No Joke: New Mexico’s Clean Transportation Fuel Standard Goes Live Today!

On April 1, 2026, New Mexico becomes the fourth state in the U.S. and the first state outside the Pacific coast to implement a low carbon fuel standard. The Clean Transportation Fuels Program (CTFP) marks a significant expansion of the regulatory model pioneered by California, Oregon, Washington, and British Columbia into a new region with a very different fuel supply landscape. For fuel suppliers, credit market participants, and anyone tracking the trajectory of low carbon fuel policy in North America, this is worth paying attention to.

The April 1 launch date is not a joke, though some industry participants may feel the timeline has elements of one. The program was signed into law in 2024, regulations were unanimously approved on January 22, 2026, and the New Mexico Environment Department (NMED) has been working at a brisk pace to stand up the compliance infrastructure for an April 1 start. Several key tools, including NMED’s registration portal and the NM-GREET carbon intensity (CI) model, are still being finalized as the program goes live.

How the CTFP works

The CTFP follows the same basic structure as its West Coast counterparts. Transportation fuels are rated by their full well-to-wheels lifecycle greenhouse gas (GHG) performance, expressed as a CI value. The program sets declining CI targets for classes of fossil fuel. Each fuel supplied generates a deficit or a credit depending on whether its CI falls above or below the applicable target. At the end of each compliance period, regulated parties must hold a zero or positive credit balance to avoid penalties.

The program’s targets are ambitious: a minimum 20% reduction below 2018 CI levels by 2030, and a minimum 30% reduction by 2040. The first compliance period runs from April 1, 2026, through December 31, 2027, giving regulated parties 21 months before their first compliance report is due.

A regulated party under the CTFP is any person producing, importing, or dispensing a regulated transportation fuel in New Mexico, as well as any party that voluntarily opts in. This definition is broadly consistent with the West Coast programs, though New Mexico’s smaller and less complex fuel market will mean a different set of obligated parties than California or Washington.

What makes New Mexico different

While the CTFP is modeled on its West Coast predecessors, New Mexico faces a distinct set of implementation challenges. The most immediate is timing. The state is standing up a full low carbon fuel program in a compressed window, and several foundational pieces are not yet in place. The NM-GREET model, a New Mexico-specific version of Argonne National Laboratory’s GREET model that will be used to calculate CI values, has not yet been publicly released. NMED hopes to publish its official Tier 1 and Tier 2 calculators by July 1, 2026, three months after the program launches. In the interim, regulated parties may use CI values certified under the CTFP, apply to NMED for a temporary CI based on an approved pathway from another jurisdiction (such as California’s LCFS), or use applicable lookup table values.

As with the other U.S. low-carbon fuel program jurisdictions, in any compliance period, NMED will consider approving pathways based on pathways approved for programs on the West Coast. To be approved, the pathway must be re-calculated using NM-GREET and adjusted for New Mexico-specific values. What makes New Mexico unique is that for the first compliance period only – April 1, 2026 through December 31, 2027 – NMED will consider temporary approvals for pathways approved in other jurisdictions, without adjustment. For multi-state fuel suppliers, this creates both an opportunity and a compliance planning question: how transferable are existing pathways, and what adjustments will NMED require?

New Mexico’s credit market dynamics will also look different from the West Coast in the beginning. The CTFP baselines are calculated on a 2018 baseline, so current suppliers of biofuel blends may have a running start towards the 1.8% reduction targets for 2026. Overall compliance is expected to depend heavily on credits generated by electricity supplied to electric vehicles (EVs). In a state with a relatively small EV fleet and limited charging infrastructure compared to California, that dependency raises questions about credit supply adequacy in the program’s early years and the resulting credit price trajectory.

A signal for the rest of the country

New Mexico’s launch matters beyond its own borders. The CTFP will show whether the low carbon fuel standard model can take hold outside the West Coast corridor where it originated. Several other states have explored or proposed similar programs in recent years. How smoothly New Mexico’s implementation goes, how its credit market develops, and how obligated parties respond will inform those policy discussions.

For fuel suppliers operating across multiple jurisdictions, the CTFP also adds another jurisdiction with complex compliance. Understanding how the program aligns with and diverges from established programs like California’s Low Carbon Fuel Standard (LCFS) will be essential for efficient compliance planning and credit portfolio management.

Key dates for regulated parties

Regulated parties should be aware of the following near-term milestones: Registration must be completed within 45 calendar days of April 1 (by May 16, 2026). NMED is hosting a kickoff webinar on April 1 to introduce the registration module. The department expects to begin accepting Alternative Fuel Pathway Applications (AFPAs) for review on July 1, 2026, the same date targeted for publication of the NM-GREET calculators. Quarterly reports are due within 45 calendar days of each quarter’s end, and the first full compliance report for the initial compliance period will be due by April 30, 2028.

Regulated parties should also be aware that third-party verification of records for each CTFP compliance period will be required by September 30 following the end of each compliance period. As such, it would also be wise to ensure that records with the necessary details are being kept beginning on April 1, 2026, even though the first verification report is not due until September 30, 2028.

Stillwater is tracking the CTFP closely

Stillwater Associates has been covering the development of New Mexico’s CTFP since the legislation was first proposed, and we will continue to provide analysis as the program rolls out. For a detailed, side-by-side comparison of the CTFP and California’s LCFS, including the granular differences in program structure, compliance mechanics, and CI calculation methodology, our upcoming LCFS Newsletter will feature a deep-dive analysis titled “Devils in the Details and Differences.”

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