Increased use of biofuels and electric vehicles the focus of Future Fuels Act

When it comes to cutting greenhouse gas emissions from the transportation sector, Minnesota can’t go electric overnight. There will still be plenty of vehicles on the state’s roads using combustion engines. But is there a way to emit less carbon from the vehicles we have?

Those in the biofuels industry have long argued that there is: Move toward less carbon-intensive fuels.

Minnesota was among the early adopters of fuel from an ethanol/gasoline blend, and technological advances are making it possible for vehicles to run on larger percentages of ethyl alcohol in their fuel mix.

Rep. Todd Lippert (DFL-Northfield) has an idea to help shape a shift in demand for low-carbon fuels. HF2083 would require the state to develop a schedule of annual standards that producers and importers of transportation fuels must meet, with the goal of decreasing the fuels’ carbon intensity by at least 20% by 2035.

The Commerce Department would establish a market for tradable credits between producers and importers whose fuels fall above and below the established annual carbon-emission standard. It would have similarities to a “cap and trade” system.

Rep. Todd Lippert

The bill was discussed on an informational basis by the House Climate and Energy Finance and Policy Committee Thursday before being referred to the House Commerce Finance and Policy Committee. Rep. Jamie Long (DFL-Mpls), the committee chair, said the referral allows the bill to meet Friday’s first committee deadline, thus making it possible to advance in the House.

Its companion, SF2027, sponsored by Sen. David Senjem (R-Rochester), awaits action by the Senate Energy and Utilities Finance and Policy Committee.

Dubbed “The Future Fuels Act,” the bill is modeled after laws in other U.S. states, countries and Canadian provinces. It would help create a policy that determines carbon intensity values for such conventional fuels as gasoline and diesel, as well as for such lower-carbon fuels as biodiesel, electricity, ethanol, hydrogen, and renewable diesel, natural gas and propane, taking into account emissions in the fuel’s “well to wheels” life cycle.

“This policy will drive the use of cleaner and cleaner fuels,” Lippert said. “A clean fuels policy has been shown to attract investment in clean fuel technology and innovation. … It would also support agricultural practices that reduce greenhouse gas emissions.”

“Minnesota passed the Next Generation Energy Act in 2007, in part to address transportation emissions and petroleum replacement,” said Brendan Jordan, vice president of transportation and fuels for the Great Plains Institute. “Its goals are not being met. Policy changes will be needed to get us back on track.”

Over the course of 12 testifiers and 15 letters of support, it became clear the proposed policy change is designed to not only expand the state’s use of biofuels, but usher in increased use of electric vehicles.

“This needs to be done in conjunction with other strategies,” said Rep. Frank Hornstein (DFL-Mpls). “It’s part of a larger mix, including reducing vehicle miles traveled and larger use of public transportation. And, of course, electrification of the transportation sector and cleaner cars.”

Rep. Chris Swedzinski (R-Ghent) spoke of the possibility that those in border communities might cross state lines to seek more conventional fuels. Jordan suggested it may have the opposite effect.

“The challenge with clean fuels is that there are massive barriers to the marketplace,” Jordan said. “Higher blends are considerably cheaper, but harder to find. We might have a border dynamic of people crossing into Minnesota to get cleaner fuels. … This creates some opportunity and incentive for new investment.”