RGF study finds New Mexico’s “clean fuel standard” will dramatically raise fuel prices

During the 2024 legislative session (at the behest of Gov. Lujan Grisham) the Democrat-controlled Legislature passed (and Gov. signed) HB 41 which mandated adoption of a so-called “Clean Fuel Standard.”

That bill passed the House narrowly on a 36-33 vote with several Democrats joining Republicans in opposition, but it was enough to get the bill through. Public meetings have been held with final implementation scheduled for sometime in Spring of 2025. New Mexico will then become one of four states with such regulations on the books.

As the Rio Grande Foundation’s new policy brief, “Modeling the Cost of New Mexico’s Low Carbon Fuel Standard” finds:

The “clean fuel standard” will phase in gradually, with the aim of achieving a 20% reduction in carbon intensity below a 2018 baseline by 2030 and a 30% reduction by 2040.

Using the formula provided by the Oregon Department of Environmental Quality and the average credit price in Oregon for the year 2023 ($129.75 per credit), Always On Energy Research (AOER) determined that these regulations will increase gasoline and diesel prices by 30 cents and 34.7 cents per gallon, respectively, by 2030. By 2040, the regulations will cause gas prices to be 45 cents per gallon higher than they otherwise would be, and diesel prices will be 52 cents higher.