CLEAN TRANSPORTATION STANDARD

Illinois General Assembly - Full Text of SB3693

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3693

Introduced 2/5/2026, by Sen. David Koehler

SYNOPSIS AS INTRODUCED:

New Act

Creates the Clean Transportation Standard Act. Establishes a clean
transportation standard to reduce life cycle carbon intensity of fuels for
the ground transportation sector by specified amounts. Provides for
related rulemaking and calculations. Provides that the clean
transportation standard shall take the form of a credit marketplace
monitored by the Environmental Protection Agency. Provides for
verification and data privacy requirements for the Agency. Provides for
penalties for failing to offset deficits in certain situations, and for
penalties for submitting false information. Exempts airline, rail,
ocean-going, and military fuel. Provides that the Agency must develop a
periodic fuel supply forecast. Establishes findings. Defines terms.
Contains other provisions. Effective January 1, 2027.
LRB104 19890 LNS 33340 b

A BILL FOR

SB3693
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1

AN ACT concerning transportation.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 1.
Short title.
This Act may be cited as the
Clean
5
Transportation Standard Act.

6

Section 5.
Findings.
The General Assembly finds that:
7

(1) The transportation sector in this State is a
8

leading source of criteria air pollutants and greenhouse
9

gas emissions, which collectively endanger public health
10

and welfare by causing and contributing to increased air
11

pollution and climate change.
12

(2) Shifting from petroleum-based transportation fuels
13

to alternative fuels has the potential to significantly
14

reduce transportation emissions of air pollutants and
15

greenhouse gases and is recommended by the
16

Intergovernmental Panel on Climate Change as an important
17

pathway for holding global warming at 1.5 degrees Celsius.
18

A clean transportation standard would promote innovation
19

in, and production and use of, nonpetroleum fuels that
20

reduce vehicle-related and fuel-related air pollution that
21

endangers public health and welfare and disproportionately
22

impacts disadvantaged communities.
23

(3) Credits generated through the use of clean fuel

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under this Act will promote innovation and investment in
2

clean fuels.
3

(4) Some of the most fertile soils in the world are
4

found in the State, with the State boasting the productive
5

silty clay loam soil, and with a majority of the cropland
6

in the State being considered prime farmland.
7

(5) State fertile soils, however, are subject to
8

ongoing degradation as soil erosion has contributed to the
9

loss of fertile topsoil we need to grow crops.
10

(6) Sustainable agriculture can be used to restore the
11

State's degraded soils to counteract loss of topsoil in
12

recent years.
13

(7) An agricultural credit program will work to
14

restore degraded soils and to produce soil health benefits
15

accrued to the people of the State.

16

Section 10.
Definitions.
As used in this Act:
17

"Advance credits" refers to credits advanced under this
18
Act for actions that will result in real reductions of the
19
carbon intensity of the State's transportation fuels.
20

"Agency" means the Environmental Protection Agency.
21

"Aggregator" or "credit aggregator" means any party other
22
than a deficit generator that offers to purchase credits from
23
one or more credit generators or on-farm credit generators for
24
resale to deficit generators.
25

"Alternative compliance credit" means a credit made

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available at the price cap for compliance purposes and in
2
accordance with the provisions of paragraphs (4) and (5) of
3
subsection (a) of Section 20.
4

"Automatic adjustment mechanism" means a mechanism which
5
advances all subsequent annual carbon intensity standards by
6
one year or reduces all subsequent annual carbon intensity
7
standards by 50% when conditions are met as specified in
8
Section 20.
9

"Aviation fuel" means a fuel suitably blended to be used
10
in aviation engines.
11

"Backstop aggregator" means a qualified nonprofit entity
12
approved by the Agency to aggregate credits for electricity
13
used as a transportation fuel when those credits would not
14
otherwise be generated.
15

"Board" means the Pollution Control Board.
16

"Carbon intensity" means the amount of life cycle
17
greenhouse gas emissions per unit of fuel energy expressed in
18
grams of carbon dioxide equivalent per megajoule.
19

"Clean fuel" means a transportation fuel that is
20
domestically produced and has a carbon intensity below the
21
clean transportation standard carbon intensity standard in a
22
given year.
23

"Clean transportation standard" means the standard adopted
24
by the Board under Section 15 for the reduction, on average, of
25
life cycle carbon intensity of fuels used for on-road
26
transportation.

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"Consumer Price Index for All Urban Consumers" or "CPI-U"
2
means the index published by the Bureau of Labor Statistics of
3
the United States Department of Labor that measures the
4
average change in prices of goods and services, United States
5
city average, all items.
6

"Credit" means a unit of measure generated when clean fuel
7
is provided for use in this State, such that one credit is
8
equal to one metric ton of carbon dioxide equivalent.
9

"Credit generator" means an individual or entity, other
10
than an on-farm credit generator, that has registered, on a
11
mandatory or permissive basis, to participate in the clean
12
transportation standard and generates a credit.
13

"Committee" means the Clean Transportation Standard
14
Agricultural Committee created under Section 20.
15

"Deficit" means a unit of measure generated when a fuel
16
provided in this State has a carbon intensity that exceeds the
17
clean transportation standard for the applicable year,
18
expressed in metric tons of carbon dioxide equivalent.
19

"Deficit generator" means an individual or entity that has
20
registered, on a mandatory or permissive basis, to participate
21
in the clean transportation standard and generates a deficit.
22

"Fuel" means any one or more of the following that is used
23
to power vehicles or equipment for the purpose of
24
transportation: electricity or a liquid, gaseous, or blended
25
fuel, including gasoline, diesel, liquefied petroleum gas,
26
natural gas, or hydrogen.

