2024 Alternative Fuels Federal Policy Agenda

Insulate Americans from Volatile Gas Prices, Reduce Foreign Oil Dependence, Transition to ZEVs and Decarbonized Biofuels, Create Jobs

Three quarters of the 20 million barrels of petroleum consumed by America each day is used for transportation. Transportation is the nation’s largest source of greenhouse emissions, the largest source of local air pollution, and the largest energy expense in many communities. Even though the U.S. is now the world’s largest energy producer, we remain vulnerable to the actions of foreign governments that do not share our interests. Reducing dependence on imported oil increases our nation’s energy security and reduces the economic impacts of fuel price volatility, as well as providing for the creation of new American jobs.

American ingenuity and technology innovation have enabled vehicles using electricity, natural gas, propane, biodiesel, ethanol, and hydrogen to make their way into the marketplace. According to the Department of Energy, there are more than 30 million alternative fuel vehicles in use in the United States and 173,000 alternative fueling stations. Additionally, annual sales of EVs more than quadrupled from 2020 to 2023, culminating in more than one million in EV sales for the first time in calendar year 2023. Yet even this represents only a very small fraction of the total American fleet.

The United States must aggressively expand our use of domestically produced alternatives to petroleum fuel if we are to reduce the impact of volatile petroleum prices on our economy, improve air quality and create more American jobs. 

Now is the time for Congress to continue the nation’s investment in clean American transportation fuels and vehicles by acting consistently on the following urgent policy matters:

  • Ensure adequate federal funding in FY 2025 for the Department of Energy (DOE) Clean Cities alternative fuel deployment program and the U.S. EPA Diesel Emission Reduction Grants.

  • Maintain for 10 years the suite of existing tax incentives for clean fuels and infrastructure.

  • Continue successful implementation of transportation energy programs outlined in both the Bipartisan Infrastructure Law (BIL), enacted as the Infrastructure Investment and Jobs Act of 2021 (Public Law 117-58), and the Inflation Reduction Act (IRA).

  • Support efforts at permitting reform including through Clean Cities to accelerate alternative fuel station deployment and clean energy transmission and distribution.
  • With nearly $600 billion in global operational automaker investments that focus on transformational activities in the next decade to develop production facilities, technology, EV batteries, new products, and to secure a future raw material supply (primarily semiconductor and battery materials), according to data analytics firm GlobalDat. It is critical that our country supports this transition to secure our global economic competitiveness as an automobile manufacturing country.
  • There are more than 200,000 propane Autogas-powered vehicles on America’s roads, including a market of 20,000 propane-powered school buses that transport 1.2 million children each day with a large cost savings over diesel; and renewable propane is emerging.
  • The U.S. natural gas industry provides 4.1 million American jobs. About 175,000 natural gas vehicles operate on America’s roads today. 69 percent of all on-road fuel used in natural gas vehicles in calendar year 2022 was renewable natural gas (RNG) with record growth each year.
  • Over the last five years, Renewable Natural Gas (RNG) use as a transportation fuel has increased dramatically. There are now 250 RNG facilities operating in the U.S. that have created more than 38,000 operational and construction jobs. Another 240 new plants are under development, and they will create an additional 35,000 new jobs.

Investment in Clean Transportation Fuels Creates American Jobs

In addition to enhancing our energy security, the clean transportation industry is also critical to our economic growth and global competitiveness.

  • There are now over 2.5 million plug-in electric vehicles on the road in the U.S. The global market for lithium-ion batteries will grow to $194 billion by 2028 and annual revenue from the infrastructure charging sector is projected to grow to $200 billion by 2031.

  • Plug-in electric vehicle sales hit a new record in December 2023, accounting for 9.8% of all light-duty vehicle sales in the U.S. and new tax credits are embraced by dealers.

  • Biodiesel and renewable diesel has grown into a 2.8 billion gallon per year industry with 75 plants across the U.S. supporting more than 65,000 jobs and providing $17 billion in economic activity.

