Governor’s Council on Biofuels Supports Vision for Minnesota Clean Fuels Policy

The Minnesota Governor’s Council on Biofuels released its recommendations to Governor Tim Walz on November 2, 2020, which include a recommendation that Minnesota move forward with a clean fuels policy that “builds on the vision, principles, and considerations of the white paper A Clean Fuels Policy for the Midwest (2020) from the Midwestern Clean Fuels Policy Initiative and on the vision and principles of the Governor’s Council on Biofuels.” The Initiative’s white paper was the result of analysis and discussion among a broad stakeholder group facilitated by the Great Plains Institute.

The governor’s council laid out a specific timeframe for developing a clean fuels policy, including release of a brief proposal for adoption by May 1, 2021, and a full proposal for adoption by November 1, 2021, unless the legislature acts sooner.

Governor Tasks Biofuels Council

The clean fuels policy recommendation was one of several made by the council.

Governor Tim Walz formed the 15-member biofuels council in September, 2019, tasking it with examining the impacts to and opportunities for farmers, rural communities, the environment, and economically disadvantaged populations as they relate to biofuels production. The governor also directed the council to consider the feasibility and cost of increasing biofuels infrastructure in Minnesota to come closer to achieving goals set in earlier legislation—30 percent petroleum replacement and 25 percent greenhouse gas (GHG) reduction by 2025.

After a nine-month long consensus-building process, the Governor’s Council on Biofuels developed a slate of policy recommendations, including the following:

• Creating a financial assistance program with a combination of grants and low-interest loans to support E15/E25 compatible infrastructure.
• Issuing an executive order to expand the use of biofuels in the state fleet.
• Creating a standing Council of Biofuels Education and Promotion within the Minnesota Department of Agriculture comprised of stakeholder groups.
• Establishing an Advanced Biofuels Taskforce to recommend policies to develop Minnesota’s cellulosic natural resources to lower the carbon intensity of energy use in transportation, electricity, residential and commercial buildings, and industry.
• Increasing funding for the AGRI Bioincentive Program.
• Developing a brief proposal by May, and full proposal by November, for a clean fuels policy or low carbon fuel standard for the state, building “on the vision, principles, and considerations of the white paper A Clean Fuels Policy for the Midwest” and the “vision and principles of the Governor’s Council on Biofuels.”

GPI-Led Initiative Set Clean Fuels Policy Vision

The Great Plains Institute, in partnership with the American Coalition for Ethanol, facilitated the discussions of a broad stakeholder group that resulted in the white paper, A Clean Fuels Policy for the Midwest, published in January 2020. The consensus document had organizational support from agriculture groups, biofuel producers, environmentalists, electric vehicle proponents, automakers, nongovernmental organizations, government officials, and other stakeholders.

The white paper laid out a vision for a clean fuels policy that takes a technology-neutral, portfolio approach in which all transportation fuels, including electric vehicles and biofuels, can earn credits for reducing carbon intensity. The policy builds on a decade of experience in California with a low carbon fuel standard (LCFS) that phased in target carbon intensity reduction goals. Today, carbon credits under the California LCFS are valued around $200 per ton of carbon. 

The stakeholders in the Midwestern Clean Fuels Policy Initiative recommended multiple adaptations of the California LCFS for the Midwest, such as using region-specific emissions factors for land use change and electrical emissions. Another significant recommendation was to allow feedstock producers to earn credits for carbon intensity reductions on the farm.

Two Efforts With Different Focus Share Common Vision

John Christianson and Mike Bull were both part of the Midwestern Clean Fuels Policy Initiative that worked almost two years to develop the policy recommendations in the white paper. Both were appointed to the governor’s biofuels council. Christianson, managing partner of Willmar-based Christianson, PLLP, works extensively with the biofuels industry and serves on the board of the American Coalition for Ethanol. Bull is policy director of the Center for Energy and Environment, which has worked on clean energy and efficiency in the Twin Cities since the 1980s.

Christianson points out the size and focus of the two groups was very different. The clean fuels initiative had a diverse group of stakeholders with a broad goal of greenhouse gas reduction, looking at electric vehicles, electricity generation, and biofuels. The governor’s council was much smaller, with 15 appointees and a narrower focus on biofuels.

Serving on the subcommittee examining a clean carbon fuel policy, Christianson says the group agreed such a policy makes sense “and it makes sense for Minnesota to be a leader in the Midwest. Minnesota has been a leader in biofuels in the past with the first E10 mandate and biodiesel mandates. It’s time for Minnesota to step up and be a leader again. And I believe other states are looking to see what Minnesota does.”

Bull stresses the significance of the council’s consensus-building approach. “Anybody could veto anything by withholding consent. It was clear our friends at Minnesota Corn Growers and Farmer Bureau focused pretty tightly on increasing the mandate in Minnesota from 10 to 15 percent over time. The petroleum marketers were nervous about that. They didn’t want the cost of those upgrades to fall entirely on them. Then there were the low carbon fuel standard folks and folks like me and Liz [Crow] from Nature Conservancy focused on environmental greenhouse gas reductions. It took time getting comfortable with each other to get the words on the page that we could all support.”

Education Key to Building Comprehensive Solutions

Building a consensus around a set of policy recommendations is only the beginning, of course. The Governor’s Council on Biofuels recommended a working group be formed and set a goal of releasing a brief proposal by May 2021 and a full proposal by November for adoption of a low carbon fuel standard, unless the state legislature adopts a proposal in the meantime.

The multi-fuel approach of a clean fuels/low carbon fuel standard has real potential to be bipartisan, given that it includes a portfolio of solutions that benefits biofuels, electric vehicles, and multiple carbon-reducing approaches.

Christianson says that in rural areas, legislators from both political parties understand the importance of biofuels to their constituents. The challenge will be to educate the urban legislators on the benefits for the state of Minnesota.

When it comes to greenhouse gas reduction goals, Bull sees urban populations leaning more towards electric vehicles while rural areas in support of increasing biofuels. He sees the clean fuels/low carbon fuel standard providing a comprehensive approach to connect both biofuels and electric vehicles. “There is no silver bullet,” he says. “We have to take a comprehensive approach. Everybody has to see some of the benefits and not bear too much of the cost moving things forward.”

“We have to work on educating legislators, industry groups, commodity groups, and others so they understand what this means” Christianson says. The modeling that has been done shows positive impacts of a clean fuel policy on the environment, health, emissions, and the state economy. “The council is really energized and wants to see this go to the next step.”

The Great Plains Institute has helped with the efforts to model the impact of various policy options. Our findings show that a clean fuels policy would benefit Minnesota’s economy and environment. We’re really looking forward to working with the governor’s office to get it done.

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This was originally posted on the Great Plains Institute’s website. The Great Plains Institute facilitates the Bioeconomy Coalition of Minnesota