Titled, Driving Progress In States, Werner provided updates on policies and opportunities for the ethanol industry in Minnesota.
"We secured nearly $7 million for biofuel infrastructure grants to expand upon our nation-leading 12.57 blend rate. We also passed a law to require all fuel retailers in Minnesota that offer E15 to report their monthly gallons so that we can better track consumer sales and highlight our progress," he said.
On his participation in Minnesota's Clean Transportation Standard (CTS) working group, Werner said Minnesota would not meet its emissions targets if it failed to tap into the strength and ingenuity of the state's farmers and biofuel producers.
"We need to see more consumer access to lower carbon biofuels, and the lifecycle methodology should reflect the most up-to-date science through Argonne's GREET model," he said.
With regards to sustainable aviation fuel (SAF), Werner said among the biggest challenges facing Minnesota ethanol producers is the state's environmental permitting process.
"There are bioethanol plants in our association that want to make millions of dollars in investment in their plants to increase production and lower their CI scores to the point necessary to become a feedstock for ethanol-to-jet but in many cases, they must wait 2 or 3 years to update their air permits with the Minnesota Pollution Control Agency," he said.
Werner's full remarks at the panel are below:
The Minnesota Bio-Fuels Association had some recent success in last year’s budget and in representing the biofuels industry on the state’s Clean Transportation Standard Work Group. Can you talk about your efforts on the work group and what you think is next for a clean transportation standard in Minnesota?
You’re right. We did achieve policy success last session and I’ll highlight the two that I think were most impactful. We secured nearly $7 million for biofuel infrastructure grants to expand upon our nation leading 12.57 percent blend rate. We also passed a law to require all fuel retailers in Minnesota that offer E15 to report their monthly gallons so that we can better track consumer sales and highlight our progress.
The nomenclature can be confusing here so I’ll point out that a Clean Transportation Standard or CTS is just another name for a Low Carbon Fuel Standard (LCFS). It’s a policy that Minnesota state agencies and non-profits like the Great Plains Institute have been exploring for the past several years and – to work through several outstanding issues - the legislature created a work group last session to identify and report on recommendations for implementing a Minnesota-specific program. Biofuel participation in this work group was critical because Minnesota is unique among states that have implemented or are considering implementing a CTS. Namely, we have abundant farmland, a robust farm economy, the 5th largest capacity for bioethanol in the country, and the highest blend rate in the nation.
The message I brought to the work group was that a Minnesota CTS program will not meet its GHG reduction targets if it fails to tap into the strength and ingenuity of our state’s farmers and bioethanol producers.
To gain our support as a bill potentially moves through the process, we need to see a truly neutral program in terms of fuels and feedstocks. We need to see more consumer access to lower carbon biofuels, and the lifecycle methodology should reflect the most up-to-date science through the Argonne GREET model.
Minnesota is one of a handful of states with a state-level SAF incentive. Notably, it also lasts much longer than the federal SAF credit, going into 2030. Can you provide any insight on what you can expect on SAF in Minnesota and would you expect any amendments to Minnesota’s credit as the federal credit sunsets?
It is true that our state-level SAF credit has a longer duration than the federal credit, but I will note that the value of the credit is capped at a total of $7.4 million total so without additional resources, it is a bit unclear how effective it will be in bringing SAF development to the state. That’s not to say that there isn’t immense interest. Besides the tax credit, the state government and private business have come together to form a SAF Hub to foster conversations about how to address the numerous challenges that we need to address to make SAF a reality in Minnesota.
The #1 biggest challenge in Minnesota to SAF is the environmental permitting process. I talk about this everywhere I go because it is truly holding back investments in the bioeconomy in our state. There are bioethanol plants in our association that want to make millions of dollars in investment in their plants to increase production and lower their CI scores to the point necessary to become a feedstock for ethanol-to-jet but in many cases, they must wait 2 or 3 years to update their air permits with the Minnesota Pollution Control Agency. This has a significant chilling effect. SAF production plants will not come to Minnesota if we can’t permit carbon sequestration technologies or plant production efficiencies to lower CI in a timelier manner.
MBA has an interest in helping this industry “take-off” and we will certainly be working with partners to push for additional resources and permitting reforms to make it a reality.
I recently attended a workshop on Illinois’ efforts for a clean transportation standard similar to California’s LCFS. There was broad consensus in the room that, in Illinois at least, the focus of GHG reductions had to be centered around biofuels. There was also some muted optimism that, if passed, an Illinois LCFS could be model or precursor to a larger, Midwest-focused standard. Can we talk about the benefits and drawbacks to that, as well as the likelihood of such a development?
Last year, when several versions of a CTS bill were being heard in the Minnesota legislature, the idea of regional collaboration or an interstate compact was discussed. There are some stakeholders in Minnesota that would prefer a more regional approach to provide for consistency and reduce the potential for market disruptions, supply challenges, or consumer price increases. We’re certainly open to that discussion.
Among the many recent state policy initiatives is the effort to petition governors to opt out of the EPA’s RVP waiver, to put E15 on the same playing field as E10. We saw some success in eight states, but with the EPA dragging their feet, it’s not likely to take effect until 2025. Tadd, you come from a red state and Brian, you come from a purple state. Can you discuss how the approach differed between Ohio and Minnesota, and what is next for the opt-out states?
We’re lucky in Minnesota to have a Governor that understands and supports bioethanol. Governor Walz has a record both in the House of Representatives and as Governor on the year-round sale of E15. We didn’t have to do a whole lot of education or lobbying to convince him that E15 is better for air quality in Minnesota than E10. Now, we did work hard to ensure that he remained committed to the petition as the oil industry began their campaign to convince Governors to abandon the petition one by one.
