New Mexico Environment Department (NMED) has proposed a Clean Transportation Fuel Program to the state’s Environmental Improvement Board (EIB).

If approved, New Mexico would become the fourth state in the nation with a clean transportation fuel standard, following Gov. Michelle Lujan Grisham’s signing of House Bill 41 in March 2024.

This innovative market-based program would allow producers, importers, and dispensers of low-carbon fuels to generate and sell credits to those producing high-carbon fuels.

“Under Gov. Michelle Lujan Grisham’s leadership, New Mexico is diversifying its economy while addressing climate emissions — proving once again you don’t have choose between the two,” said Environment Secretary James Kenney.

The program aims to:

• Strengthen and diversify New Mexico’s economy.

• Create new economic opportunities in the $3 billion alternative fuels market.

• Attract investment in emerging industries like clean hydrogen and renewable propane.

NMED developed the proposal after extensive public input, including approximately 90 responses to a discussion draft published in December 2024. The department also met with industry representatives, environmental advocates, and tribal governments.

A 60-day public comment period is expected to begin in mid-June 2025, with the EIB

considering all feedback before making a final decision.

A copy of the petition, statement of reasons, and draft proposed rule is available here.