Alternative Fuel and Advanced Vehicle Technology Incentives: A Summary of Federal Programs
Congressional research reportSep 13, 2021
Ask Donna
What actually matters in this document.
Text
Alternative Fuel and Advanced Vehicle
Technology Incentives: A Summary of
Federal Programs
Updated September 13, 2021
Congressional Research Service
https://crsreports.congress.gov
R42566
SUMMARY
Alternative Fuel and Advanced Vehicle
Technology Incentives: A Summary of
Federal Programs
A wide array of federal incentives supports the development and deployment of
alternatives to conventional fuels and engines in transportation. These incentives include
tax deductions and credits for vehicle purchases and the installation of refueling
systems, federal grants for conversion of older vehicles to newer technologies, mandates
for the use of biofuels, and incentives for manufacturers to produce alternative fuel
vehicles. The current array of incentives for alternative fuels and related technologies
does not reflect a single, comprehensive strategy, but rather an aggregative approach to a
range of discrete public policy issues, including goals of reducing petroleum
consumption and import dependence, improving environmental quality, expanding
domestic manufacturing, and promoting agriculture and rural development.
R42566
September 13, 2021
Lynn J. Cunningham
Senior Research Librarian
Bill Canis
Specialist in Industrial
Organization and Business
Melissa N. Diaz
Analyst in Energy Policy
Brent D. Yacobucci
Section Research Manager
Alternative fuels programs can be generally classified into seven categories, some of
which overlap: increasing the penetration of electric vehicles (EVs) in the automotive
market; expanding domestic biofuel production and use; establishing other alternative fuels; encouraging the
purchase of nonpetroleum vehicles; reducing fuel consumption and greenhouse gas emissions; supporting U.S.
vehicle manufacturing; and funding U.S. highways.
Current federal programs are administered by five key agencies: Department of the Treasury (Treasury),
Department of Energy (DOE), Department of Transportation (DOT), Environmental Protection Agency (EPA),
and the U.S. Department of Agriculture (USDA). The incentives and programs described in this report are
organized by the responsible agency.
Treasury (through the Internal Revenue Service, IRS) administers tax credits and deductions for
alternative fuel and advanced technology vehicle purchases, expansion of alternative fuel
refueling infrastructure, and incentives for the production and/or distribution of alternative fuels.
Many of these incentives have expired in recent years.
DOE (mainly through the Office of Energy Efficiency and Renewable Energy, EERE) administers
research and development (R&D) programs for advanced fuels and transportation technology,
grant programs to deploy alternative fuels and vehicles, and a loan program to promote domestic
manufacturing of high-efficiency vehicles.
DOT (mainly through the Federal Highway Administration, FHWA, and Federal Transit
Administration, FTA) administers grant programs to deploy “clean fuel” buses and other
alternative fuel vehicles. DOT (through the National Highway Traffic Safety Administration,
NHTSA) also administers federal Corporate Average Fuel Economy (CAFE) standards, which
include incentives for production of alternative fuel vehicles.
EPA (mainly through the Office of Transportation and Air Quality, OTAQ) administers the
Renewable Fuel Standard, which mandates the use of biofuels in transportation. EPA also
administers grant programs to replace older diesel engines with newer technology.
USDA (mainly through the Rural Business-Cooperative Service, RBS) administers grant, loan,
and loan guarantee programs to expand agricultural production of biofuel feedstocks, conduct
R&D on biofuels and bioenergy, and establish and expand facilities to produce biofuels,
bioenergy, and bioproducts.
Congressional Research Service
Alternative Fuel and Advanced Vehicle Technology Incentives
Contents
Introduction ................................................................................................................... 1
Factors Behind Alternative Fuels and Technologies Incentives ............................................... 2
Expanding Electric Vehicle Use ................................................................................... 3
Developing Domestic Biofuel Production and Use.......................................................... 3
Establishing Other New Alternative Fuels ..................................................................... 3
Encouraging the Use of Nonpetroleum Vehicles ............................................................. 4
Reducing Fuel Consumption and Vehicle Emissions ....................................................... 4
Supporting U.S. Motor Vehicle Manufacturing ............................................................... 4
Highway Funding and Fuels Taxes ............................................................................... 5
Structure and Content of the Report ................................................................................... 5
Current Federal Incentives................................................................................................ 6
Department of the Treasury......................................................................................... 6
Vehicle Incentives ................................................................................................ 6
Alternative Motor Vehicle Credit (Fuel Cell Vehicles) .......................................... 6
Plug-In Electric Drive Vehicle Credit ................................................................. 6
Plug-In Two-Wheeled Electric Vehicle Credit ..................................................... 7
Idle Reduction Equipment Tax Exemption .......................................................... 8
Fuel/Infrastructure Incentives—General................................................................... 8
Motor Fuel Excise Taxes .................................................................................. 8
Incentives for Alternative Fuel and Alternative Fuel Mixtures ................................ 9
Alternative Fuel Refueling Property Credit ....................................................... 10
Fuel/Infrastructure Incentives—Biofuels ................................................................ 11
Biodiesel or Renewable Diesel Mixture Excise Tax Credit and Income Tax
Credit ....................................................................................................... 11
Small Agri-Biodiesel Producer Credit .............................................................. 12
Second Generation Biofuel Producer Credit ...................................................... 12
Department of Energy .............................................................................................. 13
Advanced Technology Vehicles Manufacturing Loan Program (ATVM) ................ 13
Bioenergy Technologies Office (formerly the Biomass and Biorefinery
Systems R&D Program) .............................................................................. 14
Clean Cities Program..................................................................................... 15
Hydrogen and Fuel Cell Technologies Office .................................................... 15
Vehicle Technologies Office (VTO) ................................................................. 16
Department of Transportation .................................................................................... 17
Alternative Fuel Corridors.............................................................................. 17
Congestion Mitigation and Air Quality Improvement Program ............................. 17
Corporate Average Fuel Economy Program Alternative Fuel Vehicle Credits.......... 18
Low or No Emission Vehicle Program.............................................................. 18
Environmental Protection Agency .............................................................................. 19
National Clean Diesel Campaign ..................................................................... 19
Renewable Fuel Standard............................................................................... 19
Department of Agriculture ........................................................................................ 20
Bioenergy Program for Advanced Biofuels ....................................................... 20
Biomass Crop Assistance Program (BCAP; §9011) ............................................ 21
Biomass Research and Development (BRDI) .................................................... 22
Congressional Research Service
Alternative Fuel and Advanced Vehicle Technology Incentives
Biorefinery, Renewable Chemical, and Biobased Product Manufacturing
Assistance Program (formerly the Biorefinery Assistance Program) ................... 22
Rural Energy for America Program (REAP) Grants and Loans............................. 23
Figures
Figure 1. U.S. Greenhouse Gas Emissions from Transportation and Electric Power ................... 2
Tables
Table B-1. Federal Programs by Agency ........................................................................... 28
Table B-2. Federal Taxes and Incentives for Alternative Fuels .............................................. 36
Table B-3. Federal Incentives for Alternative Fuel and Advanced Technology Vehicles ............ 38
Table B-4. Selected Expired/Repealed Programs by Agency ................................................ 39
Appendixes
Appendix A. Selected Expired or Repealed Programs ......................................................... 25
Appendix B. Summary Tables ......................................................................................... 27
Contacts
Author Information ....................................................................................................... 40
Congressional Research Service
Alternative Fuel and Advanced Vehicle Technology Incentives
Introduction
Since the early years of the automobile, petroleum-fueled combustion engines have dominated
the vehicle market. Alternatives, including battery-powered electric vehicles (EVs) and alcoholfueled combustion vehicles, have existed since the automobile’s infancy, but their adoption was
limited for a variety of reasons, including abundant, inexpensive gasoline and diesel fuel, a
refueling infrastructure network dedicated to petroleum, and differences in vehicle performance
and capability. Interest in alternatives to petroleum has grown over time, driven by factors such as
concerns over U.S. reliance on imported petroleum, pollutant emissions and subsequent health
effects, and climate change resulting from the use of fossil fuels. Congress has considered and
debated the role of petroleum and other transportation energy sources for decades, and that
discussion continues as the nation considers legislation to address aging infrastructure and
meeting the needs of modern society.
A range of federal incentives support the development and deployment of alternatives to
conventional fuels and engines in transportation. These incentives include tax deductions and
credits for vehicle purchases and the installation of refueling infrastructure, federal grants for
conversion of older vehicles to newer technologies, mandates for the use of biofuels, and
incentives for manufacturers to produce alternative fuel vehicles. Some of these incentives have
expired and subsequently been reinstated, in many cases retroactively. Further, in some cases this
retroactive extension has happened multiple times.
Many of the policy choices presented for alternative fuel and advanced vehicle technologies
originated as a response to the nation’s interest in reducing petroleum imports, a goal first
articulated at the time of the two oil embargoes imposed by the Organization of Petroleum
Exporting Countries (OPEC) in the 1970s. While President Richard Nixon is often cited as the
first President to call for “energy independence,” successive Presidents and Congresses have
made efforts to reduce petroleum import dependence as well.
However, concern over import dependence among some stakeholders has waned, particularly
since the mid-2000s. Driven largely by the advent of inexpensive drilling techniques once
considered “unconventional,” domestic crude oil production increased 145% from 2008 and
2020, 1 while net U.S. petroleum (crude oil and products) imports peaked in 2005 and became
negative (i.e., net exports) in 2020. 2 Since the mid-2000s, other considerations have played a
larger role, including an increasing share of U.S. greenhouse gas (GHG) emissions coming from
transportation—while total U.S. emissions fell 11% from 2005 to 2019, transportation emissions
increased from 27% of the total to 29% (Figure 1). The majority of those transportation
emissions come from the combustion of gasoline and diesel fuel in cars, trucks, buses, and other
automobiles.
1 U.S. Energy Information Administration (EIA), U.S. Field Production of Crude Oil, Washington, DC, July 30, 2021,
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus1&f=a.
2 EIA, U.S. Net Imports of Crude Oil and Petroleum Products, Washington, DC, July 30, 2021, https://www.eia.gov/
dnav/pet/hist/LeafHandler.ashx?n=PET&s=MT TNTUS2&f=A.
Congressional Research Service
1
Alternative Fuel and Advanced Vehicle Technology Incentives
Figure 1. U.S. Greenhouse Gas Emissions from Transportation and Electric Power
Million Metric Tons Carbon Dioxide Equivalent (MMT CO2 Eq.)
Source: U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions and Sinks 19902019, EPA 430-R-21-005, Washington, DC, April 14, 2021, Tables ES-6 and ES-7, https://www.epa.gov/
ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2019.
Notes: In this figure, emissions from electric power for transportation are included in the transportation sector,
as well as in total electric power emissions. In 2005, electric power contributed 33% of U.S. emissions,
decreasing to 25% in 2019, while transportation emissions increased from 27% to 29% during the same time
frame. Excludes U.S. territories.
Federal incentives to promote alternative fuels and advanced vehicle technologies do not reflect a
single, comprehensive strategy but rather an aggregative approach to a range of discrete public
policy issues, including improving environmental quality, expanding domestic manufacturing,
and promoting agriculture and rural development.
Factors Behind Alternative Fuels and Technologies
Incentives
While a reliance on foreign sources of petroleum was an overriding concern for much of the past
50 years, other factors, such as rural development, promotion of domestic manufacturing, and
environmental concerns, have also shaped congressional interest in alternative fuels and
technologies. A variety of programs affecting the development and commercialization of
alternative fuels and technologies have been proposed and enacted, each with its own benefits and
drawbacks.3 Alternative fuels programs can be generally classified into seven categories, some of
which overlap: increasing the penetration of EVs in the automotive market; expanding domestic
biofuel production and use; establishing other alternative fuels; encouraging the purchase of
nonpetroleum vehicles; reducing fuel consumption and greenhouse gas emissions; supporting
U.S. vehicle manufacturing; and funding U.S. highways.
3 T his report does not evaluate the effectiveness of alternative fuel programs and incentives.
Congressional Research Service
2
Alternative Fuel and Advanced Vehicle Technology Incentives
Expanding Electric Vehicle Use
Many stakeholders see EVs as a key strategy in addressing transportation-related pollutant GHG
emissions. A plug-in battery electric vehicle (BEV) has no direct emissions of conventional
pollutants 4 or GHGs. 5 The same is true for a plug-in hybrid electric vehicle (PHEV) when
operating in all-electric mode. Sales of plug-in vehicles have increased: in 2015, plug-in vehicles
represented roughly 0.8% of the new passenger vehicle market, and in 2018, that share had
increased to 2.2%. 6 However, while infrastructure to recharge plug-in vehicles has grown over the
same time, the number of publicly available charging stations remains small relative to the
number of retail gasoline stations in the United States.
Developing Domestic Biofuel Production and Use
Biofuels, particularly corn-based ethanol, have been seen as a homegrown alternative to imported
oil. A number of programs were put in place to encourage their domestic development (instead of
importing from other biofuel producers, such as Brazil). To spur establishment of this domestic
industry, Congress has enacted a number of laws, which are beneficial to states that have a large
concentration of corn and soybean growers (corn and soybeans being the raw material feedstocks
in most U.S. biofuels). Many of the incentives for biofuel production have been included in farmrelated legislation and appropriations acts and hence have been administered by the U.S.
Department of Agriculture (USDA), or in tax provisions administered by the Internal Revenue
Service (IRS). Since 2005, petroleum refiners and importers have been required to supply
biofuels as a share of their gasoline and diesel supply. 7 This mandate, the Renewable Fuel
Standard (RFS), has been an impetus for expanded production and use of ethanol and other
biofuels. Within and outside of the RFS, specific policies support the development of biodiesel
and other renewable diesel fuels and biofuels produced from cellulose, farm and municipal waste,
and/or algae. These include specific carve-outs within the RFS mandates and targeted tax credits
for biofuels other than conventional ethanol.
Establishing Other New Alternative Fuels
In addition to biofuels, Congress has sought to spur development of other alternative fuels, such
as hydrogen, liquefied petroleum gas (LPG), compressed natural gas (CNG), and liquefied natural
gas (LNG). Some of these fuels have been supported through tax credits, vehicle purchase
mandates (mainly on federal and state fleets), and R&D programs (e.g., for hydrogen fuel and
fuel cell vehicles).
