MPCA's 'Clean Cars' rule awaits final approval from judge

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Minnesota is one step closer to deciding whether to enact a new policy that would require manufacturers to increase their stock of electric vehicles in Minnesota. 

With the end of public comment for the Minnesota Pollution Control Agency’s (MPCA) proposed “Clean Cars” rule this week, the next step is for an administrative law judge to determine whether the rule is "reasonable" and that the MPCA has the authority to enact it.

That's likely to happen with 30 days, though the timeframe may be extended, a spokesperson for MPCA said. 

It's the latest milestone for the proposed policy since it was first introduced nearly 18 months ago. If the judge approves it, the policy would take effect as early as January 1, 2024, impacting model year 2025 vehicles. Beginning in 2021, auto manufacturers could earn credits for following the rule before it takes effect. 

What does the rule say?

In September 2019, Gov. Tim Walz directed the MPCA to begin the rulemaking process for adopting a new clean car policy modeled after the one California set in 2002, which has since been adopted, with modifications in some cases, by 13 other states and Washington, D.C.

The policy does the following:

  • Preserve current standards, first adopted by the federal government in 2012, but rolled back by former President Trump in 2020, that require all new cars and trucks in Minnesota to abide by certain regulations limiting the amount of greenhouse gases and pollutants they can emit. Because Minnesota has already been following the regulations since 2012, this part of the rule wouldn't change anything. 
  • Require auto manufacturers to increase the availability of zero-emission vehicles in Minnesota, including electric and plug-in hybrid cars.

The policy does NOT:

  • Apply to farm equipment or other heavy-duty vehicles
  • Apply to existing or used vehicles
  • Require emissions testing 
  • Require residents to purchase an electric vehicle  

The MPCA notes there are currently 40 electric vehicles on the market currently in the U.S., but less than half are sold in Minnesota and argues that this is because the state hasn't passed clean car standards.

Electric vehicles currently make up fewer than 1 percent of car sales across the state, according to a 2020 survey by the MPCA. The agency estimates that with the new rule, that number would go up to between 6 and 7.5 percent in 2025. 

In his September 2019 letter to the MPCA, Walz cited the Next Generation Energy Act, which was approved by Republican former Gov. Tim Pawlenty in 2007. The act, based on international standards at the time, required the state to reduce greenhouse emissions by 15 percent in 2015, 30 percent in 2025 and 80 percent by 2050.

Instead, the state has only reduced emissions by 8 percent.

Because transportation accounts for the largest portion of Minnesota’s greenhouse gas emissions, supporters say the proposed policy is the best next step to get the state back on track to meet its goals in reducing pollution.

“Adopting the Clean Cars rule is a practical strategy for reducing emissions and an important step to protect our communities, improve air quality and support a healthy climate,” MPCA Commissioner Laura Bishop said in a virtual information session earlier this year.

What is the pushback? 

The proposed rule has drawn pushback from some Republican lawmakers, who argue that the Legislature should have authority over the process. 

In 1967, the state Legislature gave MPCA the authority to create and enforce rules specific to its authority, such as environmental regulations.

State Sen. Andrew Matthews, R-Princeton, has introduced a bill that would remove the MPCA’s ability to set vehicle emissions standards.

“This is about getting it back to the constitutional process, where it belongs. This debate belongs in the legislature," Matthews said at a hearing for the bill earlier this month.

Automobile dealers have joined lawmakers in disapproval. In February, a federal judge dismissed a lawsuit from the Minnesota Automobile Dealers Association against the MPCA. The complaint argued that the requirement to provide more electric vehicles would "tie up dealer capital and financing capacity."

The main arguments from lawmakers and automobile dealers have been: 

  • The change will drive up prices of all new cars in the state (The GOP says by up to $2,500).
  • The demand isn't high enough to justify an increased supply, meaning that dealerships would risk purchasing cars from manufacturers that might not sell. 
  • An incentive for consumers is needed to increase demand.
  • Because Minnesota's policy is modeled after California's version of the law, the state may be beholden to any changes California makes

In response to these arguments, the MPCA has said: 

  • Drivers of zero-emission cars will save money on gas and other maintenance costs.
  • More consumers would buy electric cars if they had more options
  • If California were to update its rules, the MPCA would begin another rulemaking process with public input to consider the updates, rather than automatically matching the updates. 
  • The Walz Administration also claims the likely rise in the cost of new cars will be closer to $1,000, rather than the $2,500 estimated by the GOP.

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