Bioenergy Industry

Biomass is a highly valued resource in Minnesota. The supply and characteristics of biomass vary greatly across the state.

Biomass may be created from a variety of sources, including wood, manure, and agricultural byproducts, which are then turned into a fuel sources such as methane gas, ethanol, or biodiesel to be used in electricity generation or  transportation. It provides for critical habitat and ecosystems and is an asset to the state’s forestry, agriculture, energy, and recreation industries. Each Minnesota community has a vested interest in long-term, sustainable practices that help assure their ongoing economic and environmental health.

Due to the scope of needs and interests in the state, multiple state agencies routinely work together on large biomass-related projects. Commerce works closely with utilities, which use biomass-based resources to produce heat and generate power.

Biomass generation in the state showed significant increases during the last five years, nearly doubling from 2002 generation to 1,848 thousand MWh in 2010.

The Minnesota Pollution Control Agency is responsible for environmental permitting of large combustion furnaces and boilers as well as landfills. Twelve biomass-fueled combined heat and power facilities are permitted and they provide more than 135 MW in total capacity. Nine landfills are permitted for methane-fueled energy production in the state, providing approximately 30MW in capacity.

The Minnesota Department of Natural Resources Biomass Market Development Program develops new markets for Minnesota's forest resources – including woody and non-woody feedstocks –for bioenergy. The Department’s State Wood Energy Team is a strong network of public and private partners that helps Minnesota companies realize the opportunity to cut energy costs, support local forest economies, and advance clean energy development.

The Minnesota Department of Agriculture Market Development Program serves as a lead agency to develop new markets for Minnesota's agricultural industry – including for agriculture-based bioenergy. Key energy industry sectors include:

• Biodiesel Industry - Minnesota was the first state to mandate the use of biodiesel, establishing a B2 mandate that took place September 29, 2005.
• Ethanol Industry - Minnesota was the first state to mandate the use of ethanol in gasoline, establishing a 2.7% oxygen level in the Twin Cities metro area in 1995.
• Ag-based Biogas - The MDA developed the Methane Digester Loan Program in 1998 to help supplement the funds needed for livestock producers in Minnesota to begin installing digesters on their farms to produce on-site heat or power. 

Loans

Minnesota Department of Agriculture Methane Digester Loan Program

This loan helps finance the purchase of necessary equipment and the construction of a system that will use manure to produce electricity.