Hawaii Enacts Clean Fuel Standard

Last week, Hawaii became the fifth state to enact a Clean Fuel Standard (CFS) for motor fuels, which is the equivalent of a low-carbon fuel standard (LCFS). Under the CFS, the government will establish carbon intensity (CI) targets, that will decline over time, for transportation fuels. The new law requires the average CI of transportation fuels to be 10% below 2019 levels by 2035, and at least 50% below baseline levels by 2045. The underlying rationale for creating a CFS is to reduce carbon emission from cars and trucks. The program structure will financially incentivize the use of low-carbon fuels and financially penalize legacy fuels and other energy sources that emit more greenhouse gases via the purchase and sale of programmatic credits in the marketplace.

Executive Director of the Pacific Propane Gas Association (PPGA), Matt Solak, has been following Senate Bill 2999 since it was first introduced this session. “Now that the CFS is law, PPGA will work with state officials to create a regulatory structure that accurately reflects propane’s low-carbon content and creates credit pathways for the use of renewable propane in transportation markets,” said Solak. Hawaii now joins California, New Mexico, Oregon and Washington State as other states that have implemented the equivalent of a LCFS for transportation fuels.

As of the 2024 industry sales report, Hawaii is the 48^th largest state propane market in the country, with 39 million gallons of fuel sold. For more information, contact NPGA’s Senior Director of State Advocacy & Affairs, Jacob Peterson.