What is the Clean Fuels Program?
Launched in 2016, the Oregon Department of Environmental Quality's Clean Fuels Program is designed to decrease the amount of greenhouse gases created during the life cycle (i.e., the production, processing, transportation, and consumption) of fuel used in Oregon. Clean fuels have lower carbon emissions, or carbon intensity, which help improve air quality and public health.
The Clean Fuels Program
- Decreases the amount of pollution allowed from transportation fuels used in Oregon by 10% by 2025 (compared to 2015 levels)
- Provides incentives to create demand for cleaner fuels in the marketplace
- Encourages the use of cleaner fuels such as electricity, ethanol, biodiesel and renewable diesel
The original goal of the Clean Fuels Program required companies that import gasoline and diesel to lower carbon emissions from the fuels they sell by 10% below 2015 levels by 2025. On March 10, 2020, Governor Brown issued an executive order that directed multiple state agencies to take action to further reduce greenhouse gas emissions. As part of this effort, the executive order expands and extends the Clean Fuels Program to increase the availability of low-carbon transportation fuels.
Clean Fuel Standards
The clean fuel standards are the annual average carbon intensity that a regulated party must comply. There is a standard for gasoline and gasoline substitutes, one for diesel and diesel substitutes, and one for alternative jet fuel. The baseline year for the program is 2015 and represents 10 percent ethanol blended with gasoline and 5 percent biodiesel blended with diesel. The rule requires a 10 percent reduction in average carbon intensity from 2015 levels by 2025.
Clean Fuel Standards (gCO2e/MJ)
|||2016||2017 ||2018 ||2019 ||2020||2021 ||2022||2023||2024 ||2025 and beyond |
How does the Clean Fuels Program work?
DEQ has identified the carbon intensity, or level of carbon emissions, for each type of available fuel, with diesel and gasoline having the highest carbon intensity. Each year, DEQ sets the level of carbon intensity of transportation fuels used in Oregon. DEQ requires fuel providers to show that the volume and type of fuel they supply for use in Oregon meets the carbon intensity level, or standard, for that year. DEQ gradually lowers the amount of carbon intensity in fuel allowed each year to meet the 2025 reduction goal.
Businesses that create fuels that are cleaner than the annual limit generate credits, while higher carbon intensity fuels create deficits. Credits and deficits are measured in metric tons of greenhouse gas emissions. Credits can be sold to offset deficits, which in turn produces revenue to pay for projects that lower greenhouse gas emissions, such as electric school buses and charging stations.
The Clean Fuels Program encourages reductions in carbon intensity by allowing a fuel provider to sell credits they have earned by going beyond the reduction goals for that year. Those excess credits can be saved to offset future deficits or for future sale as demand increases.
Examples of clean fuel providers include businesses that own electric vehicle charging stations, compressors for natural gas, or dispensers for propane. Utilities that supply electricity for electric vehicles, or manufacturers of ethanol and biodiesel, also earn credits that they can sell to pay for charging stations or to lower the cost of producing alternative fuels.