Natural Gas Laws and Incentives in Oregon

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

Laws and Regulations

Alternative Fuel Excise Tax

Compressed natural gas motor fuel is subject to the state fuel excise tax at the rate of $0.34 per 120 cubic feet, measured at 14.73 pounds per square inch and 60 degrees Fahrenheit. Propane motor fuel is subject to the excise tax $0.34 per 1.3 gallons at 60 degrees Fahrenheit. (Reference Oregon Revised Statutes 319.530)

Alternative Fuel Vehicle (AFV) Parking Space Regulation

An individual is not allowed to park a motor vehicle within any parking space specifically designated for public parking and fueling of AFVs unless the motor vehicle is an AFV fueled by electricity, natural gas, methanol, propane, gasoline blended with at least 85% ethanol (E85), or other fuel the Oregon Department of Energy approves. Eligible AFVs must also be in the process of fueling or charging to park in the space. A person found responsible for a violation is subject to traffic violation penalties. (Reference Oregon Revised Statutes 811.587)

Alternative Fuel Vehicle Acquisition and Fuel Use Requirements

All state agencies must purchase or lease zero-emission vehicles (ZEVs), including all-electric, plug-in hybrid electric, or hydrogen fuel cell vehicles, for at least 25% of new state light-duty vehicles to the maximum extent possible.

If ZEVs are not feasible, the state agency may purchase or lease AFVs and use alternative fuels to operate those vehicles, except in regions where it is not economically or logistically possible to fuel an AFV. Each state agency must develop and report a greenhouse gas reduction baseline and annual reduction targets to the Oregon Department of Administrative Services (DAS). Reports to DAS must include the number of purchases or leases of ZEVs, AFVs, and AFV conversions and the quantity of each type of alternative fuel used annually by state agency fleets. By September 15, 2020, DAS must develop a ZEV procurement plan to reduce costs for state agency ZEV purchases.

(Reference Executive Order 20-04, 2020, and Oregon Revised Statutes 283.327, 283.337, and 267.030)

Clean Transportation Fuel Standards

The Oregon Department of Environmental Quality (DEQ) administers the Oregon Clean Fuels Program (Program), which requires fuel producers and importers to register, keep records of, and report the volumes and carbon intensities of the fuels they provide in Oregon. Phase 2 of the Program, implemented in 2016, requires fuel suppliers to reduce the carbon content of transportation fuels.

In 2020, a new goal was implemented to reduce the carbon content of transportation fuels by 20% below 2015 levels by 2030, and 25% below 2015 levels by 2035.

DEQ must conduct rulemaking for the Program to support greater plug-in electric vehicle (PEV) adoption. DEQ must also develop a method to aggregate and monetize all eligible PEV credits in the Program to assist in achieving the state goal of 50,000 registered PEVs in Oregon by 2020. For more information, see the DEQ Oregon Clean Fuels Program website.

(Reference Executive Order 20-04, 2020, Oregon Revised Statutes 468A.266, and Oregon Administrative Rules 340-253)

Plug-In Electric Vehicle and Vehicle Efficiency Fees

All-electric vehicle (EV) owners must pay an annual fee of $110 or a per-mile road use fee, administered by the OReGo program. Beginning January 1, 2022, EV owners must pay a fee of $115. Medium-speed EV owners must pay an annual fee of $58. All other hybrid vehicles must pay an annual fee in the following amounts:

Vehicle EfficiencyJanuary 1, 2020 through December 31, 2021After December 31, 2021
Vehicles with a rating of 0-19 miles per gallon (mpg)$18$20
Vehicles with a rating of 20-39 mpg$23$25
Vehicles with a rating of 40 mpg or greater$33$35

The per-mile road use fee, as an alternative to the annual fees, is determined by the schedule below:

Calendar YearFee per Mile
2022$0.019 per mile

Drivers with electric vehicles or vehicles with ratings over 40 mpg are exempt from additional registration fees if they enroll in the OReGo program. For more information, including how to apply, visit the OReGo program website.These fees are in addition to standard registration fees.

(Reference Oregon Revised Statutes 803.420-803.422)

Support for Renewable Natural Gas (RNG)

The Oregon Public Utility Commission (PUC) will develop rules for RNG distribution programs for both small and large utilities. Rules must include reporting requirement guidelines and a rate recovery costs process. The PUC must establish rate caps for small natural gas utilities.

The PUC has established voluntary RNG target distribution goals for large utilities that participate in the RNG program under the following schedule:

Calendar YearsPercent RNG
2020-20245%
2025-202910%
2030-203415%
2035-203920%
2040-204425%
2045-205030%

(Reference Oregon Oregon Revised Statutes 757.396)

State Incentives

Alternative Fuel Loans

The Oregon Department of Energy administers the Small-Scale Local Energy Loan Program which offers low-interest loans for qualified projects. Eligible alternative fuel projects include fuel production facilities, dedicated feedstock production, fueling infrastructure, and fleet vehicles. Loan recipients must complete a loan application and pay a loan application fee. The Energy Loan Program is not currently accepting new loan applications (verified February 2020). For more information, including application forms and interest rate and fee information, see the Energy Loan Program website. (Reference Oregon Revised Statutes 470)

Alternative Fuel Technology Weight Exemption

A vehicle equipped with a fully functional idle reduction system designed to reduce fuel use and emissions from engine idling may exceed the maximum weight limitations by up to 550 pounds (lbs.) to accommodate the added weight of the idle reduction technology. Any natural gas vehicle or plug-in electric vehicle may exceed the limits by up to 2,000 lbs. (Reference Oregon Revised Statutes 818.030)

Clean School Bus Grants

The Oregon Department of Environmental Quality must use funds awarded to Oregon through the Volkswagen (VW) Environmental Mitigation Trust and deposited in the Clean Diesel Engine Fund, to award grants to owners and operators of at least 450 school buses powered by diesel engines. Eligible vehicles include buses that have at least three years of remaining useful life. Grants will be available for 30%, up to $50,000, for the purchase of a new bus or up to 100% of the cost to retrofit a school bus with emissions-reducing parts or technology that reduce diesel particulate matter emissions by at least 85%. Any money not expended under this Clean Diesel Engine Fund will fund grants for the reduction of diesel engine emissions as matching funds under the Diesel Emissions Reduction Act program. For more information, see the VW Settlement website. (Reference House Bill 2007, 2019, and Oregon Revised Statutes 468A.795 - 468A.803)

Pollution Control Equipment Exemption

Dedicated original equipment manufacturer natural gas vehicles and all-electric vehicles are not required to be equipped with a certified pollution control system. (Reference Oregon Revised Statutes 815.300)

More Laws and Incentives

To find laws and incentives for other alternative fuels and advanced vehicles, search all laws and incentives.