Minnesota legislature backs LCFS working group

Minnesota lawmakers have passed a transportation budget bill that includes funding to study how best to establish a low-carbon fuel standard (LCFS).

The legislation, which passed the House of Representatives 69-61 and the Senate 34-32 on 21 May, would provide a $250,000 grant to crate a Clean Transportation Fuel Standard Working Group that would be required to deliver a report by early next year.

The working group would include experts from conventional and renewable fuels producers, utilities, environmental groups and other specialists to study a proposed LCFS program that requires the state to reduce transportation fuel carbon intensity by 25pc from a 2018 baseline by the end of 2030, 75pc by the end of 2040 and by 100pc by the end of 2050.

The committee must be appointed and convened by August and deliver a legislative report by February 2024.

The transportation budget bill now goes to governor Tim Walz (D) to be signed into law.

A proposal to create the LCFS to be studied by the group failed to make it out of committee before a key legislative deadline this year.

Supporters of that legislation applauded the inclusion of the working group in the transportation bill.

"Minnesota is where a national model should be built, and by acting now, the state can lead the way in addressing climate change while supporting jobs and driving economic growth in Minnesota's rural communities," Great Plains Institute vice-president for transportation and fuels Brendan Jordan said

LCFS programs require yearly reductions in transportation fuel carbon intensity. Conventional, higher-carbon fuels such as gasoline and petroleum diesel incur deficits for exceeding the annual limits. Suppliers must offset them with credits generated from the distribution of approved, low-carbon transportation fuels in the same market.

The Great Plains Institute has worked with Midwestern groups on the potential creation of state-based or regional LCFS programs. California, Oregon and Washington each operates similar but distinct programs with non-fungible deficits and credits.

Extensive Midwestern agribusiness could mean a different approach to carbon reduction, if LCFS programs ultimately emerge in the region. California, still the largest and oldest North American LCFS program, has increasingly focused on electrifying its transportation fleet. Liquid fuels producers and agricultural have pushed for more recognition of biofuel decarbonization, rather than treating their products as a bridge fuel.

By Tomas Russo

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