California Hydrogen Laws and Incentives

State Incentives

Alternative Fuel Incentive Development

The California Air Resources Board and California Energy Commission have been asked to develop a joint plan, allocating $25 million in incentives, to promote the use and production of alternative fuels. Incentives would be provided for projects in California that promoted high efficiency, high mileage, alternative fuel light-, medium-, and heavy-duty vehicles, for both individual and public fleets. Incentives would be available to replace the current state vehicle fleet with clean, high mileage alternative fuel vehicles and for the construction of both publicly accessible alternative fuel retail fueling stations and fleet fueling facilities, including E-85. In addition, incentives would be provided for alternative fuel production in California and funding for research, development, and testing of alternative fuels and advancing vehicle technology. (Reference Assembly Bill 1811, 2006)

Alternative Fuel Vehicle (AFV) Rebate Program

The "Driving Alternatives" vehicle rebate program has allocated $1.8 million toward vehicle incentive grants for qualifying AFVs. Grants of up to $5,000 will be made available to consumers who purchase or lease eligible zero emission vehicles (ZEVs), plug-in hybrid electric vehicles, and AFVs between May 24, 2007, and March 31, 2009. For the purposes of this program, ZEVs include full function battery electric vehicles, hydrogen fuel cell vehicles, low-speed or neighborhood electric vehicles, and zero emission motorcycles.

Alternative Fuel Research and Development

The Alternative and Renewable Fuel and Vehicle Technology Program will provide grants and loans to public agencies, businesses, fleet owners, consumers, and academic institutions to develop and deploy innovative technologies that transform California's fuel and vehicle types to help attain the state's climate change policies. (Reference Assembly Bill 118, 2007)

High Occupancy Vehicle (HOV) Lane Exemption

Qualified alternative fuel vehicles (AFVs) and hybrid electric vehicles (HEVs) can use HOV lanes regardless of the number of occupants in the vehicle. An identification sticker and FasTrak account must first be obtained from the California Department of Motor Vehicles; only 85,000 decals will be made available. Until January 1, 2011, qualified AFVs are limited to the following: 1) Super Ultra Low Emission Vehicles (SULEVs) or Zero Emission Vehicles (ZEVs) which also meet the federal Inherently Low Emission Vehicles (ILEV) evaporative emissions standards; 2) Ultra Low Emission Vehicles (ULEVs) produced during Model Year 2004 (MY2004) or earlier that also meet the federal ILEV standard; 3) HEVs produced during MY2004 or earlier that have a fuel economy rating of 45 miles per gallon or greater and also meet the state ULEV, SULEV, or Partial Zero Emission Vehicle (PZEV) standards. Enactment of the 2005 Federal transportation bill Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Public Law 109-59) allowed full implementation of this incentive. Additionally, certain vehicles registered to an address in the 9-county San Francisco Bay region are permitted to use the toll-free and reduced-rate passage privilege on specified bridges if the owner of the vehicle has obtained an automatic vehicle identification account. (Reference Assembly Bill 2600 and 1407, 2006, and California Vehicle Code Sections 5205.5 and 21655.9)

Alternative Fuel Vehicle (AFV) and Refueling Infrastructure Grants and Loans

The Assembly Bill 2766 program provides incentive funding for projects that reduce on-road and off-road motor vehicle pollutant emissions (focusing on nitrogen oxides emissions and particulate matter). The program provides applicants with grant money to implement activities or purchase equipment that reduces air pollution from vehicles, including purchasing alternative fuel vehicles and building alternative fuel and advanced technology infrastructure. Check with local air districts to learn how the AB 2766 Motor Vehicle Registration Funds grants are distributed. Some programs include: Yolo-Solano AQMD, South Coast AQMD, Bay Area AQMD, Antelope Valley AQMD, Feather River AQMD, Kern County AQMD, Mojave Desert AQMD, Monterey Bay Unified APCD, North Coast Unified APCD, Northern Sierra AMD , and San Luis Obispo APCD. (Reference Health and Safety Code 44220 to 44246)

