Minnesota Lawmakers Look to Low-Carbon Fuel Standards as a Way to Address Transportation Emissions

by Walker Orenstein (MinnPost) Unlike the Clean Cars regulations — a controversial mandate from Gov. Tim Walz’s administration — the low-carbon fuel standard is noteworthy for its broader political support. -- Brian Jennings, CEO of the American Coalition for Ethanol: “Since California enacted the Low Carbon Fuel Standard in 2011, demand for E85 has quadrupled and the state is in the process of allowing E15.”

Known nationally as a low-carbon fuel standard and in Minnesota as the “Future Fuels Act,” a version of the legislation has been adopted in California, Washington and Oregon but nowhere outside of the West Coast. It is meant to gradually make transportation fuels cleaner, helping the state meet goals for reducing greenhouse gas emissions in an area that has been difficult to scrub of air pollution that contributes to the climate crisis.

Unlike the Clean Cars regulations — a controversial mandate from Gov. Tim Walz’s administration that requires auto manufacturers provide more electric vehicles for sale in Minnesota — the low-carbon fuel standard is noteworthy for its broader, though not universal, political support. Democrats are widely in favor of it, and some Republicans are open to the concept. It has the backing of pro-EV interest groups, but also ethanol producers who see it as a key policy to sustain corn growers and rural refineries in the biofuels industry.

While the policy didn’t pass the Legislature during its 2021 regular session, it’s likely to be a focus of lawmakers who write environmental policy when they convene again in 2022.

The fuel standard bill introduced in Minnesota would require a 20 percent reduction in the “aggregate carbon intensity” of transportation fuel supplied to the state by the end of 2035. The intensity measure takes into account more than emissions from a tailpipe. Pollution from electricity generation for EVs, or producing crops for biofuels, is counted, for instance.

The state Department of Commerce would set benchmarks to ensure the carbon intensity from the fuels is dropping steadily before 2035.

The state is not on pace to meet goals for a 30 percent cut in greenhouse gas emissions by 2025 set out in the Next Generation Energy Act passed in 2007.

Under the low-carbon fuel standard bill, each supplier of fuel — such as ethanol, gasoline, electricity and natural gas — would be assigned a score representing the total “life cycle” greenhouse gas output of their product. The legislation would then set up a cap-and-trade system of “clean fuel credits” that fuel providers would have to buy and trade. Suppliers who meet state pollution benchmarks would earn credits, and those who fail to meet standards would need to buy those credits to make up their deficit. That money could then pay for efforts to advance cleaner fuels.

The policy was developed over more than two years by the Great Plains Institute, a Minneapolis nonprofit focused on energy use and climate change. The organization says it worked with more than 30 organizations on creating an outline of legislation geared toward midwestern states.

Brendan Jordan, a vice president at GPI who oversees transportation and fuels issues, said the policy is “technology neutral,” meaning it doesn’t mandate or explicitly favor one type of fuel, such as EVs, but instead nudges all fuels to get cleaner over time and rewards those who can meet pollution standards.

Focusing on all fuels is helpful, Jordan said, because even if the country shifts to EVs in the next 10 to 15 years, the state needs to reduce carbon emissions from existing fuels in the meantime.

While the DFL-led House passed the low-carbon fuel standard, it stalled in the Republican-led Senate. READ MORE

Excerpt from Free Press: Creating a carbon fuels standard makes sense from environmental, economic and political perspectives. It creates incentives for lowering greenhouse gas emissions from major contributors to them in the transportation sector.

We urge legislators of both parties to support the plan and make it happen. We can’t afford to send more carbon into the atmosphere that fuels natural disasters and the billions in cost they bring. READ MORE