The New Mexico Environmental Improvement Board on Jan. 22 unanimously adopted regulations implementing a Clean Transportation Fuel Program, making New Mexico the fourth U.S. state to adopt a clean fuel standard. Similar programs are already in place in California, Oregon and Washington.&nbsp;New Mexico’s CTFP was <a href="https://biomassmagazine.com/articles/new-mexico-governor-signs-clean-transportation-fuel-standard-bill">established by legislation signed</a> by New Mexico Gov. Michelle Lujan Grisham in March 2024. The state’s Environmental Department in late 2024 released a discussion draft of a rule to implement the program. A proposed rule was released in May 2025 and a <a href="https://biomassmagazine.com/articles/new-mexico-kicks-off-public-hearing-for-proposed-ctfs-regulations">public hearing process launched later that year</a>. Rules implementing the CTFP are now final, with the program scheduled to enter into force on April 1, 2026.&nbsp;&nbsp;The CTFP is a market-based initiative designed to incentivize and expand access to lower-carbon transportation fuels, including ethanol, biodiesel, renewable diesel, renewable natural gas (RNG), electricity and supporting infrastructure. The program aims to reduce the carbon intensity (CI) of transportation fuel by at least 20% by 2030 and at least 30% below a 2018 baseline by 2040.The New Mexico Environment Department expects the CTFP to boost economic development across the state, create more than 800 jobs, and reduce health care costs by improving air quality. Overall, the program is expected to deliver $1.65 billion in net benefits to New Mexicans through avoided air quality health impacts and climate change infrastructure damages. Cumulatively through 2040, the program will prevent 337 asthma cases, 60 work-loss days, 59 school-loss days, and 353 restricted activity days for children.By 2030, the agency expects the program to reduce PM2.5 by 144 tons, VOCs by 200 tons, and NOx emissions by 169 tons. The program will also move New Mexico closer to meeting the state’s goal of cutting climate pollution 45% by 2030 and achieving net-zero emissions by 2050.Clean Fuel Alliance America is applauding the New Mexico Environmental Approval board for approving the CTFP rules. “From a market perspective, New Mexico represents an almost 800-million-gallon opportunity for the biomass-based diesel industry,” said Cory-Ann Wind, director of state regulatory affairs for Clean Fuels. “Since it sits along a key corridor for both feedstocks and finished fuels produced in the Gulf Coast and Midwest, New Mexico’s entry into the market not only expands the demand for clean fuels but further strengthens the supply chain”.“As the first non–West Coast state to implement a clean fuel standard, New Mexico proves that states with strong energy economies can also lead on clean fuel deployment and market certainty,” said Jeff Earl, director of state governmental affairs for Clean Fuels. “This program adds real momentum to clean fuel standard adoption nationwide.”Graham Noyes, managing partner at Noyes Law Corp., said the rulemaking to establish New Mexico’s CTFP was unique in terms of the high volume of stakeholder involvement. During the rulemaking process New Mexico Environment Department made multiple changes to the to the regulations based on feedback they received from program stakeholders, he explained.&nbsp;Noyes represented three different sets of clients during the rulemaking process, including electro-fuels company Infinium; Verde Clean Fuels, a developer of methane-to-gasoline projects; and sustainable aviation fuel (SAF) producers Gevo Inc., NXT and World Energy.&nbsp;While New Mexico’s new CTFP share many characteristics with similar programs in California, Washington and Oregon, it’s treatment of SAF is unique. “Instead of having a declining benchmark for alternative jet fuel, there is a fixed benchmark because it’s an opt-in fuel,” Noyes said. “That’s going to enable SAF crediting to get larger with time compared to diesel fuel.” As a result, Noyes said the program will have the most advantaged crediting for SAF beginning in 2028. He also noted New Mexico’s CTFP offers a unique advantage to alternative fuel producers “in that has the most flexible book and claim provisions for energy and heat souring.”While California, Washington and Oregon are known for support of renewable energy, New Mexico is unique in that it has historically been a predominately oil and gas state. According to the U.S. Energy Information Administration, New Mexico was the number two ranked state for oil production in 2024 and is also a top-10 natural gas producer. “New Mexico really designed a unique program recognizing that its an oil and gas state, and we think it sets a really great precedent for other in the future,” Noyes said.&nbsp;Additional information is available on the New Mexico Environment Department <a href="https://www.env.nm.gov/climate-change-bureau/clean-fuel-program/">website</a>.&nbsp;

2026-01-23 - New Mexico agency approves rule to implement Clean Transportation Fuel Program (4 publications)

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The New Mexico Environmental Improvement Board on Jan. 22 unanimously adopted regulations implementing a Clean Transportation Fuel Program, making New Mexico the fourth U.S. state to adopt a clean fuel standard. 

New Mexico agency approves rule to implement Clean Transportation Fuel Program

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