New Jersey Laws and Incentives

Listed below are the summaries of all current New Jersey 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

Zero Emissions Vehicle (ZEV) Tax Exemption

ZEVs sold, rented, or leased in New Jersey are exempt from state sales and use tax. This exemption is not applicable to partial ZEVs, including hybrid electric vehicles. ZEVs are defined as vehicles that meet California Air Resources Board zero emissions standards for that model year. For a list of qualifying ZEVs certified as such, see the New Jersey Department of the Treasury ZEV Sales Tax Exemption website. (Reference New Jersey Statutes 54:32B-8.55)

Point of Contact
Rob Schell
Environmental Specialist 4
New Jersey Department of Environmental Protection
Phone: (609) 292-7953
rob.schell@dep.nj.gov

High Occupancy Vehicle (HOV) Lane Exemption and Discount

New Jersey Turnpike Authority (Authority) allows qualified hybrid electric vehicles to travel in the HOV lanes located between Interchange 11 and Interchange 14 on the New Jersey Turnpike. The Authority offers a 10% discount on off-peak New Jersey Turnpike and Garden State Parkway toll rates through NJ EZ-Pass for drivers of vehicles that have a fuel economy of 45 miles per gallon or higher and meet the California Super Ultra Low Emission Vehicle standard. This exemption expires September 30, 2019. For more information and discount requirements, see the Authority Toll Rates website. (Reference New Jersey Administrative Code 19:9-1.24)

Plug-In Electric Vehicle (PEV) Toll Discount Program

Vehicles eligible for the New York Clean Pass Program, including PEVs and hybrid electric vehicles, receive a discounted toll rate on all Port Authority of New York and New Jersey off-peak hour crossings. Vehicles must register with E-ZPass New York. This exemption expires September 30, 2019. For more information, including a complete list of eligible vehicles and application instructions, see the Green Pass Discount Plan website.

Clean Truck Replacement Program

The Regional Truck Replacement Program (Program) through the Port Authority of New York & New Jersey provides funding for up to 50% of the cost to replace a heavily emitting truck, up to $25,000. Eligible recipients include independent owner operators and licensed motor carriers servicing the port with drayage trucks equipped with Model Year 1994 to 2006 engines. Funding is limited to two replacement trucks per eligible applicant. Additional rules and conditions apply. For more information, see the Program website.

Reduced Propane Fuel Tax

The tax imposed on liquefied petroleum gas, or propane, used to operate a motor vehicle is equal to half the tax paid on the sale or use of gasoline, or $0.0525 per gallon. (Reference New Jersey Statutes 54:39-103)

Workplace Electric Vehicle Supply Equipment (EVSE) Grants

The New Jersey Department of Environmental Protection and New Jersey Board of Public Utilities provide grants through the It Pay$ to Plug In: NJ's Electric Vehicle Workplace Charging Grant Program (the Program) to support plug-in electric vehicle and EVSE adoption. Reimbursement grants are offered on a first-come, first-served basis for the cost and installation of eligible EVSE at workplaces, government and educational facilities, non-profits, and parking facilities. Funding up to $250 is available for each Level 1 EVSE installed and up to $5,000 for each Level 2 EVSE installed. The Program is part of New Jersey's Energy Master Plan. Funding for this program is not currently available (verified January 2017). For more information, including application and eligibility requirements, visit the Drive Green NJ website.

Point of Contact
Brittany Pfeiffer
Bureau of Mobile Sources
New Jersey Department of Environmental Protection
Phone: (609) 292-7953
DriveGreen@dep.nj.gov

Utility/Private Incentives

Workplace Electric Vehicle Supply Equipment (EVSE) Program - PSE&G

Public Service Electric & Gas Company (PSE&G) provides free EVSE to companies in their service territory for the purpose of workplace charging. EVSE is available on a first-come, first-served basis to companies that secure a commitment from at least five employees who will use a plug-in electric vehicle for their commute. PSE&G will own the EVSE and collect usage data. For more information, see the PSE&G website.

All-Electric Vehicle (EV) Rebate - PSE&G

Public Service Electric and Gas Company (PSE&G) customers are eligible for a $10,000 rebate for the purchase of a new 2017 Nissan Leaf at participating dealerships. Rebates are available through December 31, 2017, or until funds are exhausted. For more information, see the PSE&G Nissan Leaf Rebate Flyer.

