Lower-carbon transportation bill slowed by legislative headwinds

A hand puts a charging plug into an electric vehicle. Text says "MN Leg 2024"

One key benefit of a Clean Transportation Standard is funding for electric vehicle infrastructure.

One of FMR’s top priorities this session was advancing a Minnesota Clean Transportation Standard. 

The legislation would have created a state-led rulemaking process to establish a Clean Transportation Standard (also known as a “CTS”) that reduces the carbon intensity of Minnesota’s transportation fuels by at least 25% by 2030 and 75% by 2040 — with a goal of achieving 100% by 2050. 

The CTS encourages cleaner and more affordable transportation options, reduces our reliance on petroleum and ethanol in our cars and trucks, promotes equitable vehicle electrification and (of particular importance to FMR) creates new pathways for millions of acres of regenerative farming practices statewide. 

This would have helped the Mississippi River both by addressing climate change and incentivizing the planting of crops that reduce runoff nitrate or fertilizer pollution

So what happened to the bills this session?

Political headwinds stall progress

The CTS legislation was introduced in the Senate (SF 2584) by Sen. Scott Dibble, co-authored by Sen. Foung Hawj and Senate Majority Leader Erin Murphy. 

The House version (HF 2602) was introduced by Rep. Jeff Brand and co-authored by House Majority Leader Jamie Long, Rep. Elkins, Rep. Stephenson, Rep. Koegel, Rep. Smith, Rep. Pursell and Rep. Frederick. 

The Senate Transportation Committee heard the CTS bill in committee on March 4 (read more about that below). At that hearing, FMR’s testimony highlighted the importance of the CTS to reduce our over-reliance on fossil fuels, while simultaneously funding the equitable transition to electric vehicles and more regenerative agricultural practices in Minnesota. 

Unfortunately, the House Transportation Committee never heard the bill. 

The combination of stiff opposition from the fossil fuels industry, persistent misinformation about how a CTS works and rapidly approaching legislative deadlines became too much to overcome. With ongoing negotiations incomplete, it became clear the CTS was not going to be able to make it through in time this session. 

Bill to study CTS impacts emerges 

While the CTS rulemaking bill was set aside, FMR and our allies worked with legislative champions to advance an alternative. 

Sen. Dibble brought forward revised study legislation that would have provided $350,000 in state general funds to the University of Minnesota’s Center for Transportation Studies to conduct a study and produce a report on a CTS in Minnesota. This study would have provided decision-makers with truly objective analysis from a trusted third-party source with expertise in transportation policy. 

After an April 17 hearing (at which FMR testified in support), the study bill was included in the Senate’s final transportation package. However, no action was taken in the House — leaving the proposal's future up to further legislative negotiations between House and Senate members.

Unfortunately, the study language met a similar fate to the rulemaking bill. A tight budget target and stiff opposition from the fossil fuels industry was too much to overcome, and the study bill failed to make it into the final transportation agreement for this session. 

What comes next

Addressing greenhouse gas emissions in the transportation sector is essential to achieving FMR's overall climate goals. A Minnesota CTS will reduce the carbon intensity of Minnesota’s transportation fuels while helping fund the transition to equitable vehicle electrification and more regenerative agriculture across the state. 

While we are disappointed that legislation to advance a CTS did not pass this year, we look forward to working with policymakers and stakeholders to position a CTS for legislative success in 2025. 

Previous updates

April 24: Funding for CTS study advances in Senate

An omnibus bill moving through the Senate now includes funding for a study that would help advance one of FMR’s top priorities — a Clean Transportation Standard. 

The latest version of the Senate’s omnibus transportation bill (heard in the Transportation Committee on April 19) includes $350,000 for University of Minnesota researchers to answer some important questions about a clean fuel policy and its impact on Minnesota. (Details below.)

Clean Transportation Standard is designed to move the state away from over-reliance on fossil fuels and ethanol, while simultaneously scaling up the new technologies needed to take their place. This energy transition opens the door for Minnesota to grow more clean-water crops that provide continuous living cover, resulting in significant environmental and economic benefits.

Because a fuel standard could mean so much for clean air, water quality and equitable electrification, we are working hard to make it a reality in Minnesota. While legislation to initiate a Clean Transportation Standard rulemaking process stalled this year, the study bill will help answer some key questions that stakeholders asked along the way.

