Key Federal Legislation

The information below includes a brief chronology and summaries of key federal legislation related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation topics.

Chronology of Federal Legislation

Alternative fuel and fuel economy legislation dates back to the Clean Air Act of 1970, which created initiatives to reduce mobile sources of pollutants. In 1975, the Energy Policy and Conservation Act established Corporate Average Fuel Economy (CAFE) standards and required the distribution of fuel economy information to consumers. To incentivize alternative fuel vehicle development, the Alternative Motor Fuels Act of 1988 established vehicle manufacturer incentives in the form of CAFE credits.

The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) laid the foundation for highway construction and safety programs. Subsequent Surface Transportation Acts include the Transportation Equity Act for the 21st Century (TEA-21) of 1998, and the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), enacted in 2005, the Moving Ahead for Progress in the 21st Century (MAP-21) Act, enacted in 2012, the Fixing America's Surface Transportation (FAST) Act, enacted in 2015, and the Bipartisan Infrastructure Law (BIL), enacted as the Infrastructure Investment and Jobs Act in 2021. Each of these acts authorizes funds for highway construction, highway safety, and public transportation programs. Recent surface transportation acts also include provisions related to alternative fuel vehicles (AFVs) and infrastructure.

The Energy Policy Act (EPAct) of 1992 established regulations requiring certain federal, state, and alternative fuel provider fleets to build an inventory of AFVs. It was amended several times, including via the Energy Conservation and Reauthorization Act of 1998 and via EPAct of 2005, which contained provisions regarding alternative fuel use and infrastructure development.

The Energy Independence and Security Act of 2007 included provisions to increase the supply of renewable fuel sources and raise CAFE standards to 35 miles per gallon by 2020. The Emergency Economic Stabilization Act authorized the Energy Improvement and Extension Act of 2008, which provided several provisions related to tax credits and exemptions for alternative fuels and fuel-efficient technologies.

The American Recovery and Reinvestment Act of 2009 appropriated nearly $800 billion towards the creation of jobs, economic growth, tax relief, improvements in education and healthcare, infrastructure modernization, and investments in energy independence and renewable energy technologies.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, the American Taxpayer Relief Act of 2012, the Tax Increase Prevention Act of 2014, the Consolidated Appropriations Act of 2016, the Further Consolidated Appropriations Act of 2020, the Consolidated Appropriations Act of 2021, and the Inflation Reduction Act of 2022, extended and reinstated a number of alternative fuel tax credits. This section summarizes these laws.

Below are summaries of selected sections of federal legislation related to alternative fuels and advanced transportation technologies.

• Inflation Reduction Act of 2022
• Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act of 2021)
• Consolidated Appropriations Act of 2021
• Further Consolidated Appropriations Act of 2020
• Consolidated Appropriations Act of 2016
• Tax Increase Prevention Act of 2014
• American Taxpayer Relief Act of 2012
• Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
• American Recovery and Reinvestment Act of 2009
• Energy Improvement and Extension Act of 2008
• Energy Independence and Security Act of 2007
• Energy Policy Act in 2005
• Energy Policy Act of 1992
• Surface Transportation Acts
• Clean Air Act Amendments of 1990
• Alternative Motor Fuels Act of 1988
• Clean Air Act of 1970

Enacted August 16, 2022
The Inflation Reduction Act (Public Law 117-169) creates and extends several alternative fuel tax incentives. The law modifies and extends the Clean Vehicle Tax Credit, creates the Previously Owned Clean Vehicles Tax Credit, creates the Qualified Commercial Clean Vehicles Tax Credit, extends the Alternative Fuel Refueling Tax Credit, and extends the Advanced Energy Project Credit. These tax credits are available through December 31, 2032. For a summary of the provisions related to alternative fuels and vehicles, alternative fuel infrastructure, and other transportation topics, see the Inflation Reduction Act summary table.

