Hitting the ground running: Climate and clean energy progress in New Mexico’s 2025 legislative session  

CATF got off to a productive start as it fully activated in New Mexico for the first time this legislative session. Why New Mexico? The state has a unique combination of a large oil and gas industry and political ambition for climate policy throughout the economy, which creates many opportunities for progress. In addition, New Mexico is growing as a subnational climate leader on the world stage and serves as a model for transitioning an economy largely dependent on legacy energy production to one more diversified and cleaner. Thanks to the leadership of Governor Michelle Lujan Grisham, the state has already enacted a series of laws addressing some of the largest emissions sources in the state: electricity, transportation, and oil and gas. 

In 2019, the state passed the Energy Transition Act (ETA), an energy-based clean electricity standard (CES) that puts the state on a pathway to achieve 100% zero-carbon resources by 2045. In 2021, the state enacted methane waste rules to begin reducing climate-warming emissions from the state’s oil and gas sector. In 2023, the state adopted clean vehicle standards and, in 2024, passed a bill to establish a Clean Transportation Fuel Standard.   

These are great achievements, and now the work begins to make sure these laws are implemented effectively even after Governor Lujan Grisham leaves her post due to term limits in 2026. 

The ETA is a CES model with a 100% zero-carbon goal for investor-owned utilities by 2045 and 2050 for electric cooperatives. The methane waste rule was a good first step, but agency offices tasked with implementing it need to be adequately staffed and resourced. The clean vehicle and fuel standards also are important, but they still need to be implemented well and defended against rollback attempts.   

The New Mexico State Legislature can do its part by continuing to pass bills that help the state meet its existing climate goals, as well as defending against efforts to dismantle those goals.   

In 2025, the legislature took several positive steps, including passing the following bills:  

• SB48, led by Senate President Pro Tempore Mimi Stewart and House Majority Floor Leader Reena Szczepanski, established a $210M Community Benefit Fund to support clean energy, clean transportation, and methane reduction projects around the state.  

• HB458, led by Rep. Meredith Dixon, allowed the state to assess and collect appropriate regulatory and permitting fees to oversee long-term stewardship of carbon-dioxide storage wells post-closure. HB456, which defined pore space, was amended into HB458 during the final hours of the legislative session.  

• HB93, led by Rep. Ortez, House Majority Whip Michael Padilla, and Rep. Patricia Roybal Caballero authorized the New Mexico Public Regulation Commission (PRC) to consider factors like emissions reduction, diversification, and equitable access to clean and renewable energy sources in electric utilities’ grid modernization plans. The amended bill includes self-sourced power generation using a qualified microgrid.   

Another bill, HB289, introduced by Rep. Patricia Roybal Caballero, Sen. Liz Stefanics, and Rep. Tara Lujan, aimed to expand eligibility for the state’s Geothermal Development Fund through a competitive bidding process and increase funding to $20 million. While the bill did not pass, $10 million was allocated in the state’s budget for projects involving political subdivisions or state universities. However, this allocation does not extend to other entities through a competitive bidding process.  

The legislature also stopped harmful bills like SB131 and SB139, which would have prohibited the state from implementing its clean vehicle standards.  

We hope that Governor Lujan Grisham’s successor will match her ambition for climate and clean energy to carry this important work forward. Meanwhile, the governor still has the rest of this year and 2026 to cement her legacy through the following actions:  

• Implementing a strong Clean Transportation Fuel Standard in 2025.  

• Codifying her 2019 Executive Order to support the Paris Agreement and achieve a statewide reduction of greenhouse gas emissions of at least 45% by 2030 as compared to 2005 levels.   

• Incentivizing projects to reduce industrial emissions. We applaud Rep. Meredith Dixon for introducing HB538 in 2025 and encourage the legislature to pass it in 2026. The state already has plans in place addressing electricity and transportation, but the industrial sector is the largest energy consumer in the state and needs policies that support emissions reductions.   

• Encouraging a 10-year distribution system plan for utilities to accommodate increasing transportation and building electrification. We applaud House Majority Whip Dayan Hochman-Vigil, Rep. Kristina Ortez, and Sen. Linda Trujillo, for introducing HB13. 

• Encouraging more geothermal investment in the state by increasing appropriations for the development fund, making geothermal projects eligible for the Community Benefit Fund, and modernizing the state’s regulatory framework to support next-generation geothermal development.   

• Leveraging New Mexico’s expertise stemming from its National Labs to support innovative clean firm electricity resources like advanced nuclear and fusion technology. 

New Mexico has made commendable progress, which has laid the foundation for future opportunities in the next legislative session and beyond. CATF looks forward to continuing our work with the governor and policymakers to advance important climate, clean energy, and public health policies.