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Oregon Clean Fuels Program

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What are "Clean Fuels?"

For the Clean Fuels Program, the term "clean" means that a fuel has a lower carbon intensity (i.e. emits less carbon pollution) than conventional gasoline or diesel throughout its lifecycle. Lifecycle emissions, sometimes called “well-to-wheels,” refer to how much total pollution is generated in the production, transport, storage and use of a fuel in a vehicle. This includes the pollution created from the extraction of crude oil or from growing and harvesting crops for biofuels. Examples of clean fuels include most types of ethanol, biodiesel, natural gas, biogas, hydrogen, electricity and propane.

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What are the environmental benefits of clean fuels?

The primary environmental benefit of using clean fuels is the reduction of greenhouse gases released. Greenhouse gases are the largest contributors to climate change. In addition, using cleaner fuels also reduces emissions of other air pollutants such as fine particulate matter, sulfur dioxide, carbon monoxide, and volatile organic compounds.

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Could the use of more clean fuels increase other types of air pollution?

Studies have shown a small increase in the amount of nitrogen oxides emitted when burning higher blends of ethanol and biodiesel. However, ethanol can reduce the emissions of carbon monoxide while other types of clean fuels, such as electricity, lower emissions of traditional and toxic air pollutants emitted from vehicles. The net change in urban air pollution from the use of clean fuels will be beneficial.

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Could the Clean Fuels Program increase the price of Oregon’s gas and diesel?

During the current registration and reporting phase, there are no changes to fuels sold in Oregon and no changes in fuel prices associated with the program. Once the carbon reduction phase begins, the Oregon Clean Fuels statute requires price safeguards. The statute directs DEQ to routinely monitor fuel prices and defer or eliminate requirements if needed to prevent price increases. DEQ has developed methodologies that provide a quick response to concerns over the lack of supply or increase in price of key fuels.

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Could the use of more clean fuels create a fuel shortage?

No. The Oregon Legislature directed DEQ to routinely monitor the supply of fuels to determine whether Oregon’s clean fuels program is causing fuel shortages. DEQ will work with clean fuel producers to ensure that there are adequate supplies of cleaner fuel to meet the program’s needs. Program requirements could be deferred or eliminated to mitigate an anticipated shortage.

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Could the use of more clean fuels benefit Oregon’s economy?

Possibly. There might be new investment in clean fuels research, additional biorefineries or more infrastructure to support new fuels. This may result in new jobs for the construction and operation of clean fuels production facilities and distribution network. See the economic analysis commissioned by DEQ during the development of this Program for more information.

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Why do we need the Clean Fuels Program in addition to the Oregon renewable fuel standard?

The Oregon renewable fuels standard mandates a 10 percent ethanol blend for gasoline and a 5 percent biodiesel blend for diesel fuel used in Oregon for transportation purposes. However, the carbon intensity of ethanol and biodiesel can range from one tenth of petroleum fuels to the same or even more than petroleum fuels depending on a variety of factors so there is no guarantee that greenhouse gas emissions will actually decrease.

Oregon needs both the Oregon renewable fuel standard and the low carbon fuel standard to ensure that a minimum amount of renewable fuels gets used and that they actually result in less greenhouse gases.

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Why do we need the Clean Fuels Program in addition to the Federal renewable fuel standard?

The Federal renewable fuels standard mandates that a minimum amount of renewable fuels be produced in any given year on a national level. However, nothing in the federal requirement mandates that a given state receive its proportional share of fuel to be consumed; it is possible that none of the fuel will be used in Oregon.

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What is the status of the California program?

California is in the fourth year of implementing its low carbon fuel standards program. Since that program’s inception, use of alternative fuels has increased and the carbon intensity of those fuels has decreased. Fuel suppliers have been able to meet the standards and there is an excess in credits banked to be used in the future. The California Air Resources Board continues to conduct extensive research on the continuing evolution of the science, the policy implications related to clean fuels and whether amendments in the regulation are needed.

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Has California's low carbon fuel standards program raised prices for gasoline and diesel?

According to the California Air Resources Board, any increase to the cost of fuel as a result of the low carbon fuel standards has been nominal.

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Did the 9th Circuit Court rule that no other state, including Oregon, can adopt a low carbon fuel standard because of the federal Clean Air Act?

Certain opponents of the Clean Fuels program have alleged that the 9th Circuit Court ruled that no other state, including Oregon, can adopt a low carbon fuel standard because of the federal Clean Air Act.

