New Mexico governor signs Clean Transportation Fuel Standard into law

Photo: Low Carbon Fuels Coalition

New Mexico Gov. Lujan Grisham signed the Clean Transportation Fuel Standard (HB 41) into law March 5, highlighting both the growing appeal and support for a technology-neutral policy to decarbonize transportation, and the substantial benefits it delivers to climate, air quality and economic development.

HB 41 allows producers and importers of low-carbon transportation fuels to generate clean-fuel credits to sell to producers and importers of high-carbon transportation fuels.

HB 41 then directs the emissions of transportation fuels in New Mexico to decrease over time.

The New Mexico program calls for reducing the lifecycle carbon intensity of transportation fuels by 20 percent by 2030 and 30 percent by 2040.

The New Mexico Environment Department will initiate a rulemaking process with the Environment Improvement Board to draft, share and ultimately adopt rules governing the clean-fuel market established by the legislation.

The first step in the rulemaking process is the establishment of an advisory group, which will be announced in early May.

The first meeting of the advisory group is anticipated to take place in July and will continue to do so through November.

NMED plans to petition the EIB in late 2024.

The Low Carbon Fuels Coalition established the New Mexico coalition supporting the bill and joined the governor at the March 5 signing ceremony.

Following the success of similar programs in California, Oregon and Washington, the passage of this bill in New Mexico widens the geographic and political landscape of states implementing the policy.

Clean transportation fuel standards do not pick winners or losers and instead create an incentive for the market to drive down greenhouse-gas emissions.

“This is a major win for an all-of-the-above approach in the second-largest oil-and-gas state in the nation,” said Robin Vercruse, executive director of the Low Carbon Fuels Coalition. “We and our many allies brought together an incredibly broad coalition to get the bill across the finish line this year.”

The campaign was led by the Low Carbon Fuels Coalition with co-chair Adelante Consulting of New Mexico.

Other states that are currently considering a clean transportation fuels standard include Hawaii, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York.

“I am thrilled to see this bill signed into law,” said Lindsay Fitzgerald, vice president of government relations for Gevo Inc. and board chair of the Low Carbon Fuels Coalition. “The Low Carbon Fuels Coalition team and membership have been relentless in their dedication to getting the CTFS passed in New Mexico. This is great progress for clean-fuels standards everywhere.”

The program established by the bill will encourage renewable fuel producers to manufacture low- and no-carbon fuels in New Mexico, sparking an economic boom for alternative-fuel producers, and providing jobs in the transportation sector.

In addition to economic growth and carbon reductions, the law delivers significant additional benefits: lowering pollution, reducing impacts on human health and welfare, diversifying the energy used in transportation, and creating fuel-market competition. 

“Not only will having a Clean Transportation Fuel Standard combat climate change and lead to cleaner air, but it will also give consumers more choices and make our fuel market more competitive,” said State Rep. Kristina Ortez, the bill’s sponsor.

The use of lower -carbon fuels reduces both air pollution and the serious resulting health effects and costs, and also narrows pollution-exposure disparities based on race and income.

“Native Americans are the population with the highest rate of asthma in the United States, and Tribal nations are on the front lines of climate change,” noted Ahtza Dawn Chavez, executive director of NM Native Vote. “Tribal communities will directly benefit from this bill through investments in rural EV infrastructure, local job opportunities, and lower transportation-related air and water pollution impacts.”

Clean Transportation Fuel Standard supporters included diverse clean-fuels industry and end users, business groups, health and social-welfare advocates, trade associations, utilities and environmental groups.

As the legislative season picks up, the Low Carbon Fuels Coalition is turning attention to other states with active or pending legislation in 2024.

“Existing programs have exceeded all expectations and are even increasing ambition to catch up to the market,” Vercruse said. “Given this demonstrated success, and proven benefits across the board, it’s past time for other states to step up to the plate.”