Sunrise Approaches for the New Mexico CTFP

On January 22, 2026, the New Mexico Environmental Improvement Board (EIB) unanimously adopted regulations to implement the Clean Transportation Fuels Program effective April 1, 2026. The final regulations, as adopted, have not yet been published – that will occur after the EIB meets on February 12 to adopt the final statement of reasons (FSOR) – but the most recently published draft of the regulations is available here. At this point, we do not have information on any differences between this draft and what was adopted by the EIB on January 22^nd. Note: We have previously written about the regulations while they were in development (here and here).

Similarities and Differences

The general structure of the CTFP is similar to the existing LCF programs in California, Oregon, and Washington. Key points of similarity include:

• Reporting requirements; definitions of credits & deficits, retiring of credits to meet deficits and processes for registration and pathways;
• Use of default carbon intensities (CIs) for common fuels;
• Use of book-and-claim provisions for gaseous fuel;
• Provisions for approval of specific pathways, including pathways approved by other states adjusted for transportation distance and indirect land use change (ILUC);
• Similar methods of calculating CI from electricity;
• Use of Project Credits (California only); and
• Provisions for First Reporting Entity.

There are also a few significant differences from the other programs, including:

• Lower baseline CIs for petroleum fuels because New Mexico has a different mix of supplying refineries with less carbon-intensive crude slates than what is employed on the West Coast;
• A CI-reduction schedule that requires significantly faster reductions than in the existing low-carbon fuel programs at similar stages of development; and
• Holding limits for credits by obligated parties.

A Quickening Pace

With respect to the rapid pace of annual CI reductions, New Mexico’s program begins with a 1.8% CI-reduction requirement in 2026 and progresses rapidly to a 20% reduction by 2030 and a 30% reduction by 2040 measured against a 2018 petroleum-only baseline. This pace of CI reductions is compared to the California, Oregon, and Washington programs in Figure 1, below. As New Mexico’s baseline is petroleum only, existing usage of ethanol and biodiesel in the state will make an important contribution towards the credits required this year.

Figure 1. Comparison of CI Reduction Trajectories of LCF Programs

Given the very short timeline for the start-up of this program, it is expected that the CTFP will be heavily reliant upon adopting pathways already approved in the existing LCF states. All market participants will be required to register promptly and pay the required registration fees. To facilitate this rapid pace, the nine months of 2026 (April through December) and all of 2027 will be combined into a single compliance period with the first compliance deadline in 2028. Subsequent compliance periods will be one year long.

How Stillwater can help…

Subscribers to Stillwater’s LCFS Newsletter will see us broaden coverage of the New Mexico CTFP as more information becomes available. Subscribe for ongoing insights. For any additional questions on how the CTFP may impact your business, please contact us!