Iowa Governor Signs Landmark Biofuels Legislation into Law

Iowa Governor Kim Reynolds Tuesday signed into law some of the most comprehensive state biofuels legislation in the nation. The legislation is expected to boost the sale of higher blends of biodiesel through an incentive-based approach. Among other things, the bill increases a Biodiesel Production Tax Credit from two to four cents per gallon while updating the state’s Renewable Fuel Infrastructure Program to increase access to higher blends of biofuels. Clean Fuels CEO Donnell Rehagen says, “Iowa joins the ranks of Illinois, Minnesota and others with some of the most forwarding-thinking legislation that values the production and use of biodiesel.” The legislation also would provide access to E15 statewide by 2026 and update the E15 promotion tax credit to $0.09 per gallon year-round through 2025. Growth Energy CEO Emily Skor applauded the bill’s passage, saying the bill “offers drivers across Iowa the opportunity to not only save money at the pump but to make a simple change for the environment.”

Below are full releases from various ethanol/biofuels groups.

CLEAN FUELS ALLIANCE AMERICA

JEFFERSON CITY, MO – Iowa Governor Kim Reynolds today signed into law some of the most comprehensive state biofuels legislation in the nation, a move applauded by Clean Fuels Alliance America. The legislation (HF2128) is expected to boost the sale of higher blends of biodiesel through an incentive-based approach.

Among other things, the bill increases a Biodiesel Production Tax Credit from 2 to 4 cents per gallon while updating the state’s Renewable Fuel Infrastructure Program to increase access to higher blends of biofuels. The legislation maintains a Biodiesel Fuel Tax Differential, but applies it to blends of 20% biodiesel (B20) rather than B11. It extends current fuel retailer tax credits for B11 and higher, while introducing new credits for higher blends like B20 (7 cpg) and even B30 (10 cpg) – a national first.

“We congratulate Iowa on this significant legislation, helping to strengthen the biofuels corridor throughout the Midwest,” Clean Fuels CEO Donnell Rehagen said. “Iowa joins the ranks of Illinois, Minnesota and others with some of the most forwarding-thinking legislation that values the production and use of biodiesel. Along with renewable diesel, it is our nation’s best option here-and-now to decarbonize the heavy-duty transportation and home heating oil sectors.”

The governor herself originally proposed the legislation, dubbed the Governor’s Biofuel Access Bill, and made it a top priority for the legislative session. It was guided through the Iowa General Assembly by Sen. Dan Zumbach (R-Ryan), Sen. Waylon Brown (R-Osage) and Rep. Lee Hein (R-Monticello).

“I am proud that my biofuels legislation will lead to the single greatest expansion of biofuels in our state’s history, while providing our industry with consistency in the face of ever-changing federal policy,” Reynolds said.

Iowa produced an estimated 340 million gallons of biodiesel in 2021, making it the top biodiesel-producing state. A study by ABF Economics shows biodiesel supported 6,513 jobs in Iowa in 2021 and contributed $1.2 billion to the state’s Gross Domestic Product.

“We applaud House and Senate leaders, and Governor Reynolds, for making this bill a priority,” said Grant Kimberley, Iowa Biodiesel Board executive director and Iowa Soybean Association sr. director of market development. “In the face of market uncertainty, 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 impact consumers. A diverse fuel supply with more low-carbon fuel made in America benefits everyone from soybean farmers to the end consumer.”

Kimberley noted that previous legislation successfully encouraged blends of B11, but that the state has reached a plateau. He said the state is “…eager to move Iowa’s energy transformation onward and upward toward higher blends like B20 and B30.”

The bill will also make E15 ethanol more available statewide, with enhanced infrastructure cost-share opportunities for retailers.

The IBB, ISA and Iowa Renewable Fuels Association championed the effort on the ground, along with Farm Bureau, Iowa Corn and other ag and industry groups. Clean Fuels Alliance America provided valuable regulatory and technical assistance throughout, IBB and ISA said.

GROWTH ENERGY

WASHINGTON, D.C. – Today, Governor Kim Reynolds signed the 2022 Biofuel Access Bill into law, making Iowa the first state in the nation to implement statewide access to E15. The legislation would provide Iowans access to E15 statewide by 2026 and update the E15 promotion tax credit to $0.09 per gallon year-round through 2025. In a statement, Growth Energy CEO Emily Skor applauded the bill’s passage:

“Thanks to Governor Reynolds’ strong leadership, every Iowan will be able to access affordable, engine-kind and earth-friendly E15 at the pump,” said Skor. “The Biofuel Access Bill, first unveiled by Governor Reynolds at the beginning of this year, offers drivers across Iowa the opportunity to not only save money at the pump but to make a simple change for the environment by simply changing fuel. At the peak of high gas prices this spring, Iowans across the state were saving about $.30 per gallon at the pump while filling up with E15. These meaningful savings will be accessible across the state, all year long.

“Governor Reynolds’ legislation also allows drivers to make a difference for the environment by simply filling up at the pump. 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. This initiative is a win-win for the economy and the environment, and we’re glad to see this legislation enacted, which will have a permanent impact for generations to come.

“We also thank 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 in this year’s legislative session, and for once again placing Iowa at the forefront of ensuring access to cleaner, American biofuels with the passage of this legislation.”

To learn more about the enacted 2022 Biofuels Access Bill, click here.

POET

Prairie City, Iowa (May 17, 2022) – Today, POET, the world’s largest biofuel producer, applauded Governor Kim Reynolds for signing HF2128 into law. The bill, which passed the Iowa legislature with overwhelming bipartisan support, will guarantee access to E15 across the state by 2026. POET Founder and CEO Jeff Broin issued the following statement:

“Iowa today, America tomorrow. We see a nationwide market for E15 on the horizon. E15 is fueling freedom, and Iowa is leading the way by expanding market share for American-made biofuels that Russia and OPEC can never take away.”

“Iowa’s game-changing E15 standard will move America one step closer to energy independence, save drivers money at the pump, and grow dependable domestic markets for farm families. POET sincerely thanks Governor Reynolds and all our legislative champions in Iowa who are winning the fight for America’s fuel.”

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