Natural Gas Laws and Incentives in North Carolina

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

State Incentives

Alternative Fuel Tax Exemption

The retail sale, use, storage, and consumption of alternative fuels is exempt from the state retail sales and use tax. (Reference North Carolina General Statutes 105-164.13)

Alternative Fuel Vehicle (AFV), Idle Reduction Technologies, and Diesel Retrofits Funding

The Clean Fuel Advanced Technology (CFAT) project provides grant funding to reducing transportation-related emissions in nonattainment and maintenance counties for National Ambient Air Quality Standards. A project that is adjacent to these areas may also be eligible for funding if the project will reduce emissions in eligible counties. The North Carolina Department of Transportation funds the CFAT project, which covers three broad areas: education and outreach; project funding; and recognition of exemplary activities. For the fiscal year 2019 funding cycle, financial support is available for AFV purchases or leases, idle reduction technologies, and diesel retrofits. For more information, including current requests for proposals, see the CFAT website.

Point of Contact
Rick Sapienza
Clean Transportation Program Manager
North Carolina Clean Energy Technology Center, North Carolina State University
Phone: (919) 515-2788

Alternative Fuel and Alternative Fuel Vehicle (AFV) Fund

The North Carolina State Energy Office administers the Energy Policy Act (EPAct) Credit Banking and Selling Program, which enables the state to generate funds from the sale of EPAct 1992 credits. The funds that EPAct credit sales generate are deposited into the Alternative Fuel Revolving Fund (Fund) for state agencies to offset the incremental costs of purchasing biodiesel blends of at least 20% (B20) or ethanol blends of at least 85% (E85), developing alternative fueling infrastructure, and purchasing AFVs and hybrid electric vehicles. Funds are distributed to state departments, institutions, and agencies in proportion to the number of EPAct credits generated by each. For the purposes of this program, alternative fuels include 100% biodiesel (B100), biodiesel blends of at least B20, ethanol blends of at least E85, compressed natural gas, propane, and electricity. The Fund also covers additional projects approved by the Energy Policy Council. (Reference North Carolina General Statutes 143-58.4, 143-58.5, 143-341, and 136-28.13)

Alternative Fuel and Idle Reduction Grants

The North Carolina Department of Environment and Natural Resources Division of Air Quality provides grants for the incremental cost of original equipment manufacturer alternative fuel vehicles, vehicle conversions, and implementing idle reduction programs. For more information see the Diesel Emission Reductions Grants website.

Point of Contact
Jill Vitas
Environmental Engineer
North Carolina Department of Environmental Quality
Phone: (919) 707-8424

Natural Gas Vehicle (NGV) Weight Exemption

A vehicle primarily powered by natural gas may exceed the state's gross vehicle weight limits by a weight equal to the difference between the average weight of the vehicle with the natural gas tank and fueling system and the average weight of a comparable vehicle with a diesel tank and fueling system. The NGV maximum gross weight may not exceed 82,000 pounds. (Reference North Carolina General Statutes 20-118)

Laws and Regulations

Alternative Fuel Use and Fuel-Efficient Vehicle Requirements

State-owned vehicle fleets must implement petroleum displacement plans to increase the use of alternative fuels and fuel-efficient vehicles. Reductions may be met by petroleum displaced through the use of biodiesel, ethanol, other alternative fuels, the use of hybrid electric vehicles, other fuel-efficient or low emission vehicles, or additional methods the North Carolina Division of Energy, Mineral and Land Resources approves. (Reference Session Law 2013-265, Section 19.5(a))

Alternative Fuel Vehicle (AFV) Acquisition Goal

North Carolina established a goal that at least 75% of new or replacement state government light-duty cars and trucks with a gross vehicle weight rating of 8,500 pounds or less must be AFVs or low emission vehicles. (Reference North Carolina General Statutes 143-215.107C)

Alternative Fuels Tax

The state motor fuel tax on liquefied natural gas (LNG) is imposed based on the diesel gallon equivalent (DGE) and the tax on propane and compressed natural gas (CNG) is based on the gasoline gallon equivalent (GGE). For taxation purposes, one GGE of propane and CNG is equal to 5.75 pounds (lbs.) and 5.66 lbs., respectively, and one DGE of LNG is equal to 6.06 lbs. The North Carolina Department of Revenue will determine the equivalent rate for all other non-liquid alternative fuels. Certain exclusions apply. For more information, including current tax rates, see the Motor Fuels Tax Information website. (Reference North Carolina General Statutes 105-449.130 and 105-449.136)

More Laws and Incentives

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