4
E.g., particulate matter (PM), volatile organic compounds (VOCs), and nitrogen oxides (NOx), which pose direct
health impacts or contribute to the formation of other atmospheric compounds that affect human health or welfare.
5 Often referred to as zero emission vehicles (ZEVs) because of the lack of direct emissions, the use of EVs may still
result in upstream emissions from the production of the vehicle and its components, as well as from the generation of
electricity (if, for example, that electricity comes from fossil fuel combustion). For more information on EVs, see CRS
Report R46231, Electric Vehicles: A Primer on Technology and Selected Policy Issues, by Melissa N. Diaz. For more
information on EV lifecycle emissions relative to conventional vehicles, see CRS Report R46420, Environmental
Effects of Battery Electric and Internal Combustion Engine Vehicles, by Richard K. Lattanzio and Corrie E. Clark.
6
International Energy Agency (IEA), Global EV Outlook 2021, April 2021, https://www.iea.org/reports/global-evoutlook-2021.
7 For further discussion, see CRS Report R43325, The Renewable Fuel Standard (RFS): An Overview, by Kelsi
Bracmort.
Congressional Research Service
3
Alternative Fuel and Advanced Vehicle Technology Incentives
Encouraging the Use of Nonpetroleum Vehicles
Congress has enacted laws which seek to boost consumer adoption by providing tax credits for
the purchase of some vehicles that consume far less petroleum than conventional vehicles, or that
do not consume petroleum at all. These tax credit programs generally are limited in duration as a
way to encourage early adopters to take a risk on new kinds of vehicles. The proponents contend
that once a significant number of such new cars and trucks are on the road, additional buyers
would be attracted to them, the increased volume would result in lower prices, and the tax credits
would no longer be needed. Currently, a credit is available for the purchase of plug-in electric
vehicles. Expired credits include incentives for hybrid vehicles, fuel cell vehicles, advanced lean
burn technology vehicles, 8 and certain alternative fuel vehicles. Congress has also enacted tax
credits to spur the expansion of infrastructure to fuel such vehicles and to incentivize the sale of
alternative fuels.
Reducing Fuel Consumption and Vehicle Emissions
Several agencies, including the Environmental Protection Agency (EPA) and the Department of
Transportation (DOT), have been mandated by statute to address concerns over fuel consumption
and vehicle emissions through programs for alternative fuels. The most significant and longstanding program to reduce vehicle fuel consumption is the Corporate Average Fuel Economy
(CAFE) program administered by DOT. 9 Under CAFE, each manufacturer’s fleet must meet
specific miles-per-gallon standards for passenger vehicles and light trucks. If a manufacturer fails
to do so, it is subject to financial penalties. Manufacturers can accrue credits toward meeting
CAFE standards for the production and sale of certain types of alternative fuel vehicles. A joint
rulemaking process between DOT and EPA links future CAFE standards with GHG standards
promulgated under EPA’s Clean Air Act authority. DOT also established the Congestion
Mitigation and Air Quality Improvement Program (CMAQ) to fund programs that intended to
reduce emissions in urban areas that exceed certain air quality standards. At EPA, the Diesel
Emission Reduction Act (DERA) was implemented with a goal of reducing diesel emissions by
funding and implementing new technologies. In addition, EPA’s RFS mandates the use of
renewable fuels for transportation. 10 Under the RFS, some classes of biofuels must achieve GHG
emission reductions relative to gasoline.
Supporting U.S. Motor Vehicle Manufacturing
The Department of Energy (DOE), in partnership with U.S. automakers, federal labs, and
academic institutions, has funded and overseen research and development programs on alternative
vehicles and vehicle electrification for decades, in particular research focused on how to produce
economical batteries that extend electric vehicle range. These R&D programs were supplemented
in the American Recovery and Reinvestment Act (ARRA; P.L. 111-5) to include grants to U.S.based companies for facilities to manufacture advanced battery systems, component
manufacturers, and software designers to boost domestic production and international
competitiveness. The Advanced Technology Vehicles Manufacturing (ATVM) loan program at
8 For the most part, these are advanced diesel vehicles.
9
For further discussion, see CRS Report R45204, Vehicle Fuel Economy and Greenhouse Gas Standards: Frequently
Asked Questions, by Richard K. Lattanzio, Linda T sang, and Bill Canis.
10 For further discussion, see CRS Report R43325, The Renewable Fuel Standard (RFS): An Overview, by Kelsi
Bracmort.
Congressional Research Service
4
Alternative Fuel and Advanced Vehicle Technology Incentives
DOE, established by the Energy Independence and Security Act of 2007 (P.L. 110-140), has
supported manufacturing plant investments to enable the development of technologies to reduce
petroleum consumption, including the manufacture of electric and hybrid vehicles, 11 although no
new loans have been approved since 2011.
Highway Funding and Fuels Taxes
As described below (see “Incentives for Alternative Fuel and Alternative Fuel Mixtures”), one of
the earliest fuels-related federal programs is the motor vehicle fuels excise tax first passed in the
Highway Revenue Act of 1956 to fund construction and maintenance of the interstate highway
system. Originally, only gasoline and diesel were taxed, but as newer fuels became available
(such as ethanol and compressed natural gas), they were added to the federal revenue program,
but often at lower tax rates than gasoline or diesel. Lower tax burdens for some fuels or vehicles
may effectively incentivize those choices over conventional options. However, lower tax burdens
for these vehicles and fuels could compromise federal highway revenue. The vehicles responsible
for lower tax revenues include traditional internal combustion engine vehicles with higher
mileage per gallon as well as new technology electric and hybrid cars.
Structure and Content of the Report
The federal tax incentives and programs discussed in this report aim to support the development
and deployment of alternative fuels. There is no central coordination of how these incentives
interact. In general, they are independently administered by separate federal agencies, including
five agencies: Department of the Treasury, DOE, DOT, EPA, and USDA.
This report focuses strictly on programs that directly support alternative fuels or advanced
vehicles. It does not address more general programs (e.g., general manufacturing loans, rural
development loans), or programs that have been authorized but never funded. The programs are
presented by agency, starting with those that generally address the above factors, followed by
those that are fuel- or technology-specific. Programs that expired or were repealed on or after
December 31, 2017, are included in Appendix A. 12 Congress may explore whether to reinstate
these expired programs or establish similar programs.
Appendix B contains four tables:
1. a summary of the programs discussed in the body of the report, listed by agency
(Table B-1);
2. a listing of programs and incentives for alternative fuels, by fuel type (Table B2);
3. a listing of programs and incentives for advanced technology vehicles, by vehicle
type (Table B-3); and
4. a listing of recently expired programs by agency (Table B-4).
11 For more information, see CRS Report R42064, The Advanced Technology Vehicles Manufacturing (ATVM) Loan
Program: Status and Issues, by Bill Canis and Brent D. Yacobucci.
12 For a list and description of programs that expired or were repealed before December 31, 2017, please see Version 17
of this report, dated November 20, 2018.
Congressional Research Service
5
Alternative Fuel and Advanced Vehicle Technology Incentives
Current Federal Incentives
Department of the Treasury
Vehicle Incentives
Alternative Motor Vehicle Credit (Fuel Cell Vehicles)13
Administered by
IRS
Authority
Established by the Energy Policy Act of 2005, (P.L. 109-58, §1341(a)). Amended by P.L.
109-135, Title IV, §§ 402(j) and 412(d), P.L. 110-343, Division B, Title II, § 205(b), P.L. 1115, Division B, §1141-1144; P.L. 112-240, Title I, § 104(c)(2)(H), and P.L. 113-295, Division
A, Title II, §§ 218(a) and 220(a). The Consolidated Appropriations Act of 2016 (P.L. 114113) extended through 2016 (retroactive for 2015) the alternative motor vehicle credit
for qualified fuel cell motor vehicles only; the credit for qualified fuel cell vehicles has
expired and subsequently been extended retroactively on multiple occasions since 2016,
most recently through 2021 by the Consolidated Appropriations Act, 2021 ( P.L. 116-260,
Division EE, Title 1, §142).14
Annual Funding
Joint Committee on Taxation (JCT) estimated budget effect for FY2021: $4 million. JCT
budget effect for FY2021-FY2025: $6 million.15
Termination Date
December 31, 2021, for fuel cell vehicles; expired December 31, 2010, or earlier for all
other vehicles.
Enacted in the Energy Policy Act of 2005, the original provision included separate credits
for four distinct types of vehicles: those using fuel cells, advanced lean burn technologies,
qualified hybrid technologies, and qualified alternative fuels technologies. Currently, only
qualified fuel cell motor vehicles are eligible for the tax credit.
Description
Qualified Applicant(s)
Taxpayers purchasing a qualified vehicle. For taxpayers who sell vehicles to tax-exempt
entities (e.g., government agencies, schools), those taxpayers may claim the credit if they
disclose to the purchaser their intent to claim the credit.
Applicable
Fuel/Technology
Qualified fuel cell vehicles
For More Information
See IRS Form 8910: Alternative Motor Vehicle Credit; Instructions for IRS Form 8910;
IRS Notice 2008-33; and the Alternative Fuels Data Center’s (AFDC’s) entry for the Fuel
Cell Motor Vehicle Credit on its “Federal Laws and Incentives” web page.
Related CRS Reports
CRS Report R46451, Energy Tax Provisions Expiring in 2020, 2021, 2022, and 2023 (“Tax
Extenders”), by Molly F. Sherlock, Margot L. Crandall-Hollick, and Donald J. Marples
Plug-In Electric Drive Vehicle Credit 16
Administered by
13
IRS
26 U.S.C. §30B.
14 In the past, Congress has acted regularly to extend expired or expiring temporary tax provisions. Collectively, these
temporary tax provisions are often referred to as “tax extenders.”
U.S. Congress, Joint Committee on T axation, “ Estimated Budget Effects of the Revenue Provisions Contained in the
‘Consolidated Appropriation Act, 2021,’” 116 th Cong., 2 nd sess., December 21, 2020, JCX-24-20 (Washington, DC:
GPO, 2020).
15
16 26 U.S.C. §30D.
Congressional Research Service
6
Alternative Fuel and Advanced Vehicle Technology Incentives
Authority
Established by the Energy Improvement and Extension Act of 2008, 26 U.S.C. 38(b)(35),
30D, P.L. 110-343, Div. B, Title II, §205(a). The American Recovery and Reinvestment Act
of 2009 (P.L. 111-5, §141) amended Section 30D effective for vehicles acquired after
December 31, 2009.
Annual Funding
JCT estimated tax expenditure for FY2021: $0.6 billion; JCT estimated tax expenditure
for FY2020-FY2024: $3.0 billion.17
Scheduled
Termination
Phased out separately for each automaker when that automaker has sold a total of
200,000 qualified vehicles.18
Description
Purchasers of plug-in electric vehicles may file to obtain a tax credit of up to $7,500 per
vehicle, depending on battery capacity. The vehicle must be acquired for use or lease and
not for resale. Additionally, the original use of the vehicle must commence with the
taxpayer and the vehicle must be used predominantly in the United States. For purposes
of the 30D credit, a vehicle is not considered acquired prior to the time when title to the
vehicle passes to the taxpayer under state law.
Qualified Applicant(s)
Taxpayers purchasing a qualified vehicle. For taxpayers who sell vehicles to tax-exempt
entities (e.g., government agencies, schools), those taxpayers may claim the credit if they
disclose to the purchaser their intent to claim the credit.
Applicable
Fuel/Technology
Plug-in electric vehicles
For More Information
See the IRS web page for the Plug-In Electric Drive Vehicle Credit (IRC 30D); and
AFDC’s web page for the Qualified Plug-In Electric Vehicle (PEV) Tax Credit.
Related CRS Reports
CRS In Focus IF11017, The Plug-In Electric Vehicle Tax Credit, by Molly F. Sherlock
Plug-In Two-Wheeled Electric Vehicle Credit 19
Administered by
IRS
Authority
American Recovery and Reinvestment Act, P.L. 111-5, §1142 amended by the American
Taxpayer Relief Act of 2012 (P.L. 112-240 §403). This temporary credit has expired and
subsequently has been extended retroactively on multiple occasions. The credit lapsed
completely for 2014 (no vehicles qualified). Most recently the credit was extended for
two-wheeled vehicles through 2021 by the Consolidated Appropriations Act, 2021 ( P.L.
116-260).
Annual Funding
JCT estimated budget effect for FY2021: Less than $500,000. JCT estimated budget effect
for FY2021-FY2025: $2 million.20
Termination Date
December 31, 2021, for two-wheeled vehicles. Expired December 31, 2013, for threewheeled vehicles and December 31, 2011, for low speed two- or three-wheeled vehicles.
Description
Internal Revenue Code Section 30D provided a tax credit for qualified plug-in electric
vehicles. The credit was equal to 10% of the cost of a qualified plug-in electric vehicle and
limited to $2,500. Qualified vehicles included vehicles that have two or three wheels. The
vehicle must have been acquired for use or lease and not for resale. The original use of
17 For JCT tax expenditure estimates, see U.S. Congress, Joint Committee on T axation, “Estimates of Federal T ax
Expenditures for Fiscal Years 2020-2024,” 116 th Cong., 2 nd sess., November 5, 2020, JCX-23-20 (Washington: GPO,
2020).
18
Estimated cumulative sales for selected automakers as of June 2020 were: T esla, 605,373; General Motors, 234,523;
Nissan, 144,913; T oyota Motor Corporation, 127,593; Ford Motor Company, 123,030; BMW Group, 99,481
(EVAdoption.com, “Federal EV T ax Credit Phase Out T racker by Automaker” (EV Sales beginning Jan 1, 2010
through June 2020), 2020 (specific date not listed), https://evadoption.com/ev-sales/federal-ev-tax-credit-phase-outtracker-by-automaker/).
19 26 U.S.C. §30D. T his credit formerly applied to both two- and three-wheeled vehicles, as well as low-speed vehicles.
