Minnesota Laws and Incentives
Listed below are the summaries of all current Minnesota laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:
Plug-In Electric Vehicle (PEV) Toll Credit Pilot Program
The Minnesota Department of Transportation is piloting a three-year program to give a one-time MnPass account credit to eligible PEV drivers for use in MnPass toll lanes. Drivers who purchase or lease a new or used plug-in hybrid electric vehicle receive a $125 credit or a $250 credit for an all-electric vehicle. Vehicles must be purchased or leased between November 1, 2019 and October 31, 2022 to be eligible for the credit.
For more information, visit the MnPass website.
Electric School Bus Pilot
The Minnesota Pollution Control Agency (MPCA) is accepting applications through October 13, 2020, to partially fund the replacement of approximately six model year 1998-2009 diesel-powered school buses and required charging infrastructure. A total of $275,000, or 75% of the total project cost, is available for the purchase of an electric school bus with charging infrastructure. Eligible applicants include for-profit, non-profit, and public entities that own or operate school buses in Minnesota. MPCA intends to fund 1-2 buses per zone. This pilot program is funded by Minnesota's portion of the Volkswagen Environmental Mitigation Trust. For more information, including how to apply, see the MPCA Electric school bus pilot project website.
Off-Road Diesel Replacement Grants
The Minnesota Pollution Control Agency (MPCA) provides funding to public, private, and nonprofit fleet owners for the replacement of eligible off-road diesel equipment. Eligible equipment includes trailer refrigeration units, terminal tractors/drayage trucks, and more. MPCA is accepting applications until September 18, 2020. For more information, including how to apply, see the MPCA Diesel Emission Reduction Act website.
Advanced Technology Business Incentives
The Minnesota Department of Employment and Economic Development’s Launch Minnesota program will provide business development and financial assistance to high technology Minnesota businesses, including cellulosic ethanol businesses. For more information, see the Launch Minnesota website. (Reference House File 2, 2019)
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)
Ethanol Production Facility Environmental Assessment Exemption
An ethanol production facility that produces less than 125 million gallons of ethanol annually and is located outside of the seven-county metropolitan area is exempt from preparing an environmental impact statement. In addition, an environmental assessment worksheet is not required for the expansion of an ethanol or biobutanol production facility or for the conversion of an ethanol facility to produce biobutanol. Exceptions may apply. (Reference Minnesota Statutes 41A.09 and 116D.04)
Idle Reduction Technology Loan Program
The Minnesota Pollution Control Agency's Small Business Environmental Assistance Program provides low-interest loans up to $75,000 to qualified small businesses to finance environmental projects such as capital equipment upgrades that meet or exceed environmental regulations, including idle reduction technologies. For more information, see the Low-Interest Environmental Loans website.
Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption
A motor vehicle equipped with idle reduction or emissions reduction technology may exceed the maximum gross vehicle weight and axle weight limits by up to 550 pounds (lbs.) to compensate for the additional weight of the technology.
NGVs may exceed the state's gross vehicle and axle weight limits by the amount of weight calculated as provided under Code of Federal Regulations Title 23, section 127(s), not to exceed 2,000 lbs.
The vehicle operator must be able to provide documentation or demonstrate that the vehicle meets these requirements.
(Reference Minnesota Statutes 169.824)
Electric Vehicle Supply Equipment (EVSE) Rebate and Rate Reduction - Otter Tail Power
Otter Tail Power Company offers a time-of-use (TOU) rate to residential customers with plug-in electric vehicles (PEV). The TOU rate only applies to electricity used to charge the PEV.
Otter Tail Power Company also offers a $400 rebate for the installation of a Level 2 EVSE.
For more information, see the Otter Tail Power Company Electric Vehicles website.
Plug-In Electric Vehicle (PEV) Charging Rate Reduction and EVSE Rebate - LREC
Lake Region Electric Cooperative (LREC) offers a time-of-use (TOU) rate to members with PEVs enrolled in the ChargeWise program. To be eligible for the TOU rate, vehicles must use a separate sub-metered circuit.
LREC also offers a rebate of up to $500 for the installation of Level 1 or Level 2 electric vehicle supply equipment (EVSE).
For more information, see the LREC ChargeWise website.
Plug-In Electric Vehicle (PEV) Charging Rate Incentive - Xcel Energy
Xcel Energy offers an electric vehicle (EV) rate and a time-of-use (TOU) rate to qualified residential customers for charging PEVs. Both rates require a separate meter. For rate information, including how to qualify, see Xcel Energy's EV Rate Options website.
Residential Plug-In Electric Vehicle (PEV) Charging Pilot Program - Xcel Energy
Xcel Energy offers a pilot program for residential customers who own or lease a PEV. The program provides discounted Level 2 electric vehicle supply equipment, installation, and charging costs.For more information, including enrollment, see the Xcel Energy EV Service Pilot website.
Plug-In Electric Vehicle (PEV) Wind Energy Promotion - Great River Energy
Great River Energy's Revolt initiative offers the ability to power a PEV with 100% wind energy for the lifetime of the vehicle. The program requires no additional cost, however standard or off-peak rates still apply for the electricity used.
