Several states in the US have already adopted “low carbon” fuel standards and programs that aim to lessen the “carbon intensity” of fuel. Regardless of political motivations, these initiatives have a real-world economic impact for fuel producers and communities nationwide. Let’s find out why.
Low Carbon and Clean Fuel Initiatives in the US
California was the first state to launch a low carbon fuel standard in the late 2000s. Since then, several states—specifically Oregon, Washington, and New Mexico—have followed suit, enacting similar standards and programs. Generally speaking, such programs rely on lifecycle models to calculate a carbon intensity score. Companies involved in the production of transportation fuels must meet certain thresholds to avoid penalties.
Here’s a quick recap for each state:
California: Known officially as the Low Carbon Fuel Standard (LCFS), California’s program requires both producers and importers of transportation fuel to meet carbon intensity levels. According to the U.S. Department of Energy (DOE), LCFS applies to “transportation fuels that are sold, supplied, or offered for sale in the state through 2045.” LCFS is administered by the California Air Resources Board (CARB). Learn more on California’s Low Carbon Fuel Standards webpage.
Oregon: According to the DOE, Oregon’s clean transportation fuel standards were first enacted in 2009. The state’s Clean Fuels Program, administered by the Oregon Department of Environmental Quality, has been implemented in phases with fuel carbon intensity requirements going into effect in 2016. The program aims to lower carbon content in transportation fuels by 37% by 2035 (compared to 2015 levels). Learn more on Oregon’s Clean Fuels Program webpage.
Washington: Oregon’s neighbor to the north, Washington, was the next state to enact low carbon fuel standards. Per the DOE, Washington’s Clean Fuels Program “requires a reduction in the overall carbon intensity of transportation fuels used in the state by 20% below 2017 levels by 2034.” Learn more on Washington’s Clean Fuel Standard webpage.
New Mexico: New Mexico was the most recent state to adopt a low carbon fuel standard. Enacted in 2024, the program was slated to officially go into effect on or before July 1, 2026, according to the DOE. Learn more on New Mexico’s Clean Transportation Fuel Program webpage.
New York, Illinois, and other states are expected to adopt similar low carbon and clean fuel initiatives in the near future.
Why This Matters, Even in Red States
At least 98% of gasoline in the United States contains ethanol, according to the DOE. Keeping pace with domestic (and international) demand for American ethanol involves massive amounts of corn, much of which is grown in states like Iowa, Nebraska, and Indiana. That means corn from traditional “red” states is fueling transportation across the nation—even in “low carbon” states.
This reality represents a unique opportunity for ethanol producers based in the Midwest, as ethanol with low carbon intensity often commands a premium. To achieve this, ethanol producers are taking a serious look at carbon capture and storage (CCS), which can reduce their carbon intensity scores, unlock federal tax credits, and bolster margins on exports. That trickles down to local economic participants, including farmers.
Questions about CCS? Contact Trigen to start a conversation.