Alternative Fuel Research and Development

Innovative Clean Air Technologies Program (ICAT) is a California Air Resources Board (ARB) program that co-funds demonstration projects of innovative technologies that can reduce air pollution. Its purpose is to advance such technologies toward commercial application, thereby reducing emissions and helping the economy of California. In general, the ICAT program can support any innovation in technology that focuses on preventing or controlling air pollution from any type of emission source in California. ICAT can support technologies applicable to any stationary, mobile, indoor, or agricultural emission source or consumer products. Proposals related to current ARB programs, such as increasing the alternatives to diesel fuel and diesel engines, increasing efficiency of zero-emission vehicles, and fuel cells and hydrogen technology, are of particular interest.

Low-Emission Vehicle Incentives and Technical Training - San Joaquin Valley

The REMOVE II Program provides incentives for the purchase of low-emission passenger vehicles, light-duty trucks, small buses, and trucks under 14,000 pounds Gross Vehicle Weight Rating. The purpose of this program is to encourage the early introduction of low-emission vehicles in the San Joaquin Valley. The program pays between $1,000 and $3,000 per vehicle depending on the emission certification level and size of the vehicle. Vehicles must be powered by alternative fuel, electric, or hybrid electric engines/motors. The program also has an Alternative Fuel Vehicle (AFV) Mechanic Training Component that provides incentives for the education of personnel on the mechanics, operation safety, and maintenance of AFVs, equipment structures, fueling stations, and tools involved in the implementation of alternative fuel emission reducing technologies.

Funding for Emission Reductions - South Coast

The South Coast Air Quality Management District (SCAQMD) administers the Air Quality Investment Program (AQIP). The AQIP is a fund created by the SCAQMD, which allows employers within SCAQMD's jurisdiction to make annual investments into an administered fund to meet employers' emission reduction targets. The revenues collected are used to fund alternative mobile source emission/trip reduction programs, including alternative fuel vehicle projects, on an on-going basis. Programs such as procurement of low-emission, alternative fuel or zero emission vehicles, and old vehicle scrapping could be considered for funding.

Technology Advancement Funding - South Coast

The South Coast Air Quality Management District's Technology Advancement Office provides funding for research, development, demonstration, and deployment projects that are expected to help accelerate the commercialization of advanced low-emission transportation technologies. Eligible projects have included: power trains and energy storage/conversion devices (e.g., fuel cells and batteries); and implementation of clean fuels (e.g. natural gas, propane, and hydrogen), including their infrastructures. Projects are selected via specific requests for proposals on an as-needed basis or through unsolicited proposals. Approximately $10-12 million in funding is available annually with expected cost-share from other project partners and stakeholders.

Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Parking Incentive - Los Angeles

Los Angeles allows free meter parking for selected HEVs and AFVs powered by electricity, compressed natural gas, and hydrogen. To qualify, the vehicle must display California Department of Motor Vehicles High Occupancy Vehicle lane access stickers. The program for HEVs expires December 31, 2007; after this date only HEVs with the California Clean Air Vehicle Decal will qualify for free parking. All other parking restrictions, including posted time limits, no parking during street cleaning times, and peak hour tow away periods, must be obeyed.

Clean Vehicle Parking Incentive - Hermosa Beach

Downtown Hermosa Beach offers free metered parking at silver poled meters for vehicles with the California Clean Air Decal and electric vehicles, including GEM vehicles. Vehicles may park for the maximum time limit designated on the meter.

Hybrid Electric Vehicle (HEV) and Zero Emission (ZEV) Vehicle Parking Incentive - San Jose

The City of San Jose has developed a Clean Air Vehicle Parking Program to encourage reduced auto emissions, stimulate activity in the downtown, and increase sales of clean-air vehicles at San Jose auto dealerships. For eligible vehicles, the program allows free parking at participating municipal off-street parking facilities, on-street meters, and regional park and recreation parking lots. Clean-air vehicles must display the Clean Air Vehicle Parking Permit, which is available for a $30 application fee. Only eligible vehicles purchased in San Jose after January 1, 2000, can obtain a permit. ZEVs purchased outside San Jose are also eligible to apply as long as the vehicle is registered in San Jose.

