Alternative Fuels -- State Regulations for Colorado

This page contains selected data from the Alternative Fuels Data Center (AFDC) at the U. S. Department of Energy. Additional details and the latest updates may be found at the AFDC summary page for Colorado.

Vehicle Acquisition

State agency vehicles

The Colorado Department of Personnel and Administration (DPA) has adopted a policy to increase the use of alternative fuels and establish objectives to increase its use for each succeeding year. DPA must purchase motor vehicles that operate on compressed natural gas (CNG), subject to the availability of vehicles and adequate fueling infrastructure. If purchases of CNG vehicles are not possible due to the incremental cost being more than 10%, DPA must purchase another type of flexible fuel, hybrid electric, or all-electric vehicle, also subject to availability and incremental costs. DPA may adopt a policy to allow some vehicles to be exempt from this requirement.Each state agency must develop a plan to improve commuting options for its employees. The plans should evaluate opportunities including plug-in electric vehicle charging.(Reference Executive Order D0012 07, 2007, and Colorado Revised Statutes 24-30-1104)

Fuel Use

State agency vehicles

The Colorado Department of Personnel and Administration (DPA) has adopted a policy that requires all state-owned diesel vehicles and equipment to be fueled with a fuel blend of 20% biodiesel (B20), subject to the availability of the fuel and so long as the price differential is not greater than $0.10 more per gallon as compared to conventional diesel. Biodiesel is defined as fuel composed of mono-alkyl esters of long chain fatty acids derived from plant or animal matter that meets ASTM specifications and is produced in Colorado.(Reference Executive Order D0012 07, 2007, and Colorado Revised Statutes 24-30-1104)

General

Definition (alternative fuel)

Alternative fuel is defined as compressed natural gas, propane, ethanol, or any mixture containing 85% or more ethanol (E85) with gasoline or other fuels, electricity, or any other fuels, which may include, but are not limited to, clean diesel and reformulated gasoline, so long as the Colorado Air Quality Control Commission determines that these other fuels result in comparable reductions in carbon monoxide emissions and brown cloud pollutants. Alternative fuel does not include any fuel product that contains or is treated with methyl tertiary butyl ether (MTBE). (Reference Colorado Revised Statutes 25-7-106.8)

Definition (GGE)

The term GGE is defined to equate the energy content of any motor fuel, including alternative fuels, to that of a gallon of gasoline. Any dispenser used for the sale of motor fuel in GGEs must display GGEs as the primary display information provided. (Reference Colorado Revised Statutes 8-20-232.5)

Reporting Requirement

Upon registering a motor vehicle with the Colorado Department of Revenue Division of Motor Vehicles, the vehicle owner must report the type of alternative fuel used to operate the vehicle and whether the vehicle is dedicated to one alternative fuel or uses more than one fuel. The Department of Revenue provides forms for the purpose of registering motor vehicles and must include space for the following fuel types: gasoline, diesel, propane, electricity, natural gas, methanol/M85, ethanol/E85, biodiesel, and other. (Reference Colorado Revised Statutes 42-3-113)

Tax Credit (alternative fuel vehicles)

An income tax credit is available from the Colorado Department of Revenue for a motor vehicle titled and registered in Colorado that uses or is converted to use an alternative fuel, is a hybrid electric vehicle (HEV), or has its power source replaced with one that uses an alternative fuel. Qualified idle reduction technologies are also eligible for the tax credit. Credits are based on defined vehicle and technology categories.The credit is capped at $6,000 for the following: alternative fuel vehicles (AFVs), AFV conversions, HEVs, plug-in hybrid electric vehicles (PHEVs), idle reduction technologies, and power source replacements. The credit for PHEV conversions is capped at $7,500. Individuals who claimed a tax credit in previous years for the purchase of a Model Year 2004 or newer HEV may be eligible to claim an additional credit for the conversion of the same vehicle to a PHEV. Credits generated after January 1, 2010, that exceed the tax due are refundable but cannot be carried forward. Used vehicles may qualify with proof that the prior owners did not claim the tax credit. For additional information regarding tax years prior to January 1, 2012, see the Department of Revenue's Income 9 FYI publication. For additional information regarding tax years after January 1, 2012, see the Income 67 FYI publication.(Reference Colorado Revised Statutes 39-22-516)

Tax Exemption (alternative fuel vehicles)

Vehicles, vehicle power sources, or parts used for converting a vehicle power source to reduce emissions are exempt from state sales tax. This exemption applies to vehicles that are certified to federal LEV standards and have a gross vehicle weight rating of over 10,000 pounds. The vehicle power source includes the engine or motor and associated wiring, fuel lines, engine coolant system, fuel storage containers, and other components. (Reference Colorado Revised Statutes 39-26-719)

Tax Exemption (natural gas, propane used as vehicle fuel)

Fuel tax exemptions are granted for natural gas and liquefied petroleum gas (propane) vehicle owners. Non-profit transit agencies are exempt from the fuel tax.(Reference Colorado Revised Statutes 39-27-102.5)

Decal Requirement (natural gas, propane vehicles)

Owners of natural gas and propane vehicles must purchase an annual tax decal from the Colorado Department of Revenue or a decal vendor.All natural gas and propane vehicles must display a current fuel tax decal. Non-profit transit agencies are exempt from the fuel tax.(Reference Colorado Revised Statutes 39-27-102.5)

Weight Limit Exemption (idle reduction)

Gross vehicle weight rating limits for AFVs are 1,000 pounds greater than those for comparable conventional vehicles, as long as the AFVs operate using an alternative fuel or both alternative and conventional fuel, when operating on a highway that is not part of the interstate system. (Reference Colorado Revised Statutes 25-7-106.8 and 42-4-508)