20 U.S. Congress, Joint Committee on T axation, “ Estimated Budget Effects of the Revenue Provisions Contained in the
‘Consolidated Appropriation Act, 2021,’” 116 th Cong., 2 nd sess., December 21, 2020, JCX-24-20 (Washington: GPO,
2020).
Congressional Research Service
7
Alternative Fuel and Advanced Vehicle Technology Incentives
the vehicle had to commence with the taxpayer and the vehicle had to be used
predominantly in the United States.
Qualified Applicant(s)
Taxpayers purchasing a qualified vehicle. For taxpayers who sell vehicles to tax-exempt
entities (e.g., government agencies, schools), those taxpayers may claim the credit if they
disclose to the purchaser their intent to claim the credit.
Applicable
Fuel/Technology
Two-wheeled plug-in electric vehicles
For More Information
See IRS Notice 2013-67 and IRS form 8936; and AFDC’s web page for the Qualified TwoWheeled Plug-In Electric Drive Motor Vehicle Tax Credit.
Related CRS Reports
CRS Report R46451, Energy Tax Provisions Expiring in 2020, 2021, 2022, and 2023 (“Tax
Extenders”), by Molly F. Sherlock, Margot L. Crandall-Hollick, and Donald J. Marples
Idle Reduction Equipment Tax Exemption21
Administered by
IRS
Authority
Established by the Energy Improvement and Extension Act of 2008 (P.L. 110-343),
Division B, Title II, §206(a).
Annual Funding
Scheduled
Termination
N/A22
No expiration date23
Description
Section 4053 of the U.S. tax code exempts certain vehicle idling reduction devices from
the federal excise tax on heavy trucks and trailers. Eligible devices are determined by the
Administrator of the EPA in consultation with the Secretary of Energy and the Secretary
of Transportation.
Qualified Applicant(s)
Applicable
Fuel/Technology
Sellers or users or heavy trucks, trailers, or tractors
Devices that have been identified as reducing idling of a heavy truck or trailer at a motor
vehicle rest stop or other location where such vehicles are temporarily parked or remain
stationary24
For More Information
See IRS Publication 510; and AFDC’s web page for the Idle Reduction Equipment Excise
Tax Exemption. For a list of eligible devices, see the U.S. Environmental Protection
Agency’s (EPA’s) web page “Learn About Federal Excise Tax Exemption.”
Related CRS Reports
None
Fuel/Infrastructure Incentives—General
Motor Fuel Excise Taxes 25
Administered by
Internal Revenue Service (IRS)
Authority
Most motor fuels taxes (some of which were initially enacted in 1932) were included in
the Highway Revenue Act of 1956 (P.L. 84-627) primarily to support the Highway Trust
Fund, except for the tax on compressed natural gas, which was enacted in 1993
21 26 U.S.C. §4053(9).
22 JCT has not estimated this expenditure for FY2020-FY2024. When enacted, this provision was estimated to reduce
federal tax revenue by $95 million from FY2009-FY2018. U.S. Congress, Joint Committee on T axation, “Estimated
Budget Effects of the ‘Energy Improvement and Extension Act of 2008 ,’” 110 th Cong., 2 nd sess., September 23, 2008,
JCX-70-08R (Washington, DC: GPO, 2008). Cost estimates for provisions that reduce excise tax liability are not
regularly provided by JCT .
23 T he excise tax on heavy trucks and trailers against which this credit may be claimed is set to expire on October 1,
2022.
24 Some idling reduction devices may not fit the description of advanced vehicle technologies as defined in this report.
25 26 U.S.C. §4081 and 26 U.S.C. §4041.
Congressional Research Service
8
Alternative Fuel and Advanced Vehicle Technology Incentives
(Omnibus Budget Reconciliation Act of 1993; P.L. 103-66). Taxes that support the
Highway Trust Fund have been extended numerous times, most recently through
September 30, 2022, by the Fixing America’s Surface Transportation (FAST) Act (P.L.
114-94).26
Annual Revenue
Congressional Budget Office (CBO) revenue projection for FY2021: $33.5 billion for all
fuels; CBO projection for FY2021-FY2025: $176.0 billion.27
Scheduled
Termination
4.3 cents per gallon of the gasoline/diesel fuel tax is permanent; the rest of the motor
fuels taxes expire on September 30, 2022, when major highway-related taxes expire.
Description
Taxes vary by fuel: gasoline, 18.4 cents per gallon; diesel fuel, 24.4 cents per gallon;
biodiesel, 24.4 cents per gallon; ethanol, 18.4 cents per gallon; P-series fuels, 18.4 cents
per gallon; hydrogen (gaseous hydrogen is not subject to the excise tax), 18.4 cents per
gallon equivalent; liquefied petroleum gas (LPG), 18.3 cents per gallon equivalent;
compressed natural gas (CNG), 18.3 cents per gallon equivalent; liquefied natural gas
(LNG), 24.3 cents per gallon equivalent. Alternative fuel tax credits are or were available
against many of these.28 Electricity and gaseous hydrogen are not taxed as motor fuels.
Qualified Applicant(s)
Sellers of applicable fuels
Applicable
Fuel/Technology
Gasoline, diesel, liquefied hydrogen, liquefied petroleum gas, liquefied natural gas,
compressed natural gas, ethanol, and methanol. (Electricity and gaseous hydrogen are not
subject to the tax.)
For More Information
See IRS publication 510, Excise Taxes; and Federal Highway Administration, Funding Federalaid Highways, Appendix K.
Related CRS Reports
CRS Report R44674, Funding and Financing Highways and Public Transportation, by Robert S.
Kirk and William J. Mallett
Incentives for Alternative Fuel and Alternative Fuel Mixtures 29
Administered by
IRS
Authority
Established by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU; P.L. 109-59); amended by the Tax Technical Corrections
Act of 2007 (P.L. 110-172). The temporary excise tax credits for alternative fuels and
alternative fuel mixtures have expired and subsequently been extended retroactively on
multiple occasions, most recently through 2021 by the Consolidated Appropriations Act,
2021 (P.L. 116-260).
Annual Funding
JCT estimated budget effect for FY2021: $204 million. JCT estimated budget effect for
FY2021-FY2025: $279 million.30
Termination Date
Description
December 31, 2021
The Alternative Fuel Excise Tax Credit is a 50-cents-per gallon excise tax credit for
certain alternative fuels used as fuel in a motor vehicle, motor boat, or airplane, and a
26
T axes dedicated to the Highway T rust Fund (HT F), and authority to place those taxes into the HTF and to spend
funds out of the HT F all have expiration dates. Congress may opt to extend these dates or allow the tax credits to
expire.
27 For FY2021, CBO estimates $23.2 billion in revenue from “gasoline and gasoline blendstocks,” including ethanol;
$10.2 billion from “diesel fuel and kerosene,” including biodiesel and renewable diesel; and $0.1 billion from “other
motor fuels,” including other alternative fuels. Congressional Budget Office, The Budget and Economic Outlook: 2021
to 2031 - Data Supplement, Washington, DC, February 2021, p. T able 5, http://www.cbo.gov/publication/56970.
28 See the sections below on “ Incentives for Alternative Fuel and Alternative Fuel Mixtures,” “ Biodiesel or Renewable
Diesel Mixture Excise T ax Credit and Income T ax Credit ,” “ Small Agri-Biodiesel Producer Credit ,” and “ Second
Generation Biofuel Producer Credit .”
29 26 U.S.C. §6426(d), 26 U.S.C. 6426(e), and 26 U.S.C. 6427(e).
30 U.S. Congress, Joint Committee on T axation, “ Estimated Budget Effects of the Revenue Provisions Contained in the
‘Consolidated Appropriation Act, 2021,’” 116 th Cong., 2 nd sess., December 21, 2020, JCX-24-20 (Washington, DC:
GPO, 2020).
Congressional Research Service
9
Alternative Fuel and Advanced Vehicle Technology Incentives
related provision establishing a 50-cents-per-gallon credit for alternative fuels mixed with
a traditional fuel (gasoline, diesel, or kerosene) for use as a fuel.
Qualified Applicant(s)
Applicable
Fuel/Technology
Taxpayers who sell qualifying fuel types for use as a motor fuel or taxpayers who so use
the qualifying fuel.
Liquefied petroleum gas, P Series fuels, compressed or liquefied natural gas, any liquefied
fuel derived from coal or peat, liquefied hydrocarbons derived from biomass, liquefied
hydrogen (gaseous hydrogen is not subject to the excise tax, and thus is ineligible for the
credit).
Ethanol, methanol, and biodiesel do not qualify for the alternative fuel or alternative fuel
mixture credit, but some of these fuels are subject to other tax incentives (see below).
Electricity and gaseous hydrogen do not qualify for the credits, nor are they subject to
motor fuels excise taxes.
For More Information
See IRS Publication 510 and IRS Forms 637, 720, 4136, and 8849 on the IRS website.
Related CRS Reports
CRS Report R46451, Energy Tax Provisions Expiring in 2020, 2021, 2022, and 2023 (“Tax
Extenders”), by Molly F. Sherlock, Margot L. Crandall-Hollick, and Donald J. Marples
Alternative Fuel Refueling Property Credit 31
Administered by
Authority
IRS
Annual Funding
JCT estimated budget effect for FY2021: $39 million. JCT estimated budget effect for
FY2021-FY2025: $159 million.32
Termination Date
December 31, 2021
Description
Consumers or businesses who installed qualified fueling equipment received a 30% tax
credit of up to $30,000 for properties subject to an allowance for depreciation and
$1,000 for all other properties.
Individuals or businesses who install qualifying equipment/property. For taxpayers who
sell equipment to tax-exempt entities (e.g., government agencies, schools), those
taxpayers may claim the credit if they disclose to the purchaser their intent to claim the
credit.
Natural gas, liquefied petroleum gas, hydrogen, electricity, E85, or diesel fuel blends
containing a minimum of 20% biodiesel.
Qualified Applicant(s)
Applicable
Fuel/Technology
Established by the Energy Policy Act of 2005 (P.L. 109-58), Title XIII, §1342(a). Amended
by P.L. 109-135, Title IV, §402(k), 412(d); P.L. 110-172, §6(b); P.L. 110-343, Division B,
title II, § 207; P.L. 111-5, Division B, Title I, §§ 1123(a),1142(b)(3), and 1144(b)(2); P.L.
113-295; and P.L. 115-141. The temporary alternative fuel refueling property credit has
expired and subsequently has been extended retroactively on multiple occasions, most
recently through 2021 by the Consolidated Appropriations Act, 2021 (P.L. 116-260,
Division EE, Title 1, §143).
For More Information
See IRS Form 8911; Instructions for IRS form 8911; AFDC’s entry for the Alternative
Fuel Infrastructure Tax Credit on its “Federal Laws and Incentives” web page; and DOE’s
Alternative Fuel Infrastructure fact sheet.
Related CRS Reports
CRS Report R46451, Energy Tax Provisions Expiring in 2020, 2021, 2022, and 2023 (“Tax
Extenders”), by Molly F. Sherlock, Margot L. Crandall-Hollick, and Donald J. Marples
31
26 U.S.C. §30C.
32 U.S. Congress, Joint Committee on T axation, “ Estimated Budget Effects of the Revenue Provisions Contained in the
‘Consolidated Appropriation Act, 2021,’” 116 th Cong., 2 nd sess., December 21, 2020, JCX-24-20 (Washington, DC:
GPO, 2020).
Congressional Research Service
10
Alternative Fuel and Advanced Vehicle Technology Incentives
Fuel/Infrastructure Incentives—Biofuels
Biodiesel or Renewable Diesel Mixture Excise Tax Credit33 and Income Tax
Credit34
Administered by
IRS
Authority
Mixture Credit: Established in 2005 by the Energy Policy Act of 2005 (P.L. 109-58),
§1346; amended by the Energy Improvement and Extension Act of 2008 ( P.L. 110-343,
Division B), §202-203. The temporary excise tax credits for biodiesel and renewable
diesel fuels have expired and subsequently have been extended retroactively on multiple
occasions, most recently through 2022 by the Further Consolidated Appropriat ions Act,
2020 (P.L. 116-94).
Income Tax Credit: Established in 2005 by the American Jobs Creation Act of 2004, §302
(P.L. 108-357); extended by the Energy Policy Act of 2005, §1344 (P.L. 109-58); amended
by the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §202203. The temporary income tax credits for biodiesel and renewable diesel fuels have
expired and subsequently have been extended retroactively on multiple occasions, most
recently through 2022 by the Further Consolidated Appropriations Act, 2020 (P.L. 11694).
Annual Funding
JCT estimated budget effect for FY2021 for both credits combined: $3.1 billion ; JCT
estimated budget effect for FY2020-FY2024: $15.183 billion 35 (the income tax credit
alone is estimated at less than $50 million cumulative for FY2020 -FY2024).
Termination Date
Description
December 31, 2022
Mixture Credit: Biodiesel and renewable diesel blenders (or producers of diesel/biodiesel
blends) can claim a $1.00 per gallon tax credit through the end of 2022 for biodiesel or
renewable diesel used to produce a qualified biodiesel mixture. The credit is claimed as a
credit against the blender’s motor fuels excise taxes; any excess credit beyond the
taxpayer’s excise tax liability is claimed as direct payments from the IRS.
Income Tax Credit: Producers, blenders, or retailers of biodiesel, renewable diesel,36 or
“agri-biodiesel” 37 (biodiesel produced from virgin agricultural products such as soybean
oil or animal fats) can claim a $1.00 per-gallon income tax credit through the end of 2022
for fuel sold or used by the taxpayer, whether delivered pure or in a qualified mixture.
Before amendment by P.L. 110-343, the credit was valued at $1.00 per gallon of agribiodiesel or 50 cents per gallon of biodiesel produced from previously used agricultural
products (e.g., recycled fryer grease).
Both credits may not be claimed for the same batch of fuel.
Qualified Applicant(s)
Applicable
Fuel/Technology
33
Biodiesel producers and blenders
Biodiesel, renewable biodiesel, agri-biodiesel
26 U.S.C. §§6426(c) and 6427(e).
34 26 U.S.C. §40A.
