Minnesota wants to be carbon-free by 2040, but it still hasn’t decided what that means

When Minnesota legislators passed a landmark climate law in 2023 requiring a carbon-free electric grid by 2040, they left out one rather large detail: What actually counts as carbon free.

It seems simple on the surface but is surprisingly contentious. Rather than try to settle the issue among politicians, lawmakers left the decision up to the expertise of the Minnesota Public Utilities Commission (PUC).

Wind, solar and nuclear are shoo-ins. But during a public comment period, debate erupted about burning wood. That inspired a campaign from northern Minnesota leaders in favor of “woody biomass,” per industry lingo.

Fossil fuels paired with technology to pull carbon emissions from the atmosphere is another source of controversy. Some even question if damming waterways to create hydropower should count.

“We need all options on the table [to replace coal],” said Kurt Anderson, director of environmental and land management for the Duluth-based utility Minnesota Power.

Whatever the PUC decides will play a critical role in guiding electric utilities in the next 16 years and could also impact Minnesota’s economy.

Minnesota Power has a modest-sized biomass plant called the Hibbard Renewable Energy Center, and wood burning is responsible for about 1% of electricity the company generates.

Still, the plant creates a market for wood that would otherwise go unused or to a landfill, helping the local economy and even clearing forests of dead trees to reduce wildfire risk, Anderson said.

The burned wood that creates electricity is a mix of waste material from sawmills, the leftover tops and limbs of trees from forestry, and other unwanted wood such as trees infected by emerald ash borer or spruce budworm, Anderson said. Metro-area plants also take wood from infested trees.

Anderson said northeast Minnesota isn’t the most fertile ground for wind and solar. The utility’s biggest wind farm is far away in North Dakota. And Minnesota Power has no nuclear plants like Xcel Energy.

That makes tapping into the abundance of wood in the heavily forested region one attractive alternative to coal and natural gas. Like those fossil fuels, biomass is reliable when the wind isn’t blowing or the sun isn’t shining.

The company said it might consider converting its large coal plant in Cohasset, Minn. to run on biomass, though it wouldn’t replace all of the power lost when Minnesota Power stops using coal at the facility by 2035.

A wide swath of northern Minnesota interests have campaigned in favor of woody biomass, including timber and paper producers, local schools, county officials, utilities and the state Department of Iron Range Resources and Rehabilitation.

The question for the PUC, however, is whether woody biomass is carbon-free.

Anderson said burning wood releases carbon to the atmosphere. But the company argues carbon would emit anyway as the wood decomposed, or if it was burned in a wildfire. That’s different than the rapid release of carbon from burning fossil fuels like oil that would otherwise stay buried underground, Anderson said.

The Minnesota Pollution Control Agency (MPCA), which catalogues the state’s carbon emissions, echoed many of the arguments and called for a “bigger picture view” of emissions that considers net emissions, not just what exits a smokestack. Though MPCA described wood burning as “not fully carbon-free,” the agency suggested it could qualify for partial credit under the law as utilities aim to reduce carbon emissions enough to hit benchmarks before 2040.

Still, several environmental nonprofits have lined up in opposition to woody biomass. The Minnesota Center for Environmental Advocacy and the Sierra Club said in regulatory filings that claiming burning wood is carbon neutral relies on “much-disputed carbon accounting assumptions” as well as speculation about future land use.

The groups cited 2017 California data compiled by the Center for Biological Diversity that found carbon emissions from burning woody biomass were about twice that of coal plants and more than four times more polluting than gas plants. Biomass plants also emit other pollutants when burning wood that can have a health impact, read a letter signed by environmental advocacy groups CURE, Minnesota Interfaith Power and Light and Partnership for Policy Integrity.

“Replacing coal and gas with resources that produce worse carbon emissions would be a perverse misinterpretation of the law,” the letter said.

There was a similar divide about burning waste for energy.

Another source of controversy is carbon capture, which is technology used to snare and bury emissions from fossil fuels before their release into the atmosphere.

Electric utilities including Minnesota Power and Xcel Energy asked for carbon capture as an option for full or partial compliance with the law, saying it could give them flexibility to meet the carbon-free standard while providing reliable power that doesn’t fluctuate if there is no wind or sun.

North Dakota Gov. Doug Burgum and other top state officials also urged the PUC to let utilities receive full or partial credit for using carbon capture, saying it would extend the life of coal plants in North Dakota that provide power to Minnesota. North Dakota has spent hundreds of millions of dollars on carbon-capture technology in a bid to keep its coal industry alive. The state also argues the carbon-free law would impact North Dakota power production and is therefore “constitutionally suspect.”

Environmental groups were split on the issue. Carbon-capture plants are often expensive, and some plants have failed to live up to promises.

“Without rigorous review of the actual carbon benefits of each hydrogen or [carbon-capture and sequestration] project, utilities could end up getting credit even while increasing carbon dioxide emissions or could get inflated credits that help prop up fossil fuel resources,” read a letter from the Sierra Club.

There was also disagreement about hydroelectric power that damming bodies of water like rivers creates. Some utilities include hydro as a critical part of their plan for carbon-free electricity.

Minnesota Interfaith Power and Light argued water power shouldn’t count as carbon-free, saying the plants emit potent greenhouse gas in the form of methane from submerged plants that decay in the man-made reservoirs. The MPCA said hydropower does, in fact, generate some direct emissions, though far less than natural gas and coal.

Yet the agency said the PUC might still consider it fully or partially carbon-free, and even most environmental groups and commenters at the PUC urged the commission to count hydro as a clean option.

Minnesota House Majority Leader Jamie Long, a Minneapolis DFLer who sponsored the carbon-free law, said deciding if something is carbon-free is so complicated in part because it can vary based on the operations of a specific power plant. That’s one reason the Legislature didn’t want to make blanket statements in favor of one power source or another.

When asked if his law might count burning wood as carbon-free, or block hydropower, Long did not take a side.

“Those are exactly the kinds of questions that the PUC is well-equipped to handle,” he said.