Natural Gas Laws and Incentives in Louisiana
The list below contains summaries of all Louisiana laws and incentives related to natural gas.
Laws and Regulations
Alternative Fuel Excise Taxes
All licensed on-road vehicles fueled with compressed natural gas (CNG) or liquefied petroleum gas (propane) are subject to a special fuels tax through the Excise Taxes Division of the Louisiana Department of Revenue. Vehicle owners or operators must pay a special fuels tax of $0.16 per gallon equivalent of natural gas at the time fuel is dispensed or delivered into the tank of a motor vehicle. A gasoline gallon equivalent is equal to 5.66 lbs. of CNG and a diesel gallon equivalent is equal to 6.06 lbs. of liquefied natural gas (LNG). A gallon of propane is subject to 73% of the state tax on a gallon of gasoline. Alternative fuel distributers must be licensed by the state. (Reference Louisiana Revised Statutes 47:802.3)
Point of Contact
Special Programs Division - Excise Tax
Louisiana Department of Revenue
Phone: (225) 219-2200
Alternative Fuel and Advanced Vehicle Acquisition Requirements
The Louisiana Division of Administration must purchase dedicated alternative fuel vehicles (AFVs) capable of operating on natural gas or liquefied petroleum gas (propane), or bi-fuel vehicles capable of operating on conventional fuel or natural gas, propane, or any non-ethanol advanced biofuel. State agency vehicles may be granted a waiver if fueling stations are not available within a 25 mile radius, the agency cannot recoup the incremental cost of the vehicle within 60 months, or the available vehicles do not meet agency specifications.Any AFV a state agency purchases or leases must have a minimum fuel economy of 18 miles per gallon (mpg) for city driving, 28 mpg for highway driving, or a combined city/highway average of 24 mpg. Law enforcement vehicles, certified emergency vehicles, and state agency vehicles with prior written authorization are exempt from this requirement. (Reference Louisiana Revised Statutes 39:364 and 39:1646)
Compressed Natural Gas (CNG) and Propane Regulatory Authority
The Louisiana Department of Natural Resources' Office of Conservation has regulatory authority over CNG safety, including fueling stations and the installation of conversion equipment in a vehicle. Vehicles capable of operating on, liquefied petroleum gas (propane) must have passed a safety inspection from the Louisiana Liquefied Petroleum Gas Commission. (Reference Louisiana Revised Statutes 30:731 and 30:732)
Deregulation of Compressed Natural Gas (CNG) as a Motor Fuel
The Public Service Commission does not regulate the sale of CNG by producers, pipelines, distribution companies, or other persons when it is to be used as a transportation fuel. (Reference Louisiana Revised Statutes 45:1163)
Alternative Fuel Vehicle (AFV) Tax Credit
Louisiana offers a nonrefundable income tax credit for new original equipment manufacturer AFVs purchased before July 1, 2021. A taxpayer may take a tax credit of 10% of the cost of the motor vehicle, up to $2,500. To qualify for the tax credit, vehicles must have a dedicated alternative fuel storage and delivery system and be registered in Louisiana. For the purpose of this incentive, alternative fuels include natural gas, propane, biofuel, biodiesel, methanol, ethanol, and electricity. (Reference Senate Bill 8, 2021, Louisiana Revised Statutes 47:6035, and Louisiana Administrative Code Title 61, Section 1913)
Alternative Fueling Infrastructure Tax Credit
Louisiana offers a nonrefundable income tax credit of 30% of the cost of purchasing and installing qualified clean-burning motor vehicle fuel property. Qualified clean-burning motor vehicle fuel property is defined as:
- Alternative fueling delivery equipment including compression equipment, storage tanks, and dispensing units for alternative fuel at the point where the fuel is delivered, and;
- Purchase of property which is directly related to the delivery of an alternative fuel for use in AFVs.
Natural Gas Vehicle Weight Exemption
A vehicle powered by compressed or liquefied natural gas may exceed the state's gross and axle vehicle weight limits by a weight equal to the difference between the weight of the vehicle with the natural gas tank and a comparable diesel tank system, up to 2,000 pounds. This exemption applies on all state roads and interstate highways. (Reference Louisiana Revised Statutes 32:386)
Vehicle Emissions Reduction and Electric Vehicle Supply Equipment (EVSE) Project Funding
The Louisiana Department of Environmental Quality’s (DEQ) Volkswagen Eligible Mitigation Action Project program provides up to 80% of the cost of new diesel or alternative fuel replacements and repowers for eligible government entities. For eligible non-government entities, the Program provides up to 40% of the cost of a new diesel or alternative fuel repower, up to 25% of the cost of a new diesel or alternative fuel vehicle, and up to 75% of the cost of an all-electric repower or replacement, with associated charging infrastructure. Qualifying alternative fuels include, but are not limited to, natural gas and propane. Vehicles that qualify for replacement or repower include:
|Model Year||Vehicle Type|
|1992-2009||Class 8 Local Freight Trucks and Port Drayage Trucks|
|1992-2009||Class 4-7 Local Freight Trucks|
|2009 or older||Class 4-8 School Buses, Shuttle Buses, and Transit Buses|
Eligible government and non-government entities may also receive funding for the all-electric repower or replacement of airport ground support equipment, forklifts, and port cargo handling equipment, as well as for the purchase, installation, and maintenance of light-duty EVSE.
The program is funded by Louisiana’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including application guidelines, see the DEQ Louisiana Volkswagen Environmental Mitigation Trust website.
More Laws and Incentives
To find laws and incentives for other alternative fuels and advanced vehicles, search all laws and incentives.