In re Proposed Rules of the Minnesota Pollution Control Agency Adopting Vehicle Greenhouse Gas Emission Standards (Clean Cars Minnesota), Minnesota Rules Chapter 7023

The Minnesota Pollution Control Agency (MPCA) proposed the Clean Cars Minnesota Rule (the proposed rule) to set standards for vehicle greenhouse-gas (GHG) emissions. The MPCA sought to adopt the same standards for low-emission vehicles (LEVs) and zero-emission vehicles (ZEVs) as those adopted by the state of California. Although the Clean Air Act (CAA) prohibited states from adopting new vehicle-emission standards that differed from the standards set out in the CAA, § 209(b) of the CAA permitted the Environmental Protection Agency to waive the CAA’s preemption of differing state regulations for California, and § 177 of the CAA expressly permitted other states to adopt regulations identical to California’s regulations. The MPCA asserted that reducing GHG emissions from vehicles was necessary to reduce the state’s overall GHG emissions and address the problem of climate change. The MPCA’s proposed rule required manufacturers of certain types of cars and trucks to offer for sale in Minnesota only vehicles that had been certified by California as meeting LEV standards. The proposed rule also required a certain percentage of cars and light-duty trucks offered for sale by manufacturers to be vehicles with zero tailpipe emissions and imposed a system of electrical-vehicle sales quotas on manufacturers, all with the goal of encouraging Minnesota consumers to purchase electric vehicles. The MPCA noted concerns about costs to dealers related to electric-vehicle marketing and training of dealership staff, as well as concerns that dealers might lose sales because LEV-certified vehicles cost typically more than other federally certified cars. However, the MPCA assumed that the costs to manufacturers and dealers from the proposed rule would be passed on to consumers. The MPCA also noted that consumers would derive the most benefit from operating LEV-certified vehicles and electric vehicles, given the savings in fuel and maintenance costs over the vehicles’ lives. Other impacts considered by the MPCA included (1) decreased demand for vehicle maintenance that could potentially negatively impact the automobile-mechanic industry, (2) increased demand for electricity leading to increased revenues for electric utilities, (3) decreased demand for gasoline and diesel leading to reduced revenues for the petroleum industry, (4) benefits to the environment and public health, and (5) the advancement of state environmental-justice initiatives. Overall, the MPCA’s cost-benefit analysis indicated that adopting the LEV and ZEV standards would result in a net benefit. The proposed rule was supported by consumers who wanted to purchase electric vehicles, environmental-advocacy groups, religious and spiritual groups, many businesses, some government entities, and electric-vehicle manufacturers Tesla and Rivian. However, other commenters were concerned about the proposed rule, including many automobile manufacturers, automobile dealers, representatives from biofuel industries, and representatives from trucking and agricultural industries. An administrative-law judge (ALJ) considered the proposed rule and whether it should be adopted by the MPCA.