Bill > SB1190

This bill establishes a low-carbon fuel standard program administered by the Department of Environment, Great Lakes, and Energy (EGLE) to progressively reduce the carbon intensity—meaning the life-cycle greenhouse gas emissions measured in carbon dioxide equivalent per megajoule using the GREET (Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation) model—of transportation fuels used in the state by at least 35% below 2019 levels by the end of 2035. Under this market-based system, fuel providers that produce or import fuels with carbon intensities exceeding the annual standard generate "deficits," while those supplying cleaner alternative fuels, such as electricity, renewable natural gas, or sustainable aviation fuel, generate tradable "credits" that can be bought, sold, or banked. Fuel providers with deficits must achieve compliance either by transitioning to cleaner fuels or by purchasing credits, failing which they face civil fines equal to 200% of the value of the required credits, while traditional fossil fuels like regular gasoline and diesel are directly regulated, aviation and marine fuels are generally exempt unless opting in to generate credits. Furthermore, the legislation directs EGLE to adopt implementing rules within 18 months in consultation with the Michigan Department of Transportation (MDOT) and other state offices, incorporate cost-containment measures and credit price caps, allow credit generation for residential electric vehicle charging with a focus on benefiting disadvantaged communities, and create science-based pathways including special scoring procedures for climate-friendly agricultural practices verified by third-party audits.