Iowa Gov. Kim Reynolds gave a boost to the state’s renewable fuels industry Dec. 3 by signing an executive order requiring all new state-owned diesel-powered vehicles use at least 20% biodiesel. The move is expected to promote widespread acceptance of the 20% biodiesel blend. The requirement applies to the state’s purchase of diesel-powered cars, trucks, road graders, snowplows, tractors, etc.
Biodiesel purchases help boost demand for soybeans and soy oil, one of the sources used to make the biofuel, the governor noted in her announcement. Iowa is the nation’s second-largest producer of soybeans and largest producer of biodiesel. Iowa also produces more ethanol than any other state and is the leading producer of corn used for ethanol.
Timely announcement for Iowa
The state biodiesel mandate announced by Reynolds comes at a time when ethanol and biodiesel plants in Iowa and the nation are struggling. The renewable fuels industry blames exemptions that the U.S. Environmental Protection Agency has provided to the oil industry.
Since 2016, the Trump administration has granted 85 waivers that have exempted petroleum refiners from requirements to blend about 4 billion gallons of biofuel into the nation’s fuel supply. As a result, five ethanol and biodiesel plants have closed in Iowa, either permanently or temporarily. About 35 biofuel plants nationally have shut down, and many more have reduced production.
Reynolds and other state and national leaders are pushing EPA to replace the gallons lost to waivers by requiring other petroleum refiners to use more ethanol and biodiesel to make up the difference. The federal Renewable Fuel Standard requires that a certain amount of ethanol and biodiesel be blended into the nation’s fuel supply annually. The waivers reduce that amount.
B20 order applies to state fleets
The governor signed the executive order in front of hundreds of farmers at the Iowa Farm Bureau annual meeting in Des Moines. The order directs all executive agencies in Iowa’s state government, when buying diesel vehicles and engines, to purchase only those that have written support from the original equipment manufacturer to use B20 biodiesel or higher.
“This executive order is groundbreaking in helping biodiesel further shore up its rightful place in our nation’s fuel supply,” says Donnell Rehagen, CEO of the National Biodiesel Board. “While biodiesel has achieved support from most diesel engine manufacturers, some engine companies have said they haven’t received clear signals from customers that biodiesel support matters to them. With this executive order, the state of Iowa has once again gone to bat for biodiesel by sending a clear signal with its buying power.”
In a statement, Reynolds said renewable fuels “remain essential to the health of the ag economy, are sustainable environmentally and employ thousands of Iowans.” Iowa has 11 biodiesel plants that produced 365 million gallons of the fuel in 2018.
The Iowa Department of Transportation began using biodiesel blends in 1994, and now the DOT fleet uses B20 most of the year in almost everything with a diesel engine, including snow plows, trucks, graders and more.
“Farm income is at one of its all-time lows, and ensuring the full acceptance of higher blends of biodiesel can only help offset those struggles,” says Grant Kimberley, executive director of the Iowa Biodiesel Board. “I’m proud that our state and governor feel so strongly about biodiesel that they’re willing to take this kind of a stand.”
Sending a strong market signal
“The governor’s executive order sends a strong market signal to diesel engine manufacturers,” says Derek Winkel, president of the Iowa Renewable Fuels Association. “If we are serious about reducing greenhouse gas emissions from the transportation sector and boosting Iowa’s rural economy, we should be looking for new ways to increase biodiesel use. This proclamation by Gov. Reynolds sets the state of Iowa on a course to do exactly that by ensuring all new diesel vehicles can use higher biodiesel blends.”
This step will help ensure Iowa is not only a leading producer of biodiesel but also an avid consumer of biodiesel, says Monte Shaw, IRFA executive director. “This order by the governor comes at a time when the biodiesel industry is in greatest need of it,” he adds. “Between petroleum refinery exemptions to the RFS destroying biodiesel demand and the uncertain federal tax policy we have today for biodiesel, the biodiesel industry faces many headwinds these days. The executive order requiring use of B20 or higher blends opens up a new door of opportunity and will help drive biodiesel demand.”