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Hawaii Joins the Growing Clean Fuel Market Movement with the Adoption of Senate Bill 2999

Managed Solutions
Hawaii Joins the Growing Clean Fuel Market Movement with the Adoption of Senate Bill 2999

Hawaii has joined the growing number of North American jurisdictions using clean fuel programs to decarbonize transportation.

Governor Josh Green signed Senate Bill 2999 (SB 2999), establishing Hawaii’s first statewide Clean Fuel Standard (CFS). The law directs the Hawaii Department of Transportation (HDOT) to create a market-based program that reduces transportation fuel carbon intensity while opening new opportunities for low-carbon fuel providers, EV charging operators, renewable fuel producers, and other clean transportation stakeholders.

Hawaii is now poised to become the fifth U.S. state with a Clean Fuel Standard, following California, Oregon, Washington, and New Mexico—reinforcing the momentum behind technology-neutral policies that reward lower-carbon transportation fuels.

What Hawaii’s Clean Fuel Standard Means

Hawaii’s Clean Fuel Standard establishes a performance-based, credit-and-deficit framework to reduce the carbon intensity of transportation fuels. Fuels and technologies that fall below the annual standard generate credits, while higher-carbon conventional fuels create compliance deficits.

By allowing the market to identify cost-effective emissions-reduction pathways, the program can support fuel diversification and create new revenue opportunities for low-carbon fuel providers, including renewable diesel, biodiesel, ethanol, renewable natural gas, and electricity.

SB 2999 also directs HDOT to establish long-term carbon intensity reduction targets of at least 10% below 2019 levels by 2035 and 50% below 2019 levels by 2045, aligning the program with Hawaii’s broader climate goals while providing market certainty for future clean transportation investments.

Key Dates for Market Participants

Although the legislation has been signed into law, the rulemaking process is only beginning.

Under SB 2999, HDOT must develop and adopt the program’s formal rules by January 1, 2028. Compliance obligations for gasoline and diesel providers are scheduled to begin on January 1, 2029.

This implementation timeline provides stakeholders with an important opportunity to evaluate potential participation strategies, assess credit-generation opportunities, and prepare systems and data management processes ahead of program launch.

From Policy to Participation: Xpansiv Is Here to Help

As Hawaii’s Clean Fuel Standard moves from legislation to implementation, Xpansiv Managed Solutions is here to help you navigate the program, streamline credit generation, and unlock new revenue streams from your clean energy investments. For those who expect to be active buyers or sellers of Hawaii clean fuel credits, Evolution Markets—the leading fuel credits broker specializing in California LCFS, Washington CFS, Oregon CFP, Canada CFR, and British Columbia LCFS—can support your trading activities.
Contact us to learn more.

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