Governor Josh Green signed SB 2999 into law on July 15, 2026 (Act 258), making Hawaii the fifth US state with a Clean Fuel Standard. The program targets at least a 50% reduction in transportation fuel carbon intensity below 2019 levels by 2045, with the Hawaii Department of Transportation required to adopt program rules by January 1, 2028. For low-carbon fuel producers already operating in West Coast programs, a new credit market is opening in the Pacific.
What Act 258 Establishes
Hawaii’s Clean Fuel Standard, enacted via SB 2999, now Act 258, follows the California/Oregon/Washington model: a performance-based system administered by the Hawaii Department of Transportation that rewards lower-carbon fuels with credits and assigns deficits to higher-carbon fuels, with credit trading, banking, and a credit clearance market as a cost-containment mechanism. Interim targets include at least a 10% CI reduction below 2019 levels by 2035, rising to at least 50% by 2045.
The program’s scope reaches beyond on-road fuels: the law includes opt-in provisions for alternative aviation, marine, and rail fuels, and expands eligibility to additional sectors including heating, cooling, and temporary power generation – an unusually broad design that matters for SAF and marine fuel suppliers serving Hawaii. Consumer protections are built in: the credit clearance market caps the credit price at $200 per compliance period (in 2026 dollars), and HDOT must publicly review consumer-protection action if per-gallon compliance costs exceed fifteen cents for gasoline or diesel.
The Timeline
- 2026: Legislature passed SB 2999 on May 6, 2026; Governor Green signed July 15, 2026 (Act 258).
- By January 1, 2028: HDOT must adopt program rules by January 1, 2028, drawing on best practices from California, Oregon, and Washington.
- January 1, 2029: Implementation for diesel and gasoline begins January 1, 2029.
Why Hawaii Matters for Fuel Producers
Hawaii is a fuel-import economy with a substantial aviation fuel market and a legislature that has explicitly framed the CFS around turning waste streams, including used cooking oil, agricultural residues, invasive-species biomass, municipal solid waste, into fuel feedstocks. For RNG, renewable diesel, and SAF producers with West Coast pathway experience, Hawaii offers a first-mover opportunity: pathway registration and CI certification frameworks will be defined in the HDOT rulemaking over the next 18 months, and early engagement can shape them.
What This Means by Segment
- RNG and renewable diesel producers: A previously unavailable credit market – evaluate Hawaii supply economics alongside existing West Coast positions.
- SAF producers and offtakers: The opt-in design for aviation fuel plus Hawaii’s air-travel dependence make this one of the most SAF-relevant state programs yet enacted.
- Fuel suppliers moving product into Hawaii: Begin evaluating pathway registration and CI certification requirements ahead of the HDOT rulemaking.
Action Checklist
- Add Hawaii to multi-state credit market scenario planning alongside CA, OR, WA, and NM.
- Track the HDOT rulemaking – engagement opportunities will define pathway and CI certification design.
- SAF and marine suppliers: assess the opt-in provisions and program participation benefits.
Trinity’s Clean Fuels Practice provides CI pathway certification and multi-state clean fuel standard strategy support. Planning for the Hawaii market? Email Alex Marcucci.
