Back in business: Iowa governor signs biodiesel legislation

Iowa’s biodiesel industry is putting people back to work and reclaiming its leadership position. The Iowa Biodiesel Board praised comprehensive legislation signed by Governor Terry Branstad today that will give the state industry an edge in the national marketplace. 

The legislation creates a system that encourages availability of biodiesel at the pump, provides an incentive for local production, and invests in the infrastructure needed for wide distribution.

Randy Olson, executive director of the Iowa Biodiesel Board, said the legislation will benefit all Iowans by supporting the state’s economy and jobs, while decreasing the use of foreign oil.

“Our state has 15 biodiesel plants that have been idle or cut production in the last couple of years,” Olson said. “It’s high time we get those plants churning out domestically produced fuel again…a fuel that is a drop-in replacement for diesel here and now, and not just a distant idea.”

The renewable energy bill, Senate File 531, will:

- Extend the Iowa biodiesel retailer credit, at 2 cents per gallon for blends of 2 percent biodiesel (B2) in 2012, and 4.5 cents per gallon for 5 percent biodiesel (B5) in 2012 through 2017

- Make it easier for petroleum marketers to achieve the credit

- Add a biodiesel producer incentive of 3 cents per gallon in 2012, 2.5 cents per gallon in 2013, and 2 cents per gallon in 2014 (for the first 25 million gallons per facility)

- Provide $3 million a year to the Renewable Fuels Infrastructure Board

- Give the Iowa Biodiesel Board a seat on the Renewable Fuels Infrastructure Board

The state legislation is expected to enhance Iowa’s role in meeting the demand created by the revised renewable fuel standard, RFS2. The biodiesel industry is poised to sell 800 million gallons of biodiesel nationally this year. Iowa’s capacity alone is about 300 MMgy, and it is widely believed that the states with the strongest policies will capture the largest share of that market.