Laws and Regulations

Alternative Fuel Vehicle (AFV) Access to Tunnels

An AFV powered by propane or natural gas may only use Port Authority of New York and New Jersey tunnels and the lower level of the George Washington Bridge if the vehicle conforms to applicable federal regulations and industry standards, displays required markings to identify its alternative fuel system, and has a fuel capacity that does not exceed 150 pounds. For more information, see the Port Authority of New York and New Jersey Trucker's Resources website.

Alternative Fuel Vehicle (AFV) Access to Brigantine Connector Tunnel

An AFV powered by liquefied petroleum gas (propane) or natural gas may only use the Brigantine Connector Tunnel if the vehicle conforms to applicable federal regulations and industry standards, displays required markings to identify its alternative fuel system, and has a fuel capacity that does not exceed 100 gasoline gallon equivalents. (Reference New Jersey Administrative Code 19:2-4.3)

Fuel Inefficient Vehicle Fee

New passenger vehicles meeting one of the following criteria are subject to an additional fee payable to the New Jersey Motor Vehicle Commission:

  • An U.S. Environmental Protection Agency (EPA) average fuel efficiency economy rating of less than 19 miles per gallon (mpg); or
  • A sales or lease price of $45,000 or more, prior to any credit or offset resulting from any rebate or trade-in.
The fee is 0.4% of the sales or lease price. A vehicle with a sale or lease price greater than $45,000 that has an EPA fuel economy rating of 40 mpg or more, or is a certified zero emission vehicle, is not subject to the fee. The fee applies to new passenger vehicles purchased or leased in or outside of New Jersey.

(Reference New Jersey Statutes 39:3-8.4)

Low Emission Vehicle (LEV) Standards

New Jersey has adopted California motor vehicle emissions standards as set forth in Title 13 of the California Code of Regulations. Under the state's LEV program, the New Jersey Department of Environmental Protection allows manufacturers who sell or lease qualified LEVs to earn and bank vehicle equivalent credits. (Reference New Jersey Administrative Code 7:27-29.1 through 7:27-29.14)

Aftermarket Alternative Fuel Vehicle (AFV) Conversion Requirements

Conventional original equipment manufacturer vehicles altered to operate on propane, natural gas, methane, ethanol, or electricity are classified as aftermarket AFV conversions. All vehicle conversions must meet current applicable U.S. Environmental Protection Agency or California Air Resources Board standards for aftermarket conversions. (Reference New Jersey Department of Environmental Protection Memorandum on Aftermarket Conversion Systems for Alternative Fuels and New Jersey Administrative Code 7:27-29)

Zero Emission Vehicle (ZEV) Sales Regulations

A motor vehicle franchisor that exclusively manufacturers ZEVs and was licensed by the New Jersey Motor Vehicle Commission prior to January 1, 2014, can buy from and sell vehicles to a consumer. The franchisor can own or operate up to four sales locations in the state and must have at least one retail facility for servicing ZEVs sold, offered for sale, or otherwise distributed in the state. The franchisor is not required to establish or operate a sales location at a ZEV service facility. Annually, all motor vehicle franchises must report the number of ZEVs sold in the state within the prior calendar year to the New Jersey Division of Taxation. (Reference Assembly Bill 3216, 2015, and New Jersey Statutes C.56:10-27.1 and C.54:32B-8.55a )

Biofuels Promotion

The New Jersey Assembly urges the U.S. Congress to maintain the federal Renewable Fuels Standard, which will increase the production of domestic renewable fuel, enhance consumer choice, improve the economy, increase national security, and improve the environment. (Reference Assembly Resolution 167, 2013)

Biodiesel and Renewable Diesel Definitions

Biodiesel is defined as the monoalkyl esters of long chain fatty acids derived from plant or animals that meet the registration requirements for fuels and fuel additives established in Section 211 of the Clean Air Act, Title 42 of the U.S. Code of Federal Regulations, section 7545, and the requirements of ASTM D6751.

Renewable diesel is defined as diesel fuel derived from biomass using a thermal depolymerization process that meets the registration requirements for fuels and fuel additives established in Section 211 of the Clean Air Act, Title 42 of the U.S. Code of Federal Regulations, section 7545, and the requirements of ASTM D975 or D396.

(Reference Senate Bill 2599, 2015, and New Jersey Statutes 54:39-101)

Clean Truck Port Requirements

Port drayage trucks with Model Year (MY) 1993 and older engines are not authorized to access the Port Authority of New York & New Jersey (PANYNJ) marine terminals. Beginning January 1, 2017, only trucks equipped with engines that meet or exceed MY 2007 engine federal emissions standards will be allowed to access the terminals. Drayage trucks operating on liquefied or compressed natural gas, electricity, or hybrid electric technology are exempt from these requirements. For purposes of this rule, drayage trucks are defined as on-road vehicles with a gross vehicle weight rating of 33,001 pounds or greater and intended to load, unload, or transport cargo from PANYNJ terminals. Additional rules apply. For more information, see the PANYNJ website.

