).

Executive Order 13693, issued in March 2015, also requires federal agencies with 20 vehicles or more to improve fleet and vehicle efficiency through the elimination of non-essential vehicles and achieve a 30% reduction of fleet-wide GHGs relative to a fiscal year (FY) 2014 emissions baseline by FY 2025. Covered agencies must also install telematics systems on certain new vehicles; submit annual vehicle acquisition data; ensure that by December 31, 2020, and December 31, 2025, 20% and 50% (respectively) of light-duty vehicle acquisitions are zero emission vehicles (ZEVs) or plug-in hybrid electric vehicles (PHEVs); and plan to install charging and other infrastructure to support new ZEV and PHEV acquisitions.

For more information, visit the Sustainable Federal Fleets website.

(Reference 42 U.S. Code 13212 and Executive Order 13693)

Point of Contact
Federal Energy Management Program
U.S. Department of Energy
https://federalfleets.energy.gov/fleet_management_contacts

Vehicle Acquisition and Fuel Use Requirements for Private and Local Government Fleets

Under the Energy Policy Act (EPAct) of 1992, the U.S. Department of Energy (DOE) was directed to determine whether private and local government fleets should be mandated to acquire alternative fuel vehicles (AFVs). In January 2004, DOE published a final rule announcing its decision not to implement an AFV acquisition mandate for private and local government fleets. In response to a March 2006 ruling by a U.S. District Court, DOE issued a subsequent final rulemaking on the new Replacement Fuel Goal in March 2007, which extended the EPAct 1992 goal to 2030. The goal is to achieve a domestic production capacity for replacement fuels sufficient to replace 30% of the U.S. motor fuel consumption. In March 2008, DOE issued its determination not to implement a fleet compliance mandate for private and local government fleets, concluding that such a mandate is not necessary to achieve the Replacement Fuel Goal. For more information on the Private and Local Government Fleet Rule compliance, visit the EPAct Private and Local Government Fleet Determination website. (Reference 42 U.S. Code 13257)

Vehicle Acquisition and Fuel Use Requirements for State and Alternative Fuel Provider Fleets

Under the Energy Policy Act (EPAct) of 1992, as amended, certain state government and alternative fuel provider fleets are required to acquire alternative fuel vehicles (AFVs) as a portion of their annual light-duty vehicle acquisitions. Compliance is required by fleets that operate, lease, or control 50 or more light-duty vehicles within the United States. Of those 50 vehicles, at least 20 must be used primarily within a single Metropolitan Statistical Area/Consolidated Metropolitan Statistical Area, and those same 20 vehicles must also be capable of being centrally fueled for the fleet to be subject to the regulatory requirements.

Under Standard Compliance, the AFVs that covered fleets acquire help them achieve compliance, with each AFV acquired earning the fleet one AFV-acquisition credit. Covered fleets may earn additional credits for AFVs earned in excess of their requirements, and these credits may be banked for future use toward compliance or traded with other fleets. Additionally, fleets that use fuel blends containing at least 20% biodiesel (B20) in medium- and heavy-duty vehicles may earn credits toward their annual AFV-acquisition requirements. A fleet may also earn credits that may be used toward compliance or banked once the fleet achieves compliance for investments in alternative fuel infrastructure, mobile non-road equipment, and emerging technologies associated with certain electric drive vehicle technologies.

Fleets may also opt into Alternative Compliance, which allows fleets the option to choose a petroleum reduction path in lieu of acquiring AFVs under Standard Compliance. Interested fleets must obtain from DOE a waiver from Standard Compliance by submitting a plan that demonstrates a path by which they will achieve a certain level of petroleum reduction specific to their fleet composition.

For more information, visit the EPAct State and Alternative Fuel Provider Fleets website.

(Reference 42 U.S. Code 13251 and 13263a, and 10 CFR 490)

Point of Contact
EPAct Transportation Regulatory Activities
U.S. Department of Energy
epact.sfp.fleets@nrel.gov
http://www.eere.energy.gov/vehiclesandfuels/epact/contacts.html

Procurement Preference for Electric and Hybrid Electric Vehicles

The U.S. Department of Defense (DOD) must exhibit a preference for the lease or procurement of motor vehicles with electric or hybrid electric propulsion systems, including plug-in hybrid systems. Tactical vehicles designed for use in combat are excluded from the requirement. DOD must establish regulations to implement the electric vehicle preference. (Reference 10 U.S. Code 2922g)

Point of Contact
U.S. Department of Defense
Phone: (703) 571-3343
http://www.defense.gov/