Plug-In Electric Vehicle (PEV) Charging Rate Reduction and EVSE Rebate - Dakota Electric Association
Dakota Electric offers a time-of-use (TOU) rate to members with PEVs enrolled in the ChargeWise program. To be eligible for the TOU rate, a ChargeWise circuit is required.
Dakota Electric also offers a rebate of up to $500 for the installation of Level 1 or Level 2 electric vehicle supply equipment (EVSE).
For more information, visit the Dakota Electric ChargeWise website.
Residential Electric Vehicle Supply Equipment (EVSE) Rebates - Connexus Energy
Connexus Energy offers a $500 rebate to residential customers toward the installation of a qualified Level 2 EVSE. Eligible applicants must enroll in a time-of-use rate.
Connexus Energy also offers a $800 discount on EVSE purchased from the EnergyWise Minnesota store.
For more information, see the Conexus Energy Electric Vehicle website.
Non-Residential Electric Vehicle Supply Equipment (EVSE) Rebate – Connexus Energy
Connexus Energy offers commercial customers a rebate of up to $2,000 for the purchase and installation of Level 2 EVSE. Eligible applicants include public entities, workplaces, multi-family units, and fleets. For more information, see the Conexus Energy Electric Vehicle website.
Plug-In Electric Vehicle (PEV) Charging Rate Reduction - Connexus Energy
Connexus Energy offers residential customers with PEVs a time-of-use (TOU) rate. A separate meter is required. For more information, see the Connexus Energy Electric Vehicle website.
Electric Vehicle Supply Equipment (EVSE) Rebate - Runestone Electric Association
Runestone Electric Association offers rebates to residential customers of up to $500 for the installation of Level 2 EVSE. To receive the full rebate, eligible applicants must enroll EVSE on a storage electricity rate of $0.469 per kilowatt hour. EVSE not installed on storage rates will receive $250. Application must be submitted within 60 days of purchase. For more information, see the Electric Vehicle website.
Laws and Regulations
All-Electric Vehicle (EV) Fee
EVs are subject to an additional registration fee of $75. (Reference Minnesota Statutes 168.013).
Public Utility Definition
An individual, corporation, or other legal entity that resells compressed natural gas as a vehicular fuel or electricity to recharge a battery that powers an electric vehicle is not defined as a public utility. (Reference Minnesota Statutes 216B.02)
Alternative Fuel Tax
The Minnesota Department of Revenue imposes an excise tax on the first licensed distributor that receives E85 fuel products in the state and on distributors, special fuel dealers, or bulk purchasers of other alternative fuels. E85 is taxed at the pump at a rate of $0.2025 per gallon, pure biodiesel (B100) is taxed at $0.285 per gallon, propane is taxed at $0.2135 per gallon, liquefied natural gas is taxed at $0.171 per gallon, and compressed natural gas is taxed at the rate of $2.50 per thousand cubic feet. Exemptions apply. For more information, see the Minnesota Fuel Excise Tax Rates and Fees website. (Reference Minnesota Statutes 296A.07 and 296A.08)
Connected and Automated Vehicles (CAVs) Advisory Council and Support
The Governor's Advisory Council on Connected and Automated Vehicles (Advisory Council) was established to study, assess, and prepare for widespread adoption of CAVs, and provide advice and support to the governor, Minnesota Department of Transportation (MnDOT), and the Department of Public Safety. The Advisory Council must meet at least four times annually to discuss advancements in CAV technologies, evaluate potential partnerships to prepare for the adoption of CAVs, and propose laws and regulations to safely test and implement CAVs.
The Advisory Council published a report in December 2018 that recommends changes to statutes, rules, and policies related to CAVs. Report recommendations include funding pilot projects to ensure that CAV technology is safely implemented, developing laws to adapt to CAVs, prioritizing equitable implementation of CAVs, and conducting public education and outreach on CAVs. The Advisory Council must review the December 2018 report and implement recommendations in the report where appropriate. The Advisory Council must also prepare an annual report for the governor by February 1, 2020, and every year thereafter, with updates on the activities and actions need to ensure Minnesota is advancing CAVs.
MnDOT and the Department of Public Safety will establish guidelines for development, testing, and deployment of CAV technologies, and will support safe and effective testing and use at every level of autonomy, including driverless technology. MnDOT will form the Interagency CAV Team to implement the tasks outlined above.
For more information, see the MnDOT CAVs website.
(Reference Executive Order 19-18, 2019)
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 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.
