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Serving: IA

ISA: Biodiesel standard would drive soybean demand

AFransen/Getty Images Biodiesel plant
BIODIESEL STANDARD: The pro-biofuels legislation would phase in fuels sold in Iowa that incorporate increased blends of soy-based biodiesel and corn-based ethanol.
According to the Iowa Soybean Association, proposed biodiesel standard would boost crop demand and rural economy.

Pro-biofuels legislation proposed by Iowa Gov. Kim Reynolds and supported by the Iowa Soybean Association would create jobs, improve air quality and boost domestic markets and income opportunities for farmers, according to a statement by ISA.

The bill would phase in fuels sold in Iowa that incorporate increased blends of soy-based biodiesel and corn-based ethanol. Beginning in 2022, the legislation would establish an 11% minimum biodiesel standard for diesel fuel sold during warmer months, ramping up to a 20% blend during warmer months in 2024 and later. October through March would allow for biodiesel blends of 5%, which is recognized as standard diesel fuel by the standard-setting organization American Society for Testing and Materials. In addition to $5 million included in the governor's fiscal year 2022 budget proposal, the bill also adds $5 million from the general fund for the Iowa Renewable Fuels Infrastructure Program.

The B11 standard would be effective from the date of passage during the months of April 1 to Sept. 30. The B20 standard would start April 1, 2024. Both standards allow time for fuel retailers to transition blends.

"A biofuel standard establishes certainty for a key domestic market for Iowa farmers," says Jeff Jorgenson, ISA president and Sidney, Iowa, farmer. "It will increase demand for biodiesel by an estimated 203 million gallons while driving demand for an additional 108 million bushels of soybeans over five years."

By creating greater value for the oil from each bushel of soybeans, soybean meal costs will decline for livestock farmers, according to the statement.

"As farmers, it's important to market the products we grow," Jorgenson adds. "This policy is a win for Iowa, and keeping our products and their benefits local."

Boosting local demand

According to ABF Economics, creating larger and more stable local demand in Iowa can greatly enlarge the latent economic benefits of biofuels production represented by the more than 50 million gallons of unutilized biodiesel production capacity. Putting this existing manufacturing infrastructure to work would greatly increase Iowa's household income and job benefits related to Iowa biofuels production.

A strong biodiesel industry directly supports farm income and, thus, Iowa's economic vitality. Soybean-based fuel contributed $1.17, or 13%, to every bushel of soybeans sold in Iowa last year. This extends the economic benefits to livestock farmers who then pay less for soybean meal for livestock feed and to consumers who enjoy lower food prices.

Biodiesel currently supports nearly 4,000 Iowa jobs and contributes almost $500 million to the state's economy.

According to ISA, biodiesel reduces life-cycle greenhouse gases by up to 86%, particulate matter by 47% and hydrocarbon emissions by 67% in older diesel engines.

Dave Walton, ISA treasurer and a soybean, corn and livestock farmer near Wilton, Iowa, says the sustainability of biodiesel gives Iowa an edge when it comes to national energy leadership.

"Times are changing, and when urban cities start advocating for electric vehicles, legislation like the biofuel standard positions Iowa as being committed and involved in the conversations about a greener future," he says. "While we can't operate large farm equipment, semis and trucks on electricity for the foreseeable future, biodiesel is an immediate answer to lowering carbon emissions with no change to our transportation infrastructure."

Source: Iowa Soybean Association, which is responsible for the information provided and is wholly owned by the source. Informa Business Media and its subsidiaries aren't responsible for any of the content contained in this information asset.

 

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