New Mexico Leaders Support Cutting Industrial Emissions—and the Bipartisan Work Will Continue, Despite a Veto

This week, New Mexico Governor Michelle Lujan Grisham unfortunately vetoed House Bill 153, which would have established four new industrial decarbonization programs. The bill had passed through the New Mexico State Legislature with strong bipartisan and community support.

Despite her veto, the governor did direct the New Mexico Environment Department (NMED) to “implement key provisions of HB153 this year and establish interagency collaboration structures that will last.” NRDC is committed to working with the administration and Environment Department leadership to develop programs that follow the intent of the legislation as closely as possible. 

New Mexico is undergoing a manufacturing and construction renaissance, which can be effectively leveraged to drive industrial decarbonization and the use of low-carbon materials. Working in tandem, these four voluntary measures could help equip local suppliers to label products to show greenhouse gas emissions, reduce the cost of low-carbon materials for use on building and infrastructure projects, and benefit the in-state production of industrial products with lower emissions. It’s a win-win-win across the board.

Through agency implementation and the $25 million appropriated in the state budget toward industrial decarbonization, we can achieve the following outcomes as intended by HB153 during the remainder of Governor Lujan Grisham’s term. The new regulations would establish the following measures: 

Environmental Product Declaration Act

The Environmental Product Declaration Act establishes a grant program administered by NMED to help manufacturers of covered construction materials create environmental product declarations (EPDs) that document a product’s carbon footprint. They can be thought of as “eco-nutrition labels” and are integral to establishing emissions transparency in the marketplace. The program seeks to prioritize small and medium-size in-state producers, helping them overcome first costs for developing emissions disclosure infrastructure for their materials. 

Low-Carbon Construction Material Rebate Act

The Low-Carbon Construction Material Rebate Act creates a rebate program administered by NMED that offers rebates—up to $500,000 per project and $10 million statewide per fiscal year—to buyers who purchase construction materials (cement, concrete, steel, glass, etc.) with a global warming potential (GWP) at or below department-set emissions benchmarks. This first-of-its-kind program aims to drive familiarity and uptake of these products in the marketplace. It can also offset potential green premiums associated with using lower-carbon alternatives, signaling state support and bringing these products to cost parity.

Industrial Carbon Reduction Act

This is the most ambitious piece, creating the third and fourth measures under the Economic Development Department. The law is designed to only benefit in-state facilities that manufacture covered industrial products and aim for substantial emissions reductions, rewarding both existing facilities and potentially attracting new companies to the state.

1. The Carbon Reduction Production Incentive Program offers $85 per ton of CO2 reduced for industrial manufacturers (of products like cement, steel, asphalt, glass, and others) that achieve production with at least a 40 percent reduction in carbon intensity below the industry benchmark, up to 2039. Entities claiming the federal 45Q carbon sequestration tax credit for the same activity in the same year are not eligible. 

2. The Carbon Reduction Investment Grant Program can cover 10 percent of needed capital expenditures (up to $5 million) for facilities making the same reductions as the incentive program. This program is not contingent on production but is complementary by providing funding to support investment costs. 

These programs tackle historically overlooked emissions from cement, steel, and other heavy industry using financial carrots, transparency, and benchmarking. It’s a multipronged framework that aligns industrial decarbonization with economic development, positioning the state to nurture a diverse, resilient, and decarbonized economy. NRDC is committed to advancing these programs, to the degree possible, in New Mexico in the upcoming year.