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:
|Date||Minimum Amount of Corn-Based Ethanol|
|January 1, 2020||60%|
|January 1, 2025||No 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 Year||Biofuel Replacement Schedule|
(Reference Minnesota Statutes 239.7911)
E85 is defined as a blend of ethanol and gasoline that contains no more than 85% ethanol and is produced for use in alternative fuel vehicles. E85 must comply with ASTM specification D5798-11. (Reference Minnesota Statutes 239.761)
Electric Vehicle Supply Equipment (EVSE) Requirements
EVSE installed in Minnesota must: 1) be able to be used by any make, model, or type of plug-in electric vehicle (PEV); 2) comply with state safety standards and standards set by the Society of Automotive Engineers; and 3) be capable of bi-directional charging once electrical utilities achieve a cost-effective ability to draw electricity from PEVs connected to the utility grid. These requirements may not apply if the installations require significant upgrades. (Reference Minnesota Statutes 325F.185 and 326B.35)
Ethanol Fuel Blend Dispensing Regulations
Gasoline blended for use in an alternative fuel vehicle (AFV) may contain any percentage of agriculturally derived, denatured ethanol, up to and including 85% (E85). Ethanol and gasoline blended at the point of retail sale in an ethanol-blending fuel dispenser must be clearly labeled "FLEX-FUEL VEHICLES ONLY." If a retailer sells both ethanol blends for use in AFVs as well as ethanol blends for use in standard combustion engines, the ethanol blends for use in a standard combustion engine must be dispensed from dedicated hoses, nozzles, or other equipment, and clearly labeled for use in conventional vehicles. Retailers are not responsible for customers' self-service fueling actions as long as they meet these requirements. (Reference Minnesota Statutes 239.761 and 296A.01)
Medium-Speed Electric Vehicle (EV) Access to Roadways
A medium-speed EV is defined as a four-wheeled motor vehicle powered by electricity that is equipped with a roll cage or a crushproof body design and is capable of achieving a maximum speed of 35 miles per hour (mph) on a paved, level surface. Except with respect to maximum speed, a medium-speed EV must meet or exceed regulations in Title 49 of the Code of Federal Regulations, section 571.500, and successor requirements. A medium-speed EV may not operate on a roadway with a speed limit greater than 35 mph, except to cross that roadway. A road authority may prohibit or further restrict the operation of medium-speed EVs on any street or highway under the road authority's jurisdiction. (Reference Minnesota Statutes 169.011 and 169.224)
Neighborhood Electric Vehicle (NEV) Access to Roadways
An NEV is an electric vehicle that has three or four wheels and is capable of achieving speeds between 20 miles per hours (mph) and 25 mph on a paved level surface. An NEV must be titled according to state law and may be operated on public streets and highways if it meets all equipment and vehicle safety requirements in Title 49 of the Code of Federal Regulations, section 571.500, and successor requirements. An NEV may not operate on a roadway with a speed limit greater than 35 mph, except to cross that roadway. A road authority may prohibit or further restrict the operation of NEVs on any street or highway under the road authority's jurisdiction. (Reference Minnesota Statutes 169.011 and 169.224)
Plug-In Electric Vehicle (PEV) Charging Tariff
Each public utility selling electricity for retail must file a tariff with the Minnesota Public Utilities Commission (PUC) to allow a customer to purchase electricity solely for the purpose of charging a PEV, neighborhood electric vehicle, or medium-speed electric vehicle. The tariff must:
- Contain either a time-of-day or off-peak electricity rate;
- Allow the customer to purchase electricity from the utility's current mix of energy supply sources or from entirely renewable energy sources; and
- Be available to the residential customer class.
The public utility will make the tariff available to customers within 60 days of PUC approval. At any time, the utility may make revisions to the tariff based on changing costs or conditions. Each public utility providing a PEV charging tariff must report quarterly to the PUC on the number of customers who have participated in the tariff, the total amount of electricity sold under the tariff, and any other data the PUC requires.
(Reference Minnesota Statutes 216B.1614)
Plug-In Electric Vehicle (PEV) and Natural Gas Vehicle (NGV) Initiatives
All solicitation documents that include the purchase of passenger automobiles issued under the jurisdiction of the Minnesota Department of Administration must assert the intention of the state to begin purchasing all-electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), neighborhood electric vehicles, and NGVs. In order for this requirement to apply, vehicles must meet the state's performance specifications and have a total life-cycle cost of ownership less than or comparable to that of gasoline-powered vehicles. An EV is defined as a motor vehicle that can be powered by an electric motor drawing current from rechargeable storage batteries, fuel cells, or other portable sources of electrical current, and meets or exceeds applicable requirements in Title 49 of the Code of Federal Regulations, section 571, and future regulations. A PHEV is defined as a PEV that contains an internal combustion engine and uses a battery-powered electric motor to deliver power to the drive wheels. When connected to the electrical grid via an electrical outlet, the vehicle must be able to recharge its battery. The vehicle must have the ability to travel at least 20 miles powered substantially by electricity. (Reference Minnesota Statutes 16C.138 and 169.011)
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.
State Agency Vehicle Procurement and Management Requirement
When purchasing a motor vehicle, a state agency must select one that is capable of being powered by cleaner fuels, including electricity and natural gas, if the total life cycle cost of ownership is less than or comparable to that of a gasoline-powered vehicle.
A committee of representatives from the Minnesota Departments of Administration, Agriculture, Commerce, Natural Resources, and Transportation, as well as the Pollution Control Agency, will implement a state fleet reporting and information management system. The committee will submit findings to the governor and appropriate legislative committees on a bi-yearly basis with recommendations for goals, directives, or legislative initiatives to meet these objectives.
(Reference Minnesota Statutes 16C.137 and 16C.138)