DEQ has identified the carbon intensity, or level of carbon emissions, for each type of available fuel, with diesel and gasoline having the highest carbon intensity. Each year, DEQ sets the level of carbon intensity of transportation fuels used in Oregon. DEQ requires fuel providers to show that the volume and type of fuel they supply for use in Oregon meets the carbon intensity level, or standard, for that year. DEQ gradually lowers the amount of carbon intensity in fuel allowed each year to meet the annual reduction goal.
Businesses that create fuels that are cleaner than the annual limit generate credits, while higher carbon intensity fuels create deficits. Credits and deficits are measured in metric tons of greenhouse gas emissions. Credits can be sold to offset deficits, which in turn produces revenue to pay for projects that lower greenhouse gas emissions. Examples of such projects are installations of electric charging stations and dairy manure digesters that inject methane into natural gas pipelines.
The Clean Fuels Program encourages reductions in carbon intensity by allowing a fuel provider to sell credits they have earned by going beyond the reduction goals for that year. Those excess credits can be saved to offset future deficits the entity may incur or for future sale as demand increases.
Examples of clean fuel providers include businesses that own electric vehicle charging stations, compressors for natural gas, or dispensers for propane. Utilities that supply electricity for electric vehicles, or manufacturers of ethanol and biodiesel, also earn credits that they can sell to pay for charging stations or to lower the cost of producing alternative fuels.