For the first time since setting goals in 2007 for reducing greenhouse gas emissions, Minnesota is on track to meet them, state regulators said on Tuesday.

It’s a significant moment for DFL lawmakers and Gov. Tim Walz’s administration as they push to slash pollution that causes climate change.

But the news comes with significant caveats, including a drop in transportation pollution that is due to the pandemic and may not continue. The climate information also raises new questions about reducing emissions in agriculture, forestry and land use, a sector that state officials say is now the second largest source of greenhouse gasses in Minnesota because of dropping emissions from electric utilities.

And the information could factor into how lawmakers act to address climate change under a DFL-controlled Legislature working with a $17.6 billion budget surplus.

The climate data came in the latest inventory of carbon output reported by the Minnesota Pollution Control Agency and the state Department of Commerce, which tracks emissions compared to goals established in the Next Generation Energy Act that was passed with bipartisan support and with then-Gov. Tim Pawlenty’s signature back in 2007. That bill included a goal of reducing emissions 30% over 2005 levels by 2025.

Minnesota’s overall carbon emissions have declined 23% between 2005 and 2020, which is the latest year regulators have data for. That puts the state on pace to hit the 2025 goal for reducing emissions by 30%.

Minnesota’s GHG emissions across economic sectors, 2005-2020, ranked by net emissions

Here are five takeaways from the state emissions report.

Emissions are down overall, mostly thanks to electric utilities

The drop in carbon pollution can be traced largely to the electric sector. Since 2005, emissions from electric utilities have decreased by a whopping 54%, which is by far the largest decline of any major sector tracked by the state. For comparison, the electric sector produced about 26.1 million tons of CO2 in 2020, compared to 36 million tons from transportation, which is now the most carbon-polluting sector.

Electric utilities are heavily regulated and have shifted away from coal, building fleets of wind, solar and other renewable power sources as many utilities pledge to be carbon-free by 2050. In 2019, the state found the electric sector was down 45% over 2005 levels, so the decline in emissions has continued.

Even as the electric sector makes significant progress in slashing emissions, the Legislature is likely to pass a bill that would steer utilities toward a carbon-free grid by 2040. The idea has some backing from utilities but has been opposed by the GOP. 

Coal is still the largest source of electric emissions. But major utilities like Xcel Energy and Minnesota Power have pledged to be coal-free by 2030 and 2035, respectively.

Transportation emissions are down … for now

Transportation became Minnesota’s largest source of greenhouse gas emissions in 2016 and has been slower in reducing carbon than the electric sector. It has also faced fewer regulations from the state and federal government.

The MPCA’s climate inventory carries some positive news: Transportation emissions fell 18% since 2005. In 2019, emissions from transportation were down just 1% over 2005 levels. 

However, the most recent decline is at least in part because people drove less and flew less in 2020 because of the COVID-19 pandemic. In other words, it’s not clear the drop in emissions will continue.

“Due to the unusual nature of 2020, this report is cautious in interpreting trends with a 2020 endpoint,” the report says.

Still, MPCA commissioner Katrina Kessler told reporters on Tuesday that emissions were already declining in 2018 and 2019, so the state is “cautiously optimistic that we will continue to see a downward trend.” Fewer people are commuting every day compared to before the pandemic, for instance, Kessler said. Transportation emissions rose sharply between 2015 and 2018.

Legislators have done less to shape the transportation sector compared to electric utilities, though the MPCA did adopt rules meant to provide more electric vehicles for sale in Minnesota. And DFL lawmakers have pushed to increase money for EV charging.

Agriculture, forestry is now the second-largest emissions source

Emissions among electric utilities have dropped enough that agriculture, forestry and “land use” — which includes emissions from naturally decomposing material in waterways — is now the second-largest carbon polluter in Minnesota. It’s a sector that has received less attention in the climate debate but may now take on a larger focus among lawmakers and regulators.

The emissions from ag, forestry and land use have been roughly flat since 2005. That year the sector emitted 28.8 million tons of carbon, according to the MPCA, and in 2020 the number was 28.6 million. Most of the emissions come from farming crops and livestock. And emissions from the use of manure and fertilizer have gone up since 2005.

For example, coal in the electric sector was responsible for 15.8 million tons of CO2 in 2020. Crop farms emitted the equivalent of 26.4 million tons of CO2 that year, mostly from fertilizer use resulting in nitrous oxide, a potent greenhouse gas.

Walz has proposed several initiatives to expand and restore grasslands, wetlands and forests to store carbon. And the governor also wants more money for soil health initiatives that help farmers with climate-friendly practices like growing crops in conjunction with commodities like corn and soybeans to help store carbon and prevent water pollution. DFL lawmakers who control the state House and Senate will ultimately determine what agricultural initiatives may pass.

Much of the state’s efforts around climate change and agriculture have been focused on nudging farmers to change with voluntary programs. Kessler did not indicate that approach would change. But she said when the state “invests and collaborates” with emitting industries like electric utilities, there is usually a reduction in emissions.

“I will say that we haven’t really brought the same level of energy and interest to the agricultural sector,” Kessler said. “We are interested in collaborating and supporting farmers who want to build climate-smart farms, and that shows up in spades in the governor and lieutenant governor’s 2023 budget.”

Mixed emissions results in other sectors

In sectors that are responsible for a smaller portion of Minnesota’s carbon emissions, progress in reducing pollution has been mixed.

For instance, emissions are down 22% in the commercial sector, which uses oil and natural gas for heating and power. But emissions are up 14% in the residential sector, which mainly includes natural gas used to heat homes or run appliances. Still, the state report says the sector has begun to see some reductions in emissions.

Industrial sector emissions are also up 14% since 2005, however, even though the MPCA report says carbon pollution has started to decline. The sector includes fossil fuel combustion, taconite processing, petroleum refining and more. Coal use has declined in that sector, and natural gas use is down from a peak in 2014.