New Mexico’s Clean Transportation Fuel Program Adopted; Seeks April 1 Start

The New Mexico Environment Improvement Board (EIB) adopted the proposed rules for the state’s Clean Transportation Fuel Program (CTFP) on Thursday during continued deliberations of the rulemaking, with the state agency indicating an aim to begin the program on April 1.

“The [New Mexico Environment Improvement] Board did initially indicate willingness to push the effective date back to July 1, which is where most, if not all, of the petroleum stakeholders requested it to be to have that additional time before the effective date,” Graham Noyes, Managing Attorney at Noyes Law Corporation, told OPIS.

Noyes represented several clean fuel companies such as Gevo, World Energy, Infinium, and Verde Clean Fuels during the rulemaking process of the New Mexico CTFP.

“Then there were some misgivings within the New Mexico Environment Department (NMED) that really emphasized the interrelated nature of the different parts of the rule, and the [New Mexico Environment Improvement] Board had some concerns about whether there might be some unintended consequences from that delay,” Noyes said.

“The NMED submitted an extensive response that talked about the ways that that delay was going to have a domino effect into 2026 compliance issues; when parties would be registered, when pathways would be available, when credit generation would start happening. A really important part of the rule is that the statute says 20% reduction by 2030, and we’re in 2026. We’ve never seen such rapid carbon intensity reduction as this, so there’s a lot of urgency to start the program”.

In March 2024, Gov. Michelle Lujan Grisham signed House Bill 41 (Clean Transportation Fuel Standards), establishing the fourth state-level low carbon fuel standard in the U.S. – the New Mexico Clean Transportation Fuel Program (CTFP). The objective of New Mexico’s CTFP is to reduce the carbon intensity of transportation fuels by 20% by 2030 and 30% by 2040, relative to the 2018 baseline.

The New Mexico Environment Department (NMED) proceeded to submit a petition to the Environmental Improvement Board (EIB) in May 2025 to adopt the proposed rules for the CTFP, and the EIB held public hearings in September through November 2025. The public comment period for stakeholders closed in November, yet EIB board members continued deliberations on the rulemaking through January 2026.

The first compliance period for the New Mexico CTFP is set to span from April 2026 through December 2027, with the first compliance reports due in April 2028.

“We were in a setting like no other in terms of having much more formal proceedings, much more opportunity for stakeholder engagement to put evidence on the record, opportunity to cross-examine the New Mexico EIB witnesses and everyone else’s witnesses, so it’s quite a robust process and I do think it’s yielding a very good program,” Noyes said.

Clean Fuels Alliance America applauded the EIB for approving the rules for New Mexico’s CTFP, hailing the program as a significant expansion of low-carbon fuel policy beyond the West Coast.

“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 CFAA.

“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,” Wind added.

The New Mexico EIB is expected to next meet on Feb. 12 to adopt the final order and Statement of Reasons (SOR) for the New Mexico CTFP in order to still meet the presumed April 1 effective date.

Reporting by Maura Hossler, mhossler@opisnet.com and Bryan Sims, bsims@opisnet.com; Editing by Jordan Godwin, jgodwin@opisnet.com