Biodiesel Laws and Incentives in Minnesota

The list below contains summaries of all Minnesota laws and incentives related to biodiesel.

Laws and Regulations

Authorization for Biofuel Incentive

The Agricultural Growth, Research, and Innovation Program may offer grants, loans, or other financial incentives to alternative fuel retailers for the installation of ethanol blender pumps or other rural economic infrastructure activities, or to producers of transportation fuels from cellulosic material or bio-based products. The program will remain in effective through June 30, 2025, with funding subject to legislative appropriation. (Reference Minnesota Statutes 41A.12)

Biodiesel Blend Mandate

During the months of April through September, diesel fuel sold in the state must contain at least 20% biodiesel (B20). Diesel fuel sold during the remainder of the year must contain at least 5% biodiesel (B5). From April 1 to April 14, diesel fuel sold in the state can be a lower blend than B20, but not less than 10% biodiesel (B10).

The Minnesota Department of Agriculture, Department of Commerce, and the Pollution Control Agency, in consultation with the Biodiesel Task Force and other technical experts, must submit annual reports regarding the implementation of minimum biodiesel content requirements, including information about the price and supply of biodiesel fuel.

(Reference Minnesota Statutes 239.75 and 239.77)

Biodiesel Definition

Biodiesel is defined as a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural plant oils or animal fats and meets ASTM specification D6751-11b for pure biodiesel (B100). A biodiesel blend is a blend of diesel fuel and biodiesel fuel (between 6% and 20%) for on-road and off-road diesel vehicle use. Biodiesel blends must comply with ASTM specification D7467-10. Biodiesel produced from palm oil is not considered biodiesel fuel unless the palm oil is waste oil or grease collected from within the United States or Canada. (Reference Minnesota Statutes 239.761 and 239.77)

Biofuel Blend Mandate

All gasoline sold or offered for sale in Minnesota must contain at least:

  • 10% corn-based ethanol by volume or the maximum percent by volume of corn-based ethanol authorized in a waiver issued by the U.S. Environmental Protection Agency (EPA), whichever is greater; or
  • 10% other biofuel authorized in an EPA waiver by volume, or a biofuel formulation registered by EPA under Title 42 of the Code of Federal Regulations, section 7545.
Biofuel is defined as renewable fuel with an approved fuel pathway under the Energy Policy Act of 2005, as amended under the Energy Independence and Security Act of 2007.

Any biofuel may be used to meet the standards above, but corn-based ethanol may not comprise more than the following percentages of the total biofuel use in the state by the date specified:

DateMinimum Amount of Corn-Based Ethanol
January 1, 202060%
January 1, 2025No Minimum

(Reference Minnesota Statutes 239.761 and 239.791)

Minnesota Biofuels Replacement Goals

The Minnesota Department of Weights and Measures promotes the replacement of petroleum used in the state with the goal that biofuels will account for at least the specified percentage of all gasoline offered for sale by the dates below:

Calendar YearBiofuel Replacement Schedule

(Reference Minnesota Statutes 239.7911)

State Agency Sustainability Plan and Requirements

Each state department or agency must prepare an annual sustainability plan that includes ways to modify vehicle use practices and report annually on progress towards implementing their plan. Each state agency plan must be based on following targets and mandates:

  • When reasonably possible, state agencies must purchase on-road vehicles that use alternative fuels, including biodiesel blends of 20% (B20) or greater, compressed or liquefied natural gas, ethanol blends of 70% (E70) or greater, hydrogen, propane, or electricity, or (with the exception of buses, snowplows, and construction vehicles) have a fuel economy rating that exceeds 30 miles per gallon (mpg) in the city and 35 mpg on the highway;
  • When reasonably possible, state employees must fuel vehicles capable of operating on an alternative fuel with that fuel;
  • State agencies must increase the use of renewable fuels derived from agricultural products or waste products; and
  • State agencies must increase the use of technology for delivering information and services in order to reduce reliance on the state's fleet.
(Reference Minnesota Statutes 16C.135 and 16C.137)

State Incentives

Biofuel Production Grant Program

The Minnesota Department of Agriculture provides grants to biofuel producers for up to $2.1053 per million British Thermal Unit (MMbtu) for advanced biofuel produced from cellulosic biomass and $1.053 per MMbtu for advanced biofuel produced from sugar, starch, oil, or animal fat feedstocks. Eligible facilities must obtain 80% of their feedstocks from Minnesota, unless the facility is 50 miles or less from the state border; begin production by June 30, 2025; and have not produced more than 23,750 MMbtu of biofuel quarterly before July 1, 2015. Additional requirements apply. Payments will not be made for production that occurs after June 30, 2035. For more information, see the Agricultural Growth, Research and Innovation (AGRI) Bioincentive Program website. (Reference Minnesota Statutes 41A.16 and 239.051)

More Laws and Incentives

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