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"Fuel pathway" means a detailed description of all stages
2
of a transportation fuel's production and use, including
3
feedstock growth, extraction, processing, transportation,
4
distribution, and combustion or use by an end user.
5

"Life cycle carbon intensity" means the quantity of
6
greenhouse gas emissions per unit of energy, expressed in
7
carbon dioxide equivalent per megajoule, emitted by the fuel,
8
including both direct and indirect sources, as calculated by
9
the Agency under paragraph (2) of subsection (a) of Section 20
10
using the methods described under Section 30.
11

"Military tactical vehicle" means a motor vehicle owned by
12
the U.S. Department of Defense or the U.S. military services
13
and used in combat, combat support, combat service support,
14
tactical or relief operations, or training for such
15
operations.
16

"On-farm credit generator" means the person who has
17
registered on a permissive basis and assumes the variable cost
18
and risk of on-farm best practices and standards that
19
generates credits and implements those practices on acreage in
20
the State.
21

"Petroleum-only portion" means the component of gasoline
22
or diesel fuel before blending with ethanol, biodiesel,
23
biofuel, or other clean fuel.
24

"Provider" means:
25

(1) with respect to any liquid fuel, hydrogen fuel,
26

and renewable propane used as a fuel source for

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transportation, the person who refines, produces, or
2

imports the fuel;
3

(2) with respect to any biomethane, the person who
4

imports or produces, refines, treats, or otherwise
5

processes biogas into biomethane used as a fuel source for
6

transportation;
7

(3) with respect to electricity used as a fuel source
8

for transportation, the person who is the direct provider
9

of electricity, the electric vehicle charging service
10

provider, the electric utility, the electric vehicle fleet
11

operator, the electric vehicle manufacturer, and the
12

owners or operators of charging stations located on
13

commercial property; or
14

(4) with respect to other types of fuel, a person
15

determined to be the provider by the Agency.
16

"Provider" does not include the owner or operator of a
17
residential charging station.
18

"Sustainable aviation fuel" means an aviation fuel with a
19
carbon intensity sufficient to generate credits under the
20
clean transportation standard upon its production or supply.
21

"Tactical support equipment" means equipment using a
22
portable engine, including turbines, that meets military
23
specifications, is owned by the U.S. Department of Defense or
24
the U.S. military services or its allies, and is used in
25
combat, combat support, combat service support, tactical or
26
relief operations, or training for such operations. "Tactical

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support equipment" includes, but is not limited to, engines
2
associated with portable generators, aircraft start carts,
3
heaters, and lighting carts.

4

Section 15.
Rulemaking, implementation, and baseline
5
calculations for clean transportation standard.
6

(a) To the extent allowed by federal law, within 24 months
7
after the effective date of this Act, the Agency shall propose
8
and the Board shall adopt rules in accordance with Section 20
9
establishing a clean transportation standard in order to
10
reduce, after a 12-month implementation period for a clean
11
transportation standard, within 10 years of the adoption of
12
the Agency's rules by the Board, the life cycle carbon
13
intensity of fuels for the ground transportation sector by 25%
14
below the 2019 baseline level as calculated under this
15
Section. Immediately after rules establishing a clean
16
transportation standard are adopted by the Board, the Agency
17
shall open a 12-month implementation period for credit
18
generators, deficit generators, and on-farm credit generators
19
to register in the clean transportation standard as required
20
under this Act and in accordance with the adopted rules. All
21
entities must be in compliance with the rules by the end of the
22
second year after the effective date of this Act. After the 25%
23
reduction described in this Section is attained, the Agency
24
shall prepare a report that proposes further reductions in the
25
life cycle carbon intensity of fuels for the ground

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transportation sector for the following 10 years. The report
2
prepared by the Agency shall include proposed changes to this
3
Act that are required to implement those reductions. The rules
4
proposed and adopted shall be subject to public notice and
5
comment under the Illinois Administrative Procedure Act. The
6
Board may recommend to the General Assembly reductions to the
7
clean transportation standard below those adopted in
8
accordance with this Act, using factors, including, but not
9
limited to, advances in clean fuel technology. The rules
10
adopted by the Board under this Section shall include fees for
11
the registration of credit generators, deficit generators, and
12
on-farm credit generators to offset the costs incurred by the
13
Board and the Agency that are associated with implementing the
14
clean transportation standard. These fees shall be used only
15
in connection with the administration of clean transportation
16
standards and may be levied differently for credit generators,
17
deficit generators, and on-farm credit generators.
18

(b) Prior to proposing the rules establishing the clean
19
transportation standard, the Agency shall solicit feedback
20
from and consult with the Clean Transportation Standard
21
Advisory Council made up of the following members, to be
22
appointed within 90 days after the effective date of this Act
23
by the Governor, in consultation with the President of the
24
Senate, the Speaker of the House of Representatives, the
25
Minority Leader of the Senate, and the Minority Leader of the
26
House of Representatives, as follows: one representative from

