U.S. Reps. Introduce RNG Tax Credit Bill for Trucks

U.S. Reps. Linda Sanchez (D-California) and Brian Fitzpatrick (R-Pennsylvania) introduced a bill that if passed would provide $1 per gallon tax credit for dispensers of renewable natural gas used for commercial trucks and other motor vehicles for 10 years.

The Renewable Natural Gas Incentive Act of 2023 (H.R. 2448) updates legislation (H.R. 9396) introduced in the 117th Congress in 2022. It was created to encourage commercial truck and transit fleets to convert their vehicles from diesel to zero emission equivalent RNG, or biomethane.

The legislation is supported by the Moving Us Forward coalition, and was applauded by NGVAmerica, a national trade association of experts in the clean transportation.

“Transitioning to renewable natural gas will help us curb the impacts of climate change while providing a cleaner, more affordable fuel option for the industries that keep America moving,” said Congresswoman Sanchez in a press release. “This tax credit will allow transit agencies, school districts, freight haulers, and package delivery companies to replace aging fleets with sustainable alternatives, all without slowing production or increasing costs.”

The tax code currently provides a 50-cent credit for natural gas used in transportation including natural gas from renewable sources.  This credit, however, is less than the credit for renewable biodiesel which has consistently benefited from a $1 a gallon tax credit and is currently only available through 2024, according to the press release.

More About Renewable Natural Gas (RNG) in Trucking

Captured above ground from organic material in agricultural, wastewater, landfill, or food waste, RNG can produce carbon-negative results when fueling on-road vehicles like short- and long-haul trucks, transit buses, and refuse and recycling collection vehicles.

California Air Resources Board data reports the average carbon intensity value of California’s bio-CNG (compressed natural gas) vehicle fuel portfolio in its Low Carbon Fuel Standard (LCFS) program is below zero at -111.7 gCO2e/MJ – the only carbon negative clean transportation fuel in the CA LCFS program, according to NGVAmerica.

In 2021, 64% of all on-road fuel used nationwide in natural gas vehicles was from a renewable source. That number is expected to rise to close to 70% for 2022, according to NGVAmerica.