Lujan Grisham signs clean transportation fuel standards into law

Gov. Michelle Lujan Grisham signed legislation aimed at reducing the carbon intensity of transportation fuels on Tuesday in Santa Fe. New Mexico is now the fourth state in the country to adopt clean transportation fuel standards. HB 41 uses a carbon credit market to help companies meet the standards. This allows companies that produce or […]

Lujan Grisham signs clean transportation fuel standards into law

Gov. Michelle Lujan Grisham signed legislation aimed at reducing the carbon intensity of transportation fuels on Tuesday in Santa Fe.

New Mexico is now the fourth state in the country to adopt clean transportation fuel standards.

HB 41 uses a carbon credit market to help companies meet the standards. This allows companies that produce or import low-carbon fuels to generate credits that they can sell to other companies that produce or import transportation fuels that have higher carbon intensity.

“Clean fuel standards not only decrease emissions and move us toward our climate goals, but also diversify our economy and attract new businesses to our state,” the governor said in a press release following the signing.

Officials anticipate the new law will create at least 1,600 full-time jobs as well as 2,300 construction jobs and will generate $470 million in wages. Additionally, they say it will attract $240 million in capital investments in production and manufacturing.

“Decreasing air pollution and reducing greenhouse gas emissions, especially around transportation corridors, makes for healthier, thriving communities while addressing the serious impacts of climate change,” co-sponsor Sen. Pro Tem Mimi Stewart, D-Albuquerque, said in a press release. “Thanks to this legislation becoming law, I expect to see a measurable, positive impact on both our health and our economy, and I am so proud of this legislature and Gov. Lujan Grisham for taking yet another bold step toward our clean energy future.”

The next step for HB 41 is a rulemaking process that the New Mexico Environment Department will undertake with the Environmental Improvement Board. That rulemaking process will begin with the establishment of an advisory group, which is anticipated in early May. 

The group will likely begin meeting in July and continue meeting through November. 

NMED expects to petition the EIB to adopt rules in late 2024.

Throughout the process, there will be opportunities for the public to weigh in.

“The historic passage of this legislation cannot be understated,” Lindsay Fitzgerald, Vice President of Government Relations of Gevo, Inc. and Board Chair of the Low Carbon Fuels Coalition, said in a press release. “This multi-year effort required the incredible leadership of Gov. Lujan Grisham and the Legislature, and we are thrilled to see the opportunities it opens up for companies eager to invest in New Mexico’s low carbon fuels market.”

Samantha Kao,  the climate and energy director for Conservation Voters New Mexico, said the availability of low-carbon alternative fuels like biodiesel is critical when it comes to addressing climate change. Additionally, Kao said the low carbon intensity fuels will lead to cleaner air and improve public health.

“We still have a lot of work to do in combating climate pollution and decarbonizing our transportation sector, but this bill is a critical stepping stone in helping us get to a 100 percent clean energy future,” Kao said.

Opponents of the clean transportation fuel standards argue that it will lead to higher gas prices and disproportionately impact rural and low-income New Mexicans.

The bill sponsors repeatedly argued during the session that, while the other states that have such standards do have higher gas prices, those high prices are not directly because of the clean transportation fuel standards.

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