New Mexico regulators today restored plans to begin its low-carbon fuel standard (LCFS) this spring after determining delays could create cascading problems for it.
If finalized, the US' fourth LCFS program could begin credit trade in August following a 1 April program start date. New Mexico would pursue a 20pc reduction from 2018 road fuel carbon intensity by the end of this decade by replacing more and more conventional gasoline and diesel with lower-carbon alternatives.
Members the state Environmental Improvement Board (EIB) continued debate on the final rules on Friday. They reconsidered a vote taken previous day to move the program start back to 1 July to allow obligated parties more time to prepare without shifting back deadlines to comply with the program. The state's Environment Department noted after the vote that the decision would ripple through other milestones for credit and deficit generation as well as fees collected to administer the program.
"You can see that by changing the effective date there really is a domino effect of pushing everything back, including jeopardizing the fees necessary to run the program in the early years," EIB member Sandra Ely said.
Board members reversed their decision to move the effective date as they worked through rulemaking language for a second day.
"It did keep me up last night that I did that and I have the opportunity to correct it," member Karen Garcia said.
LCFS programs require yearly reductions of road fuel carbon intensity. Higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives.
New Mexico follows California, Oregon and Washington in the US, as well as British Columbia and Canada, in establishing the standard. Credit and deficit generation would begin this year, with the first compliance period closing on 31 December 2027.
Five board members either braved wintry mix at the state capitol or joined by videoconference to trudge line-by-line through hundreds of pages of rulemaking. The members reviewed edits proposed throughout by oil industry, refining, alternative fuels and environmental groups.
The group largely declined to revise language proposed in November, including recommendations to not generate deficits for the first year of the program or to eliminate all book-and-claim accounting for fuels such as renewable natural gas. Members were less certain about whether the legislature was clear enough in the law to empower the department to enforce the law with penalties. That discussion had not resumed as of mid-afternoon on Friday.
The board has the option to meet again later this month if the members cannot complete their review and make recommendations by the end of the day.
