INDUSTRIAL DECARBONIZATION PRODUCTION CREDITS

HB 538 creates two tax credits for New Mexico industrial facilities to reduce emissions: a production credit paying $85 per metric ton of emissions cut (40% below industry benchmarks) and an investment credit covering 10% of qualifying decarbonization spending (up to $5 million per facility). It directly affects facilities producing concrete, steel, hydrogen, or critical minerals in New Mexico that meet emissions targets. Credits require department certification based on life-cycle assessments and industrial benchmarks, with annual funding caps of $30 million in 2026 rising to $100 million yearly after 2027. Facilities cannot claim both this credit and federal Section 45Q credits in the same year.