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the fuel production industry; one representative from the
2
renewable fuel industry; one representative from the
3
transportation industry; one representative from the State's
4
largest general farm organization; one representative from an
5
organization representing the State's largest feedstock used
6
for biofuel production; one representative from an
7
environmental advocacy organization; one representative from
8
an organization representing utilities and power generation
9
companies; one representative of a labor organization; one
10
representative from an impacted environmental justice
11
community, as defined in Section 801-10 of the Illinois
12
Finance Authority Act; one representative from the Department
13
of Agriculture; and one representative from the Department of
14
Transportation. The Clean Transportation Standard Advisory
15
Council shall meet at least once every 6 months with the Agency
16
during the development of clean transportation standard rules.
17
The Agency shall include or address the feedback received from
18
the advisory committee in the proposed rules.
19

(c) The Agency shall calculate the baseline carbon
20
intensities of the petroleum-only portion of all
21
transportation fuels produced or imported in 2019 for use in
22
this State by, in accordance with Section 30:
23

(1) reviewing and considering the best available
24

applicable scientific data and calculations; and
25

(2) using a life cycle emissions, performance-based
26

approach that is technology-and-feedstock neutral.

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(d) The Agency shall calculate the life cycle emissions of
2
nonpetroleum portions of transportation fuels in accordance
3
with Section 30.

4

Section 20.
Contents of clean transportation standard; the
5
Clean Transportation Standard Agricultural Committee.
6

(a) The clean transportation standard adopted by the
7
Board, by rule, shall:
8

(1) apply to all providers in the State;
9

(2) be measured based on a life cycle carbon intensity
10

that shall be calculated by the Agency in accordance with
11

Section 30;
12

(3) recognize voluntary farm emissions reductions that
13

contribute to the reduced carbon intensity of fuels by
14

allowing credit generators to use individualized
15

farm-level carbon intensity scoring for approved
16

sustainable agricultural practices and by requiring the
17

Agency to use the GREET model's Feedstock Carbon Intensity
18

Calculator (FD-CIC) to determine individualized farm-level
19

carbon intensity scoring;
20

(4) include a credit price cap that is to be
21

established by the Agency and published by the Board using
22

the trailing 24-month average price of credits available
23

in 2 of the 3 highest value markets with comparable,
24

technology-neutral clean transportation standards;
25

(5) ensure compliance with the price cap in paragraph

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(4) by (i) requiring evidence of an unfulfilled public
2

tender for credit purchase at the cap price by any party
3

claiming an inability to acquire credits needed for
4

compliance, (ii) establishing a facility for the Agency or
5

a designated nonprofit entity to sell alternative
6

compliance credits at the cap price value plus one
7

percent, and (iii) creating an approved list of uses for
8

revenue from the sale of alternative compliance credits
9

that increase access to and use of credit generating fuels
10

produced from in-state resources and on-farm credit
11

generating activities;
12

(6) contain a structure for compliance that conforms
13

with the marketplace system described in Section 25,
14

including, but not limited to, details, such as:
15

(A) methods for assigning compliance obligations
16

and methods for tracking tradable credits;
17

(B) mechanisms that allow credits to be traded,
18

transferred, sold, and banked for future compliance
19

periods;
20

(C) mechanisms that provide for the creation of a
21

list of accepted credit transactions and a list of
22

prohibited forms of credit transactions, which may
23

include trades involving, related to, or associated
24

with any of the following:
25

(i) any manipulative or deceptive device;
26

(ii) a corner or an attempt to corner the

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market for credits;
2

(iii) fraud or an attempt to defraud any other
3

entity;
4

(iv) false, misleading, or inaccurate reports
5

concerning information or conditions that affect
6

or tend to affect the price of a credit; and
7

(v) applications, reports, statements, or
8

documents required to be filed under this Act that
9

are false or misleading with respect to a material
10

fact or that omit a material fact necessary to
11

make the contents therein not misleading;
12

This subparagraph may not prohibit the voluntary
13

sale of credits by credit generators to any party
14

otherwise acting in compliance with this Act. Credits
15

generated outside of the clean transportation standard
16

established under this Act shall be ineligible for
17

sale or purchase for compliance purposes required
18

under this Act;
19

(D) procedures for verifying the validity of
20

credits and deficits generated under the clean
21

transportation standard;
22

(E) mechanisms by which persons associated with
23

the supply chains of transportation fuels that are
24

used for purposes that are exempt from the clean
25

transportation standard described in Section 40 and
26

persons that are associated with the supply chains of

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transportation fuels and will generate credits may
2

register with the Agency to participate in the clean
3

transportation standards; and
4

(F) an administrative procedure by which a deficit
5

generator may contest the Board's or Agency's
6

calculation prior to the levying of a penalty for
7

failure to remedy a given deficit; and
8

(G) procedures that will allow the Agency to
9

cancel or reverse (i) a credit transfer that is
10

determined to be a prohibited transaction under items
11

(i) through (v) of subparagraph (B) or (ii) any other
12

prohibited transaction as determined by the Board in
13

rulemaking;
14

(7) contain a clean transportation standards review
15

procedure whereby the Board or Agency shall, every 2 years
16

after the implementation period for the clean
17

transportation standard ends, solicit feedback from and
18

consult with the advisory council established in
19

subsection (b); the substance of the consultations shall
20

include, but may not be limited to, a review of the
21

economic impact of the clean transportation standard,
22

whether the clean transportation standard is adhering to
23

the established carbon intensity reduction goals, the
24

health impact of the emissions reductions on disadvantaged
25

environmental justice communities, as defined in Section
26

801-10 of the Illinois Finance Authority Act, and whether

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access to transportation has been affected as a result of
2

