New Jersey, New Mexico introduce low-carbon fuel standards

20 February 2024

Two more US states, New Jersey and New Mexico, introduced low-carbon fuel legislation intended to reduce the carbon intensity of gasoline and diesel transportation fuels.

• The New Jersey Senate on January 29^th introduced a Low-Carbon Transportation Fuel Standard (Bill S2425) that would reduce the average carbon intensity of gasoline and diesel fuels by 10% below a 2019 baseline by 2030. If signed into the law, the bill would create the first low-carbon fuel standard on the US East Coast.
• The New Mexico Legislature on February 13^th passed the Clean Transportation Fuels Standards (HB 41) that provide the Environmental Improvement Board the authority to adopt rules setting a carbon intensity standard for transportation fuels and requires the New Mexico Environment Department (NMED) to maintain, develop, and enforce the rules. New Mexico governor is expected to sign the bill into law.

Low-carbon fuel standards currently exist in California (adopted in 2009), Oregon (adopted in 2016 and expanded in 2022), and Washington state (adopted in 2022).

Under the California Low Carbon Fuel Standard (LCFS), more than half of diesel fuel used in the state is now composed of renewable fuels. In the second quarter of 2023, the California diesel fuel pool included 54% of renewable diesel and 7% biodiesel.

California renewable diesel consumption already exceeds the entire US production volume (Figure 1) and the demand is supplemented by imports. One of the key California suppliers is Finland’s Neste, which operates a large renewable diesel refinery in Singapore.

US domestic renewable diesel production also relies on imported feedstocks, including used cooking oil (UCO) from China. In the first eight months of 2023, Chinese UCO exports to the USA totaled 384,000 tonnes—a volume that roughly satisfies 15-20% of US renewable diesel production.

UCO imports into the United States are expected to increase further due to the additional renewable diesel demand as more states adopt low-carbon fuel standards, as well as mandates for sustainable aviation fuel (SAF).

Source: Fill It Up Clean New Jersey | New Mexico Environment Department