Biofuel Use Requirements

To reduce fossil fuel dependence and statewide greenhouse gas emissions, New Jersey state departments, agencies, offices, universities, and colleges must purchase biofuels for use in motor vehicles if the cost of biofuel is the same or less than the cost of gasoline or diesel, and if the fuel replacement is reasonable. For the purpose of this regulation, a biofuel is a liquid or gaseous fuel produced from organic sources, including native noninvasive energy crops, agricultural residues, and non-recycled organic waste, such as waste cooking oil, grease, food wastes, sewage, and algae. (Reference New Jersey Statutes 52:34-6.6-6.8)

Low Emission or Alternative Fuel Bus Acquisition Requirement

All buses purchased by the New Jersey Transit Corporation (NJTC) must be: 1) equipped with improved pollution controls that reduce particulate emissions; or 2) powered by a fuel other than conventional diesel. Qualifying vehicles include compressed natural gas vehicles, hybrid electric vehicles, fuel cell vehicles, vehicles operating on biodiesel or ultra-low sulfur fuel, or vehicles operating on any other bus fuel approved by the U.S. Environmental Protection Agency. If the NJTC is unable to meet the bus purchase requirement, the organization must submit a report to the New Jersey Senate and General Assembly detailing the reasons and the state legislature may grant an exemption. (Reference New Jersey Statutes 27:1B-22)

Idle Reduction Requirement

A gasoline-fueled motor vehicle is not allowed to operate for more than three consecutive minutes when the vehicle is not in motion, with the following exceptions: 1) a vehicle stopped in a line of traffic; 2) a vehicle being inspected by a state or federal motor vehicle inspector; 3) an emergency vehicle operating in an emergency situation; 4) a vehicle being repaired or serviced; 5) a vehicle whose primary or secondary power source is used for a mechanical operation other than propulsion; and 6) a vehicle parked in a non-residentially zoned area with a sleeper berth being used for sleeping or resting. A gasoline bus loading or unloading passengers may idle for 15 consecutive minutes in a 60-minute period.

A diesel-fueled motor vehicle is not allowed to operate for more than three consecutive minutes when the vehicle is not in motion. If the vehicle is not in a parking space equipped with idle reduction electrification technology, the following exceptions apply: 1) a vehicle stopped in a line of traffic; 2) a vehicle whose primary power source is used for a mechanical operation other than propulsion; 3) a vehicle being inspected by a state or federal motor vehicle inspector; 4) an emergency vehicle operating in an emergency situation; 5) a vehicle being repaired or serviced; 6) a vehicle with a sleeper berth that is equipped with a Model Year 2007 or newer engine and/or a functioning diesel particulate filter; and 7) a vehicle that uses a technology designed to reduce engine idling, such as auxiliary or alternate power units, generator sets, or bunk heaters. Additionally, diesel vehicles may idle for 15 consecutive minutes when the vehicle's engine has been stopped for at least three hours if the temperature is below 25 degrees Fahrenheit, and a diesel bus loading or unloading passengers may idle for 15 consecutive minutes in a 60-minute period. Violators will be issued fines.

(Reference New Jersey Administrative Code 7:27-14.3 and 7:27-15.8)

Low-Speed Vehicle Access to Roadways

A low-speed vehicle is defined as a four-wheeled vehicle that is capable of achieving speeds of up to 20 miles per hour (mph) but not more than 25 mph on a paved surface, is not powered by gas or diesel fuel, and complies with federal safety standards as noted in Title 49 of the U.S. Code of Federal Regulations, section 571.500. A low-speed vehicle may operate on roadways with posted speed of up to 25 mph, or up to 35 mph in a municipality or county that has received a special ordinance or resolution. Additional registration and other requirements apply. (Reference New Jersey Statutes 39:4-31.1 through 39:4-31.2)

Emissions Reduction Requirements

Recognizing the impact of carbon-emitting fuels on climate change and to foster economic growth in the state by spurring technological innovation, New Jersey established greenhouse gas (GHG) emissions reduction targets. These targets include stabilization of GHG emissions to 1990 levels by the year 2020 and reduction of GHG emissions to 80% below 2006 levels by 2050. To reach this goal, the New Jersey Department of Treasury will develop specific targets and strategies for reducing GHG emissions by reducing the state motor fleet's fuel consumption. (Reference Executive Order 54, 2007)