Iowa Gov. Terry Branstad on May 24 signed S.F. 2309 into law. The bill passed the recent 2016 session of the Iowa Legislature and includes the extension of several important renewable fuels tax incentives through 2024. The signing took place at the REG biodiesel plant in Newton, a 30-million-gallon-per-year capacity biodiesel production facility located in central Iowa. Iowa Renewable Fuels Association (IRFA) policy director Grant Menke released the following statement:

BOOST FOR BIOFUELS: Iowa Gov. Terry Branstad signed a bill on May 24 to expand state ethanol and biodiesel incentives. The newly signed legislation is being praised as a way to boost biodiesel use and to keep production in Iowa.

"We commend Gov. Branstad and the Iowa Legislature for once again stepping up for renewable fuels and ensuring these important incentives continue. Iowa already leads the nation in renewable fuels production, and we want to ensure we continue to lead the way in the availability and use of higher ethanol and biodiesel blends as well. The signing of this legislation does just that while also supporting Iowa jobs, cleaner air, competition at the pump, and lower fuel prices for Iowa's motorists. And with EPA's recent lackluster RFS proposal, this legislation will be more important than ever."

New law extends two retailer tax credits for ethanol blends

Included in this legislation is the extension of two retailer tax credits for ethanol blends. The E85 Promotion Tax Credit, available for fuel blends containing 70% to 85% ethanol, is extended at 16 cents per gallon through 2024. The E15 tax credit, available for fuel blends containing 15% to 69% ethanol, is extended through 2024 at 3 cents per gallon from September 16 through May 31, and 10 cents per gallon from June 1 through September 15 to help alleviate the summertime blending issues for registered E15.

“The forward-thinking legislation also included an extension and adjustment of the Biodiesel Blended Fuel Retailer Tax Credit,” says Menke. While the incentive will continue at 4.5 cents per gallon for retailers offering a biodiesel blend containing a minimum of 5% biodiesel (B5) through 2017, from 2018 through 2024 it will then provide a 3.5 cents per gallon incentive on B5, and a 5.5 cents per gallon credit on B11, or diesel blended with a minimum of 11% biodiesel.

Iowa’s renewable fuels industry is an important economic driver

According to a recent IRFA study, Iowa's renewable fuels industry accounts for more than $4.6 billion of Iowa GDP, generates $2.3 billion in income for Iowa households and supports more than 43,000 jobs throughout all sectors of the Iowa economy.

Iowa is the nation's leader in renewable fuels production. Iowa has 43 ethanol refineries capable of producing 4 billion gallons annually, including nearly 55 million gallons of annual cellulosic ethanol production capacity. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually. The IRFA was formed in 2002 to represent the state's liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development. For more information visit the IRFA website www.IowaRFA.org.

Iowa Biodiesel Board lauds bill signed to boost biodiesel usage

It just makes sense! That’s the sentiment from the Iowa Biodiesel Board and other biodiesel supporters as Gov. Branstad signed SF 2309 into law on May 24, expanding the state of Iowa’s biodiesel incentives. The newly signed legislation is aimed at keeping biodiesel production in the state.

The bill includes a tax credit that helps keep the state’s 13 biodiesel producers competitive on a national scale. It also includes a retailer’s credit that entices fuel retailers to carry higher blends of biodiesel than they may currently carry. Flanked by biodiesel supporters from around the state, Branstad signed the legislation at the REG Newton biodiesel plant located in Newton, Iowa.

Branstad signs legislation expanding state biodiesel incentives

“We are extremely grateful Gov. Branstad and the Iowa legislature appreciates the impact of biodiesel in Iowa and beyond,” said Grant Kimberley, Iowa Biodiesel Board executive director. “Renewable fuels like biodiesel point the way to a more sustainable energy future—and a more independent, homegrown energy future as well.”

This legislation:

* Extends the Biodiesel Production Credit through 2024; it was originally set to expire at the end of next year. The credit is 2 cents per gallon on the first 25 million gallons of production per biodiesel plant, and helps keep biodiesel production and economic activity in Iowa.

* Extends and expands the Biodiesel Promotion Retail Tax Credit. The incentive will continue to provide petroleum retailers 4.5 cents a gallon on blends of at least 5% biodiesel (B5) through 2017. From 2018 through 2024, the B5 incentive will drop to 3.5 cents per gallon, but an additional incentive of 5.5 cents per gallon will take effect for gallons of B11 and higher.

Iowa can have even more economic growth thanks to biofuels

“With these additional incentives, Iowa is perfectly positioned to experience even more economic growth in environmentally friendly biofuels,” Kimberley added. 

The governor previously signed legislation to secure another year of funding for the state’s successful biodiesel and ethanol blender pump program, known as the Renewable Fuels Infrastructure Program.

In 2015, Iowa’s operating biodiesel plants produced a record 242 million gallons of biodiesel. The industry supported more than 3,000 jobs and contributed almost $345 million in GDP for the year. Biodiesel is an advanced biofuel made from agricultural byproducts and co-products, such as soybean oil. The Iowa Biodiesel Board is a state trade association representing the biodiesel industry.