What Are Carbon Credits?
A carbon credit is a certificate that represents a reduction in carbon emissions. Under New Mexico's new Clean Transportation Fuel Program (CTFP), these credits are generated by producers of clean fuels — fuels that create fewer emissions than the gasoline and diesel they replace. The cleaner the fuel, the more credits it generates. Those credits then have real market value, because fuel suppliers who exceed the state's emissions limits are required to purchase them to stay in compliance.
The New Mexico CTFP Program
The Clean Transportation Fuel Program (CTFP) was created by New Mexico legislation passed in 2024, with final rules adopted in January 2026. It went into effect on April 1, 2026, making New Mexico the fourth state in the country — and the first outside the Pacific coast — to adopt a low-carbon fuel standard. The program requires fuel suppliers to cut the average carbon intensity of transportation fuel sold in New Mexico by at least 20% by 2030 and 30% by 2040, measured against a 2018 baseline. Rather than mandating specific fuels, the CTFP lets the market decide how to meet that target: any provider of a cleaner fuel — renewable diesel, biodiesel, ethanol, renewable natural gas, or electricity — can generate credits, which fuel suppliers then must purchase to stay in compliance. Owners of non-residential EV charging equipment (public, workplace, fleet, and multifamily stations) are automatically eligible to generate credits from the electricity they supply. The first compliance period runs from April 1, 2026 through December 31, 2027.
How Credits Are Generated
In simple terms, the process works like this:
- Produce or supply a clean fuel — such as biodiesel, renewable diesel, electricity, or renewable natural gas — that emits less carbon than a standard fossil fuel.
- Measure the emissions reduction against the state's benchmark for that type of fuel.
- Receive credits proportional to the emissions avoided.
- Sell the credits to fuel suppliers who need them to meet their own compliance obligations under the program.
That last step is where our brokerage comes in — connecting credit generators with buyers and managing the transaction.
Have Questions?
Our team can walk you through whether this program applies to you. Reach out here.