the implementation of the clean transportation standard;
3

(8) include annual carbon intensity reduction
4

standards that are to be met by deficit generators and
5

that result in the attainment of carbon intensity
6

reduction targets set by the Board;
7

(9) maximize benefits to the environment and natural
8

resources and develop safeguards and incentives to protect
9

natural lands and enhance environmental integrity,
10

including biodiversity;
11

(10) aim to support, through credit generation or
12

other financial means, voluntary farmer-led efforts to
13

adopt agricultural practices that benefit soil health and
14

water quality;
15

(11) support equitable transportation electrification
16

that benefits all communities and is powered primarily
17

with low-carbon and carbon-free electricity;
18

(12) seek to improve air quality and public health,
19

targeting communities that bear a disproportionate health
20

burden from transportation pollution;
21

(13) establish, in consultation with the Department of
22

Agriculture and the Department of Transportation, a
23

procedure for determining fuel pathways that:
24

(A) is consistent with Section 25;
25

(B) is consistent for all fuel types;
26

(C) is based on science and engineering; and

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(D) accounts for any on-site additional energy use
2

by a carbon capture technology employed in the fuel
3

production process, including, but not limited to,
4

generation, distillation, and compression;
5

(14) contain mechanisms to excuse noncompliance from
6

enforcement action if compliance is impossible, including
7

rules that shall specify the criteria and procedures for
8

the Agency to determine whether a period of noncompliance
9

is excusable in accordance with Sections 50 and 55;
10

(15) include mechanisms by which providers who would
11

be eligible to generate credits from electricity used as
12

transportation fuel may assign their right to generate
13

credits to an aggregator, and include mechanisms by which
14

a backstop aggregator may register to generate credits if
15

an electric utility opts out of the clean transportation
16

standards;
17

(16) provide indirect accounting mechanisms, such as
18

book-and-claim or mass-balancing for clean fuels entering
19

fungible supply systems that can access this State; and
20

(17) contain an automatic adjustment mechanism that
21

shall be implemented no earlier than the third compliance
22

period after rules establishing a clean transportation
23

standard are adopted by the Board, with the intention to
24

provide adjustments to the carbon intensity reduction
25

standards during periods of sustained and significant
26

overperformance or underperformance.

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As used in this paragraph:
2

"Overperformance" means when the total number of
3

credits in the credit bank exceeds the total number of
4

deficits generated during the prior 4 consecutive quarters
5

by 150%, and the total number of credits generated during
6

the prior 4 consecutive quarters exceeds the total number
7

of deficits generated during the prior 4 consecutive
8

quarters.
9

"Underperformance" means when the total number of
10

credits in the credit bank is less than 20% of the total
11

number of deficits generated during the prior 4
12

consecutive quarters, and the total number of credits
13

generated during the prior 4 consecutive quarters is less
14

than the total number of deficits generated during the
15

prior 4 consecutive quarters.
16

(A) An adjustment mechanism cannot be implemented:
17

(i) prior to 4 consecutive quarters of being
18

last triggered; or
19

(ii) within 2 compliance periods if the annual
20

carbon intensity standard was adjusted as part of
21

a clean transportation standards review.
22

(B) Starting the first quarter of the second
23

compliance period, and every quarter thereafter, the
24

Agency shall announce whether the conditions of this
25

paragraph have been met for that quarter and the
26

cumulative number of quarters that the conditions have

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been met. This announcement will take place on
2

February 15, May 15, August 15, and November 15 of each
3

year.
4

(C) If the conditions in this subsection have been
5

met, the Agency shall post updated annual carbon
6

intensity standards on the Agency's website on May 15,
7

following the announcement that the automatic
8

adjustment mechanism has been triggered.
9

(i) If there is a period of sustained and
10

significant overperformance and the conditions in
11

item (i) of subparagraph (A) have been met, all
12

annual carbon intensity standards shall be
13

advanced by one year.
14

(ii) If there is a period of sustained and
15

significant underperformance and the conditions in
16

item (ii) of subparagraph (A) have been met, all
17

annual carbon intensity standards shall be reduced
18

by 50% of the annual carbon intensity standards.
19

(iii) The updated annual carbon intensity
20

standards shall replace the prior annual carbon
21

intensity standards and shall take effect at the
22

beginning of the compliance period after the
23

Agency posted the updated annual carbon intensity
24

standards on the Agency's website.
25

(b) The rules adopted by the Board shall include
26
provisions enabling the generation of credits by on-farm

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credit generators that produce feedstocks.
2

