Congress Extends Alternative Fuel and Infrastructure Tax Credits
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Congress Extends Alternative Fuel and Infrastructure Tax Credits

January 10, 2013, 11:03 am
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January 9, 2013 -  Congress passed the American Taxpayer Relief Act which provided one-year extensions for several tax credits affecting alternative fuels, including those for compressed natural gas (CNG) and liquefied natural gas (LNG).
Specifically, this includes the 50-cent per GGE (Gasoline Gallon Equivalent) alternative-fuel tax credit for CNG, LNG, and propane, and the $30,000 infrastructure tax credit. The tax credits are extended until Dec. 31, 2013 and are retroactive for all of 2012.

The amended bill, now called the "American Taxpayer Relief Act of 2012," contains several extensions outlined in Title IV (Energy Tax Extenders) of the bill. Some of the highlights include:

•    Credit for alternative-fuel vehicle refueling `property extended to December 31, 2013 and retroactive to infrastructure installed after December 31, 2011.

•    Alternative fuels excise tax credits extended to December 31, 2013.

•    Extension and modification of cellulosic biofuel producer credit. The extension now carries through to qualified production beginning before January 1, 2014. Algae is treated as a qualified feedstock. Additionally, the section strikes the term cellulosic biofuel in favor of "second generation biofuel.”

•    Special allowance for cellulosic biofuel plant property extended to January 1, 2014. In addition, algae is treated as a qualified feedstock for such.

This industry is buzzing and according to a recent Fleets & Fuels article, NGVAmerica president Rich Kolodziej discussed what these credits mean for the Natural Gas Vehicle industry. Kolodziej stated,  “For LNG, the fuel tax credit helps compensate for the federal LNG tax penalty. Eliminating that penalty is high on our Congressional agenda for 2013. (The penalty is related to LNG’s lower per-gallon energy content as compared with diesel.) For CNG, the fuel tax credit will increase NGVs’ economic advantage and help accelerate the industry’s ability to displace foreign oil."

A key point in Kolodziej comments is the idea of displacing foreign oil and the implications this could have for the United States’ security, ‘green’ job creation and the significant reduction in greenhouse gasses.  In the California Energy Commission’s Well to Wheels study, it was found that natural gas fuel reduced greenhouse gas emissions by 30% in cars and 23% in medium to heavy-duty vehicles, as compared to their gasoline and diesel counterparts. This all equates to the triple bottom line effect where we can start to realize the social, economic and environmental benefits by shifting from imported crude oil to natural gas derived here in North America.

On January 2nd, Clean Energy's Andrew Littlefair told Fleets & Fuels,  “We are extremely pleased that Congress included the $0.50 per gallon alternative fuel tax credit in the American Taxpayer Relief Act passed yesterday. This will help the acceleration of natural gas as a transportation fuel.”  Littlefair continued, “Hundreds of thousands of vehicles in the U.S. are currently enjoying the environmental and economic benefits of natural gas, an abundant, domestic and cleaner-burning fuel choice.”

With recognition of the staggering abundance and lower cost of natural gas in North America we can further develop its use from power generation and heating homes to fueling consumer vehicles, commercial fleets and all other segments of the transportation industry. Gasoline and crude prices continue to increase, with the national average price for a gallon of regular gasoline hitting $3.60 in 2012, according to AAA’s overview of fuel prices for the year. The states with the highest annual average prices included New York State at $3.90 a gallon whereas CNG is currently $2.59 GGE (Gasoline Gallon Equivalent).


Author: Michael Orgera

Michael Orgera is the Energy Reporter for where his articles focus on energy, clean technologies, and environmental issues. Mr. Orgera studies at Seton Hall University School of Law, and is a Contributing Writer for the law school's online student newspaper, The Cross Examiner. He also studies at Rutgers Business School with a concentration in Finance. Mr. Orgera has previously worked for Philips Lighting North America's Legal Department, Avaya's Intellectual Property Law and Litigation Department, SolarCity, and Clean Energy Fuels Corporation. He can be reached at

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