Vehicle Incremental Cost Allocation

The U.S. General Services Administration (GSA) must allocate the incremental cost of purchasing alternative fuel vehicles (AFVs) across the entire fleet of vehicles distributed by GSA. This mandate also applies to other federal agencies that procure vehicles for federal fleets. For more information, see the GSA's AFV website. (Reference 42 U.S. Code 13212 (c))

Point of Contact
U.S. General Services Administration
Phone: (703) 605-5630

Alternative Fuel Definition

The following fuels are defined as alternative fuels by the Energy Policy Act (EPAct) of 1992: pure methanol, ethanol, and other alcohols; blends of 85% or more of alcohol with gasoline; natural gas and liquid fuels domestically produced from natural gas; liquefied petroleum gas (propane); coal-derived liquid fuels; hydrogen; electricity; pure biodiesel (B100); fuels, other than alcohol, derived from biological materials; and P-Series fuels. In addition, the U.S. Department of Energy may designate other fuels as alternative fuels, provided that the fuel is substantially non-petroleum, yields substantial energy security benefits, and offers substantial environmental benefits. For more information, see the EPAct website. (Reference 42 U.S. Code 13211)

Point of Contact
U.S. Department of Energy
Phone: (202) 586-5000
Fax: (202) 586-4403
http://www.energy.gov

Alternative Fuel Labeling Requirements

Alternative fuel dispensers must be labeled with information to help consumers make informed decisions about fueling a vehicle, including the name of the fuel and the minimum percentage of the main component of the fuel. Labels may also list the percentage of other fuel components. This requirement applies to, but is not limited to, the following fuel types: methanol, denatured ethanol, and/or other alcohols; mixtures containing 85% or more by volume of methanol, denatured ethanol, and/or other alcohols; natural gas; liquefied petroleum gas; hydrogen; coal derived liquid biofuel; and electricity. Fuel dispensers distributing biodiesel blends containing more than 5% biodiesel by volume must include the percentage of biodiesel included.

Effective July 14, 2016, the regulation also applies to ethanol flex fuels, which are defined as a mixture of gasoline and ethanol containing more than 10% but less than 83% ethanol by volume. For ethanol blends containing no greater than 50% ethanol by volume, retailers must post the exact percentage of ethanol concentration, rounded to the nearest multiple of 10. For ethanol blends containing more than 50% but no greater than 83% ethanol by volume, retailers must post the exact percentage of ethanol concentration, round to the nearest multiple of 10, or indicate that the fuel contains 51% to 83% ethanol.

(Reference 81 Federal Register 2054 and 16 CFR 306 and 309)

Point of Contact
Federal Trade Commission
Phone: (202) 326-2222
http://www.ftc.gov/

High Occupancy Vehicle (HOV) Lane Exemption

States are allowed to exempt certified alternative fuel vehicles (AFVs) and plug-in electric vehicles (PEVs) from HOV lane requirements within the state. Eligible AFVs are defined as vehicles operating solely on methanol, denatured ethanol, or other alcohols; a mixture containing at least 85% methanol, denatured ethanol, or other alcohols; natural gas, propane, hydrogen, or coal derived liquid fuels; or fuels derived from biological materials. PEVs are defined as vehicles that are recharged from an external source of electricity and have a battery capacity of at least 4 kilowatt-hours. States are also allowed to establish programs allowing low-emission and energy-efficient vehicles to pay a toll to access HOV lanes.

Vehicles must be certified by the U.S. Environmental Protection Agency (EPA) and appropriately labeled for use in HOV lanes. The U.S. Department of Transportation (DOT) is responsible for planning and implementing HOV programs, including the low-emission and energy-efficient vehicle criteria EPA established. States that choose to adopt these requirements will be responsible for enforcement and vehicle labeling. The HOV exemption for AFVs and PEVs expires September 30, 2025 and low-emission and energy-efficient vehicle toll-access to HOV lanes expires September 30, 2019.

