New Mexico’s Clean Transportation Fuel Standard Goes into Effect April 1, 2026

New Mexico has officially become the 4^th state to implement a state low carbon fuels (LCF) program.  Like LCF programs in Oregon and Washington, the New Mexico Clean Transportation Fuel Standard (CTFP) is modeled after California’s Low Carbon Fuels Standard and has many of the same features and provisions.

The NM CTFP aims to decrease transportation fuels’ carbon intensity (CI) by 20% by 2030 and 30% by 2040, versus a 2018 baseline. The CTFP creates a marketplace where deficits, created by selling fuel into the state where the CI is above the annual benchmark, are offset by deficits created by selling fuels into the state that are below the benchmark.  The benchmark CI will gradually be lowered each year to meet the program’s objectives. Deficit generators will be required to purchase credits to offset deficits quarterly to avoid penalties. NM’s reduction schedule is significantly more aggressive than other similar programs and, given the relatively small size of the overall fuel market in the state, should result in a very interesting and dynamic credit market.

The New Mexico Environment Department (NMED) has created the NM-GREET model by adjusting Argonne National Labs’ 2023 GREET model to fit the states’ specific parameters. The model will be used to calculate CIs for regulated transportation fuels imported into or produced in New Mexico.  As the NM-GREET model differs significantly from the methodology used in the CA-GREET model and NM offers reciprocity pathways, there will be some unusual dynamics with regards to pathway application strategy.

Regulated parties (i.e. fuel importers or producers in New Mexico) have 45 days to submit a registration application from the day they are covered.  This means that those currently participating in the NM fuel market must register by May 15, 2026.  Note that this is a multi-step process that takes several days to complete and includes a registration fee.  In order to generate credits in any quarter, within 45 after close of quarter in which you have first fuel sold in NM, covered low carbon fuels producers must either submit a reciprocity pathway from another state LCF program (if applicable) or apply for temporary pathways.  As the NM-GREET model has not yet been published, low carbon fuels producers whose fuel is sold in NM in 2Q2026 must contact NMED directly via email to have a pathway CI issued on a shorter timeline.

At TRICORD, we have been closely monitoring the progression of the NMED CTFP and have been heavily involved in the rulemaking process.  We have experience navigating US state low carbon fuels programs, calculating facility CI values using the GREET model, and have helped many low carbon fuels producers to navigate this ever-changing landscape. 

If you need support understanding the NMED CTFP rules and opportunities, please reach out to our low carbon fuels team leader Hannah Losey, P.E. at Hannah.Losey@tricordconsulting.com.