Hawaii Laws and Incentives

Listed below are the summaries of all current Hawaii laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

Renewable Fuels Production Incentive

Renewable fuels produced from renewable feedstocks, such as ethanol, hydrogen, biodiesel, and biofuel, may qualify for an income tax credit equal to $0.20 per 76,000 British thermal units (BTUs) of renewable fuels sold for distribution in Hawaii. The facility must produce at least 15 billion BTUs of its nameplate capacity annually to receive the tax credit and may claim the tax credit for up to five years, not to exceed $3,000,000 per calendar year. Qualifying renewable fuel production facilities must provide written notification of their intent to produce renewable fuels before becoming eligible for the tax credit.

Producers must file a statement with the Department of Business, Economic Development, and Tourism within 30 days following the close of the calendar year. The statement must provide information on fuels produced and sold during the previous calendar year, the feedstock used for each qualified fuel, the proposed income tax credit amount for each calendar year, the cumulative tax credit amount received during the current calendar year, the number of full- and part-time employees, and the number and location of all renewable fuel production facilities within and outside of the state.

Additional restrictions apply. (Reference House Bill 1044, 2017, and Hawaii Revised Statutes 235-110.31)

Plug-In Electric Vehicle (PEV) High Occupancy Vehicle (HOV) Lane and Parking Fee Exemptions

Qualified PEVs affixed with special state-issued PEV license plates may use HOV lanes regardless of the number of passengers and are exempt from parking fees charged by any state or county authority. PEVs displaying state PEV license plates are also exempt from parking fees, except when parked at a meter for more than 2.5 hours or the maximum time allowed to park, whichever is longer. Parking fee exemptions do not apply to parking fees assessed in increments longer than 24 hours, including weekly, monthly, and annual parking permits. The exemptions are effective through June 30, 2020, or until September 30, 2019, if federal authorization for HOV lane access expires. (Reference Hawaii Acts 168)

Utility/Private Incentives

All-Electric Vehicle (EV) Rebate - Kauai Island Utility Cooperative (KIUC)

KIUC customers and employees are eligible for a $10,000 rebate for the purchase of a new 2017 Nissan Leaf at participating dealerships. Rebates are available through September 30, 2017, or until funds are exhausted. For more information, see the KIUC Nissan Leaf Rebate Flyer.

Plug-In Electric Vehicle (PEV) Charging Rate Incentive - Hawaiian Electric Company

Hawaiian Electric Company and its subsidiaries, Maui Electric Company and Hawaii Electric Light Company, offer time-of-use rates for residential and commercial customers with PEVs and electric vehicle supply equipment. The pilot rates are available to customers on Oahu, in Maui County, and on the Island of Hawaii. For more information, see the Hawaiian Electric Company EVs website.

Laws and Regulations

Public Utility Definition Exemption

An entity that owns, controls, operates, or manages a plant or facility primarily used to charge or discharge a vehicle battery that provides power for vehicle propulsion is not defined as a public utility. (Reference Hawaii Revised Statutes 269-1)

Plug-In Electric Vehicle (PEV) Parking Requirement

All parking facilities that are available for use by the general public and include at least 100 parking spaces must designate at least one parking space specifically for PEVs, provided that no parking spaces required by the Americans with Disabilities Act Accessibility Guidelines are reduced or displaced. Spaces must be clearly marked and equipped with electric vehicle supply equipment (EVSE). An owner of multiple parking lots may designate and install EVSE in fewer parking spaces than required in one or more parking lots, as long as the owner meets the requirement for total number of aggregate spaces for all parking lots. A fee of $50-100 applies for non-PEVs that park in spaces designated for PEVs. (Reference Hawaii Revised Statutes 291-71 and 291-72)

Electric Vehicle Supply Equipment (EVSE) Requirements

A multi-family residential dwelling or townhouse owner may install EVSE on or near a parking stall at the dwelling as long as the EVSE is in compliance with applicable rules and specifications, the EVSE is registered with the private entity within 30 days of installation, and the homeowner receives consent from the private entity if the EVSE is placed in a common area. Private entities may adopt rules that restrict the placement and use of EVSE but may not charge a fee for the placement. The EVSE owner is responsible for any damages resulting from the installation, maintenance, repair, removal, or replacement of the EVSE. A private entity includes associations of homeowners, community associations, condominium associations, and cooperatives.

