Dive Brief:
- New Mexico's Environmental Improvement Board voted on Thursday to approve rulemaking for the state's Clean Transportation Fuel Program after an extensive public hearing process. With the new rules, the regulator threaded the needle between fuel producers eager for a boost to biogas produced on farms and environmental advocates concerned about concentrated animal operations.
- The program was created by HB 41, which was signed into law in March 2024. The law required the average carbon intensity of fuels used in the state to decline by 20% by 2030 and 30% by 2040, compared with a 2018 baseline.
- New Mexico will be the fourth state to implement a clean fuels program when the CTFP goes into effect on April 1. California was the first when its Low Carbon Fuel Standard took effect in 2011, followed by Oregon and Washington.
Dive Insight:
New Mexico is one of the country's largest producers of fossil fuels, but its biofuels industry is relatively small. When HB 41 was passed, the state had just 16 biogas-producing facilities, according to the American Biogas Council.
The rulemaking process involved multiple public hearings as well as an extensive outreach campaign conducted by New Mexico Environment Department staff. Much of the debate concerning biofuels related to carbon intensity values for certain fuels. Food & Water Watch, one of the primary environmental groups involved in the process, urged regulators not to allow avoided methane crediting.
The policy boosts carbon intensity scores for biogas derived from on-farm manure digesters, which work by concentrating manure in lagoons that are kept in anaerobic conditions and produce methane that’s refined into a fuel-quality gas.
California has included avoided methane crediting in the LCFS for several years, leading to debate during the last update of the program in 2024. Industry groups say the practice is a fair way to acknowledge the methane avoided by capturing the greenhouse gases generated by large amounts of manure on farms, while environmental groups say it unnecessarily incentivizes concentrated animal farming and disincentivizes manure management practices that pollute less than digesters.
To address those concerns, NMED proposed guardrails that would help staff determine in the future if a biogas project seeking credits was actually avoiding methane emissions.
In a statement, Alexa Reynaud, Food & Water Watch’s factory farm organizing manager, offered measured praise for regulators and the guardrails included in the final program.
“New Mexico has taken seriously the reality that programs like the Clean Transportation Fuel Program can perversely incentivize factory farms to pollute," Reynaud said. "Unfortunately, the risk remains for New Mexico’s program, and more programs like these are popping up every year across the country with even more incentives for factory farms to inundate our communities with even more pollution. No climate programs should reward factory farms for polluting.”
Fuel producers were more upbeat about the program’s finalization and its potential to spur other states to action. Clean Fuels Alliance America, an industry group representing the biodiesel, renewable diesel and sustainable aviation fuel sectors, praised the rulemaking in a release.
“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.”
Advocates for clean fuels programs have eyed the potential for additional states to adopt such policies in recent years. New York is the largest market where legislators are seriously considering a bill — A. 472, a bill establishing a clean fuel standard in New York, was referred to the state assembly's environmental conservation committee on Jan. 7.
Other states where clean fuel bills were introduced last year include Hawai'i, Illinois, Massachusetts and Minnesota.
