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Alternative fuel tax credits extended for 2018-20

December 19, 2019 By    

Congress passed H.R. 1865, which will provide the propane industry with prospective tax certainty as well as valuable research and development funding, the National Propane Gas Association (NPGA) announced.

Propane autogas truck photo by Joe McCarthy

Alternative fuel tax credits incentivize the use and adoption of propane as an engine fuel. Photo by Joe McCarthy

NPGA President and CEO Stephen Kaminski says the year-end legislation supports small businesses and energy consumers across the country.

“When Congress and the private sector work together, America wins,” he says. “This legislation will motivate consumers to make smart, green energy decisions, drive the development of modern technology using resilient energy sources such as propane and promote the growth of small businesses.”

H.R. 1865 includes an extension of the alternative fuel tax credit and the refueling property credit, covering the years 2018-20. It was the first time since 2015 that Congress extended the credits prospectively – through Dec. 31, 2020.

The credits – 37 cents per gallon on the sale of propane when used in motor vehicles (including forklifts and lawnmowers) and up to 30 percent of the cost of qualified alternative fuel vehicle refueling property (capped at $30,000) – incentivize the use and adoption of propane as an engine fuel, NPGA says. The propane-powered vehicle credits are worth more than $500 million, putting more clean vehicles on the road and money back into the pockets of consumers, the association adds.

Following Senate passage, H.R. 1865 headed to the White House, where President Donald Trump signed the legislation into law Dec. 20, 2019.

“Congress is sending a clear message to the country that it recognizes propane as a clean and green fuel of the future,” says Kaminski.

NPGA says it will provide guidance to the industry from the U.S. Internal Revenue Service on how to claim the credit retroactively and for 2020.

Rep. John Larson, D-Conn., and Sen. Richard Burr, R-N.C., provided bipartisan and bicameral leadership to advance the policy initiatives, NPGA notes.

Propane project R&D gains

Recognizing the advantages of propane as an independent energy source with wide-ranging applicability, H.R. 1865 also provides funding for U.S. Department of Energy research, development and demonstration projects, including $5 million for propane vehicle engine technology development and access to up to $10 million for propane combined heat and power systems development.

In addition, NPGA says it will continue to advocate for H.R. 5089, the Alternative Fuel Tax Credit Extension Act of 2019, which would extend the alternative fuel tax credit prospectively for several more years.

“Long-term credits give customers and communities certainty, providing the best incentives to increase investment in low-emission, propane-powered vehicles,” Kaminski says. “The association looks forward to working with Congress in the coming years to build on this significant victory and bring value to propane customers across the country.”

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at or 216-706-3748.

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