Legislation introduced in the New Mexico House of Representatives on Jan. 3 aims to establish a technology-neutral clean transportation fuel standard (CTFS) that would reduce the carbon intensity (CI) of transportation fuels by at least 30 percent by 2040.

The CTFS would phase in, requiring the CI of transportation fuels used within the state to achieve a 20 percent reduction below a baseline 2018 CI level by 2030, ramping up to 30 percent by 2040. The legislation defines transportation fuel to mean electricity or a liquid, gaseous or blended fuel, including gasoline, diesel, liquefied petroleum gas, natural gas, hydrogen and electricity sold, supplied, used or offered for sale to power vehicles or equipment for the purposes of transportation. 

The bill, HB 41, directs the New Mexico Environmental Improvement Board to promulgate rules to implement a CTFS program no later than July 1, 2026. Those rules would, in part, establish technology-neutral mechanisms for generating, obtaining, trading, selling and retiring credits among transportation fuel producers, fuel distributors and other individuals or entities in the transportation fuel market, including additional credit opportunities from activities and projects that support the reduction of greenhouse gas (GHG) emissions associated with transportation in the state. 

The Low Carbon Fuels Coalition on Jan. 9 issued a statement in support of the legislation. A primary advantage of the CTFS would be to incentivize cleaner options at the pump, said Robin Vercruse, executive director of the LCFC. “This policy is already proven in other states,” Vercruse added. “Experience shows that the CTFS will result in lower-priced fueling options for consumers when gasoline prices rise due to the latest geopolitical drama, demand spike or supply crunch in the oil market.”

Companies already doing business in New Mexico are supporting the legislation, according to the LCFC. “A Clean Transportation Fuels Standard will increase biodiesel availability throughout the state, offering New Mexicans the benefit of price competition and reduced air pollution,” said Jed Smith, chief operating officer of Rio Valley Biofuels, which supplies biodiesel and other renewable fuels to customers in Texas and New Mexico. “Making renewable fuels more readily available lets drivers use cleaner fuels in their existing vehicles, which will be great for the state of New Mexico and the environment.”

Additional information on HB 41 is available on the New Mexico Legislature website.