35
T he JCT estimated budget effect includes both the Biodiesel and Renewable Diesel Income T ax credit as well as the
Biodiesel and Renewable Diesel Excise T ax Credits. See U.S. Congress, Joint Committee on T axation, “Estimated
Budget Effects of the Revenue Provisions Contained in the House Amendment to the Senate Amendment to H.R. 1865,
the Further Consolidated Appropriations Act, 2020,” 116th Cong., 1 st Session, December 17, 2019, JCX-54R-19
(Washington, DC: GPO, 2019).
36
Renewable diesel is similar to biodiesel but produced through different processes. Renewable diesel may not qualify
as agri-biodiesel.
37 For more on the difference between biodiesel, renewable diesel, and agri-biodiesel, see the IRS website at
https://www.irs.gov/instructions/i8864.
Congressional Research Service
11
Alternative Fuel and Advanced Vehicle Technology Incentives
For More Information
See IRS Publication 510, Chapter 2: Fuel Tax Credits and Refunds; and AFDC’s entry for
the Biodiesel Mixture Excise Tax Credit on its “Federal Laws and Incentives” web page.
Related CRS Reports
CRS Report R46451, Energy Tax Provisions Expiring in 2020, 2021, 2022, and 2023 (“Tax
Extenders”), by Molly F. Sherlock, Margot L. Crandall-Hollick, and Donald J. Marples
Small Agri-Biodiesel Producer Credit 38
Administered by
IRS
Authority
Established in 2005 by the Energy Policy Act of 2005, §1345 ( P.L. 109-58); amended by
the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division B), §202-203.
This temporary credit has expired and subsequently has been extended retroactively on
multiple occasions, most recently through 2022 by the Further Consolidated
Appropriations Act, 2020 (P.L. 116-94).
Annual Funding
JCT estimated tax expenditure for FY2020-2024: JCT has not separately estimated this
expenditure.39
Termination Date
December 31, 2022
Description
The small agri-biodiesel producer credit is valued at 10 cents per gallon of “agribiodiesel” (see Biodiesel Tax Credit, above) produced. The credit can be claimed on the
first 15 million gallons of biodiesel produced by a small producer in a given year through
the end of 2022. Agri-biodiesel is defined as biodiesel derived solely from virgin oils,
including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds,
cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds,
and camelina, and from animal fats.
Qualified Applicant(s)
Any agri-biodiesel producers with production capacity less than 60 million gallons per
year
Applicable
Fuel/Technology
Biodiesel
For More Information
See IRS Publication 510, Chapter 2: Fuel Tax Credits and Refund; and IRS Form 8864, and
Instructions for Form 8864; AFDC’s webpage for the Small Agri-Biodiesel Producer Tax
Credit.
Related CRS Reports
CRS Report R41631, The Market for Biomass-Based Diesel Fuel in the Renewable Fuel
Standard (RFS), by Brent D. Yacobucci; and CRS Report R46451, Energy Tax Provisions
Expiring in 2020, 2021, 2022, and 2023 (“Tax Extenders”), by Molly F. Sherlock, Margot L.
Crandall-Hollick, and Donald J. Marples
Second Generation Biofuel Producer Credit 40
Administered by
IRS
Authority
Established on January 1, 2009, by the Food, Conservation, and Energy Act of 2008,
§15321 (P.L. 110-246); amended by the Health Care and Education Reconciliation Act of
2010 (P.L. 111-152), §1408; amended by the Small Business Jobs Act of 2010 ( P.L. 111240), §2121; amended by the American Taxpayer Relief Act of 2012 ( P.L. 112-240) §404.
This temporary credit has expired and subsequently has been extended retroactively on
multiple occasions, most recently through 2021 by the Consolidated Appropriations Act,
2021 (P.L. 116-260).
38 26 U.S.C. §40A.
39 T he JCT does not separately report tax expenditure or budget effect estimates for this credit “because the estim ated
revenue losses, or in the case of negative tax expenditures gains, for fiscal years 2020 through 2024 are below the de
minimis amount ($50 million).” See U.S. Congress, Joint Committee on T axation, “Estimates of Federal T ax
Expenditures for Fiscal Years 2020-2024,” 116 th Cong., 2 nd sess., November 5, 2020, JCX-23-20 (Washington: GPO,
2020).
40 26 U.S.C. §40.
Congressional Research Service
12
Alternative Fuel and Advanced Vehicle Technology Incentives
Annual Funding
JCT estimated budget effect for FY2021: $9 million; JCT estimated budget effect for
FY2021-FY2025: $16 million.41
Termination Date
Description
December 31, 2021
Producers of cellulosic biofuel can claim a tax credit of $1.01 per gallon. For cellulosic
ethanol producers, the value of the production tax credit is reduced by the value of the
volumetric ethanol excise tax credit (expired) and the small ethanol producer credit
(expired); the credit is currently valued at $1.01 cents per gallon. P.L. 112-240 amended
the credit to include noncellulosic fuel produced from algae feedstocks.
The credit applies to fuel produced after December 31, 2008.
Qualified Applicant(s)
Applicable
Fuel/Technology
Cellulosic biofuel producers and algae-based biofuel producers
For More Information
See AFDC’s webpage for the Second Generation Biofuel Producer Tax Credit; and IRS
Publication 510 and IRS Forms 637 and 6478, which are available via the IRS website
Related CRS Reports
CRS Report R42122, Algae’s Potential as a Transportation Biofuel, by Kelsi Bracmort; and
CRS Report R46451, Energy Tax Provisions Expiring in 2020, 2021, 2022, and 2023 (“Tax
Extenders”), by Molly F. Sherlock, Margot L. Crandall-Hollick, and Donald J. Marples
Cellulosic biofuels and algae-based biofuels
Department of Energy
Advanced Technology Vehicles Manufacturing Loan Program (ATVM)
Administered by
Authority
Loan Programs Office (LPO)
Annual Funding
$5 million for FY2021 (for program administration); $17.7 billion in loan authority
remains to catalyze domestic manufacturing of fuel efficient, light-duty passenger vehicles
and eligible components.42
Scheduled
Termination
No termination until funds fully spent.
Description
The Advanced Technology Vehicles Manufacturing (ATVM) Loan Program was
established in 2007 to help automakers meet mandated vehicle fuel economy standards
and to encourage domestic production of more fuel-efficient cars and light trucks. It
provides up to $25 billion in revolving loans to qualified automakers for investment in
their manufacturing operations. In FY2008, $7.51 billion was appropriated for the direct
loans—$7.5 billion for the loan subsidies (available until expended) and $10 million for
administration. Although appropriations are provided annually for administration,
Congress approved the program loan subsidy authority one time. Currently, loans have
been made to five companies, using $8.4 billion of the $25 billion loan authority. With
loan repayments, $17.7 billion in loan authority is available as of June 2021. No projects
have been funded with ATVM loans since March 2011. The Biden Administration has said
that it would like to utilize these funds for expanding the U.S. electric vehicle batt ery
supply chain.
Qualified Applicant(s)
An automotive manufacturer satisfying specified fuel economy requirements or a
manufacturer of qualifying components. To be financially eligible for an ATVM loan, an
applicant must be financially viable without the receipt of additional federal funding for the
proposed project; facilities must be located in the United States.
Authorized by the Energy Independence and Security Act of 2007 §136 (P.L. 110-140),
funded by the Consolidated Security, Disaster Assistance, and Continuing Appropriations
Act (P.L. 110-329)
41 U.S. Congress, Joint Committee on T axation, “ Estimated Budget Effects of the Revenue Provisions Contained in the
‘Consolidated Appropriation Act, 2021,’” 116 th Cong., 2 nd sess., December 21, 2020, JCX-24-20 (Washington: GPO,
2020).
42 See Department of Energy, FY2022 Congressional Budget Request, volume 3, part 2 (June 2021), p. 296.
Congressional Research Service
13
Alternative Fuel and Advanced Vehicle Technology Incentives
Applicable
Fuel/Technology
No limitations on specific technologies; rather, limits are stipulated for vehicle emissions
and fuel consumption
For More Information
DOE’s LPO website; DOE’s ATVM website; LPO’s Advanced Vehicles Manufacturing
Projects’ website; Advanced Technology Vehicles Manufacturing Fact Sheet; ATVM FAQs;
and the ATVM 1-Page Summary
Related CRS Reports
CRS Report R42064, The Advanced Technology Vehicles Manufacturing (ATVM) Loan Program:
Status and Issues, by Bill Canis and Brent D. Yacobucci
Bioenergy Technologies Office (formerly the Biomass and Biorefinery Systems
R&D Program)
Administered by
Office of Energy Efficiency and Renewable Energy (EERE)
Authority
Federal Nonnuclear Energy Research and Development Act of 1974 ( P.L. 93-577)
Energy Policy and Conservation Act of 1975 (EPCA; P.L. 94-163)
Energy Conservation and Production Act of 1976 (ECPA; P.L. 94-385)
Department of Energy Organization Act of 1977 (P.L. 95-91)
Energy Tax Act (P.L. 95-618)
National Energy Conservation Policy Act of 1978 (NECPA; P.L. 95-619)
Powerplant and Industrial Fuel Use Act of 1978 (P.L. 95-620)
Energy Security Act of 1980 (P.L. 96-294)
National Appliance Energy Conservation Act of 1987 (P.L. 100-12)
Federal Energy Management Improvement Act of 1988 (P.L. 100-615)
Renewable Energy and Energy Efficiency Technology Competitiveness Act of 1989 ( P.L.
101-218)
Clean Air Act Amendments of 1990 (P.L. 101-549)
Solar, Wind, Waste, and Geothermal Power Production Incentives Act of 1990 ( P.L. 101575)
Energy Policy Act of 1992 (EPACT; P.L. 102-486)
Biomass Research and Development Act of 2000 (Title III of Agricultural Risk Protection
Act of 2000; P.L. 106-224)
Farm Security and Rural Investment Act of 2002 (P.L. 107-171)
Healthy Forest Restoration Act of 2003 (P.L. 108-148)
Energy Policy Act of 2005 (EPACT 2005; P.L. 109-58)
Energy Independence and Security Act of 2007 (EISA; P.L. 110-140)
Food, Conservation, and Energy Act of 2008 (P.L. 110-234)
American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5)
Energy Act of 2020 (Div. Z of Consolidated Appropriations Act, 2020; P.L. 116-260),
Title III, Sec. 9009
Annual Funding
$255 million for FY2021.
Scheduled
Termination
None
Description
The Bioenergy Technologies Office works with a broad spectrum of partners
(government, industrial, academic, agricultural, and nonprofit), primarily focusing on
research, development, demonstration, and deployment (RDD&D) of commercially
viable, high-performance biofuels, bioproducts, and biopower made from renewable
biomass resources. Other nontransportation applications for biomass and bioenergy
systems also are studied under this program.
Qualified Applicant(s)
Applicable
Fuel/Technology
Universities and businesses
Biofuels
Congressional Research Service
14
Alternative Fuel and Advanced Vehicle Technology Incentives
For More Information
See EERE’s Bioenergy Technologies Office (BTO) website; BTO’s Bioenergy FAQ web
page; DOE’s Bioenergy Technologies Office – Funding Opportunities; and BTO’s Strategic
Plan For a Thriving and Sustainable Bioeconomy.
Related CRS Reports
CRS Report R41440, Biopower: Background and Federal Support, by Kelsi Bracmort; CRS In
Focus IF10288, Overview of the 2018 Farm Bill Energy Title Programs, by Kelsi Bracmort; and
CRS Report R45943, The Farm Bill Energy Title: An Overview and Funding History, by Kelsi
Bracmort
Clean Cities Program
Administered by
EERE and sponsored by the Vehicle Technologies Program
Authority
Established by the Alternative Motor Fuels Act of 1988 (P.L. 100-494), and amended by
the Energy Policy Act of 1992 (P.L. 102-486)
Annual Funding
$40 million for FY2021.
Scheduled
Termination
None
Description
Initially started in 1993 as a DOE program to promote alternative fuel vehicles among the
states, it is now a broader program to reduce petroleum consumption in transportation,
with more than 75 Clean Cities coalitions that focus on deployment of alternative and
renewable fuels, idle-reduction measures, fuel economy improvements, emerging
transportation technologies, and new mobility choices. Clean Cities provides technical,
informational, and financial assistance to communities.
Qualified Applicant(s)
Businesses, fuel providers, vehicle fleets, state and local government agencies, and
community organizations, led by nearly 100 Vehicle Technologies Program Clean Cities
coordinators
Applicable
Fuel/Technology
Electricity, natural gas, propane, bio-methane, ethanol, biodiesel, hydrogen
For More Information
See DOE’s Clean Cities website; EERE’s Clean Cities Overview factsheet; Clean Cities
Coalition Network: Goals and Accomplishments web page.
Related CRS Reports
None
Hydrogen and Fuel Cell Technologies Office
Administered by
EERE
Authority
Federal Energy Administration Act of 1974 (P.L. 93-275)
Federal Nonnuclear Energy Research and Development Act of 1974 ( P.L. 93-577)
Energy Policy and Conservation Act of 1975 (EPCA; P.L. 94-163)
Electric and Hybrid Vehicle Research, Development and Demonstration Act ( P.L. 94-413)
Department of Energy Organization Act of 1977 (P.L. 95-91)
Automotive Propulsion Research and Development Act of 1978 (Title III of Department
of Energy Act of 1978—Civilian Applications; P.L. 95-238)
Methane Transportation Research, Development and Demonstration Act of 1980 (P.L.
96-512)
Energy Security Act of 1980 (P.L. 96-294)
Alternative Motor Fuels Act of 1988 (P.L. 100-494)
Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990
(P.L. 101-566)
Energy Policy Act of 1992 (EPACT; P.L. 102-486)
Hydrogen Future Act of 1996 (P.L. 104-271)
Energy Policy Act of 2005 (EPACT 2005; P.L. 109-58)
Energy Independence and Security Act of 2007 (EISA; P.L. 110-140)
Congressional Research Service
15
Alternative Fuel and Advanced Vehicle Technology Incentives
American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5)
Energy Act of 2020 (Div. Z of Consolidated Appropriations Act, 2020; P.L. 116-260),
Title III, Sec. 9009
Annual Funding
$150 million for FY2021.
