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SF 2027

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/11/2021 04:48pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to transportation fuels; establishing a standard to reduce the carbon intensity
of transportation fuels; setting fees; creating an account; requiring a report;
appropriating money; proposing coding for new law in Minnesota Statutes, chapter
239.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [239.7912] FUTURES FUELS ACT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Carbon dioxide equivalent" means the number of metric tons of carbon dioxide
emissions that have the same global warming potential as one metric ton of another
greenhouse gas.
new text end

new text begin (c) "Carbon intensity" means the quantity of life cycle greenhouse gas emissions
associated with a unit of a specific transportation fuel, expressed in grams of carbon dioxide
equivalent per megajoule of transportation fuel, as calculated by the most recent version of
Argonne National Laboratory's GREET model and adapted to Minnesota by the department
through rulemaking or administrative process.
new text end

new text begin (d) "Clean fuel" means a transportation fuel that has a carbon intensity level that is below
the clean fuels carbon intensity standard in a given year.
new text end

new text begin (e)"Credit" means a unit of measure equal to one metric ton of carbon dioxide equivalent,
and that serves as a quantitative measure of the degree to which a fuel provider's
transportation fuel volume is lower than the carbon intensity embodied in an applicable
clean fuels standard.
new text end

new text begin (f) "Credit generator" means an entity involved in supplying a clean fuel.
new text end

new text begin (g)"Deficit" means a unit of measure equal to one metric ton of carbon dioxide equivalent,
and that serves as a quantitative measure of the degree to which a fuel provider's volume
of transportation fuel is greater than the carbon intensity embodied in an applicable future
fuels standard.
new text end

new text begin (h) "Deficit generator" means a fuel provider who generates deficits and who first
produces or imports a transportation fuel for use in Minnesota.
new text end

new text begin (i) "Fuel life cycle" means the total aggregate greenhouse gas emissions resulting from
all stages of a fuel pathway for a specific transportation fuel.
new text end

new text begin (j) "Fuel pathway" means a detailed description of all stages of a transportation fuel's
production and use, including extraction, processing, transportation, distribution, and
combustion or use by an end-user.
new text end

new text begin (k) "Fuel provider" means an entity that supplies a transportation fuel for use in
Minnesota.
new text end

new text begin (l)"Global warming potential" or "GWP" means a quantitative measure of a greenhouse
gas emission's potential to contribute to global warming over a 100-year period, expressed
in terms of the equivalent carbon dioxide emission needed to produce the same 100-year
warming effect.
new text end

new text begin (m) "Greenhouse gas" means carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, or sulfur hexafluoride.
new text end

new text begin (n) "Motor vehicle" has the meaning given in section 169.011, subdivision 42.
new text end

new text begin (o)"Relevant petroleum-only portion of transportation fuels" means the component of
gasoline or diesel fuel prior to blending with ethanol, biodiesel, or other biofuel.
new text end

new text begin (p)"Technology provider" means a manufacturer of an end-use consumer technology
involved in supplying clean fuels.
new text end

new text begin (q)"Transportation fuel" means electricity or a liquid or gaseous fuel that (1) is blended,
sold, supplied, offered for sale, or used to propel a motor vehicle, including but not limited
to train, light rail vehicle, ship, aircraft, forklift, or other road or nonroad vehicle in
Minnesota, and (2) meets applicable standards, specifications, and testing requirements
under this chapter. Transportation fuel includes but is not limited to electricity used as fuel
in a motor vehicle, gasoline, diesel, ethanol, biodiesel, renewable diesel, propane, renewable
propane, natural gas, renewable natural gas, hydrogen, aviation fuel, and biomethane.
new text end

new text begin Subd. 2. new text end

new text begin Clean fuels standard; establishment by rule; goals. new text end

new text begin (a) No later than ..., the
commissioner must begin the process to adopt rules under chapter 14 that implement a clean
fuels standard and other provisions of this section. The timing requirement to publish a
notice of intent to adopt rules or notice of hearing under section 14.125 does not apply to
rules adopted under this subdivision.
new text end

new text begin (b) The commissioner must consult with the commissioners of transportation, agriculture,
and pollution control when developing the rules under this subdivision. The commissioner
may gather input from stakeholders through various means, including a taskforce, working
groups, and public workshops. The commissioner, collaborating with the Department of
Transportation, may consult with stakeholders, including but not limited to fuel providers,
consumers, rural, urban and tribal communities, agriculture, environmental and environmental
justice organizations, technology providers, and other businesses.
new text end

new text begin (c) In developing the rule, the commissioner must endeavor to make available to
Minnesota a fuel-neutral clean fuels portfolio that:
new text end

new text begin (1) creates broad rural and urban economic development;
new text end

new text begin (2) provides benefits for communities, consumers, clean fuel providers, technology
providers, and feedstock suppliers;
new text end

new text begin (3) increases energy security from expanded reliance on domestically produced fuels;
new text end

