North Carolina Laws and Incentives

Listed below are the summaries of all current North Carolina 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

Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Support

The Clean Fuel Advanced Technology (CFAT) project provides grant funding to reducing transportation-related emissions in nonattainment and maintenance counties for National Ambient Air Quality Standards. A project that is adjacent to these areas may also be eligible for funding if the project will reduce emissions in eligible counties. The North Carolina Department of Transportation funds the CFAT project, which covers three broad areas: education and outreach; project funding; and recognition of exemplary activities. For 2016-2017 funding cycles, financial support is available for AFVs, fueling infrastructure, idle reduction technologies, vehicle telematics, and diesel retrofits. For more information, including current requests for proposals, see the CFAT website.

Point of Contact
Rick Sapienza
Clean Transportation Program Manager
North Carolina Clean Energy Technology Center, North Carolina State University
Phone: (919) 515-2788
cleantransportation@ncsu.edu
http://nccleantech.ncsu.edu/clean-transportation/

Alternative Fuel and Idle Reduction Grants

The North Carolina Department of Environment and Natural Resources Division of Air Quality provides grants for the incremental cost of original equipment manufacturer alternative fuel vehicles, vehicle conversions, and implementing idle reduction programs. Funding is not currently available for this incentive (verified August 2016). For more information see the Diesel Emission Reductions Grants website.

Point of Contact
Phyllis Jones
Environmental Engineer
North Carolina Department of Environmental Quality
Phone: (919) 707-8424
Fax: (919) 707-8424
phyllis.d.jones@ncdenr.gov

High Occupancy Vehicle (HOV) Lane Exemption

Qualified plug-in electric vehicles, dedicated natural gas vehicles, and fuel cell electric vehicles may use North Carolina HOV lanes, regardless of the number of occupants. This exemption expires September 30, 2019. (Reference North Carolina General Statutes 20-4.01 and 20-146.2)

Plug-In Electric Vehicle (PEV) and Fuel Cell Electric Vehicle (FCEV) Emissions Inspection Exemption

Qualified PEVs and FCEVs are exempt from state emissions inspection requirements. Other restrictions may apply. (Reference North Carolina General Statutes 20-4.01 and 20-183.2)

Alternative Fuel Tax Exemption

The retail sale, use, storage, and consumption of alternative fuels is exempt from the state retail sales and use tax. (Reference North Carolina General Statutes 105-164.13)

Biodiesel Tax Exemption

An individual who produces biodiesel for use in that individual's private passenger vehicle is exempt from the state motor fuel excise tax. (Reference North Carolina General Statutes 105-449.88)

Bond Exemption for Small Biofuels Suppliers

Fuel blenders or suppliers of ethanol or biodiesel are not required to file a bond with the North Carolina Department of Revenue when the expected motor fuel tax liability is less than $2,000. (Reference North Carolina General Statutes 105-449.72)

Alternative Fuel and Alternative Fuel Vehicle (AFV) Fund

The North Carolina State Energy Office administers the Energy Policy Act (EPAct) Credit Banking and Selling Program, which enables the state to generate funds from the sale of EPAct 1992 credits. The funds that EPAct credit sales generate are deposited into the Alternative Fuel Revolving Fund (Fund) for state agencies to offset the incremental costs of purchasing biodiesel blends of at least 20% (B20) or ethanol blends of at least 85% (E85), developing alternative fueling infrastructure, and purchasing AFVs and hybrid electric vehicles. Funds are distributed to state departments, institutions, and agencies in proportion to the number of EPAct credits generated by each. For the purposes of this program, alternative fuels include 100% biodiesel (B100), biodiesel blends of at least B20, ethanol blends of at least E85, compressed natural gas, propane, and electricity. The Fund also covers additional projects approved by the Energy Policy Council. (Reference North Carolina General Statutes 143-58.4, 143-58.5, 143-341, and 136-28.13)

Laws and Regulations

Autonomous Vehicle Regulations and Committee

A fully autonomous vehicle is defined as a vehicle equipped with an automated driving system that will not require an occupant to operate the real-time and tactical control functions of the vehicle at any time.

Effective December 1, 2017, the operator of a fully autonomous vehicle is not required to be licensed to operate a motor vehicle. A person may operate a fully autonomous vehicle if the vehicle:

The North Carolina Department of Transportation (NCDOT) is creating the Fully Autonomous Vehicle Committee to consider matters relevant to autonomous vehicle technology, review state motor vehicle laws, and make recommendations concerning vehicle testing, traffic rules and ordinances, and changes needed to state laws.

