RELATING TO A CLEAN FUEL STANDARD.

Energy

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: LOWEN, AMATO, BELATTI, EVSLIN, HUSSEY, ILAGAN, IWAMOTO, KAPELA, KEOHOKAPU-LEE LOY, KILA, KUSCH, LA CHICA, MARTEN, MORIKAWA, OLDS, PERRUSO, TAM, TARNAS, WOODSON
Last action: 2026-03-12
Official status: Referred to AEN/TRS, WAM.
Effective date: Not listed

Plain English Breakdown

The official summary does not provide details on enforcement mechanisms or penalties for non-compliance.

Creating a Clean Fuel Standard

This bill requires the Department of Transportation to create rules by January 1, 2028, that set up a clean fuel standard for alternative fuels in Hawaii.

What This Bill Does

Requires the Department of Transportation to make rules about a clean fuel standard by January 1, 2028.
Includes standards for measuring lifecycle greenhouse gas emissions from different types of fuels throughout their lifecycles.
Establishes mechanisms for generating credits and deficits based on carbon intensity levels of alternative fuels.
Sets up procedures for verifying these credits and deficits.
Requires the Department to review and update lifecycle greenhouse gas modeling every three years.

Who It Names or Affects

The Department of Transportation
Fuel producers and users in Hawaii

Terms To Know

Alternative fuel: Any fuel that is not fossil fuel-based and used for transportation purposes.
Carbon intensity: The amount of greenhouse gas emissions per unit of energy in a fuel, measured in grams of carbon dioxide equivalent per megajoule.

Limits and Unknowns

The bill does not specify how the clean fuel standard will be enforced or what penalties there might be for non-compliance.
It is unclear if and when this bill will become law, as it has only been referred to committees so far.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HD1

Hawaii published version HD1

Plain English: The amendment requires the Department of Transportation to establish rules for a clean fuel standard by January 1, 2028, aiming to reduce carbon intensity and greenhouse gas emissions.

Requires the Department of Transportation to adopt rules establishing a clean fuel standard by January 1, 2028.
Includes specific requirements such as phased implementation, lifecycle greenhouse gas emission standards, credit generation for low-carbon fuels, and deficit penalties for high-carbon fuels.

The amendment text does not provide detailed specifics on how the cost containment mechanism will be designed or what best practices from other states will be used.
It is unclear how exemptions for certain industries like aviation and military vehicles will be handled in full detail.

HD2

Hawaii published version HD2

Plain English: The amendment requires the Department of Transportation to establish rules by January 1, 2028, for a clean fuel standard that aims to reduce greenhouse gas emissions from transportation fuels.

Requires the Department of Transportation to adopt rules establishing a clean fuel standard for alternative fuels in Hawaii by January 1, 2028.
Includes specific requirements such as phased implementation targets and standards for measuring lifecycle greenhouse gas emissions using the GREET model.

The amendment text is incomplete at the end, so some details about mechanisms for electric utilities or energy producers are not fully explained.

Bill History

2026-03-12 S
Referred to AEN/TRS, WAM.
2026-03-12 S
Passed First Reading.
2026-03-12 S
Received from House (Hse. Com. No. 335).
2026-03-10 H
Passed Third Reading with none voting aye with reservations; Representative(s) Alcos, Garcia, Kong, Pierick voting no (4) and none excused (0). Transmitted to Senate.
2026-03-06 H
Reported from FIN (Stand. Com. Rep. No. 1169-26), recommending passage on Third Reading.
2026-03-05 H
The committee on FIN recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 15 Ayes: Representative(s) Todd, Takenouchi, Hussey, Kitagawa, Kusch, Lee, M., Morikawa, Templo, Yamashita, Reyes Oda; Ayes with reservations: Representative(s) Hartsfield, Keohokapu-Lee Loy, Miyake, Alcos, Gedeon; Noes: none; and 1 Excused: Representative(s) Perruso.
2026-03-03 H
Bill scheduled to be heard by FIN on Thursday, 03-05-26 2:00PM in House conference room 308 VIA VIDEOCONFERENCE.
2026-02-20 H
Report adopted; referred to the committee(s) on FIN as amended in HD 2 with Representative(s) Alcos voting aye with reservations; Representative(s) Garcia, Pierick voting no (2) and Representative(s) Quinlan excused (1).
2026-02-20 H
Reported from EEP (Stand. Com. Rep. No. 720-26) as amended in HD 2, recommending referral to FIN.
2026-02-19 H
The committee on EEP recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 7 Ayes: Representative(s) Lowen, Perruso, Chun, Kahaloa, Kusch, Quinlan; Ayes with reservations: Representative(s) Matsumoto; Noes: none; and Excused: none.
2026-02-13 H
Bill scheduled to be heard by EEP on Thursday, 02-19-26 9:45AM in House conference room 325 VIA VIDEOCONFERENCE.
2026-02-10 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on EEP with none voting aye with reservations; Representative(s) Garcia, Pierick voting no (2) and none excused (0).
2026-02-09 H
Reported from TRN (Stand. Com. Rep. No. 91-26) as amended in HD 1, recommending passage on Second Reading and referral to EEP.
2026-02-05 H
The committee on TRN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 8 Ayes: Representative(s) Kila, Miyake, Cochran, Evslin, Grandinetti, Kitagawa, La Chica, Muraoka; Ayes with reservations: none; 0 Noes: none; and 1 Excused: Representative(s) Pierick.
2026-02-03 H
Bill scheduled for decision making on Thursday, 02-05-26 9:30AM in conference room 430 VIA VIDEOCONFERENCE.
2026-02-03 H
The committee(s) on TRN recommend(s) that the measure be deferred until 02-05-26 9:30AM.
2026-01-30 H
Bill scheduled to be heard by TRN on Tuesday, 02-03-26 10:30AM in House conference room 430 VIA VIDEOCONFERENCE.
2026-01-28 H
Referred to TRN, EEP, FIN, referral sheet 3
2026-01-26 H
Introduced and Pass First Reading.
2026-01-23 H
Pending introduction.

