New Mexico Clean Fuel Standard Proposed, Counterpoints to CA LCFS Report

January 25, 2021

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by Helena Tavares Kennedy (Biofuels Digest) ... (A)an even hotter report from Jonn Axsen, Director of Sustainable Transportation Action Research Team and Michael Wolinetz at Navius Research is slamming California’s Legislative Analyst’s Office 2018 Low Carbon Fuel Standard report that had recommended the legislature rely more on the cap-and-trade policy instead of an LCFS. Also hot-off-the-press news that folks are lovin’ is the proposed New Mexico Clean Fuel Standard Act, a Governor’s priority bill that would bring an estimated $47 million in economic investments annually to the state while reducing greenhouse gas emissions from the transportation sector.

In today’s Digest, a look at the 5 counterpoints to the LAO Report’s conclusions as well as a look at Governor Michelle Lujan Grisham (D-NM)’s proposed New Mexico Clean Fuel Standard Act and what that means. READ MORE

The case for LCFS – the Navius report

Let’s start with the Navius Report on the California LCFS which makes the case for a low carbon fuel standard and provides five counterpoints to the LAO Report’s conclusions using the evidence drawn from LCFS compliance data and peer reviewed literature. The Navius report says important data and literature is omitted, incorrectly relies on a comparison of credit prices as a proxy for cost-effectiveness, and relies on vague economic theory rather than data.

To sum up their 19 page report:

Counterpoint #1: The LCFS reduces GHG emissions in the present and future.

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Counterpoint #2: Policy mixes, which may include an LCFS, are needed for deep GHG mitigation.

... No region has demonstrated the political will to achieve GHG mitigation goals solely through a strong carbon price.

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Counterpoint #3: The higher LCFS market credit price indicates that it is a strong and effective, rather than costly, policy.

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Counterpoint #4: The LCFS is more politically acceptable than carbon pricing (cap-and-trade or tax).

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Around 60-80% of citizens support an LCFS (including a stringent version requiring 80% carbon intensity reduction by 2050), compared to 22-30% support for a similarly stringent carbon price.

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Counterpoint #5: The LCFS sends a transformative signal that results in more clean fuels for transportation.

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In contrast, cap-and-trade does not provide a direct market signal to supply low-carbon transportation fuels, as that is not the purpose of the policy. Further, California’s emissions cap does not differentiate between high and low-carbon biofuels and so provides little to no transformative signal to reduce GHG emissions associated with biofuel production.

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New Mexico Clean Fuel Standard proposed

New Mexico could be soon joining the likes of California and Oregon who already have their own Clean Fuel Standard programs. The State of Washington is currently presenting a legislative proposal to begin a CFS program.

So let’s dive into the New Mexico bill. Who’s involved? Sen. Mimi Stewart and Rep. Nathan Small filed the New Mexico Clean Fuel Standard Act (Senate Bill 11), which is the first step taken toward implementing a market-based program to reduce greenhouse gas pollutants directed by Gov. Michelle Lujan Grisham in 2019’s Executive Order On Addressing Climate Change And Energy Waste Prevention.

The Governor’s priority bill would bring an estimated $47 million in economic investments annually to the state while significantly reducing greenhouse gas emissions from the transportation sector.

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So far, the response to New Mexico’s proposed Clean Fuel Standard has been positive with California-based Low Carbon Fuels Coalition applauding the announcement. The Coalition is playing a leading role in helping shape clean fuel policy at the state and national level.

“This proposed legislation aligns with the Coalition’s mission to support market-based clean fuel policies in the United States,” said Graham Noyes, Executive Director of the Low Carbon Fuels Coalition. “New Mexico Senate Bill 11 is exemplary of the kind of solid policy that will drive innovation and economic development in low carbon fuels, while improving air quality and reducing waste streams. We look forward to working with the Governor on this important legislation.”

The legislation is supported by state agencies including New Mexico Environment, New Mexico Economic Development, New Mexico Energy, Minerals and Natural Resources, and New Mexico Agriculture.

“We’re tackling greenhouse gas emissions in New Mexico using science and innovation in our laws and rules,” said NMED Cabinet Secretary James Kenney. “Today, we are taking another step in transforming our economy away from carbon-emitting fuels to protect the health New Mexicans and to stem the impacts of climate change.”

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The proposed New Mexico Clean Fuel Standard will now make its way through the 60-day New Mexico legislative session. The press release encouraged New Mexicans to contact their legislators and ask that they support the Clean Fuel Standard Act (Senate Bill 11) – NM legislators and their contact information can be found here.

LCFS isn’t goin’ anywhere and today’s news highlights that many are willing to step up and speak up to encourage low carbon fuel standards to help the economy AND environment. And as data and science are showing, both are no longer mutually exclusive. READ MORE

Legislation introduced to establish CFS in New Mexico (Biomass Magazine)

Clean fuel proposal gets green light from Senate panel (E&E News)

New Mexico Senate passes Clean Fuel Standard Act (Ethanol Producer Magazine)

Legislature: Clean Fuel Standard Act Passes On Senate Floor (Los Alamos Reporter)

Senate passes clean fuel bill despite concerns about higher gas prices (Santa Fe New Mexican)