Incentives, Grants and Tax Credits: Helping Drive the Adoption of NGVs

As natural gas becomes an increasingly viable alternative to gasoline or diesel in fleet transportation, more countries around the world are offering natural gas vehicle (NGV) tax credits, grants and incentives, enabling a more affordable transition for fleet managers and individuals. These measures are offered by governments - many at the state or provincial levels – as well as by non-governmental agencies. 

In Sweden, the government recently announced the extension of an incentive until 2016 whereby company car buyers receive a 40 per cent reduced tax rate. This makes the cost of NGVs competitive with gasoline or diesel-powered vehicles in that country.

According to the U.S. Department of Energy (DOE), in recent years, state incentives, including tax credits, grants, and rebates, have supported the deployment of natural gas vehicles and the associated infrastructure. In addition, certain state laws and regulations, such as fleet acquisition requirements, have increased the number of NGVs on the road.

The DOE’s Alternative Fuels Data Center offers a database which allows users to search for natural gas laws and incentives in every state. In addition, the advanced search narrows the parameters even further. Also, the page called   Incentive and Law Additions by Fuel and Technology Type, allows visitors to select specific fuel types and view natural gas incentives and laws according to a specific fuel.

In 2012 alone, over 35 new incentives and laws related to natural gas were added to the database.

In Pennsylvania, the Department of Environmental Protection is leading the Natural Gas Vehicle Program, which was recently widely reported in the media.  The Alternative Fuels Incentive Grant program is currently offering an estimated $10 million in grants. It offers:

An opportunity to propose projects which will convert or purchase natural gas vehicles weighing less than 14,000 pounds as well as convert or purchase electric, propane, or other alternative fuel vehicles of any size.

Pennsylvania is joined by several other states in offering financial incentives to invest in NGVs: Maryland, New York, Wisconsin, Colorado, California, Texas, Oklahoma, Louisiana and West Virginia are a few states which also offer programs. Some states, like Texas, offer programs which cover up to 80 per cent of the incremental cost of an NGV; others like California, offer various programs which open periodically when funds are available.

Keith Leech, fleet manager with the City of Sacramento is also the area’s Clean Cities coordinator and chairman. He says the Federal alternative fuel excise tax credit of 50 cents per gallon has enabled his city to double its natural gas fuel infrastructure.

“I’m not sure we could have done it without it,” Leech says.

The City of Sacramento currently operates 100 liquefied natural gas (LNG) refuse trucks with four LNG dispensers.

“We’ve been running natural gas garbage trucks for over 10 years and it’s going great,” he says.

His city also just received a $600,000 grant from the California Energy Commission and he says the number of public fueling stations is also increasing.

In Canada, British Columbia’s FortisBC, the largest investor-owned distribution utility in Canada, has initiated the FORTIS Natural Gas for Transport Incentive Program: they offer incentives for heavy, medium and light duty vehicles.  The government of BC has also recently extended its Clean Energy Vehicles for BC program, which includes incentives for CNG vehicles.

In China, the government has long supported natural gas vehicles by offering incentives at the local and central levels. Since 2006, the country has offered a range of programs aimed at promoting natural gas-based clean transportation for the purpose of reducing emissions, saving energy and ensuring national energy security.

For current information about incentives near you, visit Westport’s new incentives chart: http://www.westport.com/products/engines/15/tax-credits-and-incentives.

Have you been successful in receiving a grant or tax incentive? Tell us about it!

NGVs in China – Want one? Buy a lotto ticket

Imagine having to enter a lottery to get access to a natural gas vehicle (NGV). That’s the situation in regions of China where demand is so high that names are drawn to determine who gets to convert their vehicles first.

“Last month in Hefei, capital of Anhui province, the local traffic administration held a lottery to select 3,000 cars - mostly privately owned - from more than 6,000 owners who want to use natural gas as an alternative fuel,” a March 11 article from the People’s Daily Online stated.

Husayn Anwar, President of Westport China, says lotteries are becoming more common in central China, where drivers of personal vehicles are eagerly looking to save money on fuel. He says it’s now common throughout the country for taxis to run on natural gas, and for buses it’s a “must-have.” The savings drivers get from switching are significant since natural gas is 50-70 per cent less than the price of gasoline and a third the price of diesel.

A Forbes article states that in the Southwest city of Chongqing, 85 per cent of taxis and 92 per cent of buses are using a natural gas engine. The rising choice of natural gas over gasoline and diesel is in no small part due to China’s government policy encouraging the switch. According to a Reuters article titled, China's natural gas drive may cut oil demand by a tenth, there is a Beijing-coordinated campaign to fuel more vehicles with natural gas to reduce oil imports and coal dependency.

The cost savings and the availability of fueling stations has translated into nearly 1.5 million natural gas vehicles on the road.

Anwar says that by 2015, there will be around 5,000 natural gas fueling stations across China, half with LNG capability. There are still some challenges due to what he describes as a market that is “too competitive.”

Good technologies are getting priced-out, especially in the smaller vehicle market, he says. Societal status pressures are also affecting sales. “On the coast, NGVs are seen as the poor man’s vehicle, so uptake has been slower.” 

The market is transforming rapidly and factors affecting it today will be moot in the near future.

“From economic, environmental and energy security perspectives it all makes sense,” Anwar says, “NGVs are now a force to be contended with.”

Which is why in central China, many drivers are buying tickets to win the NGV lotto.

Related reading:
http://thetyee.ca/News/2012/11/26/China-Cleantech-Series-One/

Fleets of Natural Gas Vehicles – Conversion Report

We’re seeing more and more headlines about entire city fleets switching to natural gas as transportation fuel, and the cost-savings they expect thanks to the adopting natural gas engines. Here’s a round-up of some of the latest conversions:

Trussville, Alabama: Earlier this week, Mayor Gene Melton announced that the city’s police car fleet will now run on compressed natural gas (CNG). He estimates savings of approximately $17,000/year per vehicle. Trussville began using CNG vehicles three years ago, and also operate the city dump trucks on CNG.

Canton, Ohio: In May, the Stark Area Regional Transit Authority rolled out its first six CNG buses. The SARTA Executive Director suggests savings of ‘hundreds of thousands of dollars’ in fuel costs per year. By the end of August SARTA expects that 23 of its 85 buses will run on CNG. By 2013 it expects to have eight 40-foot buses, ten 35-foot buses and 32 smaller paratransit buses that will all run on CNG.

Chesapeake, Virginia: The city recently announced that it is planning to convert its fleet of Class 8 solid waste collection trucks from diesel fuel to CNG.

Thomasville, Georgia: The city council has an eye to convert its fleet vehicles to run on CNG where appropriate, and has already approved the construction of a CNT time-fill station. The City plans to purchase four CNG-fueled refuse trucks in the near future, and to convert all 12 of its refuse trucks to CNG during the next three years. Thomasville says it will save $200,000 annually in fuel costs, along with the benefits of reduced emissions and dependence on foreign oil.

Washburn, Wisconsin: Bayfield County purchased five CNG vehicles to be used by various departments. The public grand opening for the Washburn CNG fueling station took place on May 31, 2012.


The adoption of natural gas vehicles by municipalities demonstrates that not only do NGVs offer better fuel cost-savings, but they also produce fewer emissions which is better for the communities being served.