Official Summary Text

RELATING TO A CLEAN FUEL STANDARD.
Clean Fuel Standard; Alternative Fuels; Rules; Department of Transportation
Requires the Department of Transportation to adopt rules by 1/1/2028 governing a clean fuel standard for alternative fuels in the State. Requires reporting and public informational session requirements. Effective 7/1/3000. (HD2)

Current Bill Text

Read the full stored bill text

HB1986

HOUSE OF REPRESENTATIVES

H.B. NO.

1986

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to a clean fuel standard
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION
1.
�
The
legislature finds that by creating a clean fuel standard that rewards
environmental performance, the State will incentivize investment and job
creation in various sectors, including agriculture, construction, energy, forestry,
landscape restoration, transportation, and waste management.
�
A clean fuel standard can create new markets
for what is usually considered waste, including but not limited to municipal
solid waste, construction and demolition debris, used cooking oil from food
processing, agricultural and forestry residuals, industrial emissions, invasive
species biomass from landscape restoration projects, and renewable electricity.

�
Furthermore, the demand created for
alternative fuels and cleaner forms of mobility under a clean fuel standard
will not only help reduce greenhouse gas emissions but may also have a
co-benefit of reducing air pollution, thereby improving the health of citizens
of the State
.

����
The
legislature further finds that transportation is the State's largest source of
lifecycle greenhouse gas emissions and that the tourism industry is the State's
largest economic driver and biggest transportation sector consumer.

����
The
legislature additionally finds that better management of waste and resources is
critical to environmental stewardship, and a clean fuel standard is central to
reducing lifecycle greenhouse gas emissions while also protecting the State's
economic competitiveness, public health, and the environment.
�
To prompt the use of clean fuels and
zero-emission vehicles, other states like California, Oregon, and Washington
have successfully implemented programs that reduce the carbon intensity of
their transportation fuels.

����
The
legislature also finds that without policies specific to the transportation
sector, emissions will not be reduced in a timeframe consistent with the
State's goals.
�
Therefore, a clean fuel
standard that is technology-neutral and market-based is an effective policy for
reducing emissions in the transportation sector while also achieving other
co-benefits.

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It is the
intent of the legislature to support the deployment of clean transportation
fuel technologies through a carefully designed program that reduces the carbon
intensity of fuel used in the State to:

����
(1)
�
Reduce lifecycle greenhouse gas emissions;

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(2)
�
Stimulate the local, state, and regional
economies, thereby providing economic development;

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(3)
�
Promote public and environmental health by
increasing sustainability and encouraging a circular economy and landscape
restoration activities; and

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(4)
�
Support existing jobs in the clean fuel
industry and create new jobs in new innovative clean fuel technologies.

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In 2025,
the department of transportation began an independent analysis of the best
estimated range of probable costs or cost savings attributable to the clean
fuels program per gallon of gasoline, per gallon of diesel, and per kilowatt of
electricity, based on existing programs, covering each year of the program
projected through 2040.
�
The analysis is
to be informed by input from regulated industries and experience in
jurisdictions that have adopted similar clean fuels policies.

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Accordingly,
the purpose of this Act is to require the department of transportation to adopt
rules by January 1, 2028, establishing a clean fuel standard for alternative
fuels in the State.