The 9th Circuit Court did not rule on whether states were preempted from adopting a low carbon fuel standard because that question was never directly presented to the court. The ruling mentioned the preemption clause, but only in relation to whether the U.S. Environmental Protection Agency has adopted an emission control regulation of a fuel or fuel additive that would have preempted the California low carbon fuel standards. Since EPA has never adopted any emission control regulation of a fuel or fuel additive, neither California nor any other state is preempted under federal law from adopting a low carbon fuel standard.

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What parts of the Oregon Clean Fuels program are being implemented now?

DEQ is implementing the first phase of the Clean Fuels program, the administrative requirements. Oregon producers of biofuels and importers of gasoline, diesel, ethanol and biodiesel are required to participate in the program. To date, two producers and 62 importers have registered with DEQ. They began keeping records of their fuel transactions beginning on July 1, 2013 and will be submitting their first report to DEQ by April 30, 2014.

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What is not being implemented?

The carbon reduction portion of the Clean Fuels Program is not being implemented. Fuel suppliers do not have to meet the average carbon intensity standards. Fuel suppliers are not required to change the types of fuels they are currently supplying. Producers of natural gas, electricity, propane, hydrogen or any other alternative fuel are not required to register, keep records or report nor can they generate or sell credits.

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What is exempt from the Clean Fuels Program?

Fuels used in agricultural applications and log trucks are exempt by statute. In addition, fuels used in ocean-going vessels, railroad locomotives, and engines with special performance needs including aircraft, racing vehicles and military vehicles are exempt by rule.

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Will the program mandate 15 percent ethanol (E15) in gasoline?

No. The Oregon Department of Agriculture implements the Oregon Renewable Fuel Standard, which regulates ethanol blends. By statute, gasoline in Oregon cannot contain more than 10 percent ethanol.

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I am a gas station owner, am I regulated under the program?

DEQ designed the program to regulate at the highest point of the supply chain: the Oregon producer or importer of fuel. Individual gas stations should not be affected by this program unless they import their own fuel. In the few cases where individual gas stations are importers, the current rules only require them to register with DEQ; recordkeeping and reporting requirements do not apply.

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Will I have to replace all of my underground storage tanks and dispensing equipment?

No. By statute, gasoline can only be blended with 10 percent ethanol and diesel with 5 percent biodiesel. All underground storage tanks and dispensing equipment in place are already approved to handle these blends. The Clean Fuels Program alone cannot increase these blend rates; it will take legislative action to change this statute. As part of that action, the technical feasibility and fiscal impact of upgrading equipment to blend to a higher ethanol or biodiesel rate will need to be considered.

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I already report fuel information to the Oregon Department of Transportation, why do I need to report to DEQ?

The Oregon Department of Transportation does not require reporting of fuel carbon intensity.

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Doesn’t House Bill 2186 have a sunset date?

Yes. The bill contains an ending date of Dec. 31, 2015.

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Does DEQ need legislative approval to adopt Phase 2 rules? Is legislative approval or a budget request required to implement Phase 2 rules?

DEQ does not need additional legislative approval to adopt Phase 2; however, if the Dec. 31, 2015 sunset date is not removed by the Oregon Legislature, the program cannot be implemented beyond that. Additional state General Fund resources will be required to implement Phase 2.

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Why are you implementing the program without removing the sunset date first?

DEQ is only implementing the administrative phase of the program at this time because it provides useful information for the Legislature to consider whether to the reauthorize the program. Implementation of the carbon reduction phase of the program will not happen until the Legislature reauthorizes the program. If the program is reauthorized, an additional rulemaking by the Environmental Quality Commission is needed to adopt and implement the carbon reduction phase of the program.

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How was development of the Clean Fuels Program funded?

Development of the Oregon Clean Fuels Program has been funded partially by a federal grant (to develop greenhouse gas strategies) and partially by general funds that are budgeted to DEQ’s Air Quality Program for statewide planning activities.

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For more information on this program, call 503.229.5388 or email Oregon Clean Fuels.
For more information about Air Quality, call 503.229.5359 or email.

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For more information about Air Quality call 503-229-5359 or email.

Oregon Department of Environmental Quality
Headquarters: 811 SW Sixth Ave., Portland, OR 97204-1390
Phone: 503-229-5696 or toll free in Oregon 1-800-452-4011
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