Scheduled
Termination
None
Description
This program works with industry, national laboratories, universities, government
agencies, and other partners to overcome barriers to the use of hydrogen and fuel cells.
It includes a research and development (R&D) effort focused on advancing the
performance and reducing the cost of these technologies. R&D applies to both
transportation and stationary applications.
Federal government, national laboratories, colleges and universities, and for-profit
organizations
Qualified Applicant(s)
Applicable
Fuel/Technology
Hydrogen, fuel cells
For More Information
See EERE’s Hydrogen and Fuel Cell Technologies Office website; the Hydrogen and Fuel
Cell Technologies Office Publication & Product Library, including annual progress reports
for the program; DOE’s Hydrogen and Fuel Cell Technologies Office – Funding
Opportunities.
Related CRS Reports
[Archived] CRS Report R40168, Alternative Fuels and Advanced Technology Vehicles: Issues in
Congress, by Brent D. Yacobucci
Vehicle Technologies Office (VTO)
Administered by
EERE
Authority
Authorized by the Energy Independence and Security Act of 2007 §136 ( P.L. 110-140),
funded by the Consolidated Security, Disaster Assistance, and Continuing Appropriations
Act (P.L. 110-329); Energy Act of 2020 (Div. Z of Consolidated Appropriations Act, 2020;
P.L. 116-260), Title III, §9009
Annual Funding
$400 million for FY2021—of that amount not less than $178 million for Batteries and
Electric Drive Technology programs.
Scheduled
Termination
None
Description
Through research and development, VTO supports partnerships with other public and
private organizations to enhance energy efficiency and productivity an d bring clean,
affordable technologies to market. It supports research on electric batteries, more
efficient engines, and advanced lightweight materials. In addition, it supports, and works
through, two major government-industry endeavors: the US DRIVE Partnership and the
21 st century Truck Partnership.
Qualified Applicant(s)
Universities, vehicle and engine manufacturers, material suppliers, nonprofit technology
organizations, energy suppliers, and national laboratories
Advanced batteries, power electronics and electric motors, advanced combustion,
lightweight materials, vehicle-to-grid interaction, and fuel cell and hydrogen technologies
Applicable
Fuel/Technology
For More Information
See EERE’s Vehicle Technology Office website; annual progress reports for the Vehicle
Technologies Office and its six R&D subprograms; and DOE’s Vehicle Technologies
Office – Funding Opportunities.
Related CRS Reports
CRS Report R42064, The Advanced Technology Vehicles Manufacturing (ATVM) Loan Program:
Status and Issues, by Bill Canis and Brent D. Yacobucci
Congressional Research Service
16
Alternative Fuel and Advanced Vehicle Technology Incentives
Department of Transportation
Alternative Fuel Corridors
Administered by
Federal Highway Administration (FHWA)
Authority
Established by the Fixing America’s Surface Transportation Act (FAST Act) of 2015, P.L.
114-94, §1413, amending 23 U.S.C. Chapter 1
Annual Funding
Scheduled
Termination
Funded through the Highway Trust Fund.
N/A
Description
The Alternative Fuel Corridors program designates a national network of plug-in electric
vehicle charging and hydrogen, propane, and natural gas fueling infrastructure along
national highway system corridors. To designate the corridors, FHWA solicits
nominations from state and local officials and works with other federal officials and
industry stakeholders. Within five years of the establishment of the corridors, and every
five years thereafter, FHWA will update and redesignate the corridors. FHWA also has
an objective to deploy fuel infrastructure along the designated corridors.
Qualified Applicant(s)
State and local officials nominate corridors
Applicable
Fuel/Technology
Vehicles powered by electricity, hydrogen, propane, and natural gas
For More Information
See FHWA’s Alternative Fuel Corridors website.
Related CRS Reports
CRS Report R44388, Surface Transportation Funding and Programs Under the Fixing America’s
Surface Transportation Act (FAST Act; P.L. 114-94), coordinated by Robert S. Kirk; and CRS
Report R45747, Vehicle Electrification: Federal and State Issues Affecting Deployment, by Bill
Canis, Corrie E. Clark, and Molly F. Sherlock
Congestion Mitigation and Air Quality Improvement Program
Administered by
Federal Highway Administration (FHWA) and Federal Transit Administration (FTA)
Authority
Established by the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 ( P.L.
102-240); reauthorized multiple times, most recently by the Safe, Accountable, Flexible,
and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) of 2005 (P.L.
109-59); extended multiple times, most recently by the Highway and Transportation
Funding Act of 2014 (P.L. 113-159), and Fixing America’s Surface Transportation Act
(FAST Act, P.L. 114-94)
Annual Funding
Scheduled
Termination
$2.5 billion in FY2021; $2.5 billion requested for FY2022 .
Description
Congestion Mitigation and Air Quality Improvement (CMAQ) provides funds to states
for transportation projects designed to reduce traffic congestion and improve air quality,
particularly in areas of the country that do not attain National Ambient Air Quality
Standards. In particular, it authorizes funding for programs and projects intended to
reduce carbon monoxide, particulate matter, and ozone. CMAQ funds are apportioned in
accordance with a formula based largely on a state’s population and pollution reduction
needs.
Qualified Applicant(s)
Applicable
Fuel/Technology
State departments of transportation and metropolitan planning organizations (MPOs)
Any transportation project or technology that can lead to reductions in congestion or
help improve air quality
For More Information
See FHWA’s CMAQ website.
Related CRS Reports
CRS Report R44332, Federal-Aid Highway Program (FAHP): In Brief, Federal-Aid Highway
Program (FAHP): In Brief, by Robert S. Kirk; CRS Report R44388, Surface Transportation
Funding and Programs Under the Fixing America’s Surface Transportation Act (FAST Act; P.L.
114-94), coordinated by Robert S. Kirk
Reauthorized through FY2021
Congressional Research Service
17
Alternative Fuel and Advanced Vehicle Technology Incentives
Corporate Average Fuel Economy Program Alternative Fuel Vehicle Credits
Administered by
Authority
National Highway Traffic Safety Administration (NHTSA)
Annual Funding
N/A
Scheduled
Termination
No expiration for dedicated vehicles
Description
Automakers that sell passenger cars and light trucks in the United States must comply
with federal CAFE standards. Those standards set fuel economy targets which
automakers must meet, averaged across their car and light truck fleets. Those targets
vary by vehicle class and size. To promote the production and sale of alternative fuel
vehicles and provide flexibility in compliance, automakers may accrue CAFE credits by
selling alternative fuel vehicles. For dedicated vehicles (i.e., vehicles that run solely on
alternative fuel), credits are unlimited. For dual fueled vehicles (i.e., that may run on
conventional or alternative fuel), credits are limited. “Petroleum reduction” incentives are
applied to the calculation of “dedicated” and “dual fuel” vehicles’ fuel economy for the
purposes of CAFE compliance based on provisions in the Alternative Motor Fuels Act
(AMFA) of 1988 P.L. 100-494 (see 49 U.S.C. §32905), thereby providing miles per gallon
fuel equivalency ratings for electric and natural gas vehicles. The Biden Administration has
proposed to revise the current CAFE standards established under the Trump
Administration, increasing them by 8% per year for passenger cars and light trucks over
MYs 2024-2026. NHTSA projects that the proposed standards would require, on an
average industry fleet-wide basis, vehicles with roughly 48 mpg in MY 2026.
Qualified Applicant(s)
Applicable
Fuel/Technology
Automakers that produce vehicles for sale in the United States
Incentives apply to vehicles capable of operating on methanol (at least 85%), ethanol (at
least 85%), natural gas, liquefied petroleum gas, hydrogen, coal-derived liquid fuels,
biologically derived fuels, and electricity.
For More Information
See NHTSA’s CAFE website.
Related CRS Reports
CRS Report R45204, Vehicle Fuel Economy and Greenhouse Gas Standards: Frequently Asked
Questions, by Richard K. Lattanzio, Linda Tsang, and Bill Canis
Corporate Average Fuel Economy (CAFE) program established in the Energy Policy and
Conservation Act (EPCA) of 1975 (P.L. 94-163); alternative fuels incentives established in
the Alternative Motor Fuels Act (P.L. 100-494); amended multiple times, most recently by
the Energy Independence and Security Act of 2007, §109 ( P.L. 110-140), to extend the
expiration date through model year 2019 for dual fueled vehicles
Low or No Emission Vehicle Program
Administered by
Federal Transit Administration (FTA)
Authority
Established by the Fixing America’s Surface Transportation Act (FAST Act) of 2015, P.L.
114-94, §3017, amending 49 U.S.C. 5339
Annual Funding
$55 million per year through FY2021. In the Consolidated Appropriations Act, 2021 ( P.L.
116-260), an additional $125 million was appropriated for FY2021 for a total of $180
million.
Scheduled
Termination
End of FY2021
Description
The Low or No Emission Vehicle program provides funding to state and local
governmental authorities for the purchase or lease of zero-emission and low-emission
transit buses as well as acquisition, construction, and leasing of required supporting
facilities. The federal share of the cost of leasing or purchasing a transit bus is not to
exceed 85% of the total transit bus cost. The federal share in the cost of leasing or
acquiring low- or no-emission bus-related equipment and facilities is 90% of the net
project cost.
Eligible applicants include direct recipients of FTA grants under the Section 5307
Urbanized Area Formula program, states, and Indian tribes. Except for projects proposed
Qualified Applicant(s)
Congressional Research Service
18
Alternative Fuel and Advanced Vehicle Technology Incentives
by Indian tribes, proposals for funding eligible projects in rural (nonurbanized) areas must
be submitted as part of a consolidated state proposal.
Applicable
Fuel/Technology
Proposed vehicles must make greater reductions in energy consumption and harmful
emissions, including direct carbon emissions, than comparable standard buses. Eligible
technologies include buses and fueling infrastructure for vehicles powered by electricity,
CNG, propane, fuel cells, and hybrid fuels, such as diesel-electric buses.
For More Information
See FTA’s Low or No Emission Vehicle Program website.
Related CRS Reports
CRS Report R44388, Surface Transportation Funding and Programs Under the Fixing America’s
Surface Transportation Act (FAST Act; P.L. 114-94), coordinated by Robert S. Kirk
Environmental Protection Agency
National Clean Diesel Campaign
Administered by
Authority
Office of Transportation and Air Quality (OTAQ)
Annual Funding
$90 million for FY2021; $150 million requested for FY2022 .
Scheduled
Termination
None (last authorized through FY2024)
Description
The National Clean Diesel Campaign (NCDC) promotes clean air strategies by working
with manufacturers, fleet operators, air quality professionals, environmental and
community organizations, and state and local officials to reduce diesel emissions. States
are allocated funds for their clean diesel programs through the Diesel Emission Reduction
Act (DERA).
Manufacturers, fleet operators, air quality professionals, environmental and community
organizations, and state and local governments
Qualified Applicant(s)
Established in 2005 by the Energy Policy Act of 2005 (P.L. 109-58), §§791-797; amended
in 2008 by P.L. 110-255, §3; amended in 2011 by the Diesel Emissions Reduction Act of
2010 (P.L. 111-364), §2; and amended in 2020 by the Consolidated Appropriations Act,
2021(P.L. 116-260), Division S, §101
Applicable
Fuel/Technology
Technologies that significantly reduce emissions (EPA maintains a list of verified retrofit
technologies and emerging technologies at http://www.epa.gov/cleandiesel/verification/
verif-list.htm).
For More Information
See EPA’s National Clean Diesel Campaign website.
Related CRS Reports
None
Renewable Fuel Standard
Administered by
OTAQ
Authority
Established in 2005 by the Energy Policy Act of 2005, §1501 ( P.L. 109-58); expanded by
the Energy Independence and Security Act of 2007, §202 ( P.L. 110-140)
Annual Funding
Scheduled
Termination
N/A
Description
The Energy Policy Act of 2005 established a renewable fuel standard (RFS) for
automotive fuels. The RFS was expanded by the Energy Independence and Security Act of
2007. The RFS requires the use of renewable fuels (including ethanol and biodiesel) in
transportation fuel. In 2011, fuel suppliers were required to include 13.95 billion gallons
of renewable fuels in the national transportation fuel supply; this requirement increases
annually to 36 billion gallons in 2022. The expanded RFS also specifically mandates the use
of “advanced biofuels”—fuels produced from noncorn feedstocks and with 50% lower
lifecycle greenhouse gas emissions than petroleum fuel—starting in 2009. Of the 36
billion gallons required in 2022, at least 21 billion gallons must be advanced biofuels.
None
Congressional Research Service
19
Alternative Fuel and Advanced Vehicle Technology Incentives
There are also specific quotas for cellulosic biofuels and for biomass-based diesel fuel. On
May 1, 2007, EPA issued a final rule on the original RFS program detailing compliance
standards for fuel suppliers, as well as a system to trade renewable fuel credits between
suppliers. On March 26, 2010, EPA issued final rules for the expanded program (RFS2),
including lifecycle analysis methods necessary to categorize fuels as advanced biofuels, and
new rules for credit verification and trading. While this program is not a direct subsidy
for the construction of biofuels plants, the guaranteed market created by the RFS is
believed to have stimulated growth of the biofuels industry and raised prices above
where they would have been in the absence of the mandate.
In certain circumstances, EPA has the authority to waive portions of the RFS mandates.
Since 2014, the total renewable fuel statutory target has not been met, with the advanced
biofuel portion falling below the statutory target by a large margin since 2015.
Qualified Applicant(s)
Gasoline and diesel fuel suppliers (generally refiners), but other entities may also be
covered
Applicable
Fuel/Technology
All biofuels (conventional ethanol, biodiesel, renewable diesel, cellulosic biofuels,
advanced biofuels)
For More Information
See EPA’s Renewable Fuel Standard (RFS) website.
