Minnesota Natural Gas Laws and Incentives
State Laws and Regulations
Alternative Fuel Use and Alternative Fuel Vehicle (AFV) Acquisition Requirements
State agencies are required to use alternative fuels (B20-B100 biodiesel blends, compressed or liquefied natural gas, E70-E100 ethanol blends, hydrogen, or liquefied petroleum gas) in state motor vehicles if the clean fuels are reasonably available at similar costs to other 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 similar 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
Using 2005 as a baseline, the state is required to achieve a 25% and 50% reduction in the use of gasoline for state agency owned on-road vehicles by 2010 and 2015, respectively. Additionally, the state is required to achieve a 10% and 25% reduction in the use of petroleum-based diesel fuel for state owned on-road vehicles by 2010 and 2015, respectively. To meet these goals, each state agency will, whenever legally, technically, and economically feasible, ensure that at least 75% of new on-road vehicles purchased use alternative fuels (B20-B100 biodiesel blends, compressed or liquefied natural gas, E70-E100 ethanol blends, hydrogen, or liquefied petroleum gas). Alternatively, each state agency must ensure that at least 75% of purchases of new on-road vehicles have fuel economy ratings that exceed 30 miles per gallon (mpg) for city usage or 35 mpg for highway usage, including but not limited to hybrid electric and hydrogen vehicles. (Reference Executive Order 04-10, 2004, and Minnesota Statutes 16C.137)
State Agency Emissions Reduction Requirement
Each state department must seek to reduce air pollution by implementing two or more of the actions outlined in Executive Order 04-08 whenever legally, technically, and economically feasible, subject to the specific needs of the department and responsible management of agency finances. The actions include the purchase or lease of the most fuel-efficient and least polluting vehicles that meet the operational needs of the state department, and refueling state-operated vehicles with the cleanest fuel available. (Reference Executive Order 04-08, 2004)
Alternative Fuel Tax
An excise tax is imposed 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 a rate of $0.142 per gallon, liquefied petroleum gas is taxed at $0.15 per gallon, liquefied natural gas is taxed at $0.12 per gallon, and compressed natural gas is taxed at the rate of $1.739 per thousand cubic feet or $0.20 per gasoline gallon equivalent. Gasoline is taxed at the rate of $0.20 per gallon. (Reference Minnesota Statutes 296A.07 and 296A.08)
