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Minnesota Biodiesel Laws and Incentives


State Incentives

Biodiesel Fueling Infrastructure Grants

Funding is currently available to assist retailers with the installation and conversion of equipment to dispense biodiesel blends between 10% and 20%. Funding is based on costs associated with installation of new equipment or upgrading current equipment. Project estimates must be provided with the application form. Funding is limited and not guaranteed.

Renewable Energy and Technology Grants

The University of Minnesota's Initiative for Renewable Energy and the Environment offers grants to promote statewide economic development; sustainable, healthy and diverse ecosystems; and national energy security through development of bio-based and other renewable resources and processes. Eligible projects include those focused on environmentally sound production of energy, including hydrogen, from a renewable energy source such as biomass and agricultural crops; development of energy conservation and efficient energy utilization technologies; energy storage technologies; and analysis of policy options to facilitate adoption of technologies that use or produce low-carbon renewable energy. (Reference Senate File 550, 2009, and Minnesota Statutes 116C.779)

State Laws and Regulations

Clean Energy Collaborative

The Governor's Clean Energy Technology Collaborative (Collaborative) was created for experts to discuss issues that impact the development of new clean energy technologies that utilize Minnesota expertise, Minnesota resources, and benefit Minnesota by reducing greenhouse gas (GHG) emissions. The Collaborative provides the Governor with advice and recommendations on matters relating to advances in technology and research in order to achieve Minnesota's long-term clean energy goals, including reducing GHG emissions by 80% by 2050 and generating 25% of Minnesota energy from renewable energy resources by the year 2025. (Reference Executive Order 08-04, 2008)

Biodiesel Blend Mandate

Diesel fuel sold or offered for sale in the state for use in internal combustion engines must contain at least 5% biodiesel (B5) fuel by volume. Beginning May 1, 2012, diesel fuel must contain at least 10% biodiesel, and must contain 20% biodiesel by May 1, 2015. Diesel fuel sold during the months of April, May, June, July, August, September, and October are required to contain more than B5 and revert back to B5 for the following five consecutive months. However, the commissioners of agriculture and commerce and the Pollution Control Agency, in consultation with the Biodiesel Task Force and other technical experts, may allow the specified biodiesel blend level to be effective year round if determined that an ASTM specification or equivalent federal standard exists for the specified biodiesel blend level that adequately addresses technical issues associated with Minnesota's cold weather and publish a notice in the State Register to that effect. Additional exceptions may apply. (Reference Minnesota Statutes 239.77)

Regional Biofuels Promotion Plan

Minnesota has joined Indiana, Iowa, Kansas, Michigan, Ohio, South Dakota, and Wisconsin in adopting the Energy Security and Climate Stewardship Platform Plan (Platform) (PDF 2 MB), which establishes shared goals for the Midwest region, including increased biofuels production and use. Download Adobe Reader. Specifically, the Platform sets the following goals:

  • Produce commercially available cellulosic ethanol and other low-carbon fuels in the region by 2012;
  • Increase E85 availability at retail fueling stations in the region to 15% of stations by 2015, 20% by 2020, and 33% of all fueling stations in the region by 2025;
  • Reduce the amount of fossil fuel that is used in the production of biofuels by 50% by 2025;
  • By 2025, at least 50% of all transportation fuels consumed by the Midwest will be from regionally produced biofuels and other low-carbon transportation fuels.

The Platform also establishes a regional biofuels corridor program. The program directs state transportation, agriculture, and regulatory officials to develop a system of coordinated signage across the region for biofuels and advanced transportation fuels and to collaborate to create regional E85 corridors. The program requires standardized fuel product coding at fueling stations as well as increased education for retailers about converting existing fueling infrastructure to dispense E85.

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 D6751-08 and is produced by a person or organization certified by the BQ-9000 National Biodiesel Accreditation Program. 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 D7467-08. Biodiesel produced from palm oil is not considered biodiesel fuel, unless the palm oil is waste oil and grease collected from within the U.S. or Canada. (Reference Senate File 543, 2009 and Minnesota Statutes 239.761, 239.77 and 296A.01)

Alternative Fuel Use Requirement

State agencies are required to take all reasonable actions necessary to strengthen the infrastructure for increasing the availability and use of E85 and biodiesel throughout the state. Employees using state vehicles are expected to use E85 fuel when operating flexible fuel vehicles, whenever E85 is reasonably available. The state's SmartFleet Committee is directed to develop a plan to facilitate the use of E85 and biodiesel in state vehicles, including actively pursuing the establishment of additional E85 fueling facilities at public retail outlets throughout the state. (Reference Executive Order 06-03, 2006)

Biodiesel Task Force

To help reach the state's eight million gallon biodiesel production capacity goal and ensure a smooth introduction of biodiesel into the marketplace, a Biodiesel Task Force was established in March 2003 to help promote and educate possible biodiesel developers, marketers, consumers, and manufacturers. The 15-member task force advises the Minnesota Department of Agriculture on methods to increase production and use of biodiesel in Minnesota.

Alternative Fuel Use and Alternative Fuel Vehicle (AFV) Acquisition Requirements

State agencies are required to use alternative fuels, including B20-B100 biodiesel blends, compressed or liquefied natural gas, E70-E100 ethanol blends, hydrogen, or liquefied petroleum gas, to operate state motor vehicles if the clean fuels are reasonably available at comparable costs to conventional fuels and are compatible with the intended use of the motor vehicle. Additionally, state agencies are required to purchase alternative fuel vehicles, which include those capable of being powered by the fuels listed above or motor vehicles powered by electricity or by a combination of electricity and liquid fuel, if such a motor vehicle is reasonably available at comparable costs to other vehicles and if the vehicle is capable of carrying out the purpose for which it is purchased. (Reference Minnesota Statutes 16C.135)

State Agency Energy Plan and Vehicle Acquisition Priorities

State agencies are required to use alternative fuels, including B20-B100 biodiesel blends, compressed or liquefied natural gas, E70-E100 ethanol blends, hydrogen, or liquefied petroleum gas, to operate state motor vehicles if the clean fuels are reasonably available at comparable costs to conventional fuels and are compatible with the intended use of the motor vehicle. Additionally, state agencies are required to purchase alternative fuel vehicles, which include those capable of being powered by the fuels listed above or motor vehicles powered by electricity or by a combination of electricity and liquid fuel, if such a motor vehicle is reasonably available at comparable costs to other vehicles and if the vehicle is capable of carrying out the purpose for which it is purchased. (Reference Minnesota Statutes 16C.135)