(1) The rules shall establish a process for on-farm
3

credit generation that:
4

(A) is pragmatic and informed by actual farming
5

operations and recordkeeping practices;
6

(B) minimizes costs and operational burdens for
7

participating farmers;
8

(C) ensures accuracy in GHG emission reduction
9

claims by utilizing the GREET model's Feedstock Carbon
10

Intensity Calculator (FD-CIC) to determine carbon
11

intensity scoring;
12

(D) provides fair opportunity for farmer
13

participation in market activities as credit sellers;
14

(E) is updated every 2 years to reflect the
15

continuous improvement in optimizing low-cost,
16

efficient accounting practices that deliver high
17

integrity results;
18

(F) ensures the Agency shall protect farm data by
19

ensuring farmer ownership of data for a specified
20

amount of time or a period negotiated and agreed to by
21

the farmers on an annual basis; and
22

(G) uses a verification process that is in
23

compliance with and does not exceed subsection (c) of
24

Section 25.
25

(2) The Department of Agriculture shall maintain a
26

public list of best practices and approved accounting

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methods reflecting the Committee's recommendations.
2

(A) The Department of Agriculture shall publish
3

and certify an initial list immediately after rules
4

establishing a clean transportation standard are
5

adopted by the Board.
6

(B) The Department of Agriculture shall publish
7

and certify an updated list no later than June 1 in the
8

second year after the completion of the implementation
9

period for the clean transportation standard and by
10

June 1 every 2 years thereafter to reflect improving
11

and evolving methods of on-farm greenhouse gas
12

accounting practices.
13

(3) Within 90 days after the effective date of this
14

Act, the Director of the Department of Agriculture, in
15

consultation with the Agency, shall appoint and facilitate
16

the Clean Transportation Standard Agricultural Committee
17

for the purpose of making and updating recommendations of
18

best practices to enable the implementation of on-farm
19

crediting and accounting practices.
20

(A) The Committee shall consist of the following
21

members:
22

(i) the Director of Agriculture or a
23

designated appointee from the Department of
24

Agriculture;
25

(ii) a State Natural Resources Conservation
26

Service agronomist;

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(iii) a member from the State's largest farm
2

organization;
3

(iv) a member from the organization that
4

represents the State's largest feedstock used for
5

biofuel production;
6

(v) a member from the organization that
7

represents the State's second largest feedstock
8

used for biofuel production;
9

(vi) a certified crop advisor with cover crop
10

expertise;
11

(vii) an extension specialist with row crop
12

production credentials;
13

(viii) a specialist in the GREET model and
14

life cycle analysis;
15

(ix) 2 representatives of organizations
16

representing conservation or environmental
17

interests that work on climate smart agriculture
18

with farmers; and
19

(x) a University of Illinois, College of
20

Agriculture, Consumer, and Environmental Sciences
21

economist specializing in row crop production
22

practices.
23

(B) The Committee shall:
24

(i) develop a list of best practices and
25

standards that are considered for greenhouse gas
26

and carbon reduction and ensure that technical

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experts from the field evaluate the greenhouse gas
2

and carbon benefit of those practices to
3

understand how they will be conducted on-farm;
4

(ii) evaluate different ecosystem service
5

market mechanisms and clean transportation
6

standards frameworks to ensure transparency of the
7

value generated by the greenhouse gas and carbon
8

reduction practices;
9

(iii) establish minimum criteria for a
10

contractual definition of fair market value to be
11

used by credit aggregators seeking to acquire
12

credits from on-farm credit generators and ensure
13

the value of credits reflects the improving and
14

evolving practices to improve on-farm greenhouse
15

gas and carbon reductions and is equitable to
16

credit generators and buyers in accordance with
17

the risk and level of effort assumed by each
18

party; and
19

(iv) meet at least twice a year to evaluate
20

and propose recommendations of best practices and
21

standards for approval of the Director of
22

Agriculture.
23

(c) Rules developed by the Board shall ensure that:
24

(1) credits shall be based on annual submissions
25

reported in accordance with methods approved by the
26

Director of Agriculture;

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1

(2) on-farm credit generators will receive one credit
2

for every metric ton of greenhouse gas emission reduction
3

or removal;
4

(3) credits will be awarded to or owned by the on-farm
5

credit generator that submitted a compliant report of
6

on-farm practices for the prior 12-month period;
7

(4) credit holders will have full property rights to
8

hold, sell, or assign credits without restriction;
9

(5) credits accumulated by regulated fuel producers
10

will be accepted by the Board for the purpose of
11

demonstrating compliance with clean transportation
12

standards;
13

(6) third-party credit aggregators may purchase
14

on-farm credits from one or more on-farm credit generator,
15

as long as purchasing agreements do not violate minimum
16

requirements for ensuring fair market value as established
17

by the Director of Agriculture after consultation with the
18

Committee;
19

(7) entities may purchase or otherwise acquire credits
20

from on-farm credit generators for the purpose of
21

demonstrating compliance with regulatory or voluntary
22

standards other than the clean transportation standards,
23

such as the voluntarily established corporate greenhouse
24

gas reduction targets; and
25

(8) upon request, the Board will provide certification
26

confirmation that on-farm practices were generated and

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1

documented according to the practices recommended by the
2

Committee and approved by the Director of Agriculture.
3

(d) All advance credits must represent actual reductions
4
of greenhouse gas emissions against the clean transportation
5
standards. Vehicles must be registered in the State to be
6
eligible to earn advance credits.
7

Entities involved with zero-emission vehicles have the
8
ability to generate advance credits.
9

On-farm credit generators shall be subject to an annual
10
registration fee of $50.
11

(e) Imports that have a high risk of deforestation and
12
other environmental concerns, such as, but not limited to,
13
palm oil, are prohibited.

