 Today, Mayor Jacob Frey, joined by local climate organizations and City staff, signed a new carbon fee into law that will significantly cut pollution, save money, and move Minneapolis closer to achieving its ambitious climate goals.
The Pollution Control Annual Registration (PCAR) fee will be set at $5 per ton of carbon dioxide, based on a newly released cost study conducted by City staff. That figure reflects the actual cost of administering the PCAR program and is a fraction of the fee previously passed by the City Council, while still covering significant pollution sources. The PCAR program tracks and reduces emissions from the city’s largest polluters and incentivizes meaningful reductions.
“Minneapolis is pushing forward with bold climate action — and we’re doing it the right way,” said Mayor Jacob Frey. “This fee holds polluters accountable without overburdening schools, hospitals, or small businesses. It’s legally sound, fiscally responsible, and grounded in facts — exactly what our residents deserve.”
The new fee structure will take effect January 1, 2026, and marks a key step in Minneapolis’ broader climate strategy. That strategy includes citywide emissions tracking, accountability for public and private sectors, and smart regulations to reduce pollution.
The PCAR program creates financial incentives for large facilities to lower their carbon footprint, helping Minneapolis meet its emissions targets, improve air quality, and protect public health. The result: cleaner neighborhoods, sustainable infrastructure, and a city that leads by example.
“The PCAR fee is a critical step in holding major polluters accountable and reducing emissions across Minneapolis,” said Health Commissioner Damōn Chaplin. “By tying the fee directly to the cost of managing pollution, we’re creating a fair, effective system that supports our climate goals, protects residents’ health, and ensures long-term impact.”
Background: A Smarter Path Forward
The road to a sound carbon fee wasn’t without hurdles. Last year, a majority of the City Council passed a $452-per-ton fee — far above the actual program costs— despite warnings from the City Attorney that their version would “likely constitute an unauthorized tax.” Mayor Frey vetoed that action and directed City staff to conduct a formal cost study and design a compliant regulatory program before implementing any fee.
That decision paid off. Because the administration waited for the completion of the cost study, no one was charged the inflated fee, saving local schools, hospitals, and businesses across Minneapolis from unnecessary costs.
City staff, particularly in the Health Department, deserve recognition for their careful, methodical work to set the program up right. Their effort resulted in a fair and enforceable carbon fee that protects residents and reduces pollution.
More information on PCAR can be found online.
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