Carbon Reduction Program (Minnesota)

The Carbon Reduction Program was created under the Infrastructure Investment and Jobs Act signed into law in November 2021. It is administered by the Federal Highway Administration and implemented in Minnesota through the Minnesota Department of Transportation, metropolitan planning organizations, and area transportation partnerships. The program provides formula funding to support projects that reduce carbon dioxide emissions from the surface transportation sector. Minnesota receives approximately $21 million annually over five years, with a modest increase of about 1.9 percent each year. The purpose of the program is to reduce carbon emissions from on-road highway sources and to advance broader goals such as equity, safety, transportation access, and public health. Eligible uses of funds include electrification, travel options, low-carbon infrastructure, and system management strategies. Projects are prioritized using consistent criteria that assess cost-effectiveness in carbon reduction and co-benefits. Solicitation processes are coordinated at the regional and district levels, with input from area transportation partnerships and metropolitan planning organizations. Program funding is divided into two broad categories. About 65 percent is distributed to areas based on population, with further subdivisions into urban areas above 200,000, between 50,000 and 200,000, between 5,000 and 49,999, and areas under 5,000 residents. The remaining 35 percent is distributed statewide to MnDOT districts. Cities and counties may submit projects through their respective MPO or ATP depending on the location. Program targets are published in annual and multi-year tables, though fiscal year 2030 allocations remain projections pending committee approval. The program follows a recurring cycle of solicitations. For the 2025–2026 solicitation covering fiscal years 2027 through 2030, the letter of intent period opens October 6, 2025 and closes October 31, 2025. Review of letters of intent by MPOs and MnDOT districts will conclude by November 26, 2025. The full application period opens on December 1, 2025, with applications due January 9, 2026. Area transportation partnerships and MPOs are required to complete project selection by March 30, 2026. This cycle will continue annually with updated funding targets and timelines. Applications are evaluated based on the carbon reduction potential of the project, its relative cost-effectiveness, and co-benefits. Applicants should consult the Carbon Reduction Program Project Toolkit, solicitation materials, and the Minnesota Carbon Emissions Tool for guidance on eligible project types, scoring methods, and supporting documentation. Training materials and tools are also made available to support applicants in developing proposals that align with program goals. Program oversight in Minnesota is shared among MnDOT, MPOs, and ATPs. Contact with the appropriate regional organization is required for application submission and review. Further information about project eligibility, scoring, and solicitation timelines can be obtained from MnDOT’s Office of Sustainability and Public Health and through official solicitation materials. The program represents a continuing federal investment in sustainable transportation and local innovation in reducing greenhouse gas emissions.

Focus on demonstrating carbon reduction effectiveness and co benefits including equity, safety, access, and health.