14

Section 25.
Credit market; verification and data privacy;
15
compliance and penalties.
16

(a) The clean transportation standard adopted by the Board
17
shall take the form of a credit marketplace with the following
18
structure. The marketplace shall consist of a system of
19
credits and deficits monitored by the Agency. The Agency shall
20
compile a list of fuel pathways that providers may use to
21
generate credits. Providers seeking to be credit generators
22
must register with the Agency and attest to the transportation
23
fuels they provide in the State in order to qualify to generate
24
credits. Each deficit generator must register and comply with
25
the clean transportation standards. Fuels that are registered

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1
must have a dedicated, verifiable fuel pathway with a carbon
2
intensity score measurable by software described in Section 30
3
and assigned a unique identifier by the Agency. Providers
4
reaching or exceeding the required reduction of life cycle
5
carbon intensity under the clean transportation standard shall
6
receive credits from the Agency upon verification described in
7
subsection (c) at the end of a reoccurring reporting period as
8
determined by the Agency. Fuel providers that are deficit
9
generators during a year shall eliminate the deficit by either
10
providing transportation fuels whose carbon intensity is at or
11
below the level of that year's annual clean transportation
12
standard or by purchasing credits to offset the deficit. The
13
system of credits created under this subsection shall provide
14
credits based on a life cycle emissions performance-based
15
approach that is technology neutral, feedstock neutral, and
16
has the purpose of achieving transportation fuel
17
decarbonization.
18

(b) In compiling the list of fuel pathways authorized in
19
subsection (a) the Agency must create an initial pathway list
20
and identify procedures for modifying existing pathways or
21
adding new pathways providers may use to generate credits. All
22
listed pathways must have a carbon intensity calculated in
23
accordance with Section 30.
24

(1) The Agency must, as part of its initial rules,
25

provide a list of pathways that providers may use to
26

generate credits. The list must include pathways that have

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1

a carbon intensity calculated in accordance with Section
2

30 and are already approved for use in comparable and
3

technology-neutral clean fuel programs established by any
4

other jurisdiction in North America.
5

(2) Any provider may request approval of a
6

modification to an existing pathway or approval of a new
7

pathway. Such requests must be accompanied by
8

documentation identified by the Agency as appropriate to
9

review such requests, including third-party validation of
10

the submitted materials and carbon intensity calculations.
11

The Agency shall have 60 days to review and respond to any
12

pathway requests submitted in compliance with all
13

documentation requirements. The Agency may request
14

additional documentation as appropriate for any new
15

pathway approval requests by providing a written
16

explanation of any documentation deficiencies to the
17

provider. A request for additional documentation shall
18

pause the 60 days to review the pathway request until the
19

provider submits the requested documentation. Upon
20

submittal of the requested documentation by the provider,
21

the Agency must review and respond to the request within
22

the days remaining from the 60 days to review at the time
23

the request for additional documentation was made by the
24

Agency. The Agency shall approve a pathway request in
25

compliance with all documentation requirements set forth
26

by this Section. In the absence of a decision by the Agency

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1

within the 60-day deadline, the request shall be deemed
2

approved. If the Agency denies a pathway request, it must
3

provide a written explanation of the reasons for the
4

denial to the provider.
5

(c) The Agency must, in collaboration with the Department
6
of Agriculture and the Department of Transportation, establish
7
acceptable methods to verify compliance with the clean
8
transportation standard as required under this Act. Upon
9
registering, credit generators, deficit generators, or on-farm
10
credit generators must agree to provide data related to the
11
registered fuel pathway used to generate credits or deficits
12
with the Agency as required to administer the clean
13
transportation standards. Upon registering, credit generators,
14
deficit generators, or on-farm credit generators must agree to
15
be subject to periodic audits as determined by the Agency. The
16
Agency is authorized to contract with third party verifiers to
17
accomplish this requirement.
18

All information gathered by or provided to the Agency or
19
contractors of the Agency, either by credit generators,
20
deficit generators or on-farm credit generators, agents of
21
credit generators, deficit generators, or on-farm credit
22
generators used in a registered fuel pathway, through either
23
voluntary disclosure or audit, must not be shared by the
24
Agency with any party except in relation to the limited and
25
fully disclosed administration of the clean transportation
26
standard absent written consent by credit generators, deficit

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1
generators, or on-farm credit generators and the entity from
2
which the data was gathered. This data must not be used for any
3
purpose outside of the administration and enforcement of the
4
clean transportation standard except by written consent from
5
the original data holder. Information provided under this
6
subsection shall be exempt under subsection (b) of subsection
7
(1) of Section 7 of the Freedom of Information Act. Ownership
8
of all data shared or collected by the Agency for the
9
administration and enforcement of the clean transportation
10
standard is retained with the entity from which the data
11
originates. Data protected under this subparagraph does not
12
include a credit generator's, deficit generator's, or on-farm
13
credit generator's credit or deficit balance, which may be
14
publicly disclosed by the Agency.
15

(d) Deficit generators who fail to offset their deficits
16
at the conclusion of any compliance period administered by the
17
Agency shall be subject to a civil penalty established by the
18
Agency subject to the following limitations:
19