Key questions the study will help answer

The Senate transportation bill(link is external) provides $350,000 in state general funds to the University of Minnesota’s Center for Transportation Studies to conduct the study and produce the report on a Clean Transportation Standard (CTS) in Minnesota.
The center will develop a report assessing the overall economic and policy impacts based on a standard that requires transportation emissions reductions of 25% by 2030 and 75% by 2040, with a goal of 100% by 2050.
At a minimum, the report must include seven items:

  1. A comprehensive review of the impacts of low-carbon transportation fuel standards established in other states
  2. An economic evaluation of the proposed CTS in Minnesota
  3. An analysis of the expected “per mile cost or cost savings” for Minnesota vehicles under a CTS
  4. An evaluation of strategies for adjusting credit prices and the carbon intensity reduction schedule to protect as the standard evolves
  5. A comparison of CTS with alternative strategies for funding equitable vehicle electrification and reducing the aggregate carbon intensity of transportation fuels
  6. A review of how a Minnesota CTS might interact with federal incentives (including tax credits, carbon capture and storage, and transportation electrification)
  7. Other considerations, including an analysis of the appropriate state agency enforcement authority

The report is due Jan. 15, 2025, and must be shared with the chairs, ranking minority members, and staff of the legislative committees with jurisdiction over transportation finance and policy.

Looking ahead

The Senate’s Transportation Bill will move through the Finance Committee before heading to the Senate floor for a vote.

However, this item was not included in the House’s omnibus transportation bill(link is external). Since the House and Senate transportation bills are different, the Legislature will likely form a conference committee made up of members of both chambers to work out a compromise bill. That compromise bill will then be returned to both chambers for a final vote.  

As FMR’s Trevor Russell noted in the Senate earlier this session, the CTS may be one of the most critical water quality innovations available in Minnesota. We are grateful that the chair, Sen. Scott Dibble, brought this study bill forward, and we look forward to working with legislators to make it a reality.

April 9: 7 facts about a MN Clean Transportation Standard

A lot has been happening behind the scenes since our March committee hearing on the Clean Transportation Standard Bill. Based on continued conversations with policymakers, partner environmental organizations and other stakeholders, we think there’s room for some progress before the legislative session ends.

How much progress, and what does it look like? That’s what we’re still sorting out. 

The foundational elements of an effective, equitable Clean Transportation Standard are included in the most recent version of the proposal (Senate File 2584 ) heard in the Senate Transportation Committee on March 4. This bill deliberately moves the state away from over-reliance on fossil fuels, while simultaneously scaling up the new technologies needed to take their place. 

Here are seven key things you should know about our Clean Transportation Standard bill:

1) It will dramatically reduce fossil fuel use in Minnesota

The CTS requires GHG emissions reductions of 25% by 2030 and 75% by 2040. There’s a goal of 100% by 2050. These reductions can only mean one thing: a significant decrease in fossil fuel use in the state. Modeling shows that even moderate progress toward these targets would mean a 64% drop in gasoline use by 2050. 

2) It will decrease ethanol consumption in Minnesota’s cars and trucks

Ethanol can’t be blended into gasoline above a 15% rate. So less gasoline consumption equals less ethanol consumption. Just like the drop in fossil fuel use, modeling shows a CTS would result in less ethanol consumption in Minnesota in the decades ahead. (It’s also worth noting, California hasn’t seen ethanol use or demand expand since passing its own clean fuel bill in 2011.)

3) It will fund the transition to our EV future

A good CTS is arguably the most powerful tool we have to accelerate EV adoption in MN. It’s estimated that it will provide $134-$268 million specifically for transportation electrification by the end of this decade. <<No other policy proposal right now would create this kind of financial support for an EV transition.>>

4) It will improve water quality and soil health

Minnesota’s CTS would be the first in the nation to include credit bonuses for clean-water crops that provide continuous living cover; and the first to provide incentives for climate-smart agricultural practices. These incentives could be a powerful tool for enhancing our water quality and soil health at scale in the state.

5) It will provide clear public health benefits

A CTS will significantly improve air quality and public health, thanks in large part to reduced tailpipe emissions. In addition, the proposal requires those benefits be clearly felt by communities currently bearing a disproportionate health burden from transportation fuels pollution.

