Low-Carbon Fuels Actions
Low-carbon fuels include both liquid fuels such as ethanol, renewable diesel, and biodiesel, primarily used for transportation, as well as gaseous fuels, such as renewable natural gas and hydrogen, used for heating, manufacturing, and other direct uses. The shift to low-carbon fuels requires investment on the demand side, including in industries reliant on high-heat industrial processes as well as aviation, rail, and marine transport. It also requires supply-side investments to ensure that both transportation and direct use fuels are available where and when needed.
Some low-carbon fuels are already being used in Oregon to reduce emissions in transportation. Renewable diesel consumption has grown from 16 million gallons in 2019 to almost 171 million gallons in 2024, and renewable natural gas consumption, including out-of-state purchases, has increased from just over 2 million diesel gallons equivalent in 2019 to almost 4 million diesel gallons equivalent in 2024.
In the near-term, the focus on the demand-side is to explore the opportunities for low-carbon fuels in hardest-to-electrify industries in Oregon and generating opportunities to fund and finance measures that shift operations to low-carbon fuels.
On the supply-side, the focus is on aligning policies, programs, and incentives for low-carbon fuels in Oregon with that of neighboring states while identifying lowest-impact sites for low-carbon fuel facilities in Oregon. This would allow Oregon to define approaches to support technologies that have the support of our broader regional economy, reducing the risk of stranded costs or of Oregon “going it alone.” Oregon is currently researching and investing in a potential renewable hydrogen economy with Washington and Montana by supporting demonstration projects in the Pacific Northwest Hydrogen Hub. Identifying regional demand for low-carbon fuels as well as the lowest-impact sites for fuel production would help enable development of strategic sectors to our economy while minimizing negative effects such as harmful emissions on neighboring communities.
Fuels Action 1
Expand access to low-carbon fuels, including assessing opportunities for in-state production, identifying strategies for regional coordination, and establishing safeguards to protect communities and natural resources, through coordination between the Oregon Department of Energy, Oregon Department of Land Conservation and Development, Oregon Department of Environmental Quality, and Business Oregon.
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4 (Low-carbon fuels)
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4a (Low-carbon fuels and fuel infrastructure)
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1 (decision-making)
5 (partnerships and resources)
6 (natural and working lands, cultural resources, broader environment)
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Low-carbon fuel production potential exists in Oregon and energy modeling demonstrated a growing demand for these fuels. Some low-carbon fuels are already produced in Oregon, including ethanol made from corn as well as renewable natural gas from agricultural, wood, and municipal waste, and wastewater. Oregon imports nearly all the fuels that it uses other than electricity, making us dependent on the resiliency of the existing fossil fuel supply network.
Support for in-state low-carbon fuel production could help local economies, agriculture and forest waste management, and increase access to those fuels. In-state production could deliver other benefits, such as improved reliability of fuel supply if there are logistical issues outside of Oregon, such as pipeline failures, and could help improve power system reliability by co-locating renewable natural gas or renewable hydrogen production with electricity generation to help meet peak demand. State agencies can also lead work with industry, ports, and other public partners to increase the supply of low-carbon fuels to Oregon and a more balanced distribution throughout the state.
Finding a suitable location for low-carbon fuel production is one of the main barriers identified to producing these fuels in Oregon. State agencies could develop tools and resources to help identify criteria for sites with the greatest opportunity for low-carbon-intensity fuel production development in Oregon and those likely to have the lowest impact on communities and the environment by focusing on industrially zoned and brownfield areas. Developed resources should also identify regulatory, technical, and economic barriers to increasing in-state production and identify opportunities for collaboration with neighboring states and regional entities, including through coordinated planning, infrastructure sharing, and market integration.
Potential estimated carbon intensity analysis must also be considered when evaluating site and fuel recommendations to ensure projects align with state decarbonization targets. Local and environmental justice communities must be considered in the evaluation process both in criteria selection, and in evaluating ways to improve engagement with local communities when siting facilities.
Fuels Action 3
Research and forecast fuel needs for emergency preparedness to ensure these needs are met as technologies evolve throughout the energy transition. ODOE would work in collaboration with Tribes and public partners across the state.
