Natural Gas Laws and Incentives in Oregon
The list below contains summaries of all Oregon laws and incentives related to natural gas.
Laws and Regulations
Alternative Fuel Excise Tax
Compressed natural gas motor fuel is subject to the state fuel excise tax at the rate of $0.34 per 123.57 cubic feet. Liquefied petroleum gas motor fuel is subject to the state fuel excise tax at the rate of $0.34 per 1.353 gallons. Hydrogen motor fuel is subject to the state fuel excise tax at the rate of $0.34 per kilogram. Liquefied natural gas motor fuel is subject to the state fuel excise tax at the rate of $0.34 per 1.71 gallons.
(Reference House Bill 2099, 2023)
Alternative Fuel Vehicle (AFV) Parking Space Regulation
An individual is not allowed to park a motor vehicle within any parking space specifically designated for public parking and fueling of AFVs unless the motor vehicle is an AFV. Eligible AFVs must also be in the process of fueling or charging to park in the space. A person found responsible for a violation is subject to traffic violation penalties.
(Reference Oregon Revised Statutes 811.587)
Alternative Fuel Vehicle Acquisition (AFV) and Fuel Use Requirements
Beginning January 1, 2025, all new light-duty state agency fleet vehicle purchases or leases must be all-electric, plug-in hybrid electric, or hydrogen fuel cell vehicles, to the maximum extent possible. If purchasing or leasing these vehicles is not feasible, state agencies may purchase or lease light-duty AFVs or qualifying low-emission vehicles. Each state agency must develop and report a greenhouse gas reduction baseline and annual reduction targets to the Oregon Department of Administrative Services (DAS). Reports to DAS must include the number of purchases or leases of ZEVs, AFVs, and AFV conversions and the quantity of each type of alternative fuel used annually by state agency fleets.
(Reference Executive Order 20-04, 2020, House Bill 3550, 2023, and Oregon Revised Statutes 267.030 and 283.327)
Clean Transportation Fuel Standards
The Oregon Department of Environmental Quality (DEQ) administers the Oregon Clean Fuels Program (Program), which requires fuel producers and importers to register, keep records of, and report the volumes and carbon intensities of the fuels they provide in Oregon. Phase 2 of the Program, implemented in 2016, requires fuel suppliers to reduce the carbon content of transportation fuels.
In 2022, a new goal was implemented to reduce the carbon content of transportation fuels by 20% below 2015 levels by 2030, and 37% below 2015 levels by 2035.
DEQ must conduct rulemaking for the Program to support greater electric vehicle (EV) adoption. DEQ must also develop a method to aggregate and monetize all eligible EV credits in the Program to assist in achieving the state goal of 250,000 registered EVs in Oregon by 2025. For more information, see the DEQ Oregon Clean Fuels Program website.
(Reference Oregon Revised Statutes 468A.266, Oregon Administrative Rules 340-253, and Permanent Administrative Order DEQ 17-2022)
Electric Vehicle (EV) and Vehicle Efficiency Fees
All-electric vehicle owners must pay an annual fee of $115 or a per-mile road use fee of $0.019 per mile through the OReGo program. Hybrid electric vehicles and plug-in hybrid electric vehicles must pay an annual fee in the following amounts:
| Vehicle Efficiency | Annual Fee |
|---|---|
| Vehicles with a rating of 0-19 miles per gallon (mpg) | $20 |
| Vehicles with a rating of 20-39 mpg | $25 |
| Vehicles with a rating of 40 mpg or greater | $35 |
These fees are in addition to standard registration fees. Drivers with EVs or vehicles with ratings over 40 mpg are exempt from additional registration fees if they enroll in the OReGo program. For more information, including how to apply, visit the OReGo program website.
(Reference Oregon Revised Statutes 803.420-803.422)
Public Natural Gas Utility Cost Recovery Authorization
A public natural gas utility may seek cost recovery from retail natural gas customers for infrastructure investments that supports alternative fuel vehicles powered by renewable natural gas or hydrogen.
(Reference Oregon Revised Statutes 757.398)
Renewable Natural Gas (RNG) Support
The Oregon Public Utility Commission (PUC) will develop rules for RNG distribution programs for both small and large utilities. Rules must include reporting requirement guidelines and a rate recovery costs process. The PUC must establish rate caps for small natural gas utilities.
The PUC has established voluntary RNG target distribution goals for large utilities that participate in the RNG program under the following schedule:
| Calendar Years | Percent RNG |
|---|---|
| 2020-2024 | 5% |
| 2025-2029 | 10% |
| 2030-2034 | 15% |
| 2035-2039 | 20% |
| 2040-2044 | 25% |
| 2045-2050 | 30% |
(Reference Oregon Revised Statutes 757.396)
State Incentives
Alternative Fuel Loans
The Oregon Department of Energy administers the Small-Scale Local Energy Loan Program which offers low-interest loans for qualifying projects. Eligible alternative fuel projects include fuel production facilities, dedicated feedstock production, fueling infrastructure, and fleet vehicles. Loan recipients must complete a loan application and pay a loan application fee. For more information, see the Energy Loan Program website.
(Reference Oregon Revised Statutes 470)
Alternative Fuel Technology Weight Exemption
A vehicle equipped with a fully functional idle reduction system designed to reduce fuel use and emissions from engine idling may exceed the maximum weight limitations by up to 550 pounds (lbs.) to accommodate the added weight of the idle reduction technology. Any natural gas vehicle or electric vehicle may exceed the limits by up to 2,000 lbs.
(Reference Oregon Revised Statutes 818.030)
Clean School Bus Grants
The Oregon Department of Environmental Quality must use funds awarded to Oregon through the Volkswagen (VW) Environmental Mitigation Trust and deposited in the Clean Diesel Engine Fund, to award grants to owners and operators of at least 450 school buses powered by diesel engines. Eligible vehicles include buses that have at least three years of remaining useful life. Grants will be available for 30%, up to $50,000, for the purchase of a new bus or up to 100% of the cost to retrofit a school bus with emissions-reducing parts or technology that reduce diesel particulate matter emissions by at least 85%. Any money not expended under this Clean Diesel Engine Fund will fund grants for the reduction of diesel engine emissions as matching funds under the Diesel Emissions Reduction Act program. For more information, see the VW Settlement website.
(Reference Oregon Revised Statutes 468A.795-468A.807)
Pollution Control Equipment Exemption
Dedicated original equipment manufacturer natural gas vehicles and all-electric vehicles are not required to be equipped with a certified pollution control system.
(Reference Oregon Revised Statutes 815.300)
More Laws and Incentives
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