(1) the value of the penalty shall correspond to the
20

amount of deficits attributed to a given deficit generator
21

at the time the transaction has completed; and
22

(2) for every one deficit the deficit generator fails
23

to offset, the penalty for failure to offset that deficit
24

shall not exceed 10 times the value of the credit needed to
25

offset the deficit.
26

(e) Credit generators, deficit generators, or on-farm

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1
credit generators that submit false information in support of
2
an application to register for the clean transportation
3
standard, share false information during an audit or in
4
support of an attestation, or otherwise share false or
5
inaccurate information to the Agency or a contractor working
6
under the direction of the Agency shall be subject to
7
penalties to be determined by the Agency by rule. Penalties
8
under this subsection may include monetary penalties,
9
forfeiture of credits, and reversals of prohibited
10
transactions. The Agency may waive penalties under this
11
subparagraph. In determining whether penalties should be
12
applied and, if a penalty is to be applied, the amount of
13
penalties to be levied for violations under this subsection,
14
the Agency shall consider:
15

(1) evidence of willfulness by the credit generator,
16

deficit generator, or on-farm credit generator to submit
17

false information;
18

(2) the scope of the false information;
19

(3) evidence of past submissions of false information;
20

and
21

(4) efforts undertaken by the credit generator,
22

deficit generator, or on-farm credit generator to remedy
23

the false submission.
24

If the violator under this subsection is a credit
25
generator, following 3 violations, the Agency may remove the
26
violating credit generator from the clean transportation

SB3693
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1
standard.
2

(f) The penalties provided for in this Section may be
3
recovered in a civil action brought in the name of the people
4
of the State of Illinois by the State's Attorney of the county
5
in which the violation occurred or by the Attorney General.
6
Any penalties collected under this Section in an action in
7
which the Attorney General has prevailed shall be used to
8
offset registration fees in support of the administration of
9
the clean transportation standards. Any amount of penalties
10
collected in addition to the amount needed to administer the
11
clean transportation standards shall be deposited into the
12
Environmental Protection Trust Fund, to be used in accordance
13
with the provisions of the Environmental Protection Trust Fund
14
Act.
15

(g) The Attorney General or the State's Attorney of a
16
county in which a violation occurs may institute a civil
17
action for an injunction, prohibitory or mandatory, to
18
restrain violations of this Act or to require such actions as
19
may be necessary to address violations of this Act.
20

(h) The penalties and injunctions provided in this Act are
21
in addition to any penalties, injunctions, or other relief
22
provided under any other law. Nothing in this Act bars an
23
action by the State for any other penalty, injunction, or
24
other relief provided by any other law.

25

Section 30.
Life cycle carbon intensity calculations;

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1
software.
The life cycle carbon intensity calculation
2
conducted by the Agency under paragraph (2) of Section 20 and
3
subsection (b) of Section 25 shall use the Argonne National
4
Laboratory's GREET model and shall include all stages of fuel
5
and feedstock production and distribution, from feedstock
6
generation or extraction through the distribution, delivery,
7
and use of the finished fuel by the ultimate consumer. The
8
Agency shall use the most recent model available. Carbon
9
intensity values calculated for clean fuel pathways under
10
construction or in operation using the current version of the
11
GREET model shall be allowed if the GREET model is revised
12
during the compliance year. In calculating the life cycle
13
carbon intensity, the mass values for all greenhouse gases
14
that are not carbon dioxide must be adjusted to account for
15
each of their relative global warming potentials. This
16
adjustment shall be performed using the global warming
17
potential deemed most accurate by the Agency for each
18
greenhouse gas for the period during which reductions in
19
greenhouse gas emissions are to be attained under the clean
20
transportation standard. When measuring the carbon intensity
21
of clean fuels, the Agency shall use the GREET model's
22
Feedstock Carbon Intensity Calculator (FD-CIC) for the
23
purposes of accounting for variations in farming practices
24
across different fuel pathways.

25

Section 35.
Investments by backstop aggregators and

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1
utilities.
In implementing this Act, the Agency and the Board
2
shall establish rules directing participating utilities and
3
backstop aggregators under the standard to invest all revenue
4
earned from trading credits toward investments into
5
distribution, grid modernization, infrastructure and other
6
projects that support transportation decarbonization, with at
7
least 50% of such revenues supporting environmental justice
8
communities as defined in Section 801-10 of the Illinois
9
Finance Authority Act. All labor paid for with money from
10
required investments under this Section shall be subject to
11
the prevailing wage. The Agency and Board shall determine
12
projects and goals under this Act in consultation with
13
relevant stakeholders, including, but not limited to, credit
14
generators, affected communities, and environmental justice
15
advocacy organizations.

16

Section 40.
Exemptions.
The following fuels are exempt
17
from the clean transportation standard established in Section
18
15:
19

(1) aviation fuels;
20

(2) transportation fuel used in locomotives;
21

(3) transportation fuel used in ocean-going vessels;
22

and
23

(4) fuel used in military tactical vehicles and
24

tactical support equipment owned by the U.S. Department of
25

Defense or the U.S. military services.

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1
However, providers of these fuels, if deemed to be clean
2
fuels, shall be eligible under the rules adopted pursuant to
3
this Act to receive credits on an opt-in basis that may be
4
applied to future obligations or sold to deficit generators.

