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APGA Offers Input on Natural Gas Vehicles Tax Credits

By Stuart Saulters posted 06-15-2023 11:01 AM

  
Public gas utilities have long supported the use of natural gas in transportation.  APGA members adopted a policy resolution in 2008 and since then, have been advocating for policies that support more use of natural gas vehicles (NGVs).  Unfortunately, the Inflation Reduction Act (IRA) amended vehicle tax credits that could limit the use of natural gas as a qualifying vehicle fuel.  APGA strongly believes natural gas can achieve the goal identified by the Internal Revenue Service (IRS) in their request for comments, especially to “achieve significant carbon emissions reductions.” Data shows NGVs are 90% cleaner than the Environmental Protection Agency’s (EPA) current nitrogen oxides (NOx) standard and emit up to 21% fewer greenhouse gas (GHG) emissions than a comparable gasoline or diesel vehicle.  With renewable natural gas (RNG), which is created from agricultural waste, landfills, and wastewater treatment plants, GHG emissions can be reduced by up to 382%.  
 
The language in the IRA very narrowly defines what qualifies for funding as “new clean vehicles” under Section 30D of the internal revenue code. APGA is disappointed that Congress chose that one of the eight requirements is “the motor vehicle must be propelled to a significant extent by an electric motor which draws electricity from a battery that has a capacity of not less than 7 kilowatt hours, and is capable of being recharged from an external source of electricity.” This decision greatly limits eligible technologies, picking winners and losers by considering only emissions reductions at the tailpipe versus lifecycle impacts of the energy. While it seems hydrogen-fueled technologies meet the narrow definitions of Section 30D, NGVs and other technologies fueled by conventional natural gas or RNG do not, despite their potential to result in significant, or even net negative, emissions reductions. 
 
When defining vehicle fuel policies, APGA commented that there must be comparative consideration of affordability, environmental benefit, energy security, and reliability to ensure responsible use of American taxpayer dollars.  To see the comments, click here.
 
APGA will continue to engage in conversations on NGVs in both the legislative and regulatory spaces, ensuring this lower emission option is allowed to be a transportation choice. 

For questions on this article, please contact Stuart Saulters of APGA staff by phone at 202-544-1334 or by email at ssaulters@apga.org.     

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