On April 24, the State of Iowa took measures to remain a national leader in domestic fuel production. The House passed a bill (SF2344) that provides a key incentive for biodiesel production in Iowa, a bill the Senate also embraced. 

“Today our legislators have demonstrated foresight in supporting one of the most powerful economic drivers Iowa has—biofuels,” said Grant Kimberley, executive director of the Iowa Biodiesel Board. “Not only does this biodiesel policy benefit Iowa’s economy and a rural renaissance, it also props up our nation’s energy security and environment by encouraging domestic fuel production.” 

The legislation provides a biodiesel producer incentive in the form of a 2-cent-per-gallon refundable credit on the first 25 million gallons of biodiesel produced in any single plant. The incentive is set to expire at the end of calendar year 2014, but the legislation extends the credit through 2017.

Kimberley said the legislation, which Gov. Terry Branstad is expected to sign into law, will help shelter the state’s biodiesel industry from the impact of uncertainty over the federal renewable fuel standard and other federal policies. 

“Governor Branstad has been one of the most outspoken supporters of renewable fuels in the nation, and we thank him heartily for his support on this state legislation, too,” Kimberley said. “Iowa needs to remain competitive with surrounding states that robustly promote biodiesel.” 

Those other state policies include a B5 requirement in Minnesota, an exemption from state sales tax in Illinois and a lucrative production incentive in Missouri. 

A recent study shows the increase in economic activity generated by Iowa biodiesel supported more than 7,000 full-time equivalent jobs in the state in 2013. The industry’s contribution to Iowa’s GDP was $520 million. Also, corn, soybean and livestock producers all benefit from biodiesel production, according to economic analysis.

Biodiesel is an advanced biofuel made from agricultural byproducts and coproducts, such as soybean oil. The Iowa Biodiesel Board is a state trade association representing the biodiesel industry.