States provide policy stability for biodiesel industry
Minnesota and Iowa recently took steps in their already steadfast support of America’s advanced biofuel, biodiesel. With the uncertainty surrounding the federal biodiesel tax incentive and the renewable fuel standard (RFS) volumes, strong state biodiesel policies help stabilize the industry and provide a baseline for producers.
Recently, Iowa Gov. Terry Branstad signed into law an extension of the state’s biodiesel producer incentive.
“Iowa is a biofuels leader in this country and having states step to the plate with legislation supporting America’s advanced biofuel, biodiesel, is a win for our industry,” said Steven J. Levy, chairman of the National Biodiesel Board. “Our champions in Iowa have shown that hard work to grow this still-young industry pays off.”
The legislation is an extension of the current biodiesel producer incentive that is structured as a 2-cent-per-gallon refundable credit for the first 25 million gallons produced at any single plant in the state. The incentive was set to expire at the end of this year but the extension now moves that through 2017.
On July 1, Minnesota became the first state to move to B10 statewide in all diesel fuel.
“This sends a very important message that Minnesota remains a leader, because the state’s B2 mandate back in 2002 really jumpstarted the biodiesel industry nationwide,” said Ed Hegland, an Appleton, Minn., farmer and member of the NBB’s governing board. “Proving that a state can now go to B10 is a significant step in the right direction for renewable fuels.”
The move is expected to take the state’s yearly biodiesel consumption from 40 to 60 MMgy.
State biodiesel policies come in many forms across the country but regardless of their structure, they help provide a baseline of biodiesel demand on which the industry can build for future stability and growth.