Natural Gas Laws and Incentives in Virginia

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

Laws and Regulations

Alternative Fuel Provider License

Alternative fuel providers, bulk users, and retailers, or any person who fuels an alternative fuel vehicle from a private source that does not pay the alternative fuels tax must obtain an alternative fuel license from the Virginia Department of Motor Vehicles (DMV). For more information, see the DMV Fuels Tax Licensing website. (Reference Virginia Code 58.1-2244)

Alternative Fuel School Bus Regulations

The Virginia Board of Education may not unreasonably limit the authority of any local school division to purchase and use school buses powered by or converted to compressed natural gas (CNG) or other alternative fuels.

The Virginia Board of Education may provide for the display of signs or other markings on school buses using alternative fuels to identify the vehicle as an AFV and indicate the type of alternative fuel used.

(Reference Virginia Code 22.1-177 and 46.2-1089.1)

Alternative Fuel Vehicle (AFV) Tax Reduction Authorization

Local governments may reduce personal property taxes paid on AFVs, specifically vehicles that operate using natural gas, liquefied petroleum gas or propane, hydrogen, or electricity, including low-speed vehicles. (Reference Virginia Code 58.1-3506)

Alternative Fuel and Vehicle Tax

Alternative fuels used to operate on-road vehicles are taxed at a rate of $0.162 per gasoline gallon equivalent (GGE). Alternative fuels are taxed at the same rate as gasoline and gasohol (5.1% of the statewide average wholesale price of a gallon of self-serve unleaded regular gasoline). Refer to the Virginia Department of Motor Vehicles (DMV) Fuels Tax Rates and Alternative Fuels Conversion website for fuel-specific GGE calculations. All-electric vehicles (EVs) registered in Virginia are subject to a $64.00 annual license tax at time of registration. For more information, see the Virginia DMV Electric Vehicles website. (Reference Virginia Code 58.1-2217 and 58.1-2249)

Compressed Natural Gas (CNG) Deregulation

The Virginia State Corporation Commission may refrain from regulating and setting rates, charges, and fees for retail CNG service provided by corporations other than public service corporations. (Reference Virginia Code 56-232.2)

Natural Gas Vehicle (NGV) Technician Certification

The Virginia Department of Professional and Occupational Regulation (DPOR) administers a program to certify NGV mechanics and technicians. For application and certification information, see the DPOR Natural Gas Automobile Mechanics and Technicians Advisory Board website. (Reference Virginia Code 54.1-2355 through 54.1-2358 and Virginia Administrative Code 18-120-50)

State Energy Plan

The Virginia Energy Plan (Plan) assesses the commonwealth's primary energy sources and recommends actions to meet the following goals: make Virginia the energy capital of the East Coast by expanding traditional and alternative energy production, jobs, and investment, and increasing energy conservation and efficiency; expand public education about Virginia's energy production and consumption, its effect on the economy, and methods to increase energy efficiency; assess the impact of federal clean air standards; and maximize investment in clean energy research and development. The Plan includes policies to promote alternative fuel and efficient vehicle use, encourage efficient driving techniques, and reduce vehicle miles traveled. The Department of Mines, Minerals and Energy must submit the Plan to the governor, the State Corporation Commission, and the General Assembly by October 1 of each year following the election of a new governor. For more information, see the Virginia Energy Plan website. (Reference Virginia Code 67-101 and 67-102)

State Incentives

Alternative Fuel Tax Exemption

Alternative fuel is exempt from taxes if it is sold to a government entity for its exclusive use, sold to a non-profit charitable organization for the purpose of providing charitable services for low-income medical patients, or produced by an agricultural operator and used exclusively for farm use or vehicles of that operator. (Reference Virginia Code 58.1-2250)

Alternative Fuel Vehicle and Fueling Infrastructure Loans

The Virginia Board of Education may use funding from the Literary Fund to provide loans to school boards that convert school buses to operate on alternative fuels or construct alternative fueling stations. (Reference Virginia Code 22.1-146)

Alternative Fuel and Hybrid Electric Vehicle (HEV) Emissions Testing Exemption

The Virginia emissions inspection program, which requires biennial inspections of motor vehicles, does not apply to vehicles exclusively powered by compressed or liquefied natural gas, liquefied petroleum gas (propane), hydrogen, a combination of compressed natural gas and hydrogen, or electricity. Qualified HEVs with U.S. Environmental Protection Agency fuel economy ratings of at least 50 miles per gallon (city) are also exempt from the emissions inspection program unless remote sensing devices indicate the HEV may not meet current emissions standards. For more information, including a list of HEVs that qualify, see the Virginia Department of Motor Vehicles Emissions Inspections website. (Reference Virginia Code 46.2-1177 through 46.2-1178)

Government Alternative Fuel Vehicle (AFV) Incentive

The Virginia Department of Mines, Minerals and Energy, in collaboration with the Virginia Department of Transportation, offers up to $10,000 to state agencies and local governments for the incremental cost of new or converted AFVs. To be eligible, vehicles must comply with Buy America provisions or qualify for a waiver from the Federal Highway Administration, and must be garaged in areas of air quality nonattainment, as recognized by the federal Congestion Mitigation and Air Quality Improvement (CMAQ) program. For more information, see the Virginia CMAQ Incentive Program website.

Point of Contact
Robin Jones
Virginia Department of Mines, Minerals, and Energy
Phone: (804) 692-3224
robin.jones@dmme.virginia.gov

Green Jobs Tax Credit

Qualified employers are eligible for a $500 tax credit for each new green job created that offers a salary of at least $50,000, for up to 350 jobs per employer. The credit is allowed for the first five years that the job is continuously filled. For the purposes of this tax credit, a green job is defined as employment in industries relating to renewable or alternative energy, including hydrogen and fuel cell technology, landfill gas, and biofuels. The tax credit expires on January 1, 2021. For more information, see the Virginia Department of Taxation website. (Reference Senate Bill 573, 2018, and Virginia Code 58.1-439.12:05)

High Occupancy Vehicle (HOV) Lane Exemption

Alternative fuel vehicles (AFVs) displaying the Virginia Clean Special Fuel license plate may use Virginia HOV lanes, regardless of the number of occupants. For HOV lanes serving the I-66 corridor, only registered vehicles displaying Clean Special Fuel license plates issued before July 1, 2011, are exempt from HOV lane requirements. For express lanes serving the I-95/I-395 corridor, registered vehicles displaying Clean Special Fuel license plates are not exempt from HOV lane occupancy requirements, but may use the lanes toll-free if equipped with an E-ZPass Flex set to "HOV" mode. Vehicles displaying Clean Special Fuel license plates are exempt from the Dulles Toll Road HOV lane requirements. Eligible vehicles include dedicated AFVs and some hybrid electric vehicles; see the Virginia Department of Motor Vehicles website for a complete list of qualifying vehicles. The annual fee for Clean Special Fuel license plates is $25 in addition to the prescribed fee for commonwealth license plates. This exemption expires September 30, 2019. For more information, see the Virginia Department of Transportation HOV Lanes website. (Reference Virginia Code 33.2-501 and 46.2-749.3)

Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption

Any motor vehicle equipped with an auxiliary power unit or other idle reduction technology may exceed the gross, single axle, tandem axle, or bridge formula weight limits by up to 550 pounds to compensate for the added weight of the idle reduction technology. Furthermore, any NGV may exceed the limits by up to 2,000 pounds. To be eligible for the weight exemption, the vehicle operator must be able to provide written proof idle reduction technology weight and demonstrate or certify that it is fully functional at all times. (Reference Virginia Code 46.2-1129.1 through 46.2-1129.2)

More Laws and Incentives

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