(Reference Public Law 114-94 and 23 U.S. Code 166)

Alternative Fuel Definition - Internal Revenue Code

The Internal Revenue Service (IRS) defines alternative fuels as liquefied petroleum gas (propane), compressed natural gas, liquefied natural gas, liquefied hydrogen, liquid fuel derived from coal through the Fischer-Tropsch process, liquid hydrocarbons derived from biomass, and P-Series fuels. Biodiesel, ethanol, and renewable diesel are not considered alternative fuels by the IRS. While the term "hydrocarbons" includes liquids that contain oxygen, hydrogen, and carbon and as such "liquid hydrocarbons derived from biomass" includes ethanol, biodiesel, and renewable diesel, the IRS specifically excluded these fuels from the definition. (Reference 26 U.S. Code 6426)

Point of Contact
U.S. Internal Revenue Service
Phone: (800) 829-1040
http://www.irs.gov/

National Alternative Fuels Corridors

The U.S. Department of Transportation (DOT) has designated national plug-in electric vehicle charging and hydrogen, propane, and natural gas fueling corridors in strategic locations along major highways to improve the mobility of alternative fuel vehicles. To designate the corridors, DOT solicited nominations from state and local officials and worked with industry stakeholders. Within five years of the establishment of the corridors, and every five years thereafter, DOT will update and redesignate the corridors. During the designation and redesignation process, DOT will issue a report identifying charging and fueling infrastructure, analyzing standardization needs for fuel providers and purchasers, and reestablishing the goal of achieving strategic deployment of fueling infrastructure in the designated corridors by the end of 2020. For more information, see the DOT alternative fuel corridors page. (Reference Public Law 114-94)

Incentives

Fuel Cell Motor Vehicle Tax Credit

NOTE: This incentive originally expired on December 31, 2014, but was retroactively extended through December 31, 2016, by H.R. 2029.

A tax credit of up to $8,000 is available for the purchase of qualified light-duty fuel cell vehicles, depending on the vehicle's fuel economy. Tax credits are also available for medium- and heavy-duty fuel cell vehicles; credit amounts are based on vehicle weight. Vehicle manufacturers must follow the procedures as published in Notice 2008-33 to certify to the Internal Revenue Service (IRS) that a vehicle meets certain requirements to claim the fuel cell vehicle credit. Notice 2008-33 also provides guidance to taxpayers about claiming the credit. Under current law, this tax credit expires on December 31, 2016. For more information about claiming the credit, see IRS Form 8910, which is available on the IRS Forms and Publications website. (Reference Public Law 114-113 and 26 U.S. Code 30B)

Point of Contact
U.S. Internal Revenue Service
Phone: (800) 829-1040
http://www.irs.gov/

Alternative Fuel and Advanced Vehicle Technology Research and Demonstration Bonds

Qualified state, tribal, and local governments may issue Qualified Energy Conservation Bonds subsidized by the U.S. Department of Treasury at competitive rates to fund capital expenditures on qualified energy conservation projects. Eligible activities include research and demonstration projects related to cellulosic ethanol and other non-fossil fuels, as well as advanced battery manufacturing technologies. Government entities may choose to issue tax credit bonds or direct payment bonds to subsidize the borrowing costs. For information on eligibility, processes, and limitations, see IRS Notices 2009-29, 2010-35, and 2012-44 or contact local issuing agencies. (Reference 26 U.S. Code 54D)

Alternative Fuel Tax Exemption

Alternative fuels used in a manner that the Internal Revenue Service (IRS) deems as nontaxable are exempt from federal fuel taxes. Common nontaxable uses in a motor vehicle are: on a farm for farming purposes; in certain intercity and local buses; in a school bus; exclusive use by a non-profit educational organization; and exclusive use by a state, political subdivision of a state, or the District of Columbia. This exemption is not available to tax exempt entities that are not liable for excise taxes on transportation fuel. For more information, see IRS Publication 510. (Reference 26 U.S. Code 4041)

Point of Contact
Excise Tax Branch
U.S. Internal Revenue Service Office of Chief Counsel
Phone: (202) 317-6855
http://www.irs.gov/

Alternative Fuel Excise Tax Credit

NOTE: This incentive was retroactively extended multiple times, most recently through December 31, 2016, by Public Law 114-113, 2015.

A tax incentive is available for alternative fuel that is sold for use or used as a fuel to operate a motor vehicle. A tax credit in the amount of $0.50 per gallon is available for the following alternative fuels: compressed natural gas (CNG), liquefied natural gas (LNG), liquefied hydrogen, liquefied petroleum gas (propane), P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass. For propane, CNG, and LNG sold after December 31, 2015, the tax credit is based on the gasoline gallon equivalent (GGE) or diesel gallon equivalent (DGE). For taxation purposes, one GGE is equal to 5.75 pounds (lbs.) of propane and 5.66 lbs. of CNG. One DGE is equal to 6.06 lbs. of LNG.

