Grants and Incentives

Numerous federal and state grant opportunities exist to assist fleets in transitioning to the pure power of natural gas. Some programs are limited to government entities, but many also include funding for private fleets and even individual consumers.

Alternative Fuels Tax Credit

Administered by the U.S. Internal Revenue Service.

The Alternative Fuels Tax Credit §§ 6426, 6427 provides an incentive for compressed natural gas (CNG), liquefied natural gas (LNG), and liquified hydrogen when used as a fuel in a “motor vehicle or motorboat or in aviation.” The 50-cent incentive is provided to businesses, individuals, and tax-exempt entities that sell or, in some cases, use the fuel.

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CMAQ

U.S. Department of Transportation, Federal Highway Administration. Administered by states.

The Congestion Mitigation and Air Quality Improvement (CMAQ) program provides a funding source for state and local governments to fund transportation projects and programs to help meet the requirements of the Clean Air Act (CAA) and its amendments and is codified at 23 USC Sec 149. CMAQ funds support state- and locally-selected transportation projects that reduce mobile source emissions in both current and former areas designated by the U.S. EPA to be in nonattainment or maintenance of the national ambient air quality standards for ozone, carbon monoxide, and/or particulate matter.

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DERA

U.S. Environmental Protection Agency. Administered through national grants and rebates and by states, tribal governments, and port authorities.

The Diesel Emissions Reduction Act (DERA) Program funds grants and rebates that protect human health and improve air quality by reducing harmful emissions from diesel engines.

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Clean School Bus

U.S. Environmental Protection Agency. Administered through national grants.

With funding from the Bipartisan Infrastructure Law, the EPA’s Clean School Bus (CSB) Program provides $5 billion over five years (FY 2022-2026) to replace existing school buses with zero-emission and low-emission models. Natural gas qualifies for some competitive funding.

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Transit – Clean Fuels Grant Program

U.S. Department of Transportation, Federal Transit Administration. Administered through national grants.

The Clean Fuels Grant Program was developed to assist nonattainment and maintenance areas in achieving or maintaining the National Ambient Air Quality Standards for ozone and carbon monoxide (CO) and to support emerging clean fuel and advanced propulsion technologies for transit buses and markets for those technologies.

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Transit – Low or No Emission Grant Program

U.S. Department of Transportation, Federal Transit Administration. Administered through national grants.

The Low or No Emission competitive program provides funding to state and local governmental authorities for the purchase or lease of zero-emission and low-emission transit buses as well as acquisition, construction, and leasing of required supporting facilities. Eligible applicants include direct or designated recipients of FTA grants; States; local governmental authorities; and Indian Tribes.

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ARPA-E

U.S. Department of Energy, Advanced Research Projects Agency – Energy.

The Advanced Research Projects Agency-Energy advances high-potential, high-impact energy technologies that are too early for private-sector investment. ARPA-E awardees are unique because they are developing entirely new ways to generate, store, and use energy. ARPA-E issues periodic Funding Opportunity Announcements (FOAs), which are focused on overcoming specific technical barriers around a specific energy area. ARPA-E also issues periodic OPEN FOAs to identify high-potential projects that address the full range of energy-related technologies, as well as funding solicitations aimed at supporting America’s small business innovators.

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State incentives

In addition to these federal programs, many states administer regular grant programs intended to encourage the expanded use of alternative fuel vehicles, including natural gas and hydrogen.

Helpful links

CA – Carl Moyer Memorial Air Quality Standards Attainment Program

CO – Clean Fleet Vehicle & Technology Program

OK – Credit for Investment in Clean-Burning Motor Vehicle Fuel Property

PA – Alternative Fuels Incentive Grants

TX – Texas Emissions Reduction Plan

The U.S. Department of Energy’s Clean Cities Program has a searchable database of ongoing state incentive programs.

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The Transport Project publicizes for members new grant opportunities in our regular newsletters and SGAC updates. Be sure to sign up for inclusion with appropriate staff.

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