Enacted November 15, 2021
The Bipartisan Infrastructure Law (BIL), enacted as the Infrastructure Investment and Jobs Act of 2021 (Public Law 117-58), continues the authorization of the national surface transportation legislation and appropriates $550 billion for new infrastructure investments. The BIL supports a variety of alternative fuel and advanced vehicle technologies through grant programs, studies, technology standards, loans, research and development, fleet funding, and other measures. BIL provisions increase investment in electric vehicle supply equipment, alternative fuel infrastructure, electric vehicle batteries, electricity grid upgrades, and light-, medium-, and heavy-duty zero emission vehicles. For a summary of the provisions related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation topics, see the BIL summary table.

Enacted December 27, 2020
The Consolidated Appropriations Act of 2021 (Public Law 116-260) extends several alternative fuel tax incentives. The law extends, effective through December 31, 2021, the alternative fuel infrastructure tax credit, the excise tax credit for alternative fuels and alternative fuel mixtures, and the fuel cell motor vehicle tax credit. It also extends the tax credit for second-generation biofuel production and the tax credit for qualified two-wheeled plug-in electric-drive motor vehicles, effective through January 1, 2022.

Enacted December 20, 2019
The Further Consolidated Appropriations Act of 2020 (Public Law 116-94) retroactively reinstates and extends several alternative fuel tax incentives. The law reinstates, effective through December 31, 2020, the alternative fuel infrastructure tax credit, the excise tax credit for alternative fuels and alternative fuel mixtures, the tax credit for second-generation biofuel production, the fuel cell motor vehicle tax credit, the special depreciation allowance for second-generation biofuel plant property, the tax credit for small agri-biodiesel production, and the tax credit for qualified two-wheeled plug-in electric-drive motor vehicles. It also reinstates the income and excise tax credit for biodiesel and renewable diesel fuel mixtures, effective through December 31, 2022.

Enacted December 18, 2015
The Consolidated Appropriations Act of 2016 (Public Law 114-113) retroactively reinstates and extends several alternative fuel tax incentives. The law reinstates, effective through December 31, 2016, the alternative fuel infrastructure tax credit, the excise tax credit for alternative fuels and alternative fuel mixtures, the tax credit for second-generation biofuel production, the income and excise tax credit for biodiesel and renewable diesel fuel mixtures, the fuel cell motor vehicle tax credit, and the special depreciation allowance for second-generation biofuel plant property. It also reinstates the tax credit for qualified two- or three-wheeled plug-in electric-drive motor vehicles.

Enacted December 19, 2014
The Tax Increase Prevention Act of 2014 (Public Law 113-295) retroactively reinstates several alternative fuel tax incentives. The law reinstates, effective through December 31, 2014, the alternative fuel infrastructure tax credit, the excise tax credit for alternative fuels, the tax credit for second-generation biofuel production, the income and excise tax credit for biodiesel and renewable diesel fuel mixtures, and the special depreciation allowance for second-generation biofuel plant property.

Enacted January 2, 2013
The American Taxpayer Relief Act of 2012 (Public Law 112-240) extends and reinstates several alternative fuel incentives. The law reinstates, effective through December 31, 2013, the alternative fuel infrastructure tax credit, biodiesel income tax credit, biodiesel mixture excise tax credit, and alternative fuel mixture excise tax credits and incorporates a tax credit for two- and three-wheeled plug-in electric vehicles through December 31, 2013. It also extends until December 31, 2013, the second-generation biofuel producer tax credit and second-generation biofuel plant depreciation deduction allowance. In addition, it extends discretionary funding for the U.S. Department of Agriculture's Advanced Biofuel Production Grants and Loan Guarantees, Advanced Biofuel Production Payments, Biodiesel Education Grants, Biomass Research and Development Initiative, and Ethanol Infrastructure Grants and Loan Guarantees.

Enacted December 17, 2011
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Public Law 111-312) extends and reinstates several alternative fuel tax credits. The law extends until December 31, 2011, the qualified alternative fuel vehicle fueling property tax credit, the volumetric ethanol excise tax credit, and the ethanol and biodiesel producer tax credits. It also reinstates, effective January 1, 2011, through December 31, 2011, the alternative fuel and alternative fuel mixture excise tax credits, as well as the biodiesel mixture excise tax credit.

Enacted February 17, 2009
The American Recovery and Reinvestment Act (ARRA) of 2009 (Public Law 111-5) appropriates nearly $800 billion towards the creation of jobs, economic growth, tax relief, improvements in education and healthcare, infrastructure modernization, and investments in energy independence and renewable energy technologies. ARRA supports a variety of alternative fuel and advanced vehicle technologies through grant programs, tax credits, research and development, fleet funding, and other measures. For a summary of the provisions related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation topics, see the ARRA summary table.

Enacted October 3, 2008
The Energy Improvement and Extension Act of 2008 is Division B of the Emergency Economic Stabilization Act (Public Law 110-343). Title II of Division B of the law includes several provisions related to tax credits and exemptions for alternative fuels and fuel-efficient technologies. For a summary of the relevant provisions, see the Energy Improvement and Extension Act of 2008 summary table.

Enacted December 19, 2007
The Energy Independence and Security Act (EISA) of 2007 (Public Law 110-140) aims to improve vehicle fuel economy and reduce U.S. dependence on petroleum. EISA includes provisions to increase the supply of renewable alternative fuel sources by setting a mandatory Renewable Fuel Standard, which requires transportation fuel sold in the United States to contain a minimum of 36 billion gallons of renewable fuels annually by 2022. In addition, the law sets the Corporate Average Fuel Economy standard at 35 miles per gallon for passenger cars and light trucks by the year 2020. EISA also includes grant programs to encourage the development of cellulosic biofuels, plug-in hybrid electric vehicles, and other emerging electric technologies. The law is projected to reduce greenhouse gas emissions by 9% by 2030. For a summary of the provisions related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation topics, see the EISA summary table.

Enacted August 8, 2005
The Energy Policy Act (EPAct) of 2005 (Public Law 109-58) calls for the development of grant programs, demonstration and testing initiatives, and tax incentives that promote alternative fuels and advanced vehicles production and use. EPAct 2005 also amends existing regulations, including fuel economy testing procedures and EPAct 1992 requirements for federal, state, and alternative fuel provider fleets. For a summary of the provisions related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation topics, see the EPAct 2005 summary table.

Enacted October 24, 1992
The Energy Policy Act (EPAct) of 1992 (Public Law 102-486) aims to reduce U.S. dependence on petroleum and improve air quality by addressing all aspects of energy supply and demand, including alternative fuels, renewable energy, and energy efficiency. EPAct 1992 encourages the use of alternative fuels through both regulatory and voluntary activities and approaches the U.S. Department of Energy (DOE) carries out. It requires federal, state, and alternative fuel provider fleets to acquire alternative fuel vehicles. EPAct 1992 also defines "alternative fuels" as: methanol, ethanol, and other alcohols; blends of 85% or more of alcohol with gasoline (E85); natural gas and liquid fuels domestically produced from natural gas; propane; hydrogen; electricity; biodiesel (B100); coal-derived liquid fuels; fuels, other than alcohol, derived from biological materials; and P-Series fuels, which were added to the definition in 1999. Under EPAct 1992, DOE has the authority to add more alternative fuels to the list of authorized alternative fuels if certain criteria are met. DOE's Clean Cities and Communities was established in response to EPAct 1992 to implement voluntary alternative fuel vehicle deployment activities. For more information, visit the EPAct website.

Enacted December 18, 1991; June 9, 1998; August 10, 2005; July 6, 2012; and November 15, 2021
The national surface transportation acts authorize funds for highway construction, and highway safety and public transportation programs. The Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 (Public Law 102-240) establishes the Congestion Mitigation and Air Quality (CMAQ) Improvement Program, which provides funding for projects and programs in air quality non-attainment and maintenance areas to reduce transportation-related emissions. The Transportation Equity Act for the 21st Century (TEA-21) of 1998 (Public Law 105-178) continues the CMAQ program and establishes the Clean Fuels Grant Program, which allows transit systems to apply for and receive grants to purchase or lease clean fuel buses, related equipment or facilities, and use biodiesel. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Public Law 109-59), enacted in 2005, continues and amends several programs established under ISTEA and TEA-21, including CMAQ and the Clean Fuels Grant Program. SAFETEA-LU also establishes additional programs and incentives related to alternative fuels, advanced vehicles, and fuel efficiency, including the alternative fuel excise tax credit. The Moving Ahead for Progress in the 21st Century (MAP-21) Act (Public Law 112-141), enacted in 2012, continues and amends existing programs, including CMAQ, and establishes additional funding opportunities for alternative fuel infrastructure and research. The Fixing America's Surface Transportation (FAST) Act (Public Law 114-94), enacted in 2015, continues CMAQ, but also adds new provisions related to alternative fuels, including the establishment of national alternative fuel station corridors and authorization for federal agencies to install electric vehicle supply equipment for employee use, subject to certain conditions. The Bipartisan Infrastructure Law (BIL), enacted as the Infrastructure Investment and Jobs Act in 2021, contains both the Surface Transportation Reauthorization Act of 2021 and the Surface Transportation Investment Act of 2021. BIL continues authorization for national surface transportation legislation, such as CMAQ, and includes provisions to increase investment in electric vehicle supply equipment alternative fuel infrastructure, electric vehicle batteries, electricity grid upgrades, and light-, medium-, and heavy-duty zero emission vehicles.

Enacted November 15, 1990
The Clean Air Act Amendments (CAAA) of 1990 (Public Law 101-549) amend the Clean Air Act (CAA) of 1970. CAAA of 1990 substantially increase EPA's regulatory authority and create several initiatives to reduce mobile source pollutants, including establishing fuel quality controls and tighter pollution standards for motor vehicle emissions. For more information, refer to EPA's Overview of the Clean Air Act Amendments of 1990.

Enacted October 14, 1988
The Alternative Motor Fuels Act (AMFA) of 1988 (Public Law 100-494) creates vehicle manufacturer incentives in the form of Corporate Average Fuel Economy (CAFE) credits for the production of motor vehicles capable of operating on certain alternative fuels. AMFA also directs the U.S. Department of Transportation, in consultation with the U.S. Environmental Protection Agency and the U.S. Department of Energy (DOE), to conduct a study and submit a report to Congress evaluating the success of the policy decision to offer CAFE credit calculation incentives for dual-fuel vehicles. DOE submitted the report, Effects of the Alternative Motor Fuels Act CAFE Incentives Policy, to Congress in March 2002. AMFA fuel economy provisions were extended by the Automotive Fuel Economy Manufacturing Incentives for Alternative Fueled Vehicles Rule of 2004. AMFA also requires the creation of an alternative fuels education and data resource center. As a result, the Alternative Fuels Data Center was established in 1991 at DOE's National Renewable Energy Laboratory.

Enacted December 22, 1975
The Energy Policy and Conservation Act (EPCA) of 1975 (Public Law 94-163) establishes Corporate Average Fuel Economy (CAFE) standards for on-road vehicles beginning with Model Year (MY) 1978 in order to improve the overall fuel efficiency of new motor vehicles. EPCA grants the U.S. Department of Transportation's National Highway Traffic Safety Administration the authority to regulate CAFE standards, with the requirement that new standards may not be proposed more than five model years at a time. EPCA also requires the U.S. Department of Energy to publish and distribute an annual fuel economy guide for consumers. For more information, refer to the CAFE and FuelEconomy.gov websites.

Enacted December 31, 1970
The Clean Air Act (CAA) of 1970 (Public Law 91-604) defines the U.S. Environmental Protection Agency's (EPA) responsibilities for protecting and improving air quality. CAA authorizes the development of comprehensive federal and state regulations to limit both stationary and mobile emissions sources, including authorizing the establishment of National Ambient Air Quality Standards (NAAQS), establishing requirements for State Implementation Plans to achieve these standards, authorizing the establishment of emissions standards for hazardous air pollutants, and authorizing requirements to control motor vehicle emissions. For more information, refer to EPA's Overview of the Clean Air Act and Air Pollution.