Skip Navigation to main content U.S. Department of Energy Energy Efficiency and Renewable Energy
Alternative Fuels & Advanced Vehicles Data Center
About the AFDCFuelsVehiclesFleetsIncentives and LawsData, Analysis and TrendsInformation ResourcesHome
Alternative and Advanced Fuels

Minnesota State Flag

Minnesota E85 Laws and Incentives


State Incentives

E85 Fueling Infrastructure Grants

Funding is currently available to assist public fuel retailers with the installation or conversion of equipment to dispense E85 and intermediate ethanol blends. A station may be eligible for 75% of project costs, up to a maximum of $15,000, if program guidelines are met. Applications are required, and 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)

Ethanol Production Incentive

Through June 30, 2010, an ethanol production incentive of $0.20 per gallon of ethanol produced may be earned by qualified facilities that began production before June 30, 2000. Annual payments are limited to $3 million to any one producer. (Reference Minnesota Statutes 41A.09)

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)

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.

Ethanol Blend Mandate

All gasoline sold or offered for sale in Minnesota must contain at least 10% ethanol by volume (E10), or the maximum percent of denatured ethanol by volume authorized in a waiver granted by the U.S. Environmental Protection Agency. Gasoline-ethanol blends must comply with ASTM specification D4814-08b. Effective August 30, 2013, all gasoline sold or offered for sale in the state must contain at least 20% ethanol by volume (E20), unless, by December 31, 2010, ethanol has already replaced 20% of all motor vehicle fuel sold in the state or federal approval has not been granted for the use of E20. Certain exemptions apply. (Reference Senate File 743, 2009, House File 1122, 2009, and Minnesota Statutes 239.761 and 239.791)

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)

Hydrogen Energy Plan

The Minnesota Department of Administration is required to identify opportunities for demonstrating the use of hydrogen fuel cells within state-owned facilities, vehicle fleets, and operations. The Department of Administration is required to purchase and demonstrate hydrogen, fuel cells, and related technologies in ways that strategically contribute to realizing Minnesota's hydrogen economy goals. Additionally, the state Department of Commerce (DOC) is expected to report to the legislature every two years with a list of proposed pilot projects that contribute to realizing these goals, including those demonstrating technologies such as hybrid-electric, off-road, and fleet vehicles operating on hydrogen or fuels blended with hydrogen.

The DOC is authorized to accept federal funds, expend funds, and participate in projects to design, develop, and construct multi-fuel hydrogen fueling stations that eventually link urban centers along key trade corridors across the jurisdictions of Manitoba, the Dakotas, Minnesota, Iowa, and Wisconsin. These energy stations should accommodate a wide variety of vehicle technologies and fueling platforms, including hybrid, flexible fuel, and fuel cell vehicles. They may offer, but not be limited to, gasoline, diesel, ethanol (E85), biodiesel, and hydrogen, and may simultaneously test the integration of on-site combined heat and power technologies with the existing energy infrastructure.

The state's public research and higher education institutions are encouraged to collaborate to establish a regional energy research and education partnership for the production of renewable energy and products, including hydrogen, fuel cells, and related technologies. The Board of Trustees of the Minnesota State Colleges and Universities is encouraged to develop a fuel cell curriculum pilot program.

(Reference Minnesota Statutes 216B.811 to 216B.815)

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)

Alternative Fuel Tax

The Minnesota Department of Revenue imposes an excise tax on the first licensed distributor who 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 a rate of $0.1924 per gallon, liquefied petroleum gas is taxed at $0.20325 per gallon, liquefied natural gas is taxed at $0.1626 per gallon, and compressed natural gas is taxed at the rate of $0.2357 per hundred cubic feet. Gasoline is taxed at the rate of $0.271 per gallon. (Reference Minnesota Statutes 296A.07 and 296A.08)