Oregon expands targets under Clean Fuels Program

When the program was first implemented in 2016, it called for reducing greenhouse gas emissions from transportation fuels 10% below 2015 levels by 2025. The new targets are 20% below 2015 levels by 2030, and 37% by 2035.

To accomplish this, fuel distributors may choose to import more lower-carbon biofuels such as ethanol or renewable diesel — made from vegetable oil — to replace gasoline or diesel.

Alternatively, companies that produce biofuels or electric vehicles may generate credits that can be bought or sold to comply with the program.

Cory-Ann Wind, Clean Fuels Program manager for the Oregon Department of Environmental Quality, said increasing the emissions reductions targets will ensure the market remains strong for credits and investments in low-carbon transportation fuels.

“The policy is flexible. We leave it up to the industry to decide which fuels they want to invest in,” Wind said. “It’s all about the carbon score, and how much cleaner it is than the fossil fuels, gas and diesel it displaces.”

Transportation is the single largest carbon polluter in Oregon, making up 37% of the state’s total emissions, according to DEQ.

Since 2016, DEQ figures show the Clean Fuels Program has helped reduce 7.3 million tons of greenhouse gas emissions and displaced nearly 1.5 billion gallons of fossil fuels.

About 60 companies are required to participate in the program, though Wind said the total number of regulated entities is closer to 225, which includes companies that voluntarily participate and generate credits in the marketplace.

For the month of September, credits were trading for $114.74. Each credit represents 1 ton of greenhouse gas emissions.

Reducing the emissions targets will further increase demand for the credits, Wind said, keeping prices stable and spurring incentives for companies to invest in cleaner fuels.

“Investors in clean fuels technology need the higher credit prices to be able to invest in expanding capacity for facilities, or to continue to reduce the carbon intensity of those fuels,” Wind said. “On the climate side, too, the more aggressive those standards are, the more (emissions) you’re reducing as well.”

While agriculture is exempt from the program, Wind said the state is eyeing whether to approve credits for makers of small-scale electric tractors.

A project to test the potential of these tractors is underway in Oregon, led by the Wy’East Resource Conservation and Development Area Council, with support from Sustainable Northwest, Forth and the Bonneville Environmental Foundation.

“As all of these technologies evolve, we want to make sure they can benefit from the program and incentives,” Wind said.

Despite the agricultural exemption written into the Clean Fuels Program, farmers and ranchers have expressed concern about how the initiative will affect fuel prices going forward.

Lauren Poor, government affairs director for the Oregon Farm Bureau, said the exemption is essentially meaningless, since producers buy fuel on the open market and are therefore subject to increased fuel costs regardless.

“In the broader scheme of things, the expanding targets ... will not make a meaningful difference in combatting global climate change, but will have an immediate impact on Oregon’s rural communities, driving up the cost of everyday necessities for Oregon farmers,” Poor said.