Natural Gas Laws and Incentives in Vermont

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

State Incentives

Alternative Fueling Infrastructure Incentive

The Vermont State Infrastructure Bank (SIB) offers loan assistance to municipalities, regional development corporations, political subdivisions of the state, and private companies working for the state to finance public electric vehicle charging and natural gas fueling stations. 1% fixed loans are available to municipalities and 3% fixed loans are available to private sector borrowers. Other terms and conditions may apply. See the Vermont Economic Development Authority's SIB page for more information, including how to apply.

Fuel-Efficient Vehicle and Emission Reduction Incentives

The Vermont Agency of Transportation (VTrans) administers the High Fuel Efficiency Used-Vehicle Program, MileageSmart, which provides incentives of up to $5,000 to replace eligible vehicles with a used vehicle that has a U.S. Environmental Protection Agency (EPA) combined city/highway fuel economy of at least 40 miles per gallon (mpg).

VTrans also offers vouchers of up to $2,500 for the repair of vehicles that failed the on-board diagnostic (OBD) systems inspection. Eligible vehicles for replacement include those that have failed the OBD systems inspection or those that are more than 15 years old and have an EPA combined city/highway fuel economy of less than 25 mpg. Eligible vehicles for a repair voucher are those that have failed the OBD systems inspection, require repairs that are not under warranty, and will be able to pass the inspection once the repairs are made. The emissions repair program must be operational by July 1, 2021.

(Reference House Bill 529, 2019 and House Bill 529, 2020)

Heavy-Duty Vehicle Emissions Reduction Grants

Through the Vermont Diesel Emissions Reduction Grants Program, the Vermont Department of Environmental Conservation (DEC) provides funding to local, state and regional agencies or departments, businesses, institutions, and nonprofit organizations for projects focused on reducing emissions from diesel engines and vehicles. Qualifying heavy-duty vehicles include buses and Class 5-8 trucks. Projects eligible for funding are as follows:

  • Verified emission control technologies;
  • Verified idle reduction technologies;
  • Verified aerodynamic technologies and low rolling resistance tires;
  • Certified engine replacements;
  • Alternative fuel conversions; and
  • Certified vehicle or equipment replacements.
All technologies and engines must be certified by the U.S. Environmental Protection Agency. Alternative fuels include, but are not limited to, biodiesel, natural gas, propane, electricity, and hydrogen. Cost share requirements vary by project. For more information, including application details, see the DEC Vermont Diesel Emissions Reduction Grants website.

Laws and Regulations

Natural Gas Tax

Natural gas used to propel a motor vehicle is not subject to the state gasoline tax, but is subject to state sales and use tax. (Reference Vermont Statutes Title 32, Chapter 233, Section 9741, and Title 23, Chapter 28, Section 3101)

More Laws and Incentives

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