5

Section 45.
Agency reporting obligation.
Within 12 months
6
after the implementation period for the clean transportation
7
standard and every 2 years thereafter, the Agency shall submit
8
a report to the General Assembly detailing the implementation
9
of the clean transportation standard, the reductions in
10
greenhouse gas emissions that have been achieved through the
11
clean transportation standard, and targets for future
12
reductions in greenhouse gas emissions. These reports shall
13
include feedback solicited from stakeholders under paragraph
14
(7) of subsection (a) of Section 20.

15

Section 50.
Fuel supply forecasting.
In consultation with
16
the Department of Transportation and the Department of
17
Agriculture, the Agency must develop a periodic fuel supply
18
forecast to project the availability of fuels to the State
19
necessary for compliance with clean transportation standard
20
requirements. The fuel supply forecast for each upcoming
21
compliance period must include, but is not limited to, the
22
following:
23

(1) an estimate of the potential volumes of gasoline,
24

gasoline substitutes, and gasoline alternatives, and

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1

diesel, diesel substitutes, and diesel alternatives
2

available to the State. In developing this estimate, the
3

Agency must consider, but is not limited to, considering:
4

(A) the existing and future vehicle fleet in this
5

State; and
6

(B) any constraints that might be preventing
7

access to available and cost-effective clean fuels by
8

the State, such as geographic and logistical factors,
9

and alleviating factors to the constraints;
10

(2) an estimate of the total banked credits and
11

carried over deficits held by deficient generators, credit
12

generators, on-farm credit generators, and credit
13

aggregators at the beginning of the compliance period, and
14

an estimate of the total credits attributable to fuels
15

described in paragraph (1);
16

(3) an estimate of the number of credits needed to
17

meet the applicable clean transportation standard
18

requirements during the forecasted compliance period; and
19

(4) a comparison in the estimates of paragraphs (1)
20

and (2) with the estimate in paragraph (3), for the
21

purpose of indicating the availability of fuels and banked
22

credits needed for compliance with the requirements of
23

this chapter.
24

The Agency may appoint a forecast review team of relevant
25
experts to participate in the fuel supply forecast or
26
examination of data required by this Section. The Agency must

SB3693
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1
finalize a fuel supply forecast for an upcoming compliance
2
period by no later than 90 days prior to the start of the
3
compliance period.

4

Section 55.
Forecast deferral.
5

(a) No later than 30 calendar days before the commencement
6
of a compliance period, the Agency shall issue an order
7
declaring a forecast deferral if the fuel supply forecast
8
under Section 50 projects that the amount of credits that will
9
be available during the forecast compliance period will be
10
less than 100% of the credits projected to be necessary for
11
regulated parties to comply with the scheduled applicable
12
clean transportation standard adopted by the Agency for the
13
forecast compliance period.
14

(b) An order declaring a forecast deferral under this
15
Section must set forth:
16

(1) the duration of the forecast deferral;
17

(2) the types of fuel to which the forecast deferral
18

applies; and
19

(3) which of the following methods the Agency has
20

selected for deferring compliance with the scheduled
21

applicable clean transportation standard during the
22

forecast deferral:
23

(A) temporarily adjusting the scheduled applicable
24

clean transportation standards to a standard
25

identified in the order that better reflects the

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LRB104 19890 LNS 33340 b
1

forecast availability of credits during the forecast
2

compliance period and requiring deficit generators to
3

comply with the temporary standard;
4

(B) requiring deficit generators to comply only
5

with the clean transportation standard applicable
6

during the compliance period prior to the forecast
7

compliance period; or
8

(C) suspending deficit accrual for part or all of
9

the forecast deferral period.
10

(c) In implementing a forecast deferral, the Agency may
11
take an action for deferring compliance with the clean
12
transportation standard other than, or in addition to,
13
selecting a method under paragraph (3) of subsection (b) only
14
if the Agency determines that none of the methods under
15
paragraph (3) of subsection (b) will provide a sufficient
16
mechanism for containing the costs of compliance with the
17
clean transportation standard during the forecast deferral.
18

(d) If the Agency makes the determination specified in
19
subsection (c), the Agency shall:
20

(1) include in the order declaring a forecast deferral
21

the determination and the action to be taken; and
22

(2) provide written notification and justification of
23

the determination and the action to:
24

(A) the Governor;
25

(B) the President of the Senate;
26

(C) the Speaker of the House of Representatives;

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LRB104 19890 LNS 33340 b
1

(D) the Minority Leader of the Senate; and
2

(E) the Minority Leader of the House of
3

Representatives.
4

(e) The duration of a forecast deferral may not be less
5
than one calendar quarter or longer than one compliance
6
period. Only the Agency may terminate, by order, a forecast
7
deferral before the expiration date of the forecast deferral.
8
Termination of a forecast deferral is effective on the first
9
day of the next calendar quarter after the date that the order
10
declaring the termination is adopted.

11

Section 60.
Conflicts with other State programs.
Nothing
12
in this Act precludes the Agency or Board from adopting or
13
maintaining other programs as permitted or required by
14
existing or future legislation to reduce greenhouse gas
15
emissions from the transportation sector.

16

Section 99.
Effective date.
This Act takes effect January
17
1, 2027.

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