6) It will increase consumer choice and access to lower-cost clean fuels

EV drivers in Minnesota pay the equivalent of  $1.32 per gallon of gasoline, and cleaner fuels (such as electricity and biofuels) are even cheaper in states with clean fuel rules. Importantly, there’s little evidence from other states that a Clean Transportation Standard will impact the price of gas at the pumps. But just in case, Minnesota’s CTS bill includes special cost-containment provisions, allowing MnDOT to make adjustments to the credit market if there is any sign the program is causing higher fuel prices. 

7) It will not promote ‘Enhanced Oil Recovery’

The MN CTS bill unequivocally prohibits credit generation for CO2 capture used for enhanced oil recovery (sometimes referred to as “EOR”). This means the bill actually creates a disincentive for any Minnesota carbon capture projects to be routed toward EOR projects. In fact, EOR from Minnesota ethanol plants is actually more likely under the status quo, under which no such disincentive exists. 

March 6: FMR helps unveil new low-carbon transportation bill

A highly anticipated bill that would spur ambitious cuts to greenhouse gas emissions in Minnesota’s transportation and agriculture sectors was heard in the Minnesota Senate this week.

The amended Clean Transportation Standard (CTS) bill was unveiled ahead of a Monday afternoon hearing in the Senate Transportation Committee. The bill (authored by Sen. Scott Dibble) directs state agencies to create and implement new rules that would push Minnesota as close as possible to a carbon-neutral transportation sector by 2050.

As envisioned in the legislation, the standard would enable this seismic emissions shift by funding electric vehicle infrastructure; incentivizing the use of new, more sustainable biofuels; and reducing emissions from legacy vehicles — all while benefiting the health of Minnesota’s soils and waters thanks to quickened adoption of clean-water crops

"You may wonder why a river conservation organization is working on a piece of transportation policy," Trevor Russell, water program director at FMR, told the Senate committee. "And the reason is that the CTS reduces our greenhouse gas emissions; reduces our reliance on gasoline, petroleum and ethanol in our cars and trucks; promotes equitable vehicle electrification; and most importantly creates an exciting new pathway for millions of acres of cropland conservation statewide."

Russell was one of several individuals who testified in support of the Clean Transportation Standard bill during the hearing. Its final language is the culmination of months of work, involving discussions with representatives from a diverse range of sectors chosen to take part in a working group. 

The bill’s language was carefully crafted to ensure a final standard puts Minnesota on a path to low-carbon transportation while simultaneously funding EV infrastructure, decreasing fossil fuel use and ethanol consumption in Minnesota, and improving water quality in the state through regenerative agriculture incentives. The state’s Climate Action Framework, which calls out transportation as the largest source of greenhouse gases, has highlighted the potential of carbon-free and low-carbon fuels to address this source of emissions.

"There is no other policy proposal under consideration in Minnesota that would have such a large impact on transportation sector greenhouse gas emissions, clean air, clean water and embracing a clean fuel and vehicle future," said Brendan Jordan, vice president of transportation and fuels with the Great Plains Institute, and representative of the Future Fuels Coalition. "It increases choice for consumers and it creates new economic impact and jobs."

We’re deeply grateful Sen. Dibble took time to carefully clear up some confusion about what the bill does (and does not) do. For example:

  • There is no evidence CTS policies directly increase gas prices: Data from other states with low carbon fuel standards show such policies have little influence on fuel prices at the pump. Just in case, the Minnesota CTS bill includes cost-containment provisions allowing MnDOT to adjust the credit market if there’s any indication it is causing gas prices to go up.
  • The CTS does not promote Enhanced Oil Recovery pipelines: In fact, the bill specifically prohibits credit generation for captured carbon dioxide used for this fossil fuels extraction technique.
  • The CTS will decrease ethanol consumption in Minnesota: Modeling shows that under every scenario, a CTS would result in a decline in ethanol consumption in the state. Why? Because less gasoline means less ethanol. It’s that simple. The bill includes provisions to help farmers and biofuel producers transition from producing corn ethanol for gasoline blending, to producing low-carbon jet fuel from Forever Green crops like camelina and pennycress.

