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INFLATION REDUCTION ACT: INCENTIVES FOR ALTERNATIVE FUELS

Guest Blog by Alex Schay, NW Alliance for Clean Transportation


The Inflation Reduction Act (IRA) contains numerous incentives for alternative fuels, including both Conventional and Renewable Natural Gas (CNG & RNG). This week’s article explores the multitude of ways in which the IRA attempts to expedite our transition to alternative fuels.


For starters, the IRA extends fleets’ use of the Alternative Fuels Tax Credit (AFTC) through 2024. Both CNG and RNG are eligible for the AFTC, and this credit earns fleets $0.50 for every gasoline gallon equivalent (GGE) that is used as transportation fuel. To learn more, click here.


The Alternative Fuel Refueling Tax Credit can offer fleets as much as a $100,000 reduction in the cost of building a CNG/RNG-fueling station. To learn more, click here.

Recent conversations with the US Forest Service Region #6 revealed that the IRA will cover the cost of hauling biomass for a period of two to five years. We expect the RFP to be issued in early October, and applicants will have 30 days to respond.


The IRA’s new Clean Fuel Production Tax Credit is a technology-neutral tax credit designed to support the production of low-emissions transportation fuel and would apply to transportation fuel produced and sold in 2025, 2026 and 2027. To qualify, the fuel must achieve a GHG reduction of approximately 40 percent when compared to diesel. To learn more, click here.


These are a few of the ways in which the IRA attempts to expedite our transition to alternative fuels, including CNG and RNG. Should you have additional questions about use of CNG and RNG as transportation fuel, please do not hesitate to contact Alex Schay, Director – Membership Services, at the NW Alliance for Clean Transportation. Alex may be reached by phone at: (503) 460-9502, or via e-mail at: aschay@nwalliance.net.

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