Clean Transportation Fuel Program

CTFP is designed to regulate business entities and organizations, not individuals. Its participants cover the cost of administering the CTFP, minimizing reliance on taxpayer funds.

There is a one-time registration fee of $3,000 for CTFP credit and deficit generators and $500 for all other registered parties. There is also an annual fee.

Details about the annual fee structure and additional application fees for alternative fuel pathways, EER (energy economy ratio) pathways, fuel supply equipment, and CTFP project credits are available with other details here.

The fees that fund the CTFP are projected to result in a significant payoff for the state of New Mexico, including an estimated $11.0-$20.8 million in health benefits, and $1.65 billion in net economic benefits by 2040.

The primary factor affecting the price of gasoline and diesel made from petroleum is the price of a barrel of oil, which fluctuates based on geopolitical and other market forces – not the CTFP.

Those that do not understand how the CTFP works have argued that the cost for regulated parties to comply with CTFP results in significant price hikes in petroleum gasoline and diesel at retail stations.

In reality, CTFP is not a state tax or state fee and does not create or require a surcharge at the pump. It does not regulate gas and diesel retailers.

A regulated party that only generates deficits, such as a fuel importer that only imports high-carbon fossil fuels, makes a business decision to supply these high-carbon fuels. Importers or distributors of fuel may be driven by profit motive and may choose to increase costs for their products at any time, attributing price increases to CTFP. A party may even pass on more than what it actually costs for them to comply with programs like CTFP – in the form of credits purchased to offset deficits from high-carbon fuel – to the consumer.

Importantly, CTFP does not determine the price of credits or the cost of compliance: businesses and the credit market do. Producers and importers of high-carbon fuel can avoid compliance costs, like those that come from buying clean fuel credits, in several ways:

• Regulated parties selling high-carbon fuels can decrease their carbon intensity and deficits by using higher ethanol and biodiesel blends readily available on the market.
• They can absorb some or all costs associated with purchasing CTFP credits. Billions in annual profits mean oil and gas can afford to pay.
• They can invest in clean fuel and fuel infrastructure to generate their own credits. In many cases, making fuel like E15 available can decrease costs for consumers.

Even if a regulated party does choose to pass the entire cost of credit expenditure on to retailers – and ultimately the customer – any resulting price increase is projected to be minimal.

New Mexico’s CTFP is also expected to make cleaner and locally produced fuels more affordable each year, reducing our reliance on high-carbon fuels tied to the global economy. Together, California, Oregon, and Washington’s clean fuel programs have eliminated more than 300 million metric tons of greenhouse gas emissions, boosting economic and health outcomes.

Ultimately, this program will provide for a strong clean fuels marketplace that benefits New Mexico’s health, jobs market, and environment.

Learn more about the global and local forces that affect New Mexico’s gas prices here.

The CTFP does not require retail petroleum gas or diesel stations to register as regulated parties, unless that retail station also imports fuel to the state of New Mexico. Entities that sell fuel “below the rack” in New Mexico — after it has left the wholesale system as a finished product — are exempt from the CTFP.  

Tribal lands are outside the jurisdiction of New Mexico’s CTFP. Transportation fuel leaving the jurisdiction of CTFP is no longer credit- or deficit- generating within the program, unless the Tribal government has an agreement to participate in the program.

Non-Tribal regulated parties – importers, producers, and distributors of transportation fuel in New Mexico – selling fuel for use on Tribal lands must report that quantity of transportation fuel to the New Mexico Environment Department (NMED) when it leaves the jurisdiction of the program. This ensures that any CTFP credits or deficits associated with that fuel can be removed from the non-Tribal regulated party’s account.

Further, CTFP does not apply to Tribal importers that deliver transportation fuels to Tribal lands for use at Tribal fuel retailers.

The New Mexico Environment Department (NMED) will begin accepting applications for New Mexico alternative fuel pathways as early as July 1, 2026. Generally, these apply to transportation fuels that provide an alternative to fossil fuels, including biomass-based diesel, biomethane, ethanol, renewable diesel, renewable naphtha, hydrogen, and other “alternative fuels.”

As a bridge until these New Mexico alternative pathways are certified by the Environment Department, regulated parties may use a “temporary fuel pathway” to report fuel transactions in our online reporting tool, ARCS, for the duration of the first CTFP compliance period (April 1, 2026, to December 31, 2027), plus an additional two-quarter grace period (until June 30, 2028) after NMED approval.*

For NMED approval, they may apply to use one of three temporary reporting options:

1. Pathways approved under another state’s clean fuel program; 2. Pathways from Table 5 – New Mexico Temporary Fuel Pathways; or 3. A new temporary fuel pathway from NMED.

1. For other state temporary fuel pathways: The organization should send approved pathway code(s), EPA facility ID if assigned, certified CI, approving jurisdiction, approval status, effective dates, and supporting documentation to AFP.CTFP@env.nm.gov for NMED review. Usually, the owner of the facility is the applicant and “pathway holder.”
2. For Table 5 temporary fuel pathways: The organization should identify the applicable Table 5 pathway code and email the proposed Table 5 pathway code, and EPA facility ID (if assigned) to NMED via AFP.CTFP@env.nm.gov.
3. For fuels without an applicable other state or Table 5 temporary pathway: The organization may request a new temporary fuel pathway by scheduling a meeting with NMED staff via AFP.CTFP@env.nm.gov.

To report using a temporary pathway, the associated temporary CI must be higher than the operational CI. If NMED determines that the operational CI is higher than the temporary CI, NMED may adjust the credit balance accordingly for the period the temporary fuel pathway was used. NMED may also request additional recordkeeping or reporting from applicants.

Organizations should submit applications for temporary pathways no later than 45 days after the end of the quarter for which the applicant seeks to report using the temporary pathway.

For example, to apply for a temporary fuel pathway for use in initial quarter reporting, April 1–June 30, 2026 (calendar Q2), the 45-day deadline would be August 15, 2026. For the second quarter of CTFP, which is July 1–September 30, 2026 (calendar Q3), the deadline would be November 14, 2026.

NMED reviews temporary fuel pathway applications on a rolling basis as submissions are received. NMED will provide more information on applying for New Mexico alternative fuel pathways in the coming months. Applicants will be notified of decisions by email.

*If applications for New Mexico alternative fuel pathways are still under NMED review after the grace period, temporary pathway holders may continue to report using their temporary pathway until their application is approved.