Washington Clean Fuel Standard Cost Analysis

Fuel prices are central to Washington’s Clean Fuel Standard cost analysis

Estimating the consumer impacts of Washington's clean fuel program

Washington's Clean Fuel Standard (CFS) is a market‑based policy that curbs climate pollution from transportation by increasing the availability and affordability of low‑carbon and renewable fuels. State law requires the Department of Ecology to report annually on what the program costs consumers per gallon of fuel and per ton of carbon dioxide. Ecology commissioned our team to estimate the possible costs and cost-savings per gallon of gasoline and diesel.

We built a difference-in-differences model on Washington's weekly gasoline prices from 2015 onward, adjusted for inflation and seasonal patterns, comparing Washington against California and Oregon — which also run clean fuel programs — and against states with none. This separated Washington-specific price effects from the forces moving fuel prices everywhere. Alongside the model, we tested the result against counterfactuals estimating what drivers would have paid had the policies never passed. We then determined the share of the cost changes attributable to the CFS alone.

In 2023, Washington prices increased, and we estimate that the CFS share of cost impacts were approximately 2 percent. After prices increased in 2023, they began to return to normal in 2024, showing the market was absorbing the change.

Ecology used our per‑gallon estimates to produce the per‑ton carbon cost the statute requires and to benchmark the program against those of California and Oregon. The work has led to additional engagements to assess the program's cost in subsequent years. Read the full analyses in Ecology's CFS Program Progress reports.