Related CRS Reports
CRS Report R43325, The Renewable Fuel Standard (RFS): An Overview, by Kelsi Bracmort;
CRS Report R44045, The Renewable Fuel Standard (RFS): Waiver Authority and Modification
of Volumes, CRS Recorded Event WRE00231, An Overview of the Renewable Fuel Standard
(RFS), by Kelsi Bracmort and Brent D. Yacobucci; CRS Report R41106, The Renewable
Fuel Standard (RFS): Cellulosic Biofuels; and CRS Report R46244, The Renewable Fuel
Standard (RFS): Frequently Asked Questions About Small Refinery Exemptions (SREs), by Kelsi
Bracmort
Department of Agriculture43
Bioenergy Program for Advanced Biofuels 44
Administered by
Rural Development
Authority
Established by the Farm Security and Rural Investment Act of 2002 (P.L. 107-171). Most
recently amended by Title IX, Section 9005 of the Agriculture Improvement Act of 2018
(P.L. 115-334).
Annual Funding
Mandatory: The 2018 farm bill (P.L. 115-334) authorized mandatory funding of $7 million
annually for FY2019-FY2023 to remain available until expended. $7 million was
appropriated annually for FY2019, FY2020,45 and FY2021.
Discretionary: The 2018 farm bill authorized discretionary funding of $20 million annually
for FY2019-FY2023. No discretionary funding was appropriated through FY2021.
Scheduled
Termination
Authorized through FY2023
Description
The purpose of the program is to support and ensure an expanding production of
advanced biofuels by providing payments to eligible advanced biofuel producers.
Participating producers are paid on a quarterly basis for the quantity of eligible advanced
biofuels produced in that quarter. Producers who increase their annual production over
the previous fiscal year may also be eligible for additional incremental payments issued
annually. Not more than 5% of total payments made in a given fiscal year may go to
producers for production at facilities with a total refining capacity exceeding 150 million
gallons a year. The 2018 farm bill limited the proportion of total payments made for
43 For program details, contact Kelsi Bracmort, Specialist in Natural Resources and Energy Policy.
44 7 U.S.C. §8105.
45
In the FY2022 Budget Appendix, USDA notes a transfer of an additional $100 million from the Commodity Credit
Corporation (CCC) in FY2020 for $107 million total available funding for that fiscal year, likely reflecting the
availability of carryover funding. See the Appendix volume for FY2022 Budget of the United States Government, p.
133.
Congressional Research Service
20
Alternative Fuel and Advanced Vehicle Technology Incentives
biofuels derived from a single eligible commodity to not more than one third of total
funds available in a given fiscal year.
Qualified Applicant(s)
Applicable
Fuel/Technology
Producers of advanced biofuels
Payments will be made to eligible advanced biofuel producers for the production of fuel
derived from renewable biomass, other than corn kernel starch, to include biofuel
derived from cellulose, hemicellulose, or lignin; biofuel derived from sugar and starch
(other than ethanol derived from corn kernel starch); biofuel derived from waste
material, including crop residue, other vegetative waste material, animal waste, food
waste, and yard waste; diesel-equivalent fuel derived from renewable biomass, including
vegetable oil and animal fat; biogas (including landfill gas and sewage waste treatment gas)
produced through the conversion of organic matter from renewable biomass; butanol or
other alcohols produced through the conversion of organic matter from renewable
biomass; and other fuel derived from cellulosic biomass.
For More Information
See the USDA program website and program number 10.867 on the SAM.gov website.
Related CRS Reports
CRS Report R40913, Renewable Energy and Energy Efficiency Incentives: A Summary of
Federal Programs, by Lynn J. Cunningham; CRS In Focus IF10288, Overview of the 2018
Farm Bill Energy Title Programs, by Kelsi Bracmort; and CRS Report R45943, The Farm Bill
Energy Title: An Overview and Funding History, by Kelsi Bracmort
Biomass Crop Assistance Program (BCAP; §9011) 46
Administered by
Farm Service Agency (FSA)
Authority
Established by the Food, Conservation, and Energy Act of 2008 (P.L. 110-246). Most
recently amended by Title IX, Section 9010 of the Agriculture Improvement Act of 2018
(P.L. 115-334).
Annual Funding
Mandatory: The 2018 farm bill provided no mandatory funding. The 2014 farm bill
authorized mandatory CCC funding of $25 million annually from FY2014 through
FY2018.
Discretionary: Discretionary funding of $25 million annually for FY2019-FY2023 is
authorized to be appropriated. No funding was appropriated through FY2021.
Scheduled
Termination
Authorized through FY2023
Description
BCAP provides assistance to support the production of eligible biomass crops on land
within approved BCAP project areas. In exchange for growing eligible crops, the FSA is to
provide annual payments through 5- to 15-year contracts. Under these contracts up to
50% of establishment costs may also be provided. FSA also is to provide matching
payments to eligible material owners at a rate of $1 for each $1 per dry ton paid by a
qualified biomass conversion facility. Payments may not exceed $20 per ton for a twoyear period, and matching payments are available for no more than two years per
participant.
Qualified Applicant(s)
Producer of an eligible crop in a BCAP project area; person with the right to collect or
harvest eligible material.
Applicable
Fuel/Technology
Eligible crops and eligible material, both of which have exclusions specified in statute.
Eligible material for a matching payment is renewable biomass with several important
exclusions, including harvested grains, fiber, or other commodities eligible to receive
payments under the Commodity Title (Title I) of the 2014 farm bill (the residues of these
commodities, however, are eligible and may qualify for payment); animal waste and animal
waste byproducts, including fats, oils, greases, and manure; food waste, and yard waste.
The 2018 farm bill includes algae as an eligible material; algae was previously an eligible
crop but not an eligible material. Eligible crops for annual payments include renewable
biomass, with the exception of crops eligible to receive a payment under Title I of the
2014 farm bill and plants that are invasive or noxious, or have the potential to become
invasive or noxious.
46 7 U.S.C. §8111.
Congressional Research Service
21
Alternative Fuel and Advanced Vehicle Technology Incentives
For More Information
See program number 10.087 on the SAM.gov website.
Related CRS Reports
CRS Report R40913, Renewable Energy and Energy Efficiency Incentives: A Summary of
Federal Programs, by Lynn J. Cunningham; and CRS Report R41296, Biomass Crop Assistance
Program (BCAP): Status and Issues, by Mark A. McMinimy; CRS In Focus IF10288, Overview
of the 2018 Farm Bill Energy Title Programs, by Kelsi Bracmort; and CRS Report R45943,
The Farm Bill Energy Title: An Overview and Funding History, by Kelsi Bracmort
Biomass Research and Development (BRDI) 47
Administered by
National Institute of Food and Agriculture (NIFA)
Authority
Established by the Biomass Research and Development Act of 2000, §307 (P.L. 106-224).
Most recently amended by Section 7507 of the Agriculture Improvement Act of 2018
(P.L. 115-334).
Annual Funding
Mandatory: The 2018 farm bill provided no mandatory funding. The 2014 farm bill
authorized mandatory funding (to remain available until expended) of $3 million for four
fiscal years—FY2014-FY2017—with baseline funding authority expiring after FY2017 .
Discretionary: Discretionary funding of $20 million is authorized to be appropriated
annually for FY2019-FY2023. However, no discretionary funding was appropriated for
BRDI through FY2021.
Scheduled
Termination
Authorized through FY2023
Description
Competitive funding including grants, contracts, and financial assistance for biomass
research, development, and demonstration projects. A minimum of 15% of funding must
go to each of three program areas: feedstock development, biofuels and biobased
products development, and biofuels development analysis.
Qualified Applicant(s)
Institutions of higher learning (colleges and universities), national laboratories, federal or
state research entities, private-sector entities, and nonprofit organizations
Applicable
Fuel/Technology
Biomass; biofuels
For More Information
See the USDA program website; and the Biomass Research and Development (BR&D)
Board’s BRDI website; program number 10.312 on the Sam.gov website
Related CRS Reports
CRS Report R40913, Renewable Energy and Energy Efficiency Incentives: A Summary of
Federal Programs, by Lynn J. Cunningham; CRS In Focus IF10288, Overview of the 2018
Farm Bill Energy Title Programs, by Kelsi Bracmort; and CRS Report R45943, The Farm Bill
Energy Title: An Overview and Funding History, by Kelsi Bracmort
Biorefinery, Renewable Chemical, and Biobased Product Manufacturing
Assistance Program (formerly the Biorefinery Assistance Program) 48
Administered by
Rural Development
Authority
Established by Title IX of the Farm Security and Rural Investment Act of 2002 (FSRIA,
P.L. 107-171). Most recently amended by Title IX Section 9003 of the Agriculture
Improvement Act of 2018 (P.L. 115-334).
Annual Funding
Mandatory: Under the 2018 farm bill, mandatory Commodity Credit Corporation (CCC)
funding of $50 million for FY2019 and $25 million for FY2020 (to remain available until
expended) was authorized for loan guarantees. $50 million was made available for
FY2019. $24 million in funding was made available for FY2020. 49 There is no new baseline
funding after FY2020. However, $5 million in funding was made available for FY2021.
47
7 U.S.C. §8108.
48 7 U.S.C. §8103.
49 T he original mandatory funding of $25 million for FY2020 was reduced by $1 million for a final total of $24 million
Congressional Research Service
22
Alternative Fuel and Advanced Vehicle Technology Incentives
Discretionary: Funds of $75 million annually are authorized to be appropriated for
FY2014-FY2018 and FY2019-FY2023. No discretionary funding has been appropriated for
this program through FY2021 and there is no budget request for discretionary
appropriations for FY2022.50
Scheduled
Termination
Authorized through FY2023
Description
The purpose of the program is to assist in the development of new and emerging
technologies for advanced biofuels, renewable chemicals, and biobased product
manufacturing so as to increase the energy independence of the United States; promote
resource conservation, public health, and the environment; diversify markets for
agricultural and forestry products and agriculture waste material; and create jobs and
enhance the economic development of the rural economy. Loan guarantees are made to
fund the development, construction, and retrofitting of commercial-scale biorefineries
using eligible technology. The maximum loan guarantee is $250 million.
Qualified Applicant(s)
Individuals, entities, Indian tribes, state or local governments, corporations, farm
cooperatives, farmer cooperative organizations, associations of agricultural producers,
national laboratories, institutions of higher education, rural electric cooperatives, public
power entities, and consortia of any of the previous entities
Applicable
Fuel/Technology
Technologies being adopted in a viable commercial-scale operation of a biorefinery that
produces an advanced biofuel, renewable chemical, or biobased product; technologies
that have been demonstrated to have technical and economic potential for commercial
application in a biorefinery that produces one or more of these products.
For More Information
See the USDA program website; and program number 10.865 on the SAM.gov website.
Related CRS Reports
CRS Report R40913, Renewable Energy and Energy Efficiency Incentives: A Summary of
Federal Programs, by Lynn J. Cunningham; CRS In Focus IF10288, Overview of the 2018
Farm Bill Energy Title Programs, by Kelsi Bracmort; and CRS Report R45943, The Farm Bill
Energy Title: An Overview and Funding History, by Kelsi Bracmort
Rural Energy for America Program (REAP) Grants and Loans 51
Administered by
Rural Development
Authority
Established by Title IX, Sections 9005 and 9006 of the Farm Security and Rural
Investment Act of 2002 (FSIRA, P.L. 107-171). Most recently amended by Title IX,
Section 9007 of Agriculture Improvement Act of 2018 (P.L. 115-334).
Annual Funding
Mandatory: The 2018 farm bill retains mandatory funding of $50 million for FY2014 and
each fiscal year thereafter (therefore REAP’s mandatory funding authority does not
expire with the 2014 farm bill). Mandatory funds are to remain available until expended.
Discretionary: The 2018 farm bill also retains authorized annual discretionary funding of
$20 million to be appropriated for FY2019-FY2023. Actual discretionary appropriations
have been $335,000 for FY2019, $706,000 for FY2020, and $10.4 million for FY2021 .52
$30.2 million requested for FY2022.
in mandatory funds made available to the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing
Assistance Program. T his reduction is noted in the Appendix volume to the FY2021 Budget of the United States
Government on p. 142.
From p. 145 of the Appendix volume to the FY2022 Budget of the United States Government: “T he 2022 Budget
does not request discretionary funding for this program because mandatory funding is provided through the 2018 Farm
Bill.”
51 7 U.S.C. §8107.
50
52
$10 million in additional discretionary funding was appropriated to REAP in the Consolidated Appropriation Act,
FY2021 (P.L. 116-260, §781). T his additional amount was added to the base discretionary appropriation of $392,000
for loan subsidies and grants and is to remain available until expended. Section 781 directs the Agriculture Secretary to
use the additional $10 million “ to carry out a pilot program to provide financial assistance for rural com munities to
further develop renewable energy.”
Congressional Research Service
23
Alternative Fuel and Advanced Vehicle Technology Incentives
Scheduled
Termination
Authorized with no expiration
Description
REAP promotes energy efficiency and renewable energy for agricultural producers and
rural small businesses through the use of (1) grants for energy audits and renewable
energy development assistance, and (2) financial assistance for renewable energy systems
and energy efficiency improvements. The 2018 farm bill added new funding for equipment
that exceeds energy efficiency standards and capped funding for this category of loan
guarantees at 15% of total funds. The 2014 farm bill excluded the use of REAP funds for
installing retail energy dispensing equipment, such as blender pumps.
Qualified Applicant(s)
Eligible entities to receive grants to provide energy audits and renewable development
assistance to agricultural producers and rural small businesses include state, tribal, or
local governments; land-grant colleges or other institutions of higher education; rural
electric cooperatives; public power entities; councils; and other similar entities.
Agricultural producers and rural small businesses are eligible to receive direct financial
assistance for energy efficiency improvements and renewable energy systems.
Applicable
Fuel/Technology
Biofuels (see description above), among other technologies.
For More Information
See the USDA program website; and program number 10.868 on the SAM.gov website.
Related CRS Reports
CRS Report RL31837, An Overview of USDA Rural Development Programs, by Tadlock
Cowan; CRS Report R40913, Renewable Energy and Energy Efficiency Incentives: A Summary
of Federal Programs, by Lynn J. Cunningham
Congressional Research Service
24
Alternative Fuel and Advanced Vehicle Technology Incentives
Appendix A. Selected Expired or Repealed
Programs
Repowering Assistance Program53
Administered by
Rural Development
Authority
Established by the Food, Conservation, and Energy Act of 2008 (P.L. 110-246). Repealed
by the Agriculture Improvement Act of 2018 (P.L. 115-334).