����
SECTION
2.
�
(a)
�

No later than January 1, 2028, the department of transportation shall
adopt rules pursuant to chapter 91, Hawaii Revised Statutes, governing a clean
fuel standard for alternative fuels in the State.
�
The rules shall include:

����
(1)
�
A schedule to phase-in the implementation of
the clean fuel standard for alternative fuels in a manner that reduces the
average carbon intensity at a rate to enable the State to achieve the targets
in sections 225P-5, 225P-7, and 225P-8, Hawaii Revised Statutes, as quickly as
possible, but beginning with targets no less than ten per cent below 2019
levels by 2035 and no less than fifty per cent below 2019 levels by 2045,
including the establishment of annual carbon intensity standards for
alternative fuels;

����
(2)
�
An implementation date for the clean fuel
standard for diesel and gasoline beginning January 1, 2029;

����
(3)
�
Standards for measuring lifecycle greenhouse gas
emissions using Argonne National Lab's GREET model attributable to the
production and use of diesel, gasoline, and other alternative fuels throughout
their lifecycles, including feedstock production or extraction, fuel
production, and the transportation of raw materials and finished fuels;

����
(4)
�
A mechanism by which alternative fuel that has
a carbon intensity below the annual carbon intensity standard is used within
the State to generate credits;

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(5)
�
A mechanism to adjust the carbon intensity of
alternative fuel when the alternative fuel is used in a powertrain that is not
equal in efficiency to that of the reference fuel and drivetrain combination;

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(6)
�
A mechanism by which diesel or gasoline that
has a carbon intensity above the annual carbon intensity standard would
generate a deficit;

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(7)
�
A mechanism by which an alternative fuel that
has a carbon intensity above the annual carbon intensity standard would
generate a deficit;

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(8)
�
A mechanism that requires diesel, gasoline, or
other alternative fuel that is exported from the State to retire any associated
credit or debit;

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(9)
�
Exemptions for diesel, gasoline, or other
fuels used by aircraft, railroad locomotives, military vehicles, and interstate
waterborne vessels;

���
(10)
�
Procedures for
verifying credits and deficits generated under the clean fuel standard; and

���
(11)
�
A schedule by which the department of
transportation shall review and update the lifecycle greenhouse gas modeling
every three years based on a review of the best available scientific
literature.

����
(b)
�
The department of transportation may adopt
rules pursuant to chapter 91, Hawaii Revised Statutes, that include:

����
(1)
�
A cost containment mechanism designed to allow
for sufficient compliance flexibility and maximum greenhouse gas reductions;

����
(2)
�
Mechanisms whereby an electric utility or an
energy producer can generate credits for electricity for gaseous fuels used in
transportation; provided that the department of transportation shall develop
these mechanisms based on best practices in use in other states and in
consultation with industry stakeholders;

����
(3)
�
Mechanisms whereby exempt end-uses, such as
aviation, marine, rail, and military, can opt in to the clean fuel standard to
generate credits when using alternative fuel;

����
(4)
�
Mechanisms whereby alternative fuel users can
opt into the clean fuel standard to generate credits when it displaces the
combustion of gasoline or diesel in off-road, heating, cooling, and temporary
power generation;

����
(5)
�
A schedule to phase in the implementation of
the standards for alternative fuels that have achieved a predominant market
share and have an average carbon intensity that exceeds the annual diesel or
gasoline carbon intensity standard;

����
(6)
�
A mechanism through which electric utilities
and public agencies direct at least fifty per cent of their overall credit
value to electrified transportation programs, projects, or investments to
directly benefit overburdened or underserved populations;

����
(7)
�
Any standards, specifications, testing
requirements, and other measures as needed to ensure the quality of gasoline,
diesel, and alternative fuels used in accordance with the clean fuel standard;

����
(8)
�
Linking the clean fuel standard to similar
policies in other jurisdictions, including but not limited to California,
Oregon, and Washington;

����
(9)
�
A method to utilize the carbon intensity
pathways already approved in other states like California, Oregon, and
Washington to reduce the burden of administering and certifying the carbon
intensity of transportation fuels in the clean fuel standard;

���
(10)
�
Mechanisms that allow credits to be traded and
to be banked for future compliance periods; and

���
(11)
�
Exemptions for diesel, gasoline, and
alternative fuels that are used in volumes below thresholds established by the
department of transportation.

����
(c)
�
For the purposes of this section:

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"Alternative
fuel" means any fuel that is not fossil fuel-based and is used for
transportation purposes.

����
"Carbon
intensity" means the quantity of lifecycle greenhouse gas emissions per
unit of fuel energy, expressed in grams of carbon dioxide equivalent per
megajoule.

����
"Clean
fuel standard" means standards for the reduction of greenhouse gas
emissions, on average, per unit of fuel energy.

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"Greenhouse
gas" means carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, sulfur hexafluoride, and other gases designated by the
department of transportation or the Hawaii state energy office by rule.

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SECTION 3.
�
This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Clean
Fuel Standard; Alternative Fuels; Rules; Department of Transportation

Description:

Requires the
Department of Transportation to adopt rules by 1/1/2028 governing a clean fuel
standard for alternative fuels in the State.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.