(Photo credit: Joseph Hopper/Iowa Soybean Association)

Legislation passage fuels growth in biodiesel

April 28, 2022 | Bethany Baratta

A key legislative priority for Iowa Soybean Association (ISA) is headed to the governor’s desk after passing the Iowa Senate and Iowa House this week.

The Governor’s Biofuel Access Bill will encourage the sale of higher blends of biodiesel through an incentive-based approach. It will also make E15 ethanol more available statewide, with enhanced infrastructure cost-share opportunities for retailers.

The Iowa Senate passed the bill in a decisive 42-3 vote. The amended bill saw significant support in the Iowa House in a 81-13 passage.

“This legislation will bring Iowa to the forefront of homegrown energy,” said ISA President Robb Ewoldt, a soybean farmer near Davenport. 

The biodiesel portion of the bill:

·        Increases the Biodiesel Production Tax Credit from 2 to 4 cents per gallon;

·        Maintains the current Biodiesel Fuel Tax Differential, but applies this to blends of 20% biodiesel (B20) rather than B11;

·        Extends fuel retailer tax credits for B11 and higher, while introducing new credits for higher blends like B20 and (7 cents per gallon for B20 and 10 cents per gallon for B30); and

·        Expands statewide funding for the state’s Renewable Fuel Infrastructure Program.

“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,” said Grant Kimberley, executive director of the Iowa Biodiesel Board and ISA sr. director of market development. “Previous legislation successfully encouraged blends of 11% biodiesel (B11), but in a sense, we have reached a plateau. We are eager to move Iowa’s energy transformation onward and upward toward more B20.”

By increasing soybean oil value, biodiesel supports 13% of the price per bushel of soybeans. This equated to $1.78 per bushel in 2021, while lowering the price of meal for livestock producers and the food supply.

Once signed next week, this legislation will bring Iowa to the forefront of homegrown energy, Kimberley said.

"We're grateful for Governor Reynolds' leadership and look forward to her signing this important legislation that will continue to drive opportunities for Iowa farmers and put our state in a position to lead on sustainable energy.”

Brock Johnston contributed to this story.