A proposed amendment would strengthen biofuels marketing in Iowa. Iowa led the nation in biodiesel and ethanol production in 2020. (Photo: Iowa Soybean Association)
Amendment seeks to strengthen Iowa biofuels bill
April 27, 2021 | Bethany Baratta
A proposed amendment to the Iowa Biofuels Standard Bill strengthens support for homegrown biodiesel and ethanol while providing funding availability for retailers to update their fuel infrastructure.
Rep. Lee Hein (R-Monticello), chair of the House Ways and Means Committee, introduced the amendment late last week.
“With the Hein amendment, the overall bill, which would combine a blending floor with incentives for retailers, would give Iowa the strongest biofuels policy in the U.S.,” says Michael Dolch, director of public affairs for the Iowa Soybean Association (ISA).
Hein’s amendment (H1398) does the following:
- Reduces biofuel content variance allowed in fuel testing from 2% to 1%
- Sets a standard for 11% biodiesel (B11) beginning April 1, 2022
- Sets an E15 standard date effective in 2026 (making it the first E15 standard in the nation)
- Removes 2024 sunset of biodiesel infrastructure eligibility under RFIP
- Provides formula for distributing Iowa Renewable Infrastructure Program grants (60% to upgrade existing sites, 40% to new construction with new retailers receiving the first priority)
- Nearly quadruples the funding for RFIP grants to help retailers add E15/E85 and B20 fuel options to customers.
Hein says the Iowa Biofuels Standard Bill is a step toward recognizing all that biodiesel and ethanol brings to the state and the country.
“Iowa is the number one producer of biodiesel and ethanol in the country,” Hein told Andy Peterson of WHO Radio. Iowa produced 351 million gallons of biodiesel and 3.7 billion gallons of ethanol in 2020 and continues to be a leader in biofuels production.
“It (biofuels) is an economic driver in the state for corn and soybean producers.”
He noted that livestock farmers also benefit from biofuels production as ethanol and biodiesel byproducts are used for feedstuffs.
“It has a long-ranging outreach in the Iowa economy,” Hein said.
ISA maintains strong support for the proposed amendment and the Iowa Biofuel Standards bill as a way to boost soybean demand and biodiesel production in the state.
Dolch says any expansion of biodiesel production and use is good for farmers.
“This legislation would make gains for soybean farmers and biodiesel producers,” Dolch said. “We’re optimistic that we’ll see Chairman Hein’s amendment and the underlying bill across the finish line.”
As Iowa soybean farmers get started planting an estimated 9.8 million acres of soybeans, additional demand for soybean oil—through biodiesel—is an added price support for this year’s crop.
Biodiesel adds about 13% to the net market value of the price of soybeans, or about $1.80-1.95 in today’s prices, according to ISA Senior Director of Market Development Grant Kimberley.
Biodiesel production also benefits livestock producers by reducing the price of soybean meal by $21 per metric ton. This legislation could expand on these benefits.
Sixty-one percent of all on-road diesel contains B11 or higher biodiesel blend, but other states are seeing higher usage due to their biofuel standards, Kimberley notes.
The original biofuels bill, if passed, would have increased the total demand for biodiesel by over 200 million gallons over the course of 5 years. That translates back to an increase of over 108 million bushels of additional soybean demand, says Kimberley, who also serves as the executive director for the Iowa Biodiesel Board.
Ninety-three percent of farmers responding to an ISA Farmer Member survey conducted by Harvest Research in the fall of 2020 said they either use biodiesel, have used it in the past, or would like to use it in the future.
Sealing our fate
Dolch says engaging in state biofuel policy discussions provides farmers an opportunity to show how much biodiesel and ethanol matters to Iowa, which leads the way in the production of both homegrown fuels.
Given the uncertainty surrounding federal renewable fuel policies, it’s a way to champion local use and production of the fuels.
“Regardless of what’s happening federally, it’s an opportunity as a state, as a leader in soybean and corn production and biodiesel and ethanol production, to seal our own fate and destiny, pass this bill and not rely on Washington to do that for us,” Dolch said.
The amended and renumbered bill, HF859, is now eligible for debate on the House floor. The Senate is expected to follow House consideration with a similar bill.