"For Minnesota to meet its emissions reduction targets, we must rise to meet the scale of the challenge. The Clean Transportation Standard is essential to equitably decarbonzing the transportation and agriculture sectors. This bill will give consumers, industry leaders and farmers — and all Minnesotans — the process and tools needed to reduce emissions," said Margaret Cherne-Hendrick, senior lead, innovation and impact, at Fresh Energy.

You can read more about the CTS in two recent news stories:

Feb. 23: Passing a fuel standard will bring down transportation, ag emissions

A Clean Transportation Standard might be one of FMR’s most ambitious legislative goals.

Heading into the 2024 session, we’re as well-positioned as we could be to advocate for new rules that will result in enormous reductions in the state’s two biggest sources of greenhouse gas emissions: transportation and agriculture — while helping restore water quality in this Mississippi River. 

We’ve spent the past eight months working with a large and diverse group of allies and stakeholders to craft a set of recommendations for a Clean Transportation Standard (CTS) that are customized for Minnesota. The CTS will require statewide emissions reductions from our transportation fuels of 25% by 2030 and 75% by 2040. The goal is to achieve carbon neutrality by 2050. 

With the group’s official recommendations now in the hands of decision-makers, lawmakers have everything they need to advance a new Clean Transportation Standard this session. 

4 key benefits of a CTS

  1. Funding EV infrastructure: According to an analysis by the Minnesota Clean Transportation Standard Working Group, EV infrastructure funding is estimated to begin at between $15-$44M/yr and increase to $44-$132M/yr by 2035. 
  2. Restoring soil and water: The CTS incentivizes on-farm conservation and “continuous living cover” (CLC) crops that produce low-carbon biofuel fuels while enhancing water quality, habitat and soil health. In particular, winter annual oilseeds (ex: camelina and pennycress) and perennial oilseeds (ex: silphium) can generate credits as low-carbon marine and aviation biofuels; providing new market opportunities for crops in sectors that are unlikely to quickly electrify.
  3. Reducing legacy vehicle emissions: A CTS is a mechanism for lowering the CI for traditional fuel vehicles that are not going to be electrified. Addressing emissions from these vehicles (some of which will be on the road for another 15-20 years, or longer) is essential to achieving our climate goals as we electrify. 
  4. Reducing consumption of gasoline and ethanol: The Minnesota CTS Working Group analysis found that a CTS will result in a decrease in gasoline and ethanol consumption in Minnesota — an important part of lowering emissions and reducing demand for annual row crops. Just as importantly, during the transition period toward electric vehicles, the CTS also results in “better ethanol” by incentivizing facility efficiency improvements and widespread adoption of “climate-smart ag” practices that also enhance soil health and improve water quality. 

Addressing environmental justice and public health 

A central pillar of the CTS strategy is to ensure that the benefits that flow from this policy must be directed to help address persistent inequities in public health and EV infrastructure throughout Minnesota.

When it comes to public health, nothing is more important than the air in our lungs. That’s why the CTS bill requires the rules to be designed to ensure that the CTS “improves air quality and public health, targeting communities that bear a disproportionate health burden from pollution from transportation fuels.” In fact, the CTS policy would generate public health benefits due to reduced tailpipe emissions, particularly in communities that have been disproportionately impacted by transportation pollution. According to research by the Holloway Group at the University of Wisconsin, a CTS could generate up to $35 million in annual health benefits for Minnesota. 

As for making electric vehicles affordable and accessible to everyone, the bill requires that the CTS “supports equitable transportation electrification powered primarily with low-carbon and carbon-free electricity that benefits all communities.” In fact, the CTS bill specifies that at least 60% of the credit revenue generated by a utility from residential electric​ vehicle charging must be spent to support transportation electrification for the primary​ benefit of rural areas and environmental justice areas (as defined by Minnesota Statute 116.065).

A boost to the green economy

The CTS bill is also an investment in green jobs for all Minnesotans. This bill will create net positive economic impacts due to increased availability of lower-cost, lower-carbon fuels, investments in biofuels and electric vehicle infrastructure, and increased electricity sales. 

According to modeling by ICF, a Minnesota CTS could contribute over $197 million to Minnesota’s gross domestic product and generate an annual average of 1,500 jobs and $95 million in labor income. 

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