Hydrogen Laws and Incentives in Utah

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

Laws and Regulations

Alternative Fuel (AFV) Tax Rates

Effective January 1, 2025, compressed natural gas (CNG), hydrogen, liquefied natural gas (LNG), electricity, and propane are taxed at a rate listed below in gasoline or diesel gallon equivalent (GGE/DGE). One GGE is equal to 5.660 pounds (lbs.) of CNG or 2.198 lbs. of hydrogen. One DGE is equal to 6.06 lbs. of LNG. The tax rate for natural gas and hydrogen will be annually adjusted by the State Tax Commission (Commission. The Commission will publish the adjusted fuel tax no later than 60 days prior to the effective date. For more information, see the Commission Fuel Tax Rates website.

(Reference Utah Code 59-13-102 and 59-13-301)

Alternative Fuel Use and Vehicle Acquisition Requirement

At least 50% of new or replacement light-duty state agency vehicles must meet Bin 2 emissions standards established in Title 40 of the U.S. Code of Federal Regulations, or be propelled to a significant extent by electricity, natural gas, propane, hydrogen, or biodiesel.

(Reference Utah Code 63A-9-403)

Alternative Fuel Vehicle Inspection and Permit

The Utah State Tax Commission (Commission) may require vehicles operating on clean fuels to be inspected for safe operation. In addition, clean fuel vehicles that have a gross vehicle weight rating of more than 26,000 pounds or have more than three axels are required to obtain a special fuel user permit from the Commission. Clean fuels are defined as propane, natural gas, electricity, and hydrogen.

(Reference Utah Code 59-13-102, 59-13-303, and 59-13-304)

Alternative Fuel Vehicle Registration Fees

Electric vehicle (EV), plug-in hybrid electric vehicle (PHEV), and hybrid electric vehicle (HEV) owners and owners of vehicles powered by a fuel other than gasoline, diesel, electricity, natural gas, or propane are required to pay an additional annual registration fee. A six-month registration option with fees at lower amounts is also available. Annual fee amounts as of April 1, 2025 are as follows:

Use the Utah State Tax Commissioner Motor Vehicle Portal Fee Estimator to estimate total cost of registration and fees.

The additional registration fee paid by EVs and vehicles fueled exclusively by a fuel other than gasoline, diesel, natural gas, or propane must be equal to the maximum annual road usage charge. EV, PHEV, and HEV drivers can choose to pay the flat fee or enroll in Utah’s Road Usage Charge Program to pay for road usage based on the number of miles they drive, up to the amount of the flat fee. See the Road Usage Charge Program website for more information.

(Reference Utah Code 41-1a-1206 and 72-1-213.1)

Hydrogen Development Support

The Utah Department of Workforce Services Community Impact Fund provides grants and loans to entities that are subdivisions of the state (e.g., counties, towns, water districts, school districts) for infrastructure, including facilities for storing, distributing, or producing hydrogen for use as a fuel in zero emission motor vehicles; or a plant for the production of zero emission hydrogen fueled trucks. Zero emission motor vehicles refers to the tailpipe emissions.

(Reference Utah Code 35A-8-302)

State Incentives

Alternative Fuel Vehicle Conversion Grants

The Utah Department of Environmental Quality (DEQ) Conversion to Alternate Fuel Grant Program provides grants to businesses and government entities that install conversion equipment on eligible vehicles that allows the vehicles to operate on alternative fuel. Award recipients are required to pass these savings along to the individual who purchases the converted vehicle. Grants may cover 50% of the cost of conversion, up to $2,500. Eligible vehicles must operate solely on alternative fuel and may include on-road vehicles and off-road equipment. Eligible alternative fuels include propane, natural gas, and electricity. For more information, see the DEQ Conversion to Alternative Fuel Grant Program website. The alternative fuel vehicle conversion grant is available through July 1, 2029.

(Reference Utah Code 19-1-403.3, 19-2-301 through 19-2-304, and 63I-1-259)

Hydrogen Fuel Production Incentives

Businesses that convert natural gas to hydrogen fuel, or produce natural gas solely for use in the production of hydrogen fuel for zero emission vehicles (ZEVs), may be eligible for an oil and gas severance tax credit. Each eligible applicant may receive a tax credit equal to the amount of the severance tax owed, up to $5 million per year.

(Reference Utah Code 35A-8-302 and 59-5-102)

Qualified Heavy-Duty Alternative Fuel Vehicle (AFV) Tax Credit

Taxpayers may be eligible for a tax credit for the purchase of a qualified heavy-duty AFV. The qualified heavy-duty AFV tax credit is available through July 1, 2029. Qualifying fuels include natural gas, electricity, and hydrogen. Each qualified heavy-duty AFV is eligible for the following tax credit amounts:

Year	Credit Amount
2023	$12,000
2024	$10,500
2025	$9,000
2026	$7,500
2027	$6,000
2028	$4,500
2029	$3,000
2030	$1,500

At least 50% of the qualified vehicle’s miles must be driven in the state. A single taxpayer may claim credits for up to 10 AFVs annually. If more than 30% of the total available tax credits in a single year have not been claimed by May 1, a taxpayer may apply for credits for an additional eight AFVs. Up to 25% of the tax credits are reserved for taxpayers with small fleets of less than 40 vehicles. Additional conditions and restrictions may apply. For more information, see the Utah Department of Environmental Quality Alternative Fuel Heavy Duty Vehicle Tax Credit Program website.

(Reference Utah Code 59-7-618 and 63I-1-259 and House Bill 3005, 2024)

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