Hydrogen Laws and Incentives in Hawaii

The list below contains summaries of all Hawaii laws and incentives related to hydrogen.

Laws and Regulations

Alternative Fuel Standard Development

The state of Hawaii is responsible for facilitating the development of alternative fuels and supporting the attainment of a statewide alternative fuels standard. According to this standard, alternative fuels will provide 20% of highway fuel demand by 2020 and 30% by 2030. For the purposes of the alternative fuels standard, cellulosic ethanol is equivalent to 2.5 gallons of non-cellulosic ethanol. (Reference Hawaii Revised Statutes 196-42)

Alternative Fuel Tax Rate

A distributor of any alternative fuel used to operate an internal combustion engine must pay a license tax of $0.0025 for each gallon of alternative fuel the distributor sells or uses. In addition, a distributor must pay a license tax for each gallon of fuel sold or used by the distributor for operating a motor vehicle on state public highways according to the following rates:

Fuel TypeTax
Ethanol0.145 times the rate for diesel
Methanol0.11 times the rate for diesel
Biodiesel0.25 times the rate for diesel
Propane0.33 times the rate for diesel

For other alternative fuels, the rate is based on the energy content of the fuels as compared to diesel fuel, using a lower heating value of 130,000 British thermal units per gallon as a standard for diesel, so that the tax rate, on an energy content basis, is equal to one-quarter the rate for diesel fuel. Counties may impose additional taxes. (Reference Hawaii Revised Statutes 243-4 and 243-5)

Alternative Fuel Vehicle (AFV) Registration

Owners of plug-in electric vehicles and AFVs must pay an annual fee of $50, in addition to standard registration fees. Fees contribute to the State Highway Fund. (Reference Hawaii Revised Statutes 249-31)

Alternative Fuel and Advanced Vehicle Acquisition Requirements

State and county agencies must purchase light-duty vehicles that reduce petroleum consumption. Vehicle purchasing priority is as follows:

  1. Plug-in electric vehicles;
  2. Hydrogen or fuel cell vehicles;
  3. Other alternative fuel vehicles;
  4. Hybrid electric vehicles; and
  5. Vehicles identified as top performers for fuel economy in the U.S. Environmental Protection Agency's annual "Fuel Economy Leaders" report.

Exemptions may apply. State agencies must purchase the most fuel-efficient vehicle available that meets agency needs, use alternative fuels and ethanol blended gasoline when available, evaluate a purchase preference for biodiesel blends, and promote the efficient operation of vehicles. For the purpose of this requirement, an alternative fuel is defined as an alcohol fuel, an alcohol fuel blend containing at least 85% alcohol, natural gas, liquefied petroleum gas (propane), hydrogen, biodiesel, a biodiesel blend containing at least 20% biodiesel, a fuel derived from biological materials, or electricity generated from off-board energy sources. For more information, see the Hawaii State Energy Office's Vehicle Purchasing Guidelines website. (Reference Hawaii Revised Statutes 103D-412 and 196-9)

Clean Transportation Promotion

The state of Hawaii has signed a memorandum of understanding (MOU) with the U.S. Department of Energy to collaborate to produce 70% of the state's energy needs from energy-efficient and renewable sources by 2030 and 100% of the state's energy needs from energy-efficient and renewable sources by 2045. This effort is part of the Hawaii Clean Energy Initiative. The goals of the partnership include defining the structural transformation required to transition the state to a clean energy-dominated economy; demonstrating and fostering innovation in the use of clean energy, including alternative fuels and advanced vehicle technologies; creating opportunities for the widespread distribution of clean energy benefits; establishing an open learning model for other states and entities to adopt; and building a workforce with cross-cutting skills to support a clean energy economy in the state. For more information, see the MOU and Hawaii Clean Energy Initiative website.

Hydrogen Implementation Working Group

The Hawaii Hydrogen Implementation Working Group (H2IWG), consisting of federal, state, and county agency representatives and industry stakeholders, facilitates the establishment of infrastructure and policies across all state agencies with the goal of promoting the expansion of hydrogen-based energy in Hawaii. The H2IWG submitted recommendations to the state legislature in 2015. (Reference Hawaii Revised Statutes 206M-23)

Renewable Hydrogen Program

The Hawaii Department of Business, Economic Development, and Tourism established the Hawaii Renewable Hydrogen Program (Program) to manage the state's transition to a renewable hydrogen economy. A Hydrogen Investment Capital Special Fund was created to provide seed capital for, and venture capital investments in, private sector and federal projects for research, development, testing, and Program implementation. The Program is responsible for designing, implementing, and administering activities including:

  • Strategic partnerships for research, development, testing, and deployment;
  • Demonstration projects, including infrastructure for hydrogen production, hydrogen storage, and fueling hydrogen vehicles;
  • Statewide hydrogen economy public education and outreach;
  • Promotion of Hawaii's renewable hydrogen resources to potential partners and investors;
  • A plan, for implementation during 2010 to 2020, to transition the Island of Hawaii to a hydrogen-fueled economy and to extend the application of the plan throughout the state; and
  • Evaluation of policy recommendations that will encourage the adoption of hydrogen vehicles, fund the Hydrogen Investment Capital Special Fund, and support investment in hydrogen infrastructure.

(Reference Hawaii Revised Statutes 196-10 and 206M-63)

State Incentives

Renewable Fuels Production Tax Credit

Renewable fuels produced from renewable feedstocks, such as ethanol, hydrogen, biodiesel, and biofuel, renewable diesel, biogas, and biofuel may qualify for an income tax credit equal to $0.20 per 76,000 British thermal units (BTUs) of renewable fuels sold for distribution in Hawaii. The facility must produce at least 15 billion BTUs of its nameplate capacity annually to receive the tax credit and may claim the tax credit for up to five years, not to exceed $3,000,000 per calendar year. Qualifying renewable fuel production facilities must provide written notification of their intent to produce renewable fuels before becoming eligible for the tax credit.

Producers must file a statement with the Department of Business, Economic Development, and Tourism within 30 days following the close of the calendar year.

Additional terms and conditions apply. The incentive is effective through December 31, 2021. For more information, see the Hawaii Department of Taxation Tax Information Release document. (Reference Hawaii Revised Statutes 235-110.31)

More Laws and Incentives

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