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5 (Resilience)
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5c (Emergency response capabilities)
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1 (decision-making)
5 (partnerships and resources)
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State, Tribal, county, and local jurisdiction emergency management teams are evaluating the ability of Oregon communities to respond during an event. Most emergency response vehicles and fuel storage are dependent on fossil fuels to meet their community needs. The decarbonization of Oregon’s energy systems will lead to the adoption of new technologies, electrification, and greater use of low-carbon fuels. The rate of the change to new technologies or fuels and the impact to emergency management is evolving, which can be challenging for jurisdictions to know what to invest in and plan for.
To support resilience of the energy system, Oregon should analyze areas around the state where fuel may be in limited supply for emergency response needs, and identify specifically where and how the state, local governments, Tribes, and private sector partners can build fuel storage capacity and maintain a reliable supply of liquid fuels. Analysis of future fuel storage locations must be done in conjunction with local governments and Tribal governments, the private sector, and communities, and must not cause undue impacts to disadvantaged neighborhoods. New and existing fuel storage will also be evaluated and receive recommendations for resilience improvements based on potential exposure to seismic or other risks. Emergency response capabilities must be able to respond and have immediate access to energy at any location in our state, and the most remote areas of Oregon are frequently those that face significant risk from wildfire or other natural disasters, and may have limited means to respond to those disasters.
The Oregon Department of Energy would collaborate and coordinate with energy and emergency management Tribal and public partners to research and map the fuel needs of local jurisdictions, track adoption rates of new technologies and fuels, and provide guidance to local jurisdiction emergency management teams on how to prioritize investments in emergency management energy resources. This work would expand the depth and reach of the existing County Energy Resilience Grant Program and Energy Security Plan. A grant program for participating Tribes and local governments would need to be funded to support the sharing of data as well as help governments implement findings from the research. Results of the research project would refine and support the development of emergency plans and procedures at the Oregon Department of Energy.
Fuels Action 2
Support strategic planning and investment by Oregon businesses through a low-carbon fuels deployment roadmap, led by the Oregon Department of Energy, and informed by existing studies, data, analysis, and public partner information and guidance.
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4 (Low-carbon fuels)
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4a (Low-carbon fuels and fuel infrastructure)
4b (Low-carbon fuels adoption)
4c (Managed fuels transition)
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1 (decision-making)
2 (infrastructure development)
6 (natural and working lands, cultural resources, broader environment)
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An evaluation of current and forecasted fuel markets, existing infrastructure, and state and federal support mechanisms for low-carbon fuels would deliver a forward-looking guide on how Oregon can most constructively support decarbonization of fuel consumption. The cost of fuels, production and availability, technologies, and methods of distribution for many low-carbon fuels are uncertain and likely to evolve over time as demand for these fuels grows. Low carbon fuels unavailable today may be viable solutions in the future, and the state can help Oregon businesses vet opportunities. This may include tracking their commercial development, researching best uses for Oregon consumers, identifying opportunities to integrate them into Oregon’s energy system, and evaluating the state’s role in securing access. Shifting demand in how we use fuels and what fuels we use will require clear and early direction from the state, so Oregon businesses and communities have time to prepare.
The Oregon Department of Energy would collaborate with state agencies and public partners to evaluate and recommend fuel decarbonization targets over time for maritime, aviation, and rail transportation as well as industry, providing Oregon businesses with guidance on decarbonizing operations over time. The evaluation should include an investigation of potential low-carbon waste feedstocks available in Oregon, existing infrastructure and how it could be repurposed, economic opportunities, and which gaseous and liquid fuels make the most economic sense for Oregon to produce to meet demand while protecting public health. The roadmap would identify how different low-carbon fuels can be prioritized across sectors to maximize economy-wide decarbonization while considering economic, technical, emission, and equity impacts. The development process would include engagement of industry and fuel suppliers to learn more about fuel availability and best uses and be balanced by engagement with environmental justice and other affected communities to ensure that their views inform the roadmap.