ISA's Michael Dolch and Grant Kimberley examine information related to renewable fuels policy at the Iowa State Capitol. A recent amendment sets an 11% biodiesel blend from April 1 to September 30. (Photo: Joseph L. Murphy/Iowa Soybean Association)
Proposed amendments to Iowa biofuels bill
April 8, 2021 | Bethany Baratta
Though a stair-stepped approach to a 20% biodiesel blend (B20) standard seems to have slipped away for now, the Iowa Soybean Association (ISA) maintains strong support for the proposed Iowa Biofuel Standards bill as a way to boost soybean demand and biodiesel production in the state.
The Iowa House Ways and Means Committee approved an amendment to the bill recently. Among the changes impacting biodiesel: eliminating dyed diesel from the program and eliminating a biofuels standard from November through March.
The original bill would have included a phased-in approach to the biodiesel standard, starting with a B11 standard from April 1 to September 30, and B5 blends allowed from October 1 through March. B20 blends would have been the standard beginning April 1, 2024. It also included standards for ethanol blending and availability.
The proposed amendment set an 11% biodiesel blend (B11) standard during Iowa’s seven warmest months (April-October). The proposed amendment reduced the stair-stepped approach to B20 blends by 2024 as originally proposed. However, the updated language maintained various tax incentives for higher blends of biodiesel and needed funding for fueling infrastructure.
ISA’s Director of Public Affairs Michael Dolch says any expansion of biodiesel production and use is good for farmers.
“As amended, this legislation would make gains for soybean farmers and biodiesel producers,” Dolch said. “We’re optimistic that we’ll see this bill across the finish line.”
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Get the Facts
As Iowa farmers make their way to the field to plant 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 $1.50-1.80 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.