(Reference House Bill 469, 2017, and North Carolina General Statutes 20-400 through 20-403)

Alternative Fuels Tax

The state motor fuel tax on liquefied natural gas (LNG) is imposed based on the diesel gallon equivalent (DGE) and the tax on propane and compressed natural gas (CNG) is based on the gasoline gallon equivalent (GGE). For taxation purposes, one GGE of propane and CNG is equal to 5.75 pounds (lbs.) and 5.66 lbs., respectively, and one DGE of LNG is equal to 6.06 lbs. The North Carolina Department of Revenue will determine the equivalent rate for all other non-liquid alternative fuels. Certain exclusions apply. For more information, including current tax rates, see the Motor Fuels Tax Information website. (Reference North Carolina General Statutes 105-449.130 and 105-449.136)

Electric Vehicle (EV) Annual Fee

The owner of an EV that does not rely on a non-electric source of power must pay a fee of $130 in addition to any other required registration fees at the time of initial registration and annual registration renewal. (Reference North Carolina General Statutes 20-87)

State Highway Electric Vehicle Supply Equipment (EVSE) Regulations

The North Carolina Department of Transportation (NCDOT) may install and operate publicly-accessible EVSE at state-owned highway rest stops so long as it has developed a mechanism to charge EVSE users a fee to recover the costs related to electricity consumed, process the user fee, and operate and maintain the EVSE. NCDOT may consult with other state agencies and industry representatives to develop this required cost recovery mechanism. (Reference North Carolina General Statutes 136-18.02)

Ethanol Blend Requirement

Suppliers that import gasoline for sale in North Carolina must offer fuel that is not pre-blended with fuel alcohol but that is suitable for future blending. Future contract provisions that restrict distributors or retailers from blending gasoline with fuel alcohol are void. (Reference North Carolina General Statutes 75-90, 105-449.60)

Ethanol Blend Labeling Requirements

Pumps that dispense ethanol-blended gasoline available for purchase must be labeled with the registered brand name and the volume percentage, or blend level, of the ethanol (10% or less, 10-15%, 15-85% or 85%). The labels must be affixed to the front panel of the pump in a position that is clearly visible to the vehicle driver. Graphics requirements apply. (Reference North Carolina Administrative Code Title 2, Chapter 42, Subchapter .0401 and North Carolina General Statutes 119-27.2)

Biodiesel Warranty Requirement

All new state government diesel vehicles must have a manufacturer's warranty that allows the use of biodiesel blends of 20% (B20) in the vehicle. This requirement does not apply if the North Carolina Department of Administration determines that there is no vehicle available that is suited for the intended use and that has a manufacturer's warranty allowing the use of B20. (Reference North Carolina General Statutes 20-351.11, 136-28.15, and 143-341)

Biodiesel Requirement for School Buses

Every school bus that is capable of operating on diesel fuel must be capable of operating using blends of at least 20% biodiesel (B20). At least 2% of the total volume of fuel purchased annually by local school districts statewide for use in diesel school buses must be a minimum of B20, to the extent that biodiesel blends are available and compatible with the technology of the vehicles and the equipment used. (Reference North Carolina General Statutes 115C-240 and 115C-249)

Fuel-Efficient Vehicle Acquisition Requirements

When purchasing new state vehicles, the North Carolina Department of Administration must give purchase preference to vehicles with fuel economy ratings that rank among the top 15% of comparable vehicles in their class. (Reference North Carolina General Statutes 143-341)

Alternative Fuel Vehicle (AFV) Acquisition Goal

North Carolina established a goal that at least 75% of new or replacement state government light-duty cars and trucks with a gross vehicle weight rating of 8,500 pounds or less must be AFVs or low emission vehicles. (Reference North Carolina General Statutes 143-215.107C)

Alternative Fuel Use and Fuel-Efficient Vehicle Requirements

State-owned vehicle fleets must implement petroleum displacement plans to increase the use of alternative fuels and fuel-efficient vehicles. Reductions may be met by petroleum displaced through the use of biodiesel, ethanol, other alternative fuels, the use of hybrid electric vehicles, other fuel-efficient or low emission vehicles, or additional methods the North Carolina Division of Energy, Mineral and Land Resources approves. (Reference Session Law 2013-265, Section 19.5(a))

School Bus Idle Reduction Requirement

All local boards of education in North Carolina have adopted idle reduction policies prohibiting school buses from idling unnecessarily on school grounds or warming up for longer than five minutes. For more information, including a sample policy and administrative procedure, see the North Carolina School Boards Association Reduced Idling Materials website.

Plug-In Electric Vehicle (PEV) Definition

A PEV is defined as a vehicle that:

  • Draws electricity from a battery with a capacity of at least four kilowatt-hours and is capable of being charged from an external source
  • Has not been modified from the original equipment manufacturer power train specifications
  • Has a gross vehicle weight rating of 8,500 pounds or less
  • Has a maximum speed of at least 65 miles per hour
  • Meets applicable requirements in Title 49 of the U.S. Code of Federal Regulations, section 571.
(Reference North Carolina General Statutes 20-4.01)