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) Acquisition, Fuel Use, and Emissions Reductions Requirements

All state agencies and transit districts must purchase AFVs and use alternative fuels to operate those vehicles to the maximum extent possible, 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 determine annual reduction targets. Reports to the Oregon Department of Administrative Services (DAS) must include the number of purchases or leases of AFVs or AFV conversions and the quantity of each type of alternative fuel used annually by state agency fleets.

DAS and the Oregon Department of Energy (ODOE) must improve the plug-in electric vehicle (PEV) bulk procurement process to reduce costs for state agency PEV purchases. DAS must develop a "Low-Emission Vehicle (LEV) First" policy to encourage state employees to use PEVs or other LEVs in the state fleet. DAS and ODOE must also develop a tool to calculate the long-term return on investment and life-cycle costs of PEVs to inform agencies of potential cost savings. In addition, DAS must inform and support legislative changes that enable increased charging infrastructure and state agency PEV purchases.

(Reference Executive Order 17-21, 2017, Oregon Revised Statutes 283.327 and 267.030, and Executive Order 06-02, 2006)

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 Law 208, 2015, and Oregon Revised Statutes 469B.100)

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.

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 17-21, 2017, Oregon Revised Statutes 468A.270, and Oregon Administrative Rules 340-253)

Natural Gas and Propane Vehicle License Fee

Drivers using natural gas or propane to fuel a vehicle may pay an annual special use fuel license fee in lieu of the state fuel excise tax of $0.34 per gallon. The fee is determined by multiplying a base amount in the table below by the current tax rate and dividing by 12.

Combined Vehicle Weight (pounds)Base Amount
0 - 10,000$60
10,001 - 26,000$300
26,001 and above$400

(Reference Oregon Revised Statutes 319.535)

Plug-In Electric Vehicle and Vehicle Efficiency Fees

Beginning January 1, 2020, all-electric vehicle (EV) owners must pay an annual fee of $110. 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 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

These fees are in addition to standard registration fees. (Reference Oregon Revised Statutes 803.420-803.422)

State Incentives

Alternative Fuel Loans

The Oregon Department of Energy administers the State Energy Loan Program (SELP) 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. SELP is not currently accepting new loan applications (confirmed April 2018). For more information, including application forms and interest rate and fee information, see the SELP website. (Reference Oregon Revised Statutes 470)

Clean School Bus Grants

The Oregon Department of Environmental Quality must use funds awarded to Oregon through the Volkswagen Clean Air Act Civil Settlement 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%. (Reference Oregon Revised Statutes 468A.795-468A.803)

Idle Reduction and Natural Gas Vehicle (NGV) 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 NGV may exceed the limits by up to 2,000 lbs. (Reference Oregon Revised Statutes 818.030)

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

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