State Laws and Regulations

Emission Reduction Requirements

A public transit bus rule adopted by the California Air Resources Board (ARB) regulates public transit fleets and sets emission reduction standards for new urban transit buses. The rule allows transit fleets to choose one of two options in order to reduce their emissions to the required levels: using alternative fuels, including zero-emission buses, or clean diesel, including retrofit devices. A solid waste collection vehicle (SWCV) rule adopted by ARB regulates SWCV with a Gross Vehicle Weight Rating of 14,000 pounds or more, operate on diesel fuel, have 1960 through 2006 engine models, and collect waste for a fee. Each year through 2011, public agency and utility vehicle owners are required to install Best Available Control Technology devices or purchase vehicles that run on alternative fuels or use advanced technologies to achieve emissions requirements. (Reference California Code of Regulations Title 13, Division 3, Chapter 1, Article 1, Section 1956.1)

Alternative Fuels Plan

On October 31, 2007, the State Energy Resources Conservation and Development Commission, in partnership with other state agencies, developed and adopted the State Alternative Fuels Plan to increase the use of alternative transportation fuels (Reference Assembly Bill 1007, 2005, Assembly Bill 1012 and 2264, 2006, and California Health and Safety Code Section 43865)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

When awarding a vehicle procurement contract, every city, county, and special district, including a school district and a community college district, is authorized to require that 75% of the passenger cars and/or light-duty trucks acquired be energy-efficient vehicles. Vehicle procurement contracts are also authorized to evaluate fuel economy and life-cycle factors. By definition, this includes hybrid vehicles or alternative fuel vehicles that meet California's advanced technology partial zero-emission vehicle (AT PZEV) standard for criteria pollutant emissions. Furthermore, by July 1, 2009, vehicles owned or leased by the state that are capable of operating on an alternative fuel must operate on that fuel unless alternative fuels are not available. The Secretary of State and Consumer Services must develop and implement a plan to reduce or displace the state fleets consumption of petroleum products on or before July 1, 2009. (Reference Assembly Bill 1660, 2005, Assembly Bill 236, 2007,California Health and Safety Code Section 43810, and California Public Resources Code Section 25725)

Hydrogen Energy Plan

The state's 21 interstate freeways are now designated as the "California Hydrogen Highway Network," and the state is committed to working with legislators, energy providers, automakers, and others to achieve the following by 2010: 1) Build a network of hydrogen fueling stations; 2) ensure that hydrogen vehicles are commercially available for purchase; 3) incorporate hydrogen vehicles into the state fleet; 4) develop safety standards for hydrogen fueling stations and vehicles; and 5) establish incentives to encourage the use of hydrogen vehicles and encourage the development of renewable sources of energy for hydrogen production. Regulations will require the reporting of the amount and method by which the hydrogen fuel is dispensed and how the fuel is produced and delivered. The Hydrogen Highway Plan must be implemented in an environmentally responsible and advantageous manner that contributes to the reduction of greenhouse gases, criteria air pollutants, and toxic emissions. (Reference Executive Order S-7-04, 2004, Senate Bill 1505, 2006, and California Health and Safety Code 43868 to 43869)

Hydrogen Specifications

By January 1, 2008, the Department of Food and Agriculture, with the concurrence of the State Air Resources Board, is required to establish specifications for hydrogen fuels for use in internal combustion engines and fuel cells in motor vehicles until a standards development organization accredited by the American National Standards Institute formally adopts standards for hydrogen fuels for use in the internal combustion engines and fuel cells in motor vehicles. (Reference Senate Bill 76, 2005, and California Business and Professional Code 13446)

