The Clean Fuels Program at a glance
The illustration below is a quick way to view the basic structure of the Clean Fuels Program. The left axis of the graph shows the required reductions in average carbon intensity or level of carbon emissions when combusted. The bottom axis shows years starting from the beginning of the program in 2016. To the left is a list of transportation fuels and how they might participate in the program. For more details, please see the specific sections below.
Mandatory Regulated Parties - Importers of:
- Renewable diesel
Voluntary Registered Parties:
- For CNG, LNG & LPG: owner of dispenser
- For renewable natural gas, propane & jet fuel: producer or importer
- For electricity:
- Fixed light rail, street car, aerial tram, buses: transit agency
- For forklifts: fleet owner or operator
- For residential EV charging: electric utility
- For non-residential EV charging: charger owner or operator
- For hydrogen: owner of fuel
Clean Fuel Standards
The clean fuel standards are the annual average carbon intensity with which 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 the standard for that year represents 10 percent ethanol blended with gasoline and 5 percent biodiesel blended with diesel. The current 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 |
Governor Brown's Executive Order 20-04 directed DEQ and the Environmental Quality Commission to expand and extend the Clean Fuels Program beyond 10% and 2025 but those standards must be adopted through a formal rulemaking process that hasn't begun yet.
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 annual 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. Examples of such projects are installations of electric charging stations and dairy manure digesters.
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 the entity may incur 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.
Who are the participants in the Clean Fuels Program?
Importers of gasoline, diesel, ethanol, biodiesel, and renewable diesel and in-state producers of any transportation fuel are required to participate. In addition, providers of natural gas (owner of the dispenser), propane (owner of the dispenser), electricity (owner of the charger or the electric utility), and hydrogen (owner of the fuel) can choose to participate if they wish to generate credits.
Requirements for regulated parties and credit generators
Collectively, regulated parties and credit generating entities that opt into the program are referred to as Registered Parties and must:
- Register with DEQ before producing fuel in Oregon, importing fuel into Oregon or generating or transacting credits for fuels supplied in Oregon;
- Keep records for each transaction of transportation fuel imported, sold or supplied for use in Oregon; and
- Submit quarterly and annual reports using the
Oregon Fuels Reporting System.
Regulated parties must comply with the Clean Fuel Standards by balancing their credits and deficits by the end of each calendar year. Regulated parties can retire credits they generated themselves or purchase credits from other entities. A Credit Clearance Market will provide an additional opportunity for regulated parties to comply with the clean fuel standards if they cannot generate or purchase sufficient credits during the year.
For more information on this program, email Oregon Clean Fuels.
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