Annual Funding
Mandatory: Under the 2014 farm bill, mandatory CCC funding of $12 million for FY2014
was authorized, to remain available until expended (i.e., no new baseline funding after
FY2014).
Discretionary: The 2014 farm bill authorized discretionary funding of $10 million annually
to be appropriated for FY2014-FY2018.
Termination Date
Repealed on December 20, 2018
Description
The Repowering Assistance Program (RAP) made payments to eligible biorefineries to
encourage the use of renewable biomass as a replacement for fossil fuels used to provide
heat for processing or power in the operation of these eligible biorefineries. Not more
than 5% of the funds was to be made available to eligible producers with a refining
capacity exceeding 150 million gallons of advanced biofuel per year.
Qualified Applicant(s)
Eligible biorefinery. The biorefinery must have been in existence on or before June 18,
2008.
Applicable
Fuel/Technology
Renewable Biomass
For More Information
See the USDA program website; and program number 10.866 on the beta.SAM.gov
website.
Related CRS Reports
CRS Report R43416, Energy Provisions in the 2014 Farm Bill (P.L. 113-79): Status and
Funding, by Kelsi Bracmort; CRS Report R40913, Renewable Energy and Energy Efficiency
Incentives: A Summary of Federal Programs, by Lynn J. Cunningham
Special Depreciation Allowance for Second Generation (Cellulosic and AlgaeBased) Biofuel Plant Property54
Administered by
IRS
Authority
Established in 2006 by the Tax Relief and Health Care Act of 2006 ( P.L. 109-432), §209;
amended by the Energy Improvement and Extension Act of 2008 (P.L. 110-343, Division
B), §201; modified by the Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 (P.L. 111-312), §401; amended by the American Taxpayer Relief
Act of 2012 (P.L. 112-240, §410). This temporary credit has expired and subsequently has
been extended retroactively on multiple occasions, most recently through 2020 by the
Further Consolidated Appropriations Act, 2020 (P.L. 116-94).
Annual Funding
JCT estimated tax expenditure for FY2020-FY2024: Less than $50 million total55
Termination Date
December 31, 2020
53 7 U.S.C. §8104.
54
26 U.S.C. §168.
55 “T he special depreciation allowance for qualified second-generation biofuel plant property [was] extended three
years to property placed in service prior to January 1, 2021. T his tax expenditure is not listed in T able 1 because the
estimated revenue loss is below the de minimis amount [Less than $50 million]. See U.S. Congress, Joint Committee
on T axation, Estimates of Federal T ax Expenditures for Fiscal Years 2020 -2024,” 116th Cong., 2 nd sess., November 5,
2020, JCX-23-20 (Washington, DC: GPO, 2020).
Congressional Research Service
25
Alternative Fuel and Advanced Vehicle Technology Incentives
Description
Qualified Applicant(s)
A taxpayer could take a depreciation deduction of 50% of the adjusted basis of a new
cellulosic or algae-based biofuel plant in the year it was put in service. Any portion of the
cost financed through tax-exempt bonds was exempted from the depreciation allowance.
Before amendment by P.L. 110-343 the accelerated depreciation applied only to cellulosic
ethanol plants that break down cellulose through enzymatic processes—the amended
provision applied to all cellulosic biofuel plants. Before amendment by P.L. 112-240 the
provision did not apply to algae-based biofuel plants: the incentive for algae-based plants
applies to property placed in service after January 2, 2013.
Any cellulosic biofuel plant acquired after December 20, 2006, and placed in service
before January 1, 2021, and any algae-based biofuel plant placed in service between
January 2, 2013, and December 31, 2021. Any plant that had a binding contract for
acquisition before December 20, 2006, did not qualify.
Applicable
Fuel/Technology
Cellulosic and algae-based biofuels
For More Information
See Senate Finance Committee, Summary of House-Senate Agreement on Tax, Trade, Health,
and Other Provisions, December 7, 2006; AFDC’s web page for the Second Generation
Biofuel Plant Depreciation Deduction Allowance, listed on the database’s “Expired,
Repealed, and Archived Incentives and Laws” website.
Related CRS Reports
CRS Report R42122, Algae’s Potential as a Transportation Biofuel, by Kelsi Bracmort; and
CRS Report R44990, Energy Tax Provisions That Expired in 2017 (“Tax Extenders”), by Molly
F. Sherlock, Donald J. Marples, and Margot L. Crandall-Hollick
Congressional Research Service
26
Alternative Fuel and Advanced Vehicle Technology Incentives
Appendix B. Summary Tables
Appendix B contains four tables
Table B-1 provides a summary of the programs discussed in the body of the
report, listed by agency;
Table B-2 lists programs and incentives for alternative fuels, by fuel type;
Table B-3 lists programs and incentives for advanced technology vehicles, by
vehicle type; and
Table B-4 lists programs by agency that have expired or were repealed since
December 31, 2017.
Congressional Research Service
27
Table B-1. Federal Programs by Agency
Program
FY2021 Appropriation
or JCT Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Internal Revenue Service
Vehicle Incentives
Alternative Motor
Vehicle Credit (Fuel
Cell Vehicles)
This provision included separate credits for four distinct
types of vehicles: using fuel cells, advanced lean burn
technologies, qualified hybrid technology, or qualified
alternative fuels technologies.
$4 million
December 31, 2021,
for fuel cell vehicles
Hybrid gasoline-electric;
diesel; battery-electric;
alternative fuel and fuel cell
vehicles; and advanced
lean-burn technology
vehicles
Plug-in Electric Drive
Vehicle Credit
Purchasers of plug-in electric vehicles may file to obtain a
tax credit of up to $7,500 per vehicle, depending on
battery capacity.
$0.6 billion
The credit is phased
out when an
automaker has sold
a total of 200,000
qualified vehicles
Plug-in electric vehicles
Plug-in Electric
Vehicle Credit (Twoor Three-Wheeled)
A maximum credit of $2,500 was allowed for certain
types of new qualified plug-in electric vehicles, including
vehicles with two or three wheels.
Less than $500,000
December 31, 2021,
for two-wheeled
vehicles; December
31, 2013, for threewheeled vehicles
Two- or three-wheeled
plug-in electric vehicles
Idle Reduction
Equipment Tax
Exemption
The Idle Reduction Equipment Tax Exemption exempts
certain vehicle idling reduction devices from the federal
excise tax on heavy trucks and trailers.
JCT has not estimated this
expenditure
None
Devices that have been
identified by the
Administrator of the EPA
as reducing idling of a heavy
truck or trailer at a motor
vehicle rest stop or other
location where such
vehicles are temporarily
parked or remain
stationary
CRS-28
Program
FY2021 Appropriation
or JCT Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Fuel/Fueling Infrastructure Incentives - General
Motor Fuels Excise
Taxes
The motor fuels taxes that were included in the Highway
Revenue Act of 1956 (P.L. 84-627) were dedicated to
supporting the Highway Trust Fund, except for the tax
on compressed natural gas, which was enacted in 1993.
The federal excise tax on most of these fuels was last
raised by Congress in 1993. Taxes vary by fuel: gasoline,
18.4 cents per gallon; diesel fuel, 24.4 cents per gallon;
biodiesel, 24.4 cents per gallon; ethanol, 18.4 cents per
gallon; P-series fuels, 18.4 cents per gallon; liquefied
hydrogen, 18.4 cents per gallon equivalent; liquefied
petroleum gas (LPG), 18.3 cents per gallon equivalent;
compressed natural gas (CNG), 18.3 cents per gallon
equivalent; liquefied natural gas (LNG), 24.3 cents per
gallon equivalent. Alternative fuel tax credits are or were
available against many of these (see “Incentives for
Alternative Fuel and Alternative Fuel Mixtures” and
“Biodiesel or Renewable Diesel Mixture Tax Credit”).
Electricity for electric vehicles is untaxed. These
exemptions/credits effectively incentivize selected
fuels/vehicles relative to conventional options.
N/Aa
4.3 cents per gallon
of the gasoline/
diesel fuel tax is
permanent; the rest
of the motor fuels
taxes expire on
September 30,
2022, when many
current highwayrelated taxes expire
Gasoline, diesel, liquefied
petroleum gas, liquefied
natural gas, fuels with
methanol from natural gas,
P Series fuels, and
compressed natural gas
Incentives for
Alternative Fuel and
Alternative Fuel
Mixtures
The Alternative Fuel Excise Tax Credit was a 50-centper gallon excise tax credit for certain alternative fuel
used as fuel in a motor vehicle, motor boat, or airplane; a
similar provision established a 50-cent-per gallon credit
for alternative fuel mixed with a traditional fuel (gasoline,
diesel, or kerosene) for use as a fuel.
$204 million
December 31, 2021
Liquefied petroleum gas, P
Series fuels, compressed or
liquefied natural gas,
liquefied hydrogen, any
liquefied fuel derived from
coal or peat, liquefied
hydrocarbons derived from
biomass (does not include
ethanol, methanol, or
biodiesel)
CRS-29
Program
Alternative Fuel
Refueling Property
Credit
FY2021 Appropriation
or JCT Estimated
Expenditure
Description
Consumers and businesses who install qualified fueling
equipment received a 30% tax credit of up to $30,000
for properties subject to an allowance for depreciation,
and $1,000 for all other properties.
$39 million
Expiration Date
Eligible Fuels or
Technologies
December 31, 2021
Natural gas, liquefied
petroleum gas, hydrogen,
electricity, E85, or diesel
fuel blends containing a
minimum of 20% biodiesel
$3.1 billion (combined total
for excise and income tax
credits)
December 31, 2022
Biodiesel, renewable diesel,
and agri-biodiesel
Fuel/Fueling Infrastructure Incentives – Biofuels
Biodiesel or
Renewable Diesel
Income Tax Credit
and Mixture Credit
(both credits may not
be claimed for the
same batch of fuel)
Income Tax Credit: Biodiesel and renewable diesel
blenders (or producers of diesel/biodiesel blends) may
claim a tax credit of $1.00 per gallon of fuel used to
produce a qualified mixture.
Small Agri-Biodiesel
Producer Credit
An agri-biodiesel (produced from virgin agricultural
products) producer with less than 60 million gallons per
year in production capacity could claim a credit of 10
cents per gallon on the first 15 million gallons produced
in a year.
JCT has not estimated this
expenditure
December 31, 2022
Agri-biodiesel
Second Generation
Biofuel Producer
Credit (formerly
Credit for Production
of Cellulosic and
Algae-Based Biofuel)
Producers of cellulosic biofuel could claim a tax credit of
$1.01 per gallon. For cellulosic ethanol producers, the
value of the production tax credit was reduced by the
value of the volumetric ethanol excise tax credit and the
small ethanol producer credit. The credit was valued at
$1.01 cents per gallon (the offsetting tax credits have
expired). P.L. 112-240 amended the credit to include
noncellulosic fuel produced from algae feedstocks.
$9 million
December 31, 2021
Cellulosic and algae-based
biofuels
CRS-30
Mixture Credit: Producers, blenders, or retailers of
biodiesel, renewable diesel, or agri-biodiesel may claim a
tax credit of $1.00 per gallon of qualified fuel sold or
used by the taxpayer
Program
FY2021 Appropriation
or JCT Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Department of Energy
Advanced Technology
Vehicles
Manufacturing
(ATVM) Program
ATVM was established in 2007 to help automakers meet
mandated vehicle fuel economy standards and to
encourage domestic production of more fuel-efficient
cars, light trucks, and components. It was first funded in
2008 to provide $25 billion in revolving loans to qualified
automakers for investment in their manufacturing
operations. In FY2008, $7.51 billion was appropriated for
the direct loans—$7.5 billion for the loan subsidies
(available until expended) and $10 million for
administration. As of August 2021, loans have been made
to five companies; with loan repayments, $17.7 billion of
the $25 billion loan authority remains available.
$5 million (for administration)
No expiration for
the loan program
No limitations on specific
technologies; rather, limits
are stipulated for vehicle
emissions and fuel
consumption, and facilities
must be located in the
United States. There must
be a reasonable prospect
for repayment.
Biomass and
Biorefinery Systems
Program
The Biomass Program primarily focuses on research,
development, demonstration, and deployment (RDD&D)
to ensure that cellulosic ethanol is commercially viable by
2012 and that biobased aviation fuel, diesel fuel, and
gasoline are price competitive by 2017.
$255 million
None
Biofuels
Clean Cities Program
Initially started in 1993 as a DOE program to promote
alternative fuel vehicles among the states, it is now a
broader program to reduce petroleum consumption in
transportation, with 100 Clean Cities coalitions that
focus on deployment of alternative and renewable fuels,
idle-reduction measures, fuel economy improvements,
and emerging transportation technologies. Clean Cities
provides technical, informational, and financial assistance
to communities.
$40 million
None
Electricity, natural gas,
propane, bio-methane,
ethanol, biodiesel,
hydrogen
Hydrogen and Fuel
Cell Technologies
Program
The DOE Hydrogen Program works with industry,
national laboratories, universities, government agencies,
and other partners to overcome the barriers to the use
of hydrogen and fuel cells. It includes a research and
development (R&D) effort focused on advancing the
performance and reducing the cost of these technologies.
$150 million
None
Hydrogen, fuel cells
CRS-31
FY2021 Appropriation
or JCT Estimated
Expenditure
Program
Description
Vehicle Technologies
Office (VTO)
Through research and development, VTO supports
partnerships with other public and private organizations
that will enhance energy efficiency and productivity, bring
clean and affordable technologies to market, and enhance
advanced technology vehicle choices for consumers.
$400 million—of that amount
not less than $178 million for
Batteries and Electric Drive
Technology programs
Expiration Date
Eligible Fuels or
Technologies
None
Advanced batteries, power
electronics and electric
motors, advanced
combustion, lightweight
materials, vehicle-to-grid
interaction, and fuel cell
and hydrogen technologies
Department of Transportation
Alternative Fuel
Corridors
The Alternative Fuel Corridors program designates a
national network of plug-in electric vehicle charging and
hydrogen, propane, and natural gas fueling infrastructure
along national highway system corridors. To designate
the corridors, FHWA solicits nominations from state and
local officials and works with other federal officials and
industry stakeholders. Within five years of the
establishment of the corridors, and every five years
thereafter, FHWA will update and redesignate the
corridors. FHWA also has an objective to deploy fuel
infrastructure along the designated corridors.