  • With nearly $600 billion in global operational automaker investments that focus on transformational activities in the next decade to develop production facilities, technology, EV batteries, new products, and to secure a future raw material supply (primarily semiconductor and battery materials), according to data analytics firm GlobalData.It is critical that our country supports this transition to secure our global economic competitiveness as an automobile manufacturing country.
  • There are more than 200,000 propane Autogas-powered vehicles on America’s roads, including a market of 20,000 propane-powered school buses that transport 1.2 million children each day with a large cost savings over diesel; and renewable propane is emerging.
  • The U.S. natural gas industry provides 4.1 million American jobs. About 175,000 natural gas vehicles operate on America’s roads today. 69 percent of all on-road fuel used in natural gas vehicles in calendar year 2022 was renewable natural gas (RNG) with record growth each year.
  • Over the last five years, Renewable Natural Gas (RNG) use as a transportation fuel has increased dramatically. There are now 250 RNG facilities operating in the U.S. that have created more than 38,000 operational and construction jobs. Another 240 new plants are under development, and they will create an additional 35,000 new jobs.

Transportation Energy Partners 2024 Federal Policy Priorities

Ensure Adequate Federal Funding in FY 2025 for Key Clean Transportation Programs: 

  • Congress should support funding for the following federal programs, which advance the development and deployment of clean transportation technologies:
  • Congress should provide $75 million for the DOE Clean Cities program including $30 million for Coalitions and $40 million in competitive grants for new alternative fuel and vehicle deployment solutions.
  • Congress should provide $150 million for the EPA Clean Diesel (DERA) Grants program, which has created jobs and improved air quality in hundreds of communities across the U.S.

 Maintain for 10 years the suite of existing tax incentives for clean fuels adoption and implementation

  • Maintain the suite of alternative fuel tax programs through 2034 to provide business and government certainty and maintain the direct pay option.
  • Clean Vehicle Tax Credit
  • Previously Owned Clean Vehicles Tax Credit

  • Qualified Commercial Clean Vehicles Tax Credit

  • Clean Fuel Production Credit and Clean Hydrogen Production Credit
  • Alternative Fuel Excise Tax Credit
  • Alternative Fuel Refueling Tax Credit
  • Advanced Energy Project Credit.

 Continue successful implementation of transportation energy programs outlined in both the Bipartisan Infrastructure Law (BIL), enacted as the Infrastructure Investment and Jobs Act of 2021 (Public Law 117-58), and the Inflation Reduction Act (IRA).

These continue the authorization of the national surface transportation legislation and appropriates $550 billion for new infrastructure investments. The BIL has been a critical tool supporting a variety of alternative fuel and advanced vehicle technologies through grant programs, studies, technology standards, loans, research and development, fleet funding, and other measures. BIL provisions increase investment in electric vehicle supply equipment, alternative fuel infrastructure, electric vehicle batteries, electricity grid upgrades, and light-, medium-, and heavy-duty zero emission vehicles.

Support efforts at permitting reform including through Clean Cities to accelerate alternative fuel station deployment and clean energy transmission and distribution.

  • Federal leaders need to expand and lead a planning, general permitting, and programmatic review to accelerate the permitting process for clean energy infrastructure in the long term.
  • Federal leaders should support multi-agency coordination through the Federal Permitting Improvement Steering Council (FPISC), by expanding its scope to cover mid-sized as well as large clean energy projects.
  • Agencies should report on permitting progress or site delays and prepare for hydrogen and deeply decarbonized fuel transmission tools for communities.

Transportation Energy Partners (TEP) is a national, non-profit policy and education organization that brings Clean Cities coalitions together with the clean transportation industry to advance policies that will reduce American dependence on petroleum-based fuels. About 299 million people (90% of the total U.S. population) live inside the boundaries of Clean Cities coalitions. Since 1993, the nation’s more than 75 Clean Cities coalitions and their 20,000 stakeholders have played a leading role in implementing local programs and projects to deploy alternative fuels, vehicles, and infrastructure that has reduced petroleum consumption by more than 14.5 billion gallons.

For more information, contact:

Alleyn Harned, TEP President
aharned@vacleancities.org,
(540) 568-8896

Steven Montoya, TEP Executive Director
steven@transportationenergypartners.org
(202) 808-5891