Biodiesel and Ethanol

Iowa Gov. Branstad Considering Biodiesel Incentives Bill

May 17, 2011

DES MOINES, IA  – Iowa’s biodiesel industry is urging Gov. Terry Branstad to sign legislation that would give Iowa one of the most comprehensive biodiesel fuel policies in the U.S. 

The bill passed the Iowa House and Senate earlier this month.

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

The bill includes provisions to:

  • Extend the Iowa biodiesel retailer credit at 2 cents per gallon for blends of 2 percent biodiesel (B2) and 4.5 cents per gallon for 5 percent biodiesel (B5) in 2012, followed by 4.5 cents per gallon of B5 through 2017
  • 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 first 25 million gallons per producer)
  • Provide $3 million a year to the Renewable Fuels Infrastructure Board
  • Give the Iowa Biodiesel Board a seat on the Renewable Fuels Infrastructure Board.

“This is legislation that truly makes Iowa biodiesel competitive in the national marketplace, and I commend our legislators for empowering our state’s industry,” said Randy Olson, executive director of the Iowa Biodiesel Board. 

As a result of the federal Renewable Fuels Standard-2, the biodiesel industry is poised to sell 800 million gallons of biodiesel nationally. However, Iowa’s capacity alone is about 300 million, and it is widely believed that the states with the strongest policies will capture the largest share of that market.  

Olson urged Branstad to sign the legislation. 

“Putting biodiesel producers back to work is good for the state’s economy, and also will help make Iowa the renewable energy capital of the world in the face of rising oil prices,” Olson said. 

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