A working group within the Hawaii Department of Business, Economic Development, and Tourism identified and examined the issues regarding multi-family dwelling EVSE requests to private entities. The group reported its findings and recommendations to the state legislature in December 2015.

(Reference Hawaii Revised Statutes 196-7.5)

Alternative Fuel Standard Development

The state of Hawaii is responsible for facilitating the development of alternative fuels and supporting the attainment of a statewide alternative fuels standard. According to this standard, alternative fuels will provide 20% of highway fuel demand by 2020 and 30% by 2030. For the purposes of the alternative fuels standard, cellulosic ethanol is equivalent to 2.5 gallons of non-cellulosic ethanol. (Reference Hawaii Revised Statutes 196-42)

Alternative Fuel and Advanced Vehicle Acquisition Requirements

State and county agencies must purchase light-duty vehicles that reduce petroleum consumption and meet the needs of the agency. The priority to be used for purchasing such vehicles is as follows:

  1. Plug-in electric vehicles;
  2. Hydrogen or fuel cell vehicles;
  3. Other alternative fuel vehicles;
  4. Hybrid electric vehicles; and
  5. Vehicles identified as top performers for fuel economy in the U.S. Environmental Protection Agency's annual "Fuel Economy Leaders" report.

Exemptions may apply. State agencies must purchase alternative fuels and ethanol blended gasoline when available, evaluate a purchase preference for biodiesel blends, and promote the efficient operation of vehicles. For the purpose of this requirement, an alternative fuel is defined as an alcohol fuel, an alcohol fuel blend containing at least 85% alcohol, natural gas, liquefied petroleum gas (propane), hydrogen, biodiesel, a biodiesel blend containing at least 20% biodiesel, a fuel derived from biological materials, or electricity generated from off-board energy sources. For more information, see the Hawaii State Energy Office's Vehicle Purchasing Guidelines website. (Reference Hawaii Revised Statutes 103D-412 and 196-9)

Clean Transportation Promotion

The state of Hawaii has signed a memorandum of understanding (MOU) with the U.S. Department of Energy to collaborate to produce 70% of the state's energy needs from energy-efficient and renewable sources by 2030 and 100% of the state's energy needs from energy-efficient and renewable sources by 2045. This effort is part of the Hawaii Clean Energy Initiative. The goals of the partnership include defining the structural transformation required to transition the state to a clean energy-dominated economy; demonstrating and fostering innovation in the use of clean energy, including alternative fuels and advanced vehicle technologies; creating opportunities for the widespread distribution of clean energy benefits; establishing an open learning model for other states and entities to adopt; and building a workforce with cross-cutting skills to support a clean energy economy in the state. For more information, see the MOU and Hawaii Clean Energy Initiative website.

Biofuels Production Land Use Allowance and Exemption

Lands originally zoned as agricultural land use districts may be used for renewable energy production, storage, and distribution, including the production of biofuels. Biofuels production facilities must be integrated with an agricultural activity and may not adversely impact agricultural land and other agricultural uses in the vicinity. Biofuels production facilities include those that produce liquid or gaseous fuels from organic sources such as biomass crops, agricultural residues, food wastes, animal residues and wastes, and oil crops including palm, canola, soybean, and waste cooking oils. Additionally, biofuels production facilities are exempt from subdivision requirements for leases and easements within agricultural land use districts. The exemption from subdivision requirements is effective through July 1, 2020. (Reference Hawaii Revised Statutes 201N-14, 205-2, and 205-4.5)

Idle Reduction Requirement

A vehicle may not idle at a loading zone, parking or service area, route terminal, or other off-street areas, except for the following situations: during adjustment or repair of the engine; during auxiliary equipment operation such as operation of cranes and certain bulk carriers, provided no visible smoke is emitted and the equipment is being used for its intended purpose; during loading and unloading of passengers, not to exceed three minutes; and during engine start-up and cool-down, not to exceed three minutes. (Reference Hawaii Administrative Rules Title 11, Chapter 60.1-34)

Energy Feedstock Program

The Hawaii Department of Agriculture established the Energy Feedstock Program to promote and support the production of energy feedstock development in Hawaii and to establish milestones and objectives for production of energy feedstock in the state to meet its energy requirements. Energy feedstock includes feedstock used to produce biofuels. (Reference Hawaii Revised Statutes 141-9)

