How state and local governments can promote propane use

December 30, 2025 By Gordon Feller 0 Comments

Energy policy is always evolving – whether in response to changing economic pressures, infrastructure challenges or environmental concerns.

The good news is that propane offers a compelling solution across each one of these. It’s proven to have real value in transportation (autogas), backup and distributed power generation, agriculture, commercial heating and operations, and warehousing.

Despite its benefits, adoption remains uneven. State and local governments can play a pivotal role in accelerating the use of propane through targeted policies and programs. This essay outlines five key steps governments can take to promote propane use in the sectors of autogas, power generation, agriculture, commercial operations and warehouses.

1. Create financial incentives and rebates for propane equipment and infrastructure.

One of the most direct ways to promote propane adoption is through financial incentives such as tax credits, purchase rebates, grants and low-interest loans for propane-powered equipment and infrastructure. These incentives can help offset the initial capital cost, which is often a barrier to adoption.

In autogas, this could include rebates for fleet conversions and the installation of fueling infrastructure. States like Texas and Colorado have already piloted successful programs that cover a percentage of the vehicle conversion cost or offer per-gallon fuel incentives.

In agriculture, rebates for propane-powered irrigation engines, grain dryers and flame weeders can incentivize farmers to transition from diesel or gasoline, which often have higher emissions and fuel costs.

For commercial and warehouse operations, financial assistance for retrofitting HVAC systems, installing propane forklifts and backup power units can ease the burden for small and medium businesses. Governments can also structure these programs to prioritize underserved rural or low-income communities, where propane offers energy resilience and grid independence.

2. Implement favorable regulations and streamline permitting processes.

Regulatory clarity and permitting efficiency are critical to expanding propane’s use. State and local governments should review and revise zoning, fire code and environmental regulations that may unintentionally hinder propane deployment.

For example, power generation units such as propane standby generators often face complex permitting, especially in urban or high-fire-risk areas. By streamlining the environmental permitting process and providing clear, propane-specific guidance in fire and building codes, governments can reduce delays and promote adoption.

In warehouses and commercial buildings, propane-powered forklifts and HVAC systems may be limited by indoor air quality regulations. Yet modern propane engines meet or exceed Environmental Protection Agency and Occupational Safety and Health Administration standards for indoor use. Updating these regulations to reflect current technology can remove unnecessary restrictions.

Governments can also provide fast-track permitting for propane refueling stations, distributed generation sites or agricultural equipment upgrades. Reducing bureaucratic friction encourages private investment and helps municipalities adopt propane within their own operations.

3. Integrate propane into state energy and climate plans.

In order to build long-term demand and institutional support, propane must be recognized as part of the broader clean energy mix. State and local governments should formally incorporate propane into their energy and climate resilience plans, especially in roles where electrification may be impractical or cost-prohibitive.

Autogas is a prime example. While electric vehicles receive the bulk of media and policy attention, propane-powered vehicles offer immediate emissions reductions, especially in heavy-use fleets. Propane autogas produces significantly fewer NOx emissions than diesel and is more cost-effective over the vehicle’s lifecycle.

In power generation, propane can be a critical player in microgrids and emergency backup systems, supporting grid resilience during natural disasters or peak demand. States can encourage utilities and critical infrastructure to adopt propane generators as part of resilience planning.

By including propane in climate action frameworks, states affirm environmental and economic value, which can unlock federal funding, private investment and market development.

4. Promote public-private partnerships, workforce development.

A coordinated transition to propane requires collaboration between government, industry and educational institutions. Public-private partnerships can accelerate adoption by leveraging shared resources, pilot projects and mutual interests.

For example, school districts can partner with propane suppliers and vehicle manufacturers to transition their fleets to autogas, as seen in Georgia and Indiana. These programs often reduce fuel and maintenance costs while improving air quality for students.

In the ag sector, partnerships with extension offices, farm bureaus and propane dealers can provide technical training and demonstrations of LPG technologies. Similar outreach can be adapted for commercial and warehouse applications.

State and local governments should also invest in workforce development, funding training programs at vocational schools and community colleges for propane system installation, maintenance and safety. This creates local jobs and ensures the infrastructure to support growing demand.

5. Conduct education and outreach campaigns to raise awareness.

Adoption of propane technologies often suffers from a lack of awareness or misconceptions. Targeted education and outreach campaigns can inform consumers, business owners and policymakers about propane’s benefits.

Governments can sponsor informational webinars, trade show booths and demonstration projects highlighting propane’s cost savings, emissions performance and reliability. Materials should be tailored for each sector:

⦁ Fleet managers need data on total cost of ownership and refueling logistics.

⦁ Farmers should receive comparisons between propane and diesel-powered equipment.

⦁ Warehouse operators may need indoor emissions profiles for forklifts.

⦁ Commercial building owners could benefit from case studies on HVAC and hot water systems powered by propane.

Public sector leadership is also key. When municipalities convert their own fleets, install propane generators at public buildings or adopt propane in parks and recreation maintenance, they signal confidence in the fuel and generate community interest.

In the halls of most state and local governments, propane is now widely seen for what it is: a practical, scalable and environmentally responsible energy solution across all critical domains: autogas, power generation, agriculture, commercial applications and warehouses. Yet, realizing its full potential requires proactive, coordinated action from state and local governments.

Gordon Feller is a Global Fellow: The Smithsonian Institution; a White House appointee of a federal commission advising the U.S. secretary of energy; and an adviser to U.S.-based companies.

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