Regulators in California have adopted a first-in-the-nation mandate on Thursday requiring low-carbon fuels, part of the state's wider effort to reduce greenhouse gas emissions.

The California Air Resources Board voted 9-1 in Sacramento, Calif., to approve the standards, which are expected to create a new market for alternative fuels and could serve as a template for a national policy that has been advocated by U.S. President Barack Obama and Democrats in Congress.

Gov. Arnold Schwarzenegger said the rules would "reward innovation, expand consumer choice and encourage the private investment we need to transform our energy infrastructure."

"I think we're creating the framework for a new way of looking at automotive fuels where no longer will gasoline derived by petroleum be the only game in town," board chairwoman Mary Nichols said.

The rules call for reducing the carbon content of fuels sold in the state by 10 per cent by 2020, a plan that includes counting all the emissions required to deliver gasoline and diesel to California consumers — from drilling a new oil well or planting corn to transporting it to gas stations.

Transportation accounts for 40 per cent of greenhouse gas emissions in the state.

"The emissions from this sector have traditionally grown in California at a rate that exceeds even our growth in population," Nichols said before the vote. "It has led to a host of environmental problems."

Representatives of the ethanol industry have criticized the rules, saying state regulators overstated the environmental effects of corn-based ethanol.

They also have criticized the board's intention to tie global deforestation and other land conversions to biofuel production in the United States.