Look for more biofuels in Iowa, thanks to a new bill that’s passed both the Iowa House and Senate and currently awaits the governor’s signature. This Biofuels Access Bill will encourage the sale of higher blends of biodiesel and ethanol through incentives, as well as enhancing the infrastructure for retailers.
Grant Kimberley, Iowa Biofuels Board executive director and Iowa Soybean Association senior director of market development, says the current policy incentivized lower-percent blends, but this will help with the higher-percent blends.
“We applaud lawmakers on the passage of this landmark Iowa legislation, which we anticipate will increase consumer access to higher blends of biodiesel. Consumers, the economy and the environment all stand to gain. This is the most comprehensive state legislation anywhere in the nation, offering something for everyone — including the continuation of a fuel tax differential for consumers, infrastructure dollars and tax credits for fuel retailers and an increased biodiesel production tax credit for producers,” Kimberley says.
Expansion of producing higher-percentage blends
This bill is expected to increase biodiesel blends of 5% and 11% to 20% or more. Kimberley says these blends become useful in other parts of the country and are environmentally friendly to meet many of the standards set in those states.
Ethanol also benefits from this bill, as it burns cleaner at higher percentages as well. “The Biofuels Access Bill is a key piece of ethanol legislation to keep Iowa as the leader of not only corn and ethanol production, but also in access to cleaner-burning, more affordable, homegrown ethanol,” says Lance Lillibridge, a Vinton, Iowa, farmer and president of the Iowa Corn Growers Association. “This bill is a top priority for ICGA because it expands the availability of E15 to consumers, saving them an average of 10 cents per gallon; provides additional funding for retailers in the Renewable Fuels Infrastructure Program and creates additional markets for Iowa corn farmers.”
The legislation will allow consumers better access to biofuels and farmers more opportunities to market their corn and soybeans. Iowa’s 42 ethanol plants and 11 biodiesel plants will be able to ramp up production with these changes, adding to the value of Iowa’s grains. Kimberley says the biodiesel plants are working to increase capacity and expand production. “The more production we can have in Iowa, even if the final product is going to other parts of the U.S., the better it is for Iowa’s farmers,” he says. “Previous legislation successfully encouraged blends of 11% biodiesel, but in a sense, we have reached a plateau. We are eager to move Iowa’s energy transformation onward and upward toward more B20.”
Farmer-leaders like the bill
Iowa’s farmer-leaders believe this will help farmers and Iowa communities. Robb Ewoldt, a Davenport, Iowa, farmer and president of the Iowa Soybean Association, says, “This legislation will bring Iowa to the forefront of homegrown energy. As land stewards and community leaders across our 99 counties, the state’s 40,000 soybean growers understand the important role of biofuels in supporting growers, growing communities and investing in cleaner-burning fuels to meet carbon reduction goals.”
Lillibridge agrees and says the Iowa Biofuels Access Bill is consumer-friendly and will benefit all Iowans. The E15 ethanol burns clean and is more affordable for vehicles made in 2001 and newer. During times of high gas prices, these are important factors for consumers and help provide farmers with a market for their grain
“I applaud Gov. Reynolds for her bold proposal and thank the Legislature for working with stakeholders to move this bill forward. The legislation will ensure Iowans have access to lower-cost, cleaner-burning fuels at the pump while also continuing to invest in our state’s biofuel infrastructure,” says Mike Naig, Iowa Secretary of Agriculture. “Renewable fuels provide an additional market for Iowa’s farmers, bolster thousands of jobs in rural communities and are a significant contributor to domestic energy independence. At a time when Iowans are feeling a pinch at the pump, biofuels offer consumers more choice and a more affordable option — an all-around win for Iowa.”
Kimberley says this legislation comes when supply-chain challenges and federal policy have made it difficult for the biofuel industry. The expansion of state producer credit offers a cushion for producers, and with uncertainty of the fuel industry worldwide, the passage of the governor’s Biofuel Access Bill benefits everyone. Research showed in 2020 that biofuel production supported 13% of the price per bushel of soybeans, which equated to $1.78 per bushel. Kimberley says with the increased price of fuel and soybeans, that amount is more than $2 per bushel.