Green Fertilizer Program

The application period for this program is closed.

The Green Fertilizer Grant Program provides funding to agricultural and rural electric cooperatives to invest in green fertilizer production facilities located in Minnesota. Program funds can be combined with available federal financial assistance programs, such as the Inflation Reduction Act Green Hydrogen Tax Credit (45V) or Department of Energy loan programs.

Eligibility and funding priorities

Applicants must:

• Be organized under MINN. STAT. 308A or 308B as an agricultural or rural electric cooperative.
• Intend to invest in a facility that produces green fertilizer.
• Commit to a long-term offtake agreement(s) with the green fertilizer production facility.
• Commit to provide training in fertilizer application best management practices and develop a program to share information with cooperative members.
• Be in good standing with the State of Minnesota.

Green fertilizer production facilities must:

• Use renewable energy in the production of anhydrous ammonia, urea, or hydrogen.
• Use green hydrogen to make green fertilizer.
• Only use renewable energy, hydrogen, and ammonia produced within 100 miles of the green fertilizer production facility.
• Produce final green fertilizer product in Minnesota.
• Be operational within five years of the grant agreement effective date.

This grant program will prioritize:

• Projects demonstrating strong business readiness.
• Projects demonstrating support through private financing, state loans, or federal sources.
• Projects located in Minnesota counties with a poverty rate greater than 9%. (Minnesota Poverty – Map)

Amount available

We have approximately $6.665 million available for eligible projects. The minimum grant award is $250,000 and the maximum grant amount is $6.665 million.

The total number of awards and the funding per award will be determined through a competitive proposal review process. Cooperatives may apply for funding to invest in multiple green fertilizer production facilities – each facility requires its own application.

This grant requires matching funds. Cooperatives must provide at least 50% of the total investment cost.

Applying

The application period for this program closed on March 18, 2025. Details on this page and in the Green Fertilizer Grant Request for Proposals (PDF) apply to the past round of funding

Contact us if you need this information in an alternative format.

Definitions

• Green fertilizer – Means a nitrogen-based fertilizer produced from green hydrogen.
• Green hydrogen – Means hydrogen produced by splitting water molecules using either 1) grid-based electrolyzers that have matched their electricity consumption with wind or solar, or 2) electrolyzers connected directly to a wind or solar facility. The green hydrogen must have a carbon intensity not greater than four kilograms of carbon dioxide equivalent per kilogram of hydrogen produced. This carbon intensity threshold aligns with the Inflation Reduction Act (IRA) Clean Hydrogen provisions.
• Carbon intensity – Means a measure of lifecycle greenhouse gas emissions for the process to produce a unit of energy or product. Carbon intensity is a way to compare environmental impacts of different fuels, products, and activities. The U.S. Department of Energy Argonne Laboratory GREET model assesses lifecycle greenhouse gas emissions of fuels and products like hydrogen.

Questions & answers

These are some common questions about the Green Fertilizer Grant Program.

• What can the grant funds be used for?
  • The only eligible expenses allowed in this program are investments in green fertilizer production facilities located in Minnesota. Eligible expense guidance applies to the grantee, not to the activities of the green fertilizer production facility. We have defined "invest" to mean the purchase of equity shares, or a similar ownership stake.
• Will you consider a different reimbursement payment cycle following an initial investment in a Green Fertilizer Production Facility? Is there flexibility so a grantee could draw down their funding award earlier if they’ve invested in a project that’s in the early stage of development?
  • The Green Fertilizer Grant Program is a reimbursement grant. If the expected payment cycle outlined in the RFP is not ideal, an applicant can propose an alternative payment cycle in their application. The payment cycles can be negotiated during development of the grant award agreement. 
    When evaluating requests for alternative payment cycles, we will consider the grant program priorities of 1) projects demonstrating strong business readiness, and 2) projects demonstrating support through private financing, state loans, or federal sources.
• If a cooperative is operating in Minnesota (Principal Place of Business), but is registered as a foreign cooperative (registered with another state’s Secretary of State), is this business eligible to apply?
  • To be eligible for this grant, the applicant must satisfy the requirement for the definition of “Cooperative” organized under Minnesota Statutes Chapter 308A and 308B, where “Cooperative" means “an association conducting business on a cooperative plan that is organized under this chapter or is subject to this chapter.”
• Can a cooperative that is not registered as a 308A or 308B within the state of Minnesota collaborate with a cooperative that is registered as a 308A or 308B in the state of Minnesota?
  • Agricultural or rural electric cooperatives registered with the state of Minnesota as 308A and 308B are the only entities eligible to receive a grant award, and this entity must be the organization that receives the ownership stake in the green fertilizer production facility. Cooperatives registered as 308A and 308B may develop partnerships with other entities as their business needs require.
• If the green fertilizer production facility is not operating at commercial scale by July 1, 2030, the MDA has the right to recover grant funds from the cooperative investor. Why is this provision necessary?
  • The grant contract agreement includes a provision allowing us to recover grant funds from a project that does not produce green fertilizer at a commercial scale. This provision is included as a risk mitigation strategy to help ensure we are responsible stewards of taxpayer dollars and grant awards lead to measurable outcomes for Minnesotans.

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Green fertilizer process

1. Renewable energy is created from solar and wind.
2. The energy powers an electrolyzer which splits water (H20) into oxygen (O2) and hydrogen (H2).
3. At the same time, a process of air separation gathers nitrogen (N2) and is stored with the hydrogen (H2) collected from electrolysis.
4. The hydrogen and nitrogen are combined into ammonia (NH3) at the plant, which can then be used for other products like:
   • Fertilizer
   • Energy storage
   • Ammonia for shipping fuel
   • Renewable chemicals