Governor Michelle Lujan Grisham took a significant step on Tuesday towards combating climate change by signing legislation aimed at reducing the carbon intensity of transportation fuels in Santa Fe.
With the signing of HB 41, New Mexico becomes the fourth state in the nation to implement clean transportation fuel standards. The bill employs a carbon credit market to assist companies in meeting these standards. Essentially, companies producing or importing low-carbon fuels can generate credits, which they can then sell to other companies dealing in transportation fuels with higher carbon intensity.
In a press release following the signing, Governor Lujan Grisham emphasized the multifaceted benefits of clean fuel standards, including emission reduction, progress towards climate goals, economic diversification, and the attraction of new businesses to the state.
Officials project that the new law will result in the creation of at least 1,600 full-time jobs and 2,300 construction jobs, along with $470 million in wages. Moreover, it is expected to draw $240 million in capital investments in production and manufacturing.
Co-sponsor Senator Pro Tem Mimi Stewart, D-Albuquerque, expressed optimism about the legislation’s impact on both public health and the economy. She credited the legislature and Governor Lujan Grisham for taking a bold step towards a clean energy future.
The next phase for HB 41 involves a rulemaking process led by the New Mexico Environment Department and the Environmental Improvement Board. This process is slated to commence with the establishment of an advisory group in early May, followed by meetings likely starting in July and continuing through November. The NMED plans to petition the EIB to adopt rules by late 2024, with ample opportunities for public input throughout the process.
Lauding the passage of the legislation, Lindsay Fitzgerald, Vice President of Government Relations of Gevo, Inc. and Board Chair of the Low Carbon Fuels Coalition, emphasized the significant opportunities it creates for companies investing in New Mexico’s low-carbon fuels market.
Samantha Kao, Climate and Energy Director for Conservation Voters New Mexico, underscored the importance of low-carbon alternative fuels in addressing climate change. Kao highlighted the potential for cleaner air and improved public health as a result of the legislation, viewing it as a critical step towards achieving a 100 percent clean energy future.
However, opponents of the clean transportation fuel standards argue that they could lead to higher gas prices and disproportionately affect rural and low-income New Mexicans. Nevertheless, bill sponsors maintain that while states with similar standards often have higher gas prices, these increases are not directly attributed to clean transportation fuel standards.