new text begin (4) supports equitable transportation electrification that benefits all communities and is
powered primarily with low-carbon and carbon-free electricity;
new text end

new text begin (5) improves air quality and public health, targeting communities that bear a
disproportionate health burden from transportation pollution;
new text end

new text begin (6) supports state solid waste recycling goals by facilitating credit generation from
renewable natural gas produced from organic waste;
new text end

new text begin (7) aims to support, through credit generation or other financial means, voluntary
farmer-led efforts to adopt agricultural practices that benefit soil health and water quality
while contributing to lower life cycle greenhouse gas emissions from clean fuel feedstocks;
and
new text end

new text begin (8) maximizes benefits to the environment and natural resources, develops safeguards
and incentives to protect natural lands, and enhances environmental integrity, including
biodiversity.
new text end

new text begin Subd. 3. new text end

new text begin Clean fuels standard; establishment. new text end

new text begin (a) A clean fuels standard is established
that requires the aggregate carbon intensity of transportation fuel supplied to Minnesota be
reduced to at least 20 percent below the 2018 baseline level by the end of 2035. In
consultation with the Pollution Control Agency, Department of Agriculture, and Department
of Transportation the commissioner must establish by rule a schedule of annual standards
that steadily decreases the carbon intensity of transportation fuels.
new text end

new text begin (b) When determining the schedule of annual standards, the commissioner must consider
the cost of compliance, the technologies available to a provider to achieve the standard, the
need to maintain fuel quality and availability, and the policy goals under subdivision 2,
paragraph (c).
new text end

new text begin (c) Nothing in this chapter precludes the department from adopting rules that allow the
generation of credits associated with electric or alternative transportation fuels or
infrastructure that existed prior to the effective date of this section or the start date of program
requirements.
new text end

new text begin Subd. 4. new text end

new text begin Clean fuels standard; baseline calculation. new text end

new text begin The department must calculate
the baseline carbon intensity of the relevant petroleum-only portion of transportation fuels
for the 2018 calendar year after reviewing and considering the best available applicable
scientific data and calculations.
new text end

new text begin Subd. 5. new text end

new text begin Clean fuels standard; compliance. new text end

new text begin A deficit generator may comply with this
section by:
new text end

new text begin (1) producing or importing transportation fuels whose carbon intensity is at or below
the level of that year's standard; or
new text end

new text begin (2) purchasing sufficient credits to offset any aggregate deficits resulting from the carbon
intensity of the deficit generator's transportation fuels exceeding that year's standard.
new text end

new text begin Subd. 6. new text end

new text begin Clean fuel credits. new text end

new text begin The commissioner must establish by rule a program for
tradeable credits and deficits. The commissioner must adopt rules to fairly and reasonably
operate a credit market, that may include:
new text end

new text begin (1) a market mechanism that allows credits to be traded or banked for future use;
new text end

new text begin (2) transaction fees associated with the credit market; and
new text end

new text begin (3) procedures to verify the validity of credits and deficits generated by a fuel provider
under this section.
new text end

new text begin Subd. 7. new text end

new text begin Fuel pathway and carbon intensity determination. new text end

new text begin The commissioner must
establish a process to determine the carbon intensity of transportation fuels, including but
not limited to the review by the commissioner of a fuel pathway submitted by a fuel provider.
Fuel pathways must be calculated using the most recent version of the Argonne National
Laboratory's GREET model adapted to Minnesota, as determined by the commissioner.
The fuel pathway determination process must (1) be consistent for all fuel types, (2) be
science and engineering-based, and (3) reflect differences in vehicle fuel efficiency and
drive trains. The commissioner must consult with the Department of Agriculture, Department
of Transportation, and Pollution Control Agency to determine fuel pathways, and may
coordinate with third-party entities or other states to review and approve pathways to reduce
the administrative cost.
new text end

new text begin Subd. 8. new text end

new text begin Fuel provider reports. new text end

new text begin The commissioner must collaborate with the Department
of Transportation, Department of Agriculture, Pollution Control Agency, and the Public
Utilities Commission to develop a process, including forms developed by the commissioner,
for credit and deficit generators to submit required compliance reporting.
new text end

new text begin Subd. 9. new text end

new text begin Enforcement. new text end

new text begin The commissioner of commerce may enforce this section under
section 45.027.
new text end

new text begin Subd. 10. new text end

new text begin Report to the legislature. new text end

new text begin No later than 48 months after the effective date of
a rule implementing a clean fuels standard, the commissioner must submit a report detailing
program implementation to the chairs and ranking minority members of the senate and
house committees with jurisdiction over transportation and climate change. The commissioner
must make summary information on the program available to the public.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2. new text beginAPPROPRIATION.
new text end

new text begin $100,000 in fiscal year 2022 is appropriated from the general fund to the commissioner
of commerce to pay for costs incurred to create the report under Minnesota Statutes, section
239.7912, subdivision 10. The money from this appropriation does not cancel, but remains
available until expended. This is a onetime appropriation.
new text end