In early May the Iowa House approved legislation, passed previously by the Senate, which would give Iowa one of the most comprehensive biodiesel fuel policies in the United States.

ISA President Randy VanKooten responded on behalf of the association. VanKooten said, “Even though ISA pushed for a slightly higher retail credit, we believe 4.5 cents per gallon of B5 is significant and will provide greater incentives for retailers to offer higher blends of soy biodiesel. The bill also provides a new production credit and funding for the Renewable Fuels Infrastructure. These wins can only strengthen Iowa’s biodiesel industry.”

More specifically, Senate File 531:
• Extends the Iowa biodiesel retailer credit, at 2 cents per gallon for blends of 2 percent biodiesel (B2) and 4.5 cents per gallon for 5 percent biodiesel (B5) in 2012, followed by 4.5 cents per gallon of B5 through 2017;
• Makes it easier for petroleum marketers to achieve credit;
• Adds a biodiesel production incentive of 3 cents per gallon in 2012, 2.5 cents per gallon in 2013, and 2 cents per gallon in 2014 (for first 25 million gallons per producer);
• Provides $3 million a year to the Renewable Fuels Infrastructure Board;
• Gives the Iowa Biodiesel Board a seat on the Renewable Fuels Infrastructure Board.

As a result of the federal Renewable Fuels Standard-2, the biodiesel industry is poised to sell 800 million gallons ofbiodiesel nationally. However, Iowa’s capacity alone is about 300 million, and it is widely believed the states with the strongest policies will capture the largest share of that market.

“A healthy biodiesel industry is good for the agricultural economy, which is key to Iowa’s economic vitality, and provides much needed jobs,” VanKooten said.

The legislation was signed by Governor Branstad on May 26.