Natural Gas Laws and Incentives in Illinois

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

Laws and Regulations

Alternative Fuel Vehicle Labeling Requirement

Vehicles powered by liquefied petroleum gas (propane) or compressed natural gas (CNG) must visibly display identifying decals, as established by the National Fire Protection Association's standards for the Storage and Handling of Liquefied Petroleum Gases and for CNG Vehicular Fuel Systems. (Reference 625 Illinois Compiled Statutes 5/12-704.3)

Alternative Fuels Tax and Reporting

Alternative fuel dealers must sell liquefied natural gas (LNG) and propane used as motor fuel in diesel gallon equivalents (DGEs). For taxation purposes, LNG and propane must be reported as DGEs and are taxed at a rate of $0.215 per DGE. One DGE is equal to 6.06 pounds (lbs.) of LNG and 6.41 lbs. of propane. Alternative fuel dealers must sell compressed natural gas (CNG) used as motor fuel in gasoline gallon equivalents (GGEs). CNG must be reported in GGEs and is taxed at a rate of $0.19 GGE. One GGE is equal to 5.66 lbs. of CNG. (Reference Senate Bill 2801, 2017)

Fuel-Efficient Vehicle Acquisition Goals

Illinois state agencies must work towards meeting the following goals:

  • By July 1, 2025, at least 60% of new passenger vehicles purchased must be hybrid electric vehicles (HEVs) and 15% must be battery electric vehicles (EVs).
  • Agencies that operate medium- and heavy-duty vehicles must implement strategies to reduce fuel consumption through diesel emission control devices, HEV and EVs technologies, alternative fuel use, and fuel-efficient technologies.
  • Agencies must also implement strategies to promote the use of biofuels in state vehicles; reduce the environmental impacts of employee travel; and encourage employees to adopt alternative travel methods.

Vehicles designated as specialty, police, and emergency vehicles by the Illinois Department of Central Management Services are exempt from these goals, but should make all reasonable efforts to minimize petroleum usage.

(Reference Executive Order 11, 2009)

Public Utility Definition

An entity that owns, controls, operates, or manages a facility that supplies electricity to the public exclusively to charge battery electric and plug-in hybrid electric vehicles are not defined as a public utility. An entity that supplies compressed natural gas to fuel natural gas vehicles is also not defined as a public utility. (Reference 220 Illinois Compiled Statutes 5/3-105, and 20 Illinois Compiled Statutes 627/10)

State Incentives

Heavy-Duty Transit Bus and School Bus Grants

The Illinois Environmental Protection Agency (EPA) established the Driving a Cleaner Illinois program to administer funds awarded through the Volkswagen Clean Air Act Civil Settlement. Funding is available for the replacement of existing government-owned diesel public transit buses with new diesel, alternative fuel, and all-electric transit buses, as well as for all-electric school bus pilot projects. For more information, including how to apply, see the Illinois EPA Grant Accountability and Transparency Act page.

Natural Gas and Propane Vehicle Weight Exemption

A vehicle powered by natural gas or propane may exceed the state's gross, axle, and bridge vehicle weight limits by up to 2,000 pounds. This exemption does not apply on interstate highways. (Reference 625 Illinois Compiled Statutes 5/15-111)

School Bus Retrofit Reimbursement

The Illinois Department of Education will reimburse any qualifying school district for the cost of converting gasoline buses to more fuel-efficient engines or to engines using alternative fuels. Restrictions may apply. (Reference 105 Illinois Compiled Statutes 5/29-5)

More Laws and Incentives

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