Natural Gas Laws and Incentives in Alabama

The list below contains summaries of all Alabama laws and incentives related to natural gas.

Laws and Regulations

Alternative Fuel Tax

The state road tax for vehicles that operate on propane (liquefied petroleum gas or LPG) is paid through the purchase of an annual flat fee sticker, and the amount is based on the vehicle's gross vehicle weight rating. Each person owning and/or operating a vehicle that operates on propane must obtain a decal annually from the Alabama LPG Board. The decal must be affixed to the vehicle according to LPG Board specification as proof that the issuance fee and decal fee have been paid. Vehicle owners must apply for a decal within 10 days of converting a vehicle to operate on propane or natural gas, or a 20% penalty will be applied to the decal fee. Out-of-state alternative fuel vehicle operators that purchase propane within the state must pay the current Alabama motor fuel tax or they may elect to purchase the annual flat fee decal. The propane dealer or supplier must remit these funds to the LPG Board before the 20th of the month following the date of sale. Decal and road tax requirements for natural gas fuels are suspended until October 1, 2018.

Effective October 1, 2018, the tax rate on compressed natural gas (CNG) and liquefied natural gas (LNG) used as a vehicle fuel will be applied in the amounts below:

CNG:
  • $0.08 per gasoline gallon equivalent (GGE) until September 30, 2023;
  • $0.13 per GGE from October 1, 2023, until September 30, 2028; and
  • $0.18 per GGE from October 1, 2028 and beyond.

LNG:
  • $0.08 per diesel gallon equivalent (DGE) until September 30, 2023;
  • $0.13 per DGE from October 1, 2023, until September 30, 2028; and
  • $0.18 per DGE from October 1, 2028 and beyond.

A GGE will be equal to 5.66 pounds (lbs.) or 126.67 cubic feet of natural gas for CNG and a DGE will be equal to 6.06 lbs. for LNG.

(Reference Code of Alabama 40-17-160 through 40-17-165)

Point of Contact
Mark Nelson
Administrator
Alabama Liquefied Petroleum Gas Board
Phone: (334) 241-8887
mark.nelson@lpgb.alabama.gov
http://www.lpgb.alabama.gov/

Fuel-Efficient Green Fleets Policy and Fleet Management Program Development

The Alabama Green Fleets Review Committee (Committee) established a Green Fleets Policy (Policy) outlining a procedure for procuring state vehicles based on criteria that includes fuel economy and life cycle costing. State fleet managers must classify their vehicle inventory for compliance with the Policy and submit annual plans for procuring fuel-efficient vehicles. These plans must reflect a 4% annual increase in average fleet fuel economy for light-duty vehicles, a 3% annual increase in average fleet fuel economy for medium-duty vehicles, and a 2% annual increase in average fleet fuel economy for heavy-duty vehicles per fiscal year. The Policy will also require that government entities manage and operate their fleets in a manner that is energy efficient, minimizes emissions, and reduces petroleum dependency by using specified proven technology the Committee identifies.

In addition, the Alabama Department of Transportation appointed and employed a fleet manager to develop a statewide fleet management program (Program). The Office of Fleet Management will propose fleet management policies, procedures, and guidelines for all state agency, board, commission, and department fleets and will address future cooperation between the Department of Finance and the Committee to ensure compliance with the Green Fleets Policy.

(Reference Code of Alabama 41-17A-1 through 41-17A-6, and Executive Order 38, 2013)

State Incentives

Alternative Fuel and Idle Reduction Revolving Loan Program for Private Entities

The Alabama Department of Economic and Community Affairs provides an energy efficiency and renewable energy loan through its AlabamaSAVES program to commercial, industrial, and non-profit entities. Eligible energy efficiency improvements include those involving idle reduction equipment, natural gas and propane vehicle conversions or purchases, and alternative fueling infrastructure installation at existing facilities in Alabama. Dedicated and bi-fuel vehicles are eligible, and the loan may cover incremental and conversion costs. For additional information, see the AlabamaSAVES website.

Point of Contact
Maureen Neighbors
Energy Division Chief
Alabama Department of Economic and Community Affairs
Phone: (334) 242-5292
maureen.neighbors@adeca.alabama.gov

Alternative Fuel and Idle Reduction Revolving Loan Program for Public Entities

The Alabama Department of Economic and Community Affairs provides low-interest energy efficiency loans through its Local Government Energy Loan program to local governments and educational institutions. Eligible energy efficiency improvement projects include those involving idle reduction equipment and natural gas and propane vehicle conversions or purchases. Dedicated and bi-fuel vehicles are eligible, and the loan may cover incremental and conversion costs. Local governments and public colleges and universities can borrow up to $350,000; K-12 public schools may borrow up to $350,000 per campus or $500,000 per school system. The minimum loan amount is $50,000 and the maximum loan term is five years. The program is not currently accepting applications (verified June 2018).

Point of Contact
Maureen Neighbors
Energy Division Chief
Alabama Department of Economic and Community Affairs
Phone: (334) 242-5292
maureen.neighbors@adeca.alabama.gov

Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption

Any motor vehicle equipped with an auxiliary power unit (APU) or other idle reduction technology may exceed the gross, axle, tandem, or bridge formula weight limits by up to 400 pounds (lbs.). To be eligible for the weight exemption, the vehicle operator must be able to provide written proof or certification of the weight of the APU and demonstrate or certify that the idle reduction technology is fully functional at all times. Any NGV may exceed the limits by up to 2,000 lbs. (Reference House Bill 40, 2018, and Code of Alabama 32-9-20)

More Laws and Incentives

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