Hawaii Gov. Josh Green has signed legislation establishing a statewide Clean Fuel Standard, creating a performance-based program aimed at reducing the carbon intensity of transportation fuels while encouraging investment in lower carbon fuel technologies.

Senate Bill 2999, now Act 258, is part of the state's broader effort to reduce greenhouse gas emissions from the transportation sector, which officials identified as Hawaii's largest source of emissions. The law is designed to promote cleaner fuel alternatives without requiring the use of any specific technology.

The program will use a credit and deficit system that rewards fuels with lower lifecycle carbon intensity while assigning deficits to fuels with higher emissions. State officials said the market-based approach is intended to encourage innovation while limiting impacts on the cost of living.

The Hawaii Department of Transportation will develop and implement the program through a public rulemaking process, with full implementation required by Jan. 1, 2028. The department also will establish lifecycle emissions reduction benchmarks and create a phased plan to reduce the carbon intensity of transportation fuels.

Under the law, transportation fuel carbon intensity must be reduced by at least 10% below 2019 levels by 2035 and by 50% below 2019 levels by 2045.

State officials said the Clean Fuel Standard is expected to expand markets for locally produced renewable fuels and other renewable materials, including fuels derived from waste products. They also said the policy could support local agriculture and renewable energy industries while encouraging private investment and job creation.

The legislation includes provisions for public engagement, regular reporting and stakeholder participation throughout development of the program. The Hawaii Department of Transportation plans to provide updates through its Energy Security, Community and Culture Portal.

The measure was signed alongside House Bill 2021, now Act 259, as part of the state's broader clean energy and transportation initiative. Officials said the actions are intended to modernize Hawaii's transportation policies, improve air quality, strengthen energy security and support the state's transition to a lower carbon economy.

Source: Hawaii Office of the Governor, "Office of the Governor — News Release — Gov. Green Signs Legislation to Modernize Our Transportation System"