Funded through the Highway
Trust Fund
N/A
Vehicles powered by
electricity, hydrogen,
propane, and natural gas
Congestion Mitigation
and Air Quality
Improvement
Program (CMAQ)
Congress directed the DOT to establish the CMAQ
program to provide funds for projects and programs that
may reduce the emissions of transportation-related
pollutants that may cause an area within a state to
exceed certain air quality standards.
$2.5 billion
September 30, 2021
Not limited to alternative
fuels or advanced
technologies
CRS-32
FY2021 Appropriation
or JCT Estimated
Expenditure
Description
Corporate Average
Fuel Economy (CAFE)
Incentives for
Alternative Fuel
Vehicles
Automakers subject to Corporate Average Fuel
Economy (CAFE) standards may accrue credits under
that program for the production and sale of alternative
fuel vehicles. For dedicated vehicles (i.e., vehicles that run
solely on alternative fuel), credits are unlimited. For dual
fueled vehicles (i.e., that may run on conventional or
alternative fuel), credits are limited: “Petroleum
reduction” incentives are applied to the calculation of
“dedicated” and “dual fuel” vehicles’ fuel economy for
the purposes of CAFE compliance based on provisions in
the Alternative Motor Fuels Act (AMFA) of 1988 P.L.
100-494 (see 49 U.S. Code §32905), thereby providing
miles per gallon fuel equivalency ratings for electric and
natural gas vehicles. The Biden Administration has
proposed to revise the current CAFE standards
established under the Trump Administration, increasing
them by 8% per year for passenger cars and light trucks
over MYs 2024-2026. NHTSA projects that the
proposed standards would require, on an average
industry fleet-wide basis, vehicles with roughly 48 mpg in
MY 2026.
N/A
No expiration for
dedicated vehicles
Methanol (at least 85%),
ethanol (at least 85%),
natural gas, liquefied
petroleum gas, hydrogen,
coal-derived liquid fuels,
biologically derived fuels,
and electricity
Low or No Emission
Vehicle Program
The Low or No Emission Vehicle program provides
funding to state and local governmental authorities for
the purchase or lease of zero-emission and low-emission
transit buses as well as acquisition, construction, and
leasing of required supporting facilities. The federal share
of the cost of leasing or purchasing a transit bus is not to
exceed 85% of the total transit bus cost. The federal
share in the cost of leasing or acquiring low- or noemission bus-related equipment and facilities is 90% of
the net project cost
$55 million per year through
FY2021. In the Consolidated
Appropriations Act, 2021 (P.L.
116-260) an additional $125
million was appropriated for
FY2021 for a total of $180
million
September 30, 2021
Eligible technologies
include buses and fueling
infrastructure for vehicles
powered by electricity,
CNG, propane, fuel cells,
and hybrid fuels such as
diesel-electric buses
CRS-33
Expiration Date
Eligible Fuels or
Technologies
Program
Program
FY2021 Appropriation
or JCT Estimated
Expenditure
Description
Expiration Date
Eligible Fuels or
Technologies
Environmental Protection Agency
National Clean Diesel
Campaign
EPA’s National Clean Diesel Campaign (NCDC)
promotes clean air strategies by working with
manufacturers, fleet operators, air quality professionals,
environmental and community organizations, and state
and local officials to reduce diesel emissions. States are
allocated funds for their clean diesel programs through
the Diesel Emission Reduction Act (DERA).
$90 million
None (last
authorized through
FY2016, but the
program is still
active and receiving
funding)
Primarily for technologies
that significantly reduce
emissions (EPA maintains a
list of verified retrofit
technologies and emerging
technologies at
http://www.epa.gov/
cleandiesel/)
Renewable Fuel
Standard (RFS)
Mandated use of renewable fuel in gasoline and diesel
fuel: 4.0 billion gallons in 2006, increasing to 36 billion
gallons in 2022. There are specific submandates for
advanced biofuels (fuels other than corn-based ethanol),
cellulosic biofuels, and biomass-based diesel fuels.
Greenhouse gas emission reduction requirements apply
to all advanced biofuels and to conventional biofuels from
refineries built after 2007.
N/A
None
Biofuels (specific
requirements for advanced
biofuels, cellulosic fuels,
and biomass-based diesel
fuels)
Authorized through
FY2023
Advanced biofuels
Authorized through
FY2023
Feedstocks for the
production of advanced
biofuels
Department of Agriculture
Bioenergy Program
for Advanced Biofuels
To support and ensure an expanding production of
advanced biofuels by providing payments to eligible
advanced biofuel producers.
Mandatory funding: $7 million
for each of FY2019-FY2023
was authorized to remain
available until expended
Discretionary funding of $20
million annually for FY2019FY2023
Biomass Crop
Assistance Program
(BCAP)
CRS-34
The Biomass Crop Assistance Program (BCAP) provides
financial assistance to support the production of eligible
biomass crops on land within approved BCAP project
areas.
The 2018 farm bill provided
no mandatory funding.
Discretionary funding of $25
million annually for FY2019FY2023
FY2021 Appropriation
or JCT Estimated
Expenditure
Expiration Date
Eligible Fuels or
Technologies
Program
Description
Biomass Research and
Development
Initiative (BRDI)
Provides competitive funding in the form of grants,
contracts, and financial assistance for biomass research,
development, and demonstration projects.
The 2018 farm bill provided
no mandatory funding.
Discretionary funding of $20
million is authorized to be
appropriated annually for
FY2019-FY2023
Authorized through
FY2023
Biomass energy and
biobased products (not
limited to transportation
applications)
Biorefinery,
Renewable Chemical,
and Biobased Product
Manufacturing
Assistance Program
The Biorefinery, Renewable Chemical, and Biobased
Product Manufacturing Assistance Program (formerly the
Biorefinery Assistance Program or BAP) assists in the
development of new and emerging technologies for
advanced biofuels, renewable chemicals, and biobased
product manufacturing. Loan guarantees are made to
fund the development, construction, and retrofitting of
commercial-scale biorefineries using eligible technology.
Mandatory CCC funding of
$50 million in FY2019 and $25
million in FY2020 (to remain
available until expended) was
authorized for loan
guarantees. Discretionary
funding of $75 million annually
was authorized for FY2019FY2023
Authorized through
FY2023
Advanced biofuels,
renewable chemicals, and
biobased products
Rural Energy for
America Program
(REAP)
REAP promotes energy efficiency and renewable energy
for agricultural producers and rural small businesses
through the use of (1) grants for energy audits and
renewable energy development assistance, and (2)
financial assistance for renewable energy systems and
energy efficiency improvements.
Mandatory CCC funds of $50
million are authorized for
FY2014 and each fiscal year
thereafter. Discretionary
funding of $20 million annually
was authorized to be
appropriated for FY2019FY2023
Authorized with no
expiration
Rural energy projects
broadly
Source: CRS analysis.
Note: N/A = not applicable.
a.
CRS-35
The motor fuels excise tax generates revenue (as opposed to being a tax expenditure). CBO projects revenue of $33.5 billion in FY2021 from all motor fuels
(conventional and alternative).
Table B-2. Federal Taxes and Incentives for Alternative Fuels
Fuel
Excise Tax Rate
(¢ per gallon)
Production
Incentive
Incentive for Blending
and/or Fuel Use
Federal R&D
Other Programs
DOE Biomass R&D
program—$255
million in FY2021,a
smaller amounts in
USDA Biomass R&Db
Renewable fuel standard (RFS)
mandates biofuel use by gasoline and
diesel fuel suppliers
Biofuels
General
None
None
None
Tax credit for installation of refueling
infrastructure for some biofuels
Conventional Ethanol
18.4
None
$0.54 per gallon [expired]
Majority of RFS currently met through
use of conventional (corn-based)
ethanol
Biodiesel and Renewable
Diesel
24.4
$1.00 plus $0.10 for
small “agri-biodiesel”
producers
$1.00 per gallon (may not
claim this and the
producer credit)
Specific carve-out in RFS for biomassbased diesel
Cellulosic and AlgaeBased Biofuels
Varies
$1.01 per gallon, plus
accelerated
depreciation of plant
property
None
DOE and USDA
biomass programs
focused on cellulosic
biofuel development
Specific carve-out in RFS for cellulosic
biofuels (but not for algae-based fuels)
Advanced Biofuelsc
Varies
Varies
Varies
DOE Biomass
Program
USDA Farm Bill programs, including
Biorefinery Assistance, Bioenergy
Program, Biomass Crop Assistance
Program (BCAP); specific carve-out in
RFS for advanced biofuels
Electricity d
None
None
None
Hydrogen
Liquefied Hydrogen
CRS-36
DOE Hydrogen and
Fuel Cell Technologies
Program—$150
million in FY2015 e
18.4
None
$0.50 per gallon
Tax credit for installation of refueling
infrastructure
Fuel
Excise Tax Rate
(¢ per gallon)
Production
Incentive
Incentive for Blending
and/or Fuel Use
Federal R&D
Other Programs
Gaseous Hydrogen d
None
None
None
Tax credit for installation of refueling
infrastructure
Liquefied Petroleum
Gas (LPG)
18.3
None
$0.50 per gallon
Tax credit for installation of refueling
infrastructure
Compressed Natural Gas
(CNG)
18.3
None
$0.50 per gallon
Tax credit for installation of refueling
infrastructure
Liquefied Natural Gas
(LNG)
24.3
None
$0.50 per gallon
Tax credit for installation of refueling
infrastructure
Natural Gas
Source: CRS analysis.
Notes: For more details, see Table B-1. Italics indicate expired provisions.
a.
b.
Program not exclusively for transportation biofuels—also covers bioenergy (i.e., stationary sources) and bioproducts.
Program not exclusively for transportation biofuels—also covers bioenergy (i.e., stationary sources) and bioproducts.
c.
This category generally encompasses others, including cellulosic biofuels, algae-based biofuels, and biomass-based diesel fuels.
d.
Electricity and gaseous hydrogen are not subject to the excise tax, nor are they subject to the excise tax credit.
e.
Program not exclusively focused on transportation.
CRS-37
Table B-3. Federal Incentives for Alternative Fuel and Advanced Technology Vehicles
Vehicle Technology or Fuel
Type
Manufacturing
Incentive
Purchase Incentive
Federal R&D
Other Programs
Electrified Vehicles
General
$178.7 million in FY2021 under
DOE’s Vehicle Technologies
Program covers battery and
electrification technologies
National Clean Diesel
Campaign (NCDC), Clean
Cities
Hybrid
ATVM loan program
generally applies
Up to $3,400 for passenger vehicles
[expired]
Battery Electric
Credits under CAFE
program; ATVM loan
program generally applies
Up to $7,500 for passenger vehicles;
Up to $2,500 for two- and threewheeled and low-speed vehicles
Up to $4,000 for conversion kits
[expired]
Plug-in Hybrid
Credits under CAFE
program; ATVM loan
program generally applies
Up to $7,500 for passenger vehicles;
Up to $2,500 for two- and threewheeled and low-speed vehicles
Up to $4,000 for conversion kits;
[expired]
Ethanol Flexible Fuel
Vehicle (FFV)
Credits under CAFE
program expire after
2019 model year
None
Limited
National Clean Diesel
Campaign (NCDC), Clean
Cities
Fuel Cell Vehicles
Credits under CAFE
program; ATVM loan
program generally applies
Up to $8,000 for passenger vehicles
[expired]
DOE Hydrogen and Fuel Cell
Technologies Program—$150
million in FY2021 a
National Clean Diesel
Campaign (NCDC), Clean
Cities
Compressed Natural Gas
(CNG)
Credits under CAFE
program; ATVM loan
program generally applies
Up to $4,000 for passenger vehicles
[expired]
National Clean Diesel
Campaign (NCDC), Clean
Cities
Liquefied Natural Gas (LNG)
Credits under CAFE
program; ATVM loan
program generally applies
Up to $4,000 for passenger vehicles
[expired]
National Clean Diesel
Campaign (NCDC), Clean
Cities
Natural Gas Vehicles
Source: CRS analysis.
CRS-38
Limited
Notes: For more details, see Table B-1. Italics indicate expired provisions.
a. Program not exclusively focused on transportation.
Table B-4. Selected Expired/Repealed Programs by Agency
Administering
Agency
Program
Description
Expiration Date
Eligible Fuels or Technologies
Department of
Agriculture
Repowering
Assistance
Program (RAP)
The Repowering Assistance Program (RAP) made payments
to eligible biorefineries to encourage the use of renewable
biomass as a replacement for fossil fuels used to provide
heat for processing or power in the operation of these
eligible biorefineries.
Repealed on
December 20, 2018
Renewable biomass
Internal
Revenue Service
Special
Depreciation
Allowance for
Second
Generation
Biofuel Plant
Property
A taxpayer could take a depreciation deduction of 50% of
the adjusted basis of a new cellulosic or algae-based biofuel
plant in the year it was put in service. Any portion of the
cost financed through tax-exempt bonds was exempted
from the depreciation allowance. Before amendment by P.L.
110-343 the accelerated depreciation applied only to
cellulosic ethanol plants that break down cellulose through
enzymatic processes—the amended provision applied to all
cellulosic biofuel plants. Before amendment by P.L. 112-240
the provision did not apply to algae-based biofuel plants: the
incentive for algae-based plants applied to property placed in
service in 2013.
December 31, 2017
Cellulosic and algae-based biofuels
Source: CRS analysis.
CRS-39
Alternative Fuel and Advanced Vehicle Technology Incentives
Author Information
Lynn J. Cunningham
Senior Research Librarian
Melissa N. Diaz
Analyst in Energy Policy
Bill Canis
Specialist in Industrial Organization and Business
Brent D. Yacobucci
Section Research Manager
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.
Congressional Research Service
R42566 · VERSION 20 · UPDATED
40
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.