Biofuels Procurement Preference

State and county agency contracts awarded for the purchase of diesel fuel must give preference to bids for biofuels or blends of biofuel and petroleum fuel. When purchasing fuel for use in diesel engines, the price preference is $0.05 per gallon of B100. For blends containing both biodiesel and petroleum-based diesel, the preference is applied only to the biodiesel portion of the blend. For the purpose of this requirement, biodiesel is a vegetable oil-based fuel that meets ASTM specification D6751 and biofuel is a fuel from non-petroleum plant- or animal-based sources that can be used for the generation of heat or power. (Reference Hawaii Revised Statutes 103D-1012)

Hydrogen Implementation Working Group

A hydrogen implementation working group, consisting of federal, state, and county agency representatives and industry stakeholders, facilitates the establishment of infrastructure and policies across all state agencies with the goal of promoting the expansion of hydrogen-based energy in Hawaii. The Director of the Hawaii Center for Advanced Transportation Technologies serves as the state Hydrogen Implementation Coordinator (Coordinator). The Coordinator submitted recommendations to the state legislature in 2015. (Reference Hawaii Revised Statutes 206M)

Renewable Hydrogen Program

The Hawaii Department of Business, Economic Development, and Tourism established the Hawaii Renewable Hydrogen Program (Program) to manage the state's transition to a renewable hydrogen economy. A Hydrogen Investment Capital Special Fund was created to provide seed capital for, and venture capital investments in, private sector and federal projects for research, development, testing, and Program implementation. The Program is responsible for designing, implementing, and administering activities including:

  • Strategic partnerships for research, development, testing, and deployment;
  • Demonstration projects, including infrastructure for hydrogen production, hydrogen storage, and fueling hydrogen vehicles;
  • Statewide hydrogen economy public education and outreach;
  • Promotion of Hawaii's renewable hydrogen resources to potential partners and investors;
  • A plan, for implementation during 2010 to 2020, to transition the Island of Hawaii to a hydrogen-fueled economy and to extend the application of the plan throughout the state; and
  • Evaluation of policy recommendations that will encourage the adoption of hydrogen vehicles, fund the Hydrogen Investment Capital Special Fund, and support investment in hydrogen infrastructure.

(Reference Hawaii Revised Statutes 196-10 and 211F-5.7)

Alternative Fuel Tax Rate

A distributor of any alternative fuel used to operate an internal combustion engine must pay a license tax of $0.0025 for each gallon of alternative fuel the distributor sells or uses. In addition, a distributor must pay a license tax for each gallon of fuel sold or used by the distributor for operating a motor vehicle on state public highways according to the following rates:

Fuel TypeTax
Ethanol0.145 times the rate for diesel
Methanol0.11 times the rate for diesel
Biodiesel0.25 times the rate for diesel
Propane0.33 times the rate for diesel

For other alternative fuels, the rate is based on the energy content of the fuels as compared to diesel fuel, using a lower heating value of 130,000 British thermal units per gallon as a standard for diesel, so that the tax rate, on an energy content basis, is equal to one-quarter the rate for diesel fuel. Counties may impose additional taxes. (Reference Hawaii Revised Statutes 243-4 and 243-5)

Neighborhood Electric Vehicle (NEV) Access to Roadways

An NEV may operate at speeds of up to 25 miles per hour (mph) and is only permitted on roadways with speed limits of 25 mph or less. An NEV must have a notice of the operational restrictions pertaining to the vehicle permanently attached to, or painted on, the vehicle in a location that is in clear view of the driver. An NEV is a four-wheeled self-propelled electrically-powered motor vehicle that produces no emissions, has a gross vehicle weight rating of less than 3,000 pounds, and conforms to the minimum safety equipment requirements in Title 49 of the Code of Federal Regulations, section 571.500. (Reference Hawaii Revised Statutes 286-2, 286-41, and 291C-134)

High Efficiency Taxi Incentive Request

The Hawaii Senate requests that the Hawaii Department of Transportation adopt rules to encourage the use of high-efficiency vehicles, including hybrid electric vehicles, for taxis at Honolulu International Airport. The Hawaii Senate requests that the rules include incentives such as the establishment of a separate taxi stand for high-efficiency vehicles. (Reference Senate Resolution 144, 2013)