Biofuels Production Mandate and Alternative Fuel Use Study

The State of California plans to use biomass resources from agriculture, forestry, and urban wastes to provide transportation fuels and electricity to satisfy California's fuel and energy needs. To increase the use of biomass in fuel production, the state will produce its own biofuels at a minimum of 20% by 2010, 40% by 2020, and 75% by 2050. The California Air Resources Board and the California Energy Commission, in conjunction with other agencies, have participated in the Bioenergy Interagency Working Group to prepare a Bioenergy Action Plan Bioenergy Action Plan. The Bioenergy Action Plan includes: research and development of commercially viable biofuels production and advanced biomass conversion technologies; evaluation of the potential for biofuels to provide a clean, renewable source for hydrogen fuel; and increases the purchase of flexible-fuel vehicles to 50% of total new vehicles purchased by state agencies by 2010. (Reference Executive Order S-06-06, 2006)

Zero Emission Vehicle (ZEV) Production Requirements

All 2005 model year and subsequent model year passenger cars, light-duty trucks, and medium-duty vehicles will be certified as ZEVs if the vehicles produce zero exhaust emissions of any criteria pollutant (or precursor pollutant) under any and all possible operational modes and conditions with certain exceptions for fuel-fired heaters.Manufacturers must produce and deliver for sale in California a minimum percentage of ZEVs for each model year as follows:

Manufacturers may comply with the ZEV requirements through multiple alternative compliance options that include other low emission vehicles. (Reference California Code of Regulations Title 13, Division 3, Chapter 1, Article 1, Section 1962)

Alternative Fuel Vehicle (AFV) License

In order to equalize the vehicle license fee between AFVs and conventional fuel vehicles, the incremental cost of purchasing an AFV is exempt from the vehicle license fee (of 2%) when the costs are more than the most comparable conventional fuel vehicle, as determined by the California Energy Commission. This reduction applies to new, light-duty AFVs that are certified to meet or exceed Ultra Low Emission Vehicle standards. This program expires January 1, 2009. (Reference California Revenue and Taxation Code Section 10759.5)

Emissions Reduction Requirements - San Joaquin Valley

The San Joaquin Valley Air Pollution Control District is authorized to do the following: 1) Adopt rules and regulations that require the use of best available control technology for new and modified sources of pollution, promote the use of cleaner burning alternative fuels, and encourage and facilitate ridesharing for commuters; 2) Impose a $1 fee on the initial and renewal of motor vehicle registration in the district for reducing air pollution from motor vehicles through activities including the establishment of a clean fuels program; and 3) Establish expedited permit review and project assistance mechanisms for facilities or projects that are directly related to research and development, demonstration, or commercialization of electric and other clean fuel vehicle technologies. (Reference California Health and Safety Code Sections 40603 and 40605)

Public Agency Fleet Emissions Reduction Requirements - South Coast

The South Coast Air Quality Management District has the authority to require government fleets and private contractors under contract with public entities to purchase cleaner, alternative fuel vehicles. The rule applies to transit buses, school buses, trash trucks, and other vehicles, and has set alternative fuel vehicle purchasing requirements for public and commercial fleets that operate in Southern California. The rules are applicable in Los Angeles, San Bernardino, Riverside, and Orange Counties. (Reference SCAQMD Rules 1191 to 1196 and 1186.1)

Utilities/Private Incentives

City of Riverside Employee Vehicle Purchase Incentives

City of Riverside employees are eligible to receive a rebate toward the purchase of qualified alternative fuel and hybrid electric vehicles that are purchased from a City of Riverside automobile dealership. New qualified vehicles can receive up to $2,000 and used qualified vehicles can receive up to $1,000.

Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (AFV) Insurance Discount

Farmers Insurance provides a discount on insurance to HEV and AFV owners. Owners can cave 10% on all major insurance coverage. To qualify, the automobile must be either: 1) A vehicle designed to use a dedicated alternative fuel as defined in the Energy Policy Act of 1992; or 2) An electric and gasoline hybrid vehicle. A complete Vehicle Identification Number (VIN) will be required to validate vehicle eligibility.