IBB: State support remains critical, advocates say during Iowa Biodiesel Hill Day
SOURCE: Iowa Biodiesel Board
March 5, 2024
BY Iowa Biodiesel Board
Iowa continues to lead the nation in both biodiesel production and comprehensive pro-biodiesel state policies – and that's not a coincidence. That was the message today from biodiesel producers, soybean farmers and other supporters as they met with Iowa lawmakers at the State Capitol.
The Iowa Biodiesel Board, an independent board founded by the Iowa Soybean Association and biodiesel plants, hosted its annual Iowa Biodiesel Day on the Hill on March 5.
“Our industry – including soybean farmers – continues to face a great deal of market uncertainty due to federal policy fluctuations, so the expansion of our state’s producer credit and other policies offers a significant safeguard,” said Suzanne Shirbroun, ISA president and soybean farmer from Farmersburg, Iowa.
The advocates continued to stress the importance of state policies to help shield the biodiesel industry from concerns over uncertain federal policies like the Renewable Fuel Standard. The Hill Day came in the wake of Chevron REG’s announcement that the company will idle its biodiesel plant in Ralston, Iowa indefinitely.
Advertisement
Chevron REG cited “poor market conditions” as a result of low RFS volumes as the primary reason. The U.S. EPA has supported only low biomass-based diesel growth under the program.
“While we were disappointed to learn of the idling of the biodiesel plant in Ralston, we have not heard of plans for any additional biodiesel plants in the state to go off-line,” said Grant Kimberley, IBB executive director. “Our strong state policies are a big reason for that.”
Some of the most comprehensive biofuels legislation in the country has taken effect in Iowa and has begun to improve consumer access to low-carbon biodiesel statewide, including blends like B20 (20% biodiesel) and B30 (30% biodiesel), Kimberley noted.
Iowa began its enhanced incentives in 2016. According to the latest Iowa Department of Revenue data, the pure biodiesel gallons sold in Iowa have increased by almost 80% since 2016 (64.3 million gallons in 2022). A new incentive for B30 took effect last year.
Advertisement
The Governor’s 2022 Biofuels Access Bill (HF2128) passed by wide bipartisan margins in 2022. The law is increasing consumer access to higher biofuel blends like 20% biodiesel (B20) and even B30 – the first legislation in the nation to do so.
The key biodiesel policies in the state include:
- A credit for fuel retailers for 11% biodiesel (B11) at 5 cents per gallon until 2027, and new credits of 7 cpg for B20 and 10 cpg for B30.
- A Biodiesel Production Tax Credit of 4 cents per gallon (sunset 2027)
- A Biodiesel Fuel Tax Differential to be based on the higher B20 blend beginning in 2026 and expiring in 2030.
- The Renewable Fuel Infrastructure Program to help retailers modernize equipment for higher blends at the retail level.
According to a study by ABF Economics, in 2023, the biodiesel industry supported about:
- $850 million of Iowa GDP
- 5,700 fulltime-equivalent jobs
- $410 million of household income for Iowans
“By increasing soybean oil value, biodiesel supports 13% of the price per bushel of soybeans – and that’s not small change,” Shirbroun said.
Biodiesel is an advanced biofuel made from agricultural byproducts and co-products, such as soybean oil.
Related Stories
CoBank latest quarterly research report highlights current challenges facing the biobased diesel industry. The report cites policy uncertainty and trade disruptions due to tariff disputes as factors impacting biofuel producers.
The U.S. EIA on April 15 released its Annual Energy Outlook 2025, which includes energy trend projections through 2050. The U.S. DOE, however, is cautioning that the forecasts do not reflect the Trump administration’s energy policy changes.
Iowa Secretary of Agriculture Mike Naig on April 10 announced that the Iowa Renewable Fuels Infrastructure Program board recently approved 114 project applications from Iowa gas stations, totaling more than $2.88 million.
The USDA on April 14 announced the cancellation of its Partnerships for Climate-Smart Commodities program. Select projects that meet certain requirements may continue under a new Advancing Markets for Producers initiative.
The governors of Iowa, Nebraska, South Dakota and Missouri on April 10 sent a letter to U.S. EPA Administrator Lee Zeldin urging the agency to set higher Renewable Fuel Standard renewable volume obligations (RVOs).
Upcoming Events
