Iowa House, Senate pass governor’s biofuels bill

By Erin Voegele | April 26, 2022

The Iowa Senate and Iowa House of Representatives on April 26 each voted to approve legislation introduced by Iowa Gov. Kim Reynolds in January that will increase consumer access to higher blends of ethanol and biodiesel. Reynolds is expected to sign the bill soon.

For ethanol, the legislation makes E15 the standard blend of gasoline to be sold within the state by 2026. It also updates the E15 promotion tax credit to 9 cents per gallon year-round through 2025. For biodiesel, the bill increases the state’s biodiesel production tax credit from 2 cents per gallon to 4 cents per gallon. It also maintains the current biodiesel fuel tax differential, but applies it to blends of B20 rather than B11, and extends fuel retailer tax credits for B11 and higher while introducing new credits for higher blends like B20 and B30. In addition, the legislation supports increased use of both biodiesel and ethanol by increasing funding for the state’s renewable fuel infrastructure program.

The Iowa House on Feb. 2 voted 82 to 10 in favor of the bill, H.F. 2128. The Senate approved an amended version of the legislation on April 26 by a vote of 42 to 3. Shortly after the Senate vote, the House also passed the amended bill by a vote of 78 to 13.

The Iowa Renewable Fuels Association is applauding the Iowa legislature for passing the governor’s biofuel bill. “Today was a victory for Iowa consumers,” said Monte Shaw, executive director of the IRFA. “Every person in Iowa deserves the choice of higher blends like E15 and B20. It’s also a victory for Iowa leadership as this legislation is already being looked at by other states as a model for how to promote access to lower-cost, cleaner-burning fuels. We would not be here today if not for Governor Kim Reynolds crafting this bill and pushing it over the finish line. Lots of legislators and other groups played major roles, but Gov. Reynold’s started the process and saw it threw to the end. Iowa’s biofuels supporters cannot say thank you enough. It’s exciting to see the leading corn, soybean and biofuels production state also be the leading biofuels policy state.”

The Iowa Soybean Association and Iowa Biodiesel Board also released statements in support of legislation. “Once signed, this legislation will bring Iowa to the forefront of homegrown energy,” said Robb Ewoldt, president of the ISA. “As land stewards and community leaders across our 99 counties, the state’s 40,000 soybean growers understand the important role of biofuels in supporting growers, growing communities and investing in cleaner-burning fuels to meet carbon reduction goals.

“By increasing soybean oil value, biodiesel supports 13 percent of the price per bushel of soybeans,” Ewoldt continued. “This equated to $1.78 per bushel in 2020, while lowering the price of meal for livestock producers and the food supply. "We're grateful for Governor Reynolds' leadership and look forward to her signing this important legislation that will continue to drive opportunities for Iowa farmers and put our state in a position to lead on sustainable energy.”

“We applaud lawmakers on the passage of this landmark Iowa legislation, which we anticipate will increase consumer access to higher blends of biodiesel,” added Grant Kimberley, executive director of the IBB and senior director of market development at the ISA. “Consumers, the economy and the environment all stand to gain. This is the most comprehensive state legislation anywhere in the nation, offering something for everyone – including the continuation of a fuel tax differential for consumers, infrastructure dollars and tax credits for fuel retailers, and an increased biodiesel production tax credit for producers. Previous legislation successfully encouraged blends of 11 percent biodiesel (B11), but in a sense, we have reached a plateau. We are eager to move Iowa’s energy transformation onward and upward toward more B20.

“This legislation comes at a critical time in history,” Kimberley added. “Supply chain challenges and federal policy limbo make this a precarious time for our industry. The expansion of our state’s producer credit offers a new cushion for biodiesel producers that is quite significant. Worldwide uncertainty and fuel price instability also impacts consumers. A diverse fuel supply with more low-carbon fuel made in America benefits everyone. The passage of the Governor’s Biofuel Access Bill makes us optimistic for Iowa’s future as the leading biodiesel-producing state. We thank House and Senate leaders, and the governor, for making this bill a priority in the session.”

Growth Energy stressed that the legislation will give Iowans cleaner, more affordable fuel options. “This week’s bipartisan and bicameral support of the Biofuels Access Bill underscores Iowa legislators’ strong commitment to making statewide E15 a reality, a move that could soon provide all families across Iowa access to affordable, engine smart, earth kind fuel options,” said Emil Skor, CEO of Growth Energy. “As our nation was reminded earlier this month with President Biden’s national E15 announcement, Iowa is a leader in addressing high gas prices and rising climate challenges through expanded access to higher biofuel blends. Research shows that statewide E15 in Iowa could cut climate emissions by 180,000 metric tons, the equivalent of removing almost 40,000 vehicles off the road across the state. In recent weeks, drivers in Iowa have seen significant savings when filling up with E15, which makes a meaningful difference, especially amid today’s high gas prices. 

“We thank Governor Reynolds for her leadership; Speaker Grassley, Minority Leader Konfrst, and Chair Hein in the House; and Majority Leader Whitver, Sens. Zumbach, Brown, and Minority Leader Wahls in the Senate for their strong support of biofuels and for once again placing Iowa at the forefront of providing access to cleaner, American biofuels with the passage of this legislation,” Skor added. “We look forward to Governor Reynolds’ swift approval of the 2022 Biofuel Access Bill and for this legislation to serve as an example for biofuels’ role in decarbonizing our transportation.” 






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