There is a suite of compliance options underneath this regulation. As I stated, the option to comply through investment into the compliance fund mechanism is only 10% at most in a year. The regulation itself is based on a credit market. Regulated parties, such as refineries, need to retire credits equal to their debits at the end of every compliance year. Those credits can be created in a suite of ways.
There are generally three credit creation categories we talk about. The first one is GHG reduction projects along the life cycle of fossil fuels, like, for example, carbon capture and storage at a refinery. We also talk about a second credit creation category, which is low-carbon-intensity fuels, such as blending gasoline with ethanol. A third credit creation category is advanced vehicle technologies, such as EV fleets.
A regulated party needs to retire credits equal to their obligation each year. They can generate credits by taking actions in the three compliance categories I discussed. They can also purchase credits from other credit creators—that could be regulated parties or voluntary parties—or they could make use of compliance flexibility, such as, for example, this compliance fund.