NMED seeks approval to enact clean fuels rule by end of the year
Traffic along Tramway road captured May 21, 2025. New Mexico put forward draft rules for its clean fuels program, and officials hope hearings will begin later this year. (Danielle Prokop / Source NM)
As the Trump administration attacks states' efforts to combat climate change, New Mexico pushes ahead with its plans to create a market place for clean fuels.
Last week, the New Mexico Environment Department proposed the Clean Transportation Fuel Program to the state's Environmental Improvement Board, which, if approved, would be the fourth one in the country.
A public comment period on the 112-page draft rule is expected to start in mid-June, according to an NMED news release, with a request to schedule the required hearings this fall.
The draft rule follows the New Mexico Legislature's 2024 passage of House Bill 41, which mandated the environment department create a market to incentivize less vehicular pollution and the state reduce emissions by 20% by 2030 and 30% by 2040. The law sets a deadline of July 1, 2026 for the adoption of rules creating the marketplace.
Officials and proponents say the program is meant to reduce pollution over time by allowing cleaner fuel companies — using electricity or diesel made from refined plants like corn or soybeans — to sell credits to sellers of more polluting fuels. In its proposed rule, NMED created an objective measure, called the clean fuel standard, to determine the total greenhouse emissions of a fuel.
The standard measures the 'well-to-wheel' intensity, said Michelle Miano, who leads NMED's Environmental Protection Division.
'It includes the drilling of the well, taking up petroleum or fossil products from the well, what it takes to refine, take to market and go to sale,' she said. 'We are calculating the carbon intensity of that entire lifecycle and we're doing that for all the different kinds of fuels.'
Miano said the marketplace meets the goals of diversifying the economy; working to curb pollution; and incentivizing fuel producers to reduce their carbon footprints.
New Mexico would be the fourth state to adopt this kind of program, behind California, Washington and Oregon. Miano said the program will be entirely state-run, and doesn't require federal input.
'This is a state program and state law, so no matter what happens at the federal level, this program will remain in place so that the economic benefits are received by New Mexico, regardless of federal movements,' Miano said.
Transportation ranks as New Mexico's second-largest source of greenhouse gas emissions behind oil and gas production, according to Travis Madsen, the transportation program director at the Southwest Energy Efficiency Project, a nonprofit that advocates for electrification across the intermountain West.
'Most of that is burning petroleum in cars and trucks,' he told Source NM. 'And in order to reduce those emissions, we need to move our transportation and energy supplies towards less emitting, or zero-emitting energy sources — that's what the clean fuel standard aims to do.'
Madsen said the efforts to use renewables on the electrical grid and the further adoption of electric cars at home could translate to cost-savings.
'Using electricity instead of gasoline can provide some major savings on fuel costs for residents or businesses, and I'm expecting that the net effect of this policy is going to be that New Mexicans save money,' he said.
Madsen referenced recent proposals from House Republicans to gut clean energy tax credits and pollution rules as a driving reason for New Mexico to create the program.
'I think the federal government is definitely not moving toward emission reductions and is probably moving away. That would push things in the wrong direction and make it harder for New Mexico to achieve those pollution reduction goals that it set out,' he said. 'I think it's even more important now that New Mexico pursues actions that it can take on its own without the help of the federal government — the clean fuel standard is a prime example of that.'
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