Updated: Industry Reacts to Tax Credit Extension for Alternative Fuels

Correction:Two quotes from an earlier article were erroneously included in this piece and have been removed.

The Protecting Americans from Tax Hikes Act of 2015 (PATH) was approved last week by the U.S. Congress and will extend several federal tax credits that expired in 2014. The package includes a two-year extension through the end of 2016 for compressed natural gas (CNG), liquefied natural gas (LNG), and propane autogas. President Obama is expected to sign off on the extensions.

Clean Energy Fuels Corp., based in Newport Beach, Calif., a provider of natural gas fuel for transportation in North America, applauded the passage by the U.S. Congress of the alternative fuel tax credit, which will continue to support the use of natural gas, a cleaner and domestic transportation fuel option.

“The tax credit will support the continued expansion of natural gas fueling in the U.S., which will help to clean our air and keep dollars here,” Andrew Littlefair, president and CEO of Clean Energy, said in a statement. “We applaud Congress for taking this action and encourage the implementation of permanent measures to encourage further use of this superior and cleaner fuel.”

PATH will extend the federal $0.50 per gallon alternative fuels tax credit for compressed natural gas, liquefied natural gas, propane autogas and other alternative transportation fuels. It also would extend the alternative vehicle refueling property subsidy, which provides a tax credit covering up to 30 percent of the cost of infrastructure installation.

Kevin Kraushaar, vice president of government affairs for the National Waste & Recycling Association (NWRA), lauded the move.

"The extension of the tax credit for alternative fuels was a big win for NWRA members and provides additional incentives to continue investments in truck fleets that use cleaner forms of energy," Kraushaar says. "NWRA was successful in securing a number of important tax provisions that will allow our member companies to operate more efficiently and help consumers save money."

Natural gas fuel costs up to $1 less per gallon than gasoline or diesel, depending on local market conditions. The use of natural gas fuel not only reduces operating costs for vehicles, but also reduces greenhouse gas emissions up to 30 percent in light-duty vehicles and 23 percent in medium to heavy-duty vehicles. In addition, nearly all natural gas consumed in North America is produced domestically, according to Clean Energy Fuel’s statement.

Usage of natural gas-powered vehicles has been a major strategy for several years, which is anticipated to continue into 2016, according to industry experts.

According to PATH documents, incentive extensions also were granted to other sources of energy production and conservation, including: