Hydrogen Laws and Incentives in Washington
The list below contains summaries of all Washington laws and incentives related to hydrogen.
State Incentives
Alternative Fuel Vehicle (AFV) Retail Sales and Use Tax Exemption
The sale or lease of new or used passenger vehicles, light-duty trucks, and medium-duty passenger AFVs is exempt from the state retail sales and use tax. Eligible AFVs include those powered by natural gas, propane, hydrogen, or electricity. To be eligible, new vehicles may not be valued above $45,000 and used vehicles may not be valued above $30,000. The tax exemption may apply to all or a portion of the vehicle’s value. The maximum eligible amount for used purchased or leased vehicles is $16,000. The Maximum exemption amounts for vehicles are as follows:
| Purchase or Lease Year | Maximum New Vehicle Price Eligible for Exemption | Maximum Leased Vehicle Price Eligible for Exemption |
|---|---|---|
| August 1, 2021 - July 31, 2023 | $20,000 | $16,000 |
| August 1, 2023 - July 31, 2025 | $15,000 | $16,000 |
For more information, see the Renewable Energy/Green Incentives section of Washington Department of Revenue’s Incentives Programs website.
(Reference Revised Code of Washington 82.12.9999)
Alternative Fueling Infrastructure Grant Program
The Washington State Department of Transportation (WSDOT) offers competitive grants to strengthen and expand the West Coast Electric Highway network by deploying Level 2 and direct current fast charging electric vehicle chargers and hydrogen fueling infrastructure along highway corridors in Washington. Eligible project costs include siting, equipment purchases, electrical upgrades, installation, operations, and maintenance. For more information, including funding availability and application periods, see the WSDOT Zero Emission Vehicle Grants website.
(Reference Revised Code of Washington 47.04.350)
Commercial Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Tax Credit
Businesses are eligible to receive tax credits for purchasing new or used medium- and heavy-duty AFVs and medium- and heavy-duty vehicles converted to alternative fuels, and installing alternative fueling infrastructure. Eligible alternative fuels are natural gas, propane, hydrogen, dimethyl ether, and electricity. Tax credits for qualified alternative fueling infrastructure are for up to 50% of the cost to purchase and install the infrastructure. New commercial vehicle tax credit amounts vary based on gross vehicle weight rating (GVWR) and are up to 75% of the incremental cost, with maximum credit values as follows:
| GVWR | Maximum Credit Amount Per Vehicle |
|---|---|
| Up to 14,000 pounds (lbs.) | $25,000 |
| 14,001 to 26,500 lbs. | $50,000 |
| Over 26,500 lbs. | $100,000 |
Leased AFVs may receive a tax credit for 75% cost, up to $25,000 per vehicle. This exemption also applies to qualified used vehicles modified with a U.S. Environmental Protection Agency-certified aftermarket conversion, if the vehicle is being sold for the first time after modification. Modified vehicles are eligible for credits equal to 50% of the commercial vehicle conversion cost, up to $25,000.
Each entity may claim up to $250,000 or credits for 25 vehicles per year. Applications must be submitted within 30 days of vehicle acquisition or installation completion. All credits earned must be used in that calendar year or the subsequent year. Tax credits are available on a first-come, first-served basis and are subject to annual limits of $2 million for vehicle credits, and $6 million for infrastructure.
(Reference Revised Code of Washington 82.16.0496 and 82.04.4496)
Diesel Emission Reduction Grants
The Washington State Department of Ecology offers grants for the replacement or repower of medium- and heavy-duty diesel refuse trucks, street sweepers, freight switcher locomotives, port cargo handling equipment, and forklifts with zero emission vehicles (ZEVs) and associated infrastructure. Grants are available in the following amounts:
| Eligible ZEVs | Maximum Grant Amount |
|---|---|
| Zero Emission Refuse Vehicles and Street Sweepers | 80% of project costs, up to $750,000 |
| Zero Emission Freight Switcher Locomotives | 60% of project costs, up to $3,500,000 |
| All-electric Port Cargo Handling Equipment and Forklifts | 80% of project costs, up to $400,000 |
Eligible applicants include local and state government entities, utilities, port authorities, school districts, universities, and tribal governments. Applicants located in environmental justice communities will be given funding priority. Additional terms and conditions apply. This program is funded by Washington’s portion of the Volkswagen (VW) Environmental Mitigation Trust. For more information, including application guidelines, see the Washington State Department of Ecology VW Enforcement Action Grants website.
Electric Vehicle (EV) and Fuel Cell Electric Vehicle (FCEV) Infrastructure and Battery Tax Credit
Public lands used for installing, maintaining, and operating EV chargers are exempt from leasehold excise taxes. Additionally, the state sales and use taxes do not apply to EV and FCEV batteries or fuel cells; labor and services for installing, repairing, altering, or improving EV and FCEV batteries fuel cells, or EV and FCEV infrastructure; the sale of property used for EV and hydrogen fueling infrastructure; and the sale of zero emission buses.
(Reference Revised Code of Washington 82.29A.125, 82.08.816, and 82.12.816)
Fuel Cell Electric Vehicle (FCEV) Tax Exemption
Beginning July 1, 2022, 50% of the retail sales and state use tax does not apply to the sale or lease of the first 650 purchases of new passenger vehicles, light-duty trucks, and medium-duty passenger vehicles powered by fuel cells. The maximum value amount eligible for the tax exemption is the less of $16,000 or the fair market value of the vehicle. Additionally, all used FCEV sales and leases are exempt from the retail and state use tax. The FCEV exemption may not be combined with the Retail Sales and Use tax Exemption.
(Reference Revised Code of Washington 82.08.993 and 82.12.817)
Green Transportation Grant Program
The Washington State Department of Transportation (WSDOT) offers grants for projects that reduce the carbon intensity of the Washington transportation system, including fleet electrification, modification or replacement of facilities to facilitate fleet electrification and hydrogen fueling, upgrades to electrical transmission and distribution systems, and constructing of charging and fueling infrastructure. To be eligible, a transit authority must provide matching funding at the level deemed appropriate by the department. Priority will be given to projects that serve overburdened communities and underserved populations. For more information, including funding availability and program dates, see the WSDOT Green Transportation Capital Grants website.
(Reference Revised Code of Washington 47.66.120 and Senate Bill 6229, 2024)
Zero Emission School Bus Grants
The Washington State Department of Ecology offers grants to public, tribal, and charter schools for the replacement of diesel school buses with zero emission school buses, including associated fueling infrastructure. Applicants are eligible for up to 100% of the incremental cost between zero emission and diesel bus replacement, up to $50,000 per bus replacement and three buses. Increased funding is available for schools located in a small or rural local education agency or for schools in which over 50% of students are eligible for free reduced price lunch program. For more information, see the Washington Department of Ecology Clean Diesel Grants page.
(Reference House Bill 1368, 2024)
Zero Emission Vehicle (ZEV) Carshare Grant
The Zero-emissions Access Program (ZAP), administered by the Washington State Department of Transportation (WSDOT), offers grants to nonprofit organizations and local governments to design and create a ZEV carshare program in underserved and low-to moderate-income communities. Grant awards may range from $50,000 to $200,000. Eligible projects include:
- Contract, lease, or purchase of ZEVs;
- Construction or installation of correlated chargers or fueling infrastructure; and,
- Operational costs to develop, implement, and manage a car share program.
Applicants must provide matching funds as direct contributions or gifts-in-kind for at least 10% of the total cost of the project. Additional eligibility requirements may apply. For more information, including eligible communities and program dates, see the WSDOT ZEV Grants website.
(Reference Revised Code of Washington 47.04.355)
Laws and Regulations
Alternative Fuel Vehicle (AFV) Technical Assistance and Education Program
The Washington State University (WSU) Energy Program must establish and administer a technical assistance and education program on the use of AFVs for public agencies, including state and local governments. For more information, visit the WSU Energy Program Green Transportation Program website.
(Reference Revised Code of Washington 28B.30.903)
Electric Vehicle (EV) Chargers and Hydrogen Fueling Station Support
Washington State Department of Transportation (WSDOT) must install co-located direct current fast chargers and hydrogen fueling stations in the Wenatchee or East Wenatchee area near a state route or publicly owned facility. WSDOT must contract with a public utility that produces hydrogen or provides technical assistance for hydrogen fueling stations.
(Reference House Bill 1125, 2023)
Fleet Electric Vehicle (EV) Procurement Requirements
State executive and small-cabinet agency fleets must procure EVs to replace light-, medium-, and heavy- duty internal combustion engine (ICE) vehicles once they reach the end of their useful life. Fleets must achieve the following procurement requirements:
| Percentage of Procured Vehicles that Must be EVs | |||
|---|---|---|---|
| Year | Light Duty | Medium Duty | Heavy Duty |
| 2025 | 40% | No Requirement | No Requirement |
| 2030 | 75% | 30% | 50% |
| 2035 | 100% | 55% | 75% |
| 2040 | 100% | 100% | 100% |
(Reference Executive Order 21-04, 2021)
Hydrogen Distribution, Production, and Sale Authorization
Government entities or transit authorities that provide public transportation are authorized to produce, distribute, sell, and use green electrolytic hydrogen and renewable hydrogen. Renewable hydrogen is defined as hydrogen produced using renewable resources as the source of the hydrogen and the source for the energy input into the production process. Green electrolytic hydrogen is defined as hydrogen produced through electrolysis, which does not include hydrogen produced from a fossil fuel feedstock. Additional requirements apply.
(Reference Revised Code of Washington 36.57A, 36.56, 35.92, 36.57, 81.112, 81.104)
Low Carbon Fuel Standard
Washington’s Clean Fuels Program (Program) requires a reduction in the overall carbon intensity of transportation fuels used in the state by 20% below 2017 levels by 2034. The Program requires transportation fuel producers and suppliers to meet specified average carbon intensity requirements for fuel. The Program’s regulated fuels include gasoline, diesel, gasoline mixed with at least 10% corn-derived ethanol, biomass-based diesel, propane, and hydrogen. Producers of low carbon fuels, such as electricity and alternative jet fuel, may participate, but are not required to register for the Program. Aviation fuel, marine fuel, railroad fuel, and offroad fuel used for agriculture, logging, mining, and other activities are exempt and will not generate deficits. The Program allows producers and importers to generate, acquire, transfer, bank, borrow, and trade credits. Fuel producers and importers regulated under the LCFS must meet quarterly and annual reporting requirements. For more information, see the Washington Department of Ecology Clean Fuel Standard page.
(Reference Revised Code of Washington 70A.535.005-70A.535.140)
Low Carbon Fuel and Fuel-Efficient Vehicle Acquisition Requirement
Washington state agencies must consider purchasing low carbon fuel vehicles or converting conventional vehicles to use low carbon fuels when financially comparable over the vehicle’s useful life. Low carbon fuels include hydrogen, biomethane, electricity, or natural gas blends of at least 90%. State agencies must achieve an average fuel economy of 36 miles per gallon (mpg) for passenger vehicle fleets in motor pools and leased conventional vehicles. State agencies must also purchase low carbon fuel vehicles or, when purchasing new conventional vehicles, achieve an average fuel economy of 40 mpg for light-duty passenger vehicles and 27 mpg for light-duty vans and sport utility vehicles. When calculating average fuel economy, emergency response vehicles, passenger vans with a gross vehicle weight rating of 8,500 pounds or greater, off-road vehicles, low carbon fuel vehicles, and vehicles driven less than 2,000 miles per year are excluded.
(Reference Revised Code of Washington 43.19.622)
Medium- and Heavy-Duty (MHD) Zero Emission Vehicle (ZEV) Deployment Support
California, Colorado, Connecticut, District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington (signatory states) signed a memorandum of understanding (MOU) to support the deployment of MHD ZEVs through involvement in a Multi-State ZEV Task Force (Task Force).
In July 2022, the Task Force published a multi-state action plan to support electrification of MHD vehicles. The action plan includes strategies and recommendations to accomplish the goals of the MOU, including limiting all new MHD vehicle sales in the signatory states to ZEVs by 2050, accelerating the deployment of MHD ZEVs, and ensuring MHD ZEV deployment also benefits disadvantaged communities.
For more information, see the MHD ZEVs: Action Plan Development Process website.
Medium- and Heavy-Duty Zero Emission Vehicle (ZEV) Requirement
Washington has adopted the California Advanced Clean Trucks requirements specified in Title 13 of the California Code of Regulations, requiring manufacturers to meet California’s ZEV production and sales requirements. Beginning with model year 2025, manufacturers will be required to sell zero-emission trucks as an increasing percentage of their annual sales for Class 2b through Class 8 vehicles in Washington. ZEVs include all-electric and fuel cell electric vehicles. For more information, see the Washington Clean Car Standards website.
(Reference Washington Administrative Code 173-423 and 173-400-025)
Renewable Natural Gas (RNG) and Renewable Hydrogen Fuel Sales Regulations
Public utility districts are authorized to sell RNG and renewable hydrogen to facilities that condense or dispense natural gas or renewable hydrogen for use as a motor fuel. RNG is defined as methane gas or other hydrocarbons derived from organic materials. Renewable hydrogen is defined as hydrogen produced using renewable resources as the source of the hydrogen and the source for the energy input into the production process.
(Reference 54.04.190)
Support for Interagency Collaboration on Hydrogen Development
The Washington Department of Commerce must establish the Office of Renewable Energy (Office) to leverage, support, and collaborate with other state agencies to:
- Accelerate market development by providing assistance along the entire life cycle of renewable fuel projects;
- Support research on the development and deployment of renewable fuel and use of renewable and green electrolytic hydrogen;
- Drive job creation, improve economic vitality, and support the transition to clean energy;
- Enhance resiliency by using renewable fuels and green electrolytic hydrogen to support climate change mitigation and adaptations; and,
- Partner with underserved communities to ensure communities equitably benefit from clean fuel efforts.
(Reference Revised Code of Washington 43.330)
Volkswagen (VW) Settlement Allocation
The Washington State Department of Ecology (Ecology) will work with the Office of the Governor and state agencies to select projects and distribute funding to leverage 15% of Washington's portion of the VW Environmental Mitigation Trust for the acquisition, installation, operation, and maintenance of light-duty zero-emission vehicle charging infrastructure.
Ecology will establish a competitive process to identify and select projects to fund with the remaining 85% of the appropriation to maximize total air pollution reduction and health benefits, improve air quality in areas disproportionately affected by air pollution, leverage additional matching funds, achieve substantial emission reduction beyond what would occur absent the funding, accelerate fleet turnover to the cleanest engines, and accelerate adoption of electric vehicles, equipment, and vessels. As appropriate, Ecology will work with state agencies to select projects and distribute funding. For more information, see the Ecology VW Enforcement Action website.
Zero Emission School Bus Grant Program Authorization
The Washington State Department of Ecology (Department) must offer grants for the replacement of diesel school buses with zero emission school buses within the Clean Diesel Grants program. By June 1, 2025, the Department must submit a report to the governor and the legislature that provides a status update and a summary of recommendations and implementation considerations.
Additionally, the Office of the Superintendent of Public Instruction (Office) must adopt rules to establish a formula to calculate the total cost of ownership (TCO) for zero emission and diesel school buses. Using this formula, once the TCO of a zero-emission school bus is at or below that of a diesel school bus, school districts may only receive funding to purchase zero emission school buses.
(Reference House Bill 1368, 2024 and Revised Code of Washington 28A.160.195 and 28A.160.140)
Zero Emission Truck Support and Demonstration
The Northwest Seaport Alliance (NWSA) must establish and coordinate a zero-emission truck stakeholder group to lead the development and implementation of at least one zero-emission drayage truck demonstration project and develop a roadmap to transition the NWSA cargo gateway fleet to zero-emission trucks, by 2050.
(Reference House Bill 1125, 2023)
Zero Emission Vehicle (ZEV) and Infrastructure Manufacturing Siting and Permitting Support
The Interagency Clean Energy Siting Council (Council) supports siting and permitting of new clean energy projects, including ZEV, electric vehicle charging infrastructure and equipment, and hydrogen fueling equipment manufacturing facilities. The Council must identify opportunities to improve siting and permitting of clean energy projects and may establish working groups and advisory committees to inform the development of new siting and permitting approaches. Beginning October 1, 2024, the Council must publish an annual report of their activities and recommendations.
(Reference Revised Code of Washington 43.394.010 and 43.394.020)
Zero Emission Vehicles (ZEVs) Support
The Department of Commerce must develop and maintain a publicly available mapping and forecasting tool that locates and provides information on electric vehicle charging and refueling infrastructure. Electric utilities with more than 25,000 customers must analyze how their resource plans support and account for anticipated levels of ZEV use, relevant infrastructure forecasts and associated energy impacts, and information from the utilities’ transportation electrification plans.
(Reference Revised Code of Washington 19.280.030)
More Laws and Incentives
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