December 25, 2020. The Alternative Fuels Tax Credit (AFTC) was included in a combined year-end FY 2021 Omnibus spending and Covid-19 stimulus package passed by U.S. Congress. The legislation extends the $0.50 fuel credit/payment for the use of natural gas as a transportation fuel, and the Alternative Fuel Vehicle Refueling Property Credit, which extends the 30 percent/$30,000 investment tax credit for alternative vehicle refueling property. It also supports the expansion of renewable natural gas (RNG).
“If we want clean air, we need clean trucks and buses,” said NGVAmerica President Daniel Gage. “By extending the AFTC through 2021, Congress signals how important clean technology natural gas vehicles are to growing our economy, improving our air quality, and enhancing our energy security while reducing our carbon footprint.”
“This legislation provides the added needed incentive for fleets of all sizes – public and private – to transition to clean natural gas transportation fuel,” said Gage. “Heavy-duty vehicles are the fastest growing vehicle segment and among the largest contributors of pollutant and greenhouse gas emissions in the transportation sector. Natural gas vehicles are zero emission equivalent and can be carbon-neutral – even negative – depending on the natural gas source.”
“This extension of the tax credit comes at a particularly opportune time as more fleets are realizing the tremendous impact that RNG is having on reducing carbon and the long-term impact it has on climate change,” said Andrew J. Littlefair, president and CEO of Clean Energy. “We applaud Congress and the President for taking this action and encourage the implementation of permanent measures to encourage further use of this superior and clean fuel.”
With this credit, America’s transit agencies can continue to invest in cleaner, commercially available and proven natural gas buses without reducing service or increasing fares, school districts can provide exhaust-free rides to school by replacing their dirty legacy fleets, and freight haulers and package delivery companies can afford to replace aging diesel trucks with the cleanest heavy-duty truck on the market, which runs entirely on natural gas.
The Alternative Fuels Tax Credit was last extended last year for the 2018, 2019, and 2020 calendar years and applies to all classes of natural gas vehicles fueled by geologic and renewable CNG and LNG. Its continuation is important to provide investment certainty for fleets of all shapes and sizes working to reduce their environmental footprint and address clean air and climate change sustainability goals.
The overall measure awaits President Trump’s signature into law in order to become effective.