cCarbon’s 2035 WA CFS Market Outlook

The Washington Clean Fuel Standard (CFS), implemented statewide in 2023 and substantially updated in 2025, is a market-based program aimed at reducing greenhouse gas emissions from the transportation sector. Transportation accounts for nearly 45% of the state’s carbon pollution, making the CFS a critical policy tool to drive decarbonization.
On 17th May 2025, Washington State updated its clean fuels policy with the passage of Second Substitute House Bill 1409 in 2025. This new law not only raises the stringency for carbon intensity (CI) reduction but also introduces a sophisticated framework for compliance, enforcement, and transparency.
This legislative revision mandated annual declines of approximately 3–4% starting in 2026.
These Analyst note presents the cCarbon’s updates on the recent amendment.

The note presents:

• cCarbon’s 2035 credit, deficit, bank, and credit price forecasts using the CFS.CarbonOutlook model
• Three market scenarios
• Supply-demand equilibrium projections through 2035

cCarbon published an article exploring these forecasts. You can read it here.