For an entity to be eligible to claim the credit they must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle. Tax exempt entities such as state and local governments that dispense qualified fuel from an on-site fueling station for use in vehicles qualify for the incentive. Eligible entities must be registered with the Internal Revenue Service (IRS). The incentive must first be taken as a credit against the entity's alternative fuel tax liability; any excess over this fuel tax liability may be claimed as a direct payment from the IRS. The tax credit is not allowed if an incentive for the same alternative fuel is also determined under the rules for the ethanol or biodiesel tax credits. Under current law, this tax credit is applicable to fuel sold or used between January 1, 2015, and December 31, 2016. For more information about claiming the credit, see IRS Publication 510, IRS Forms 637, 720, 4136, and 8849, and IRS Notice 2015-56 (August 2015), which are available on the IRS Forms and Publications website. (Reference Public Law 114-113, 2015, and 26 U.S. Code 6426)

Point of Contact
Excise Tax Branch
U.S. Internal Revenue Service Office of Chief Counsel
Phone: (202) 317-6855
http://www.irs.gov/

Improved Energy Technology Loans

The U.S. Department of Energy (DOE) provides loan guarantees through the Loan Guarantee Program to eligible projects that reduce air pollution and greenhouse gases, and support early commercial use of advanced technologies, including biofuels and alternative fuel vehicles. The program is not intended for research and development projects. DOE may issue loan guarantees for up to 100% of the amount of the loan for an eligible project. Eligible projects may include electric vehicle supply equipment, including associated hardware and software. For loan guarantees of over 80%, the loan must be issued and funded by the Treasury Department's Federal Financing Bank. For more information, see the Loan Guarantee Program website. (Reference 42 U.S. Code 16513)

Point of Contact
Loan Guarantee Program
U.S. Department of Energy
Phone: (202) 586-8336
Fax: (202) 586-7366
lgprogram@hq.doe.gov
http://www.energy.gov/lpo/loan-programs-office

Airport Zero Emission Vehicle (ZEV) and Infrastructure Incentives

The Zero Emissions Airport Vehicle and Infrastructure Pilot Program provides funding to airports for up to 50% of the cost to acquire ZEVs and install or modify supporting infrastructure for acquired vehicles. Grant funding must be used for airport-owned, on-road vehicles used exclusively for airport purposes. Vehicles and infrastructure must meet the Federal Aviation Administration's Airport Improvement Program requirements, including Buy American requirements. To be eligible, an airport must be for public use. The program will give priority to applicants located in nonattainment areas, as defined by the Clean Air Act, and projects that achieve the greatest air quality benefits, as measured by the amount of emissions reduced per dollar of funds spent under the program. For more information, see the Zero Emissions Airport Vehicle and Infrastructure Pilot Program website. Reference Public Law 112-95 and 49 U.S. Code 47136a)

Low and Zero Emission Public Transportation Research, Demonstration, and Deployment Funding

Financial assistance is available to local, state, and federal government entities; public transportation providers; private and non-profit organizations; and higher education institutions for research, demonstration, and deployment projects involving low or zero emission public transportation vehicles. Funding may cover up to 85% of project costs, with a required 15% non-federal cost share requirement. Eligible vehicles must be designated for public transportation use and significantly reduce energy consumption or harmful emissions compared to a comparable standard vehicle. For more information, see the FAST Act Section 5312 fact sheet and the MAP-21 website. (Reference Public Law 113-159, Public Law 114-94, 49 U.S. Code 5312, and 49 U.S. Code 5339(c))

Point of Contact
Federal Transit Administration, Office of Program Management
U.S. Department of Transportation
Phone: (202) 366-2053
http://www.fta.dot.gov

Alternative Fuel Infrastructure Tax Credit

NOTE: This incentive originally expired on December 31, 2013, but was retroactively extended through December 31, 2016, by H.R. 2029.

Fueling equipment for natural gas, liquefied petroleum gas (propane), liquefied hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed between January 1, 2015, and December 31, 2016, is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Permitting and inspection fees are not included in covered expenses. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location. Consumers who purchased qualified residential fueling equipment prior to December 31, 2016, may receive a tax credit of up to $1,000. Unused credits that qualify as general business tax credits, as defined by the Internal Revenue Service (IRS), may be carried backward one year and carried forward 20 years. For more information about claiming the credit, see IRS Form 8911, which is available on the IRS Forms and Publications website. (Reference Public Law 114-113; 26 U.S. Code 30C and 38; and IRS Notice 2007-43)

Point of Contact
U.S. Internal Revenue Service
Phone: (800) 829-1040
http://www.irs.gov/

  

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