Oregon Regulators Approve Long-Awaited Clean Fuel Standards

The Oregon Environmental Quality Commission has approved new rules that lay out the next phase of the Oregon Clean Fuels Program, which seeks to reduce greenhouse gases by cutting the carbon content in Oregon transportation fuels by 10% over a 10-year period. The rules, developed by the Oregon Department of Environmental Quality (DEQ), go into effect Feb. 1.

The commission voted 4-1 to approve the rules, and Commissioner Melinda Eden said, ‘I believe in the goal of carbon reduction, and I also believe in the role of market transformation.’

Full implementation of the Clean Fuels Program has been in the works for years now ever since the state legislature passed it under H.B.2186 back in 2009. Although the DEQ worked to collect fuel data from producers and importers under Phase I, the agency did not implement the program's carbon-reduction requirements. In February 2014, Gov. John Kitzhaber, D-Ore., directed the DEQ to move forward.

The Clean Fuels Program Phase II rules will do the following:

  • Establish clean fuel standards to reduce greenhouse-gas emissions from Oregon's transportation fuels by 10% over the next decade, finally implementing the requirement under H.B.2186.
  • Require importers of transportation fuels – owners of the fuel when it crosses into Oregon – to reduce the average carbon intensity of fuels they provide in Oregon to meet the annual clean fuel standards. To meet the standards, regulated parties can choose a variety of strategies, including incorporating more lower-carbon biofuels, natural gas, biogas, propane or electricity into their fuel mix, or purchasing clean fuel credits from providers of clean fuels.
  • Allow providers of clean fuels to generate and sell clean fuel credits for the fuels they provide in Oregon.
  • Establish fuel supply and fuel price deferrals to contain the program's cost.

The DEQ notes that H.B.2186 established a sunset date of Dec. 31, 2015, on the program, and the Oregon legislature will have to vote to remove that deadline. If the lawmakers do not, however, the program will not be fully implemented.

More information on the Clean Fuels Program is available here.

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