Employees of Star Energy fill a tank with biodiesel fuel last summer. A strong biodiesel industry directly supports farm income and thus, Iowa’s economic vitality. (Photo: Joseph L. Murphy/Iowa Soybean Association)
Biodiesel Standard Drives Soybean Demand, Boosts Rural Economy and Paves Way for Cleaner Energy Future
February 25, 2021
Pro-biofuels legislation proposed by Gov. Kim Reynolds and supported by the Iowa Soybean Association (ISA) will create jobs, improve air quality and boost domestic markets and income opportunities for farmers.
The bill would phase in fuels sold in Iowa that incorporate increased blends of home-grown energy including soy-based biodiesel and corn-based ethanol. Beginning in 2022, the legislation would establish an 11% minimum biodiesel standard for diesel fuel sold during warmer months, ramping up to a 20% blend during warmer months in 2024 and later. October through March would allow for biodiesel blends of 5%, which is recognized as standard diesel fuel by the standard-setting organization ASTM. In addition to $5 million included in the governor’s FY2022 budget proposal, the bill also adds $5 million from the general fund for the Iowa Renewable Fuels Infrastructure Program (RFIP).
The B11 standard would be effective from the date of passage during the months of April 1 to September 30. The B20 standard would start April 1, 2024. Both standards allow time for fuel retailers to transition blends.
“A biofuel standard establishes certainty for a key domestic market for Iowa farmers,” says Jeff Jorgenson, ISA president and Sidney, Iowa, farmer. “It will increase demand for biodiesel by an estimated 203 million gallons while driving demand for an additional 108 million bushels of soybeans over five years.”
By creating greater value for the oil from each bushel of soybeans, soybean meal costs will decline for livestock farmers.
“As farmers, it’s important to market the products we grow,” adds Jorgenson. “This policy is a win for Iowa and keeping our products and their benefits local.”
According to ABF Economics, creating larger and more stable local demand in Iowa can greatly enlarge the latent economic benefits of biofuels production represented by the more than 50 million gallons of unutilized biodiesel production capacity. Putting this existing manufacturing infrastructure to work would greatly increase Iowa’s household income and job benefits related to Iowa biofuels production.
A strong biodiesel industry directly supports farm income and thus, Iowa’s economic vitality. Soybean-based fuel contributed $1.17, or 13% to every bushel of soybeans sold in Iowa last year. This extends the economic benefits to livestock farmers who then pay less for soybean meal for livestock feed and to consumers who enjoy lower food prices.
Biodiesel currently supports nearly 4,000 Iowa jobs and contributes almost $500 million to the state’s economy.
Environmental benefits of the clean-burning fuel are the reason biodiesel is the only classified “Advanced Biofuel” by the Environmental Protection Agency.
As the most sustainable liquid fuel available, biodiesel reduces lifecycle greenhouse gases by up to 86%, lowers particulate matter by 47% and hydrocarbon emissions by 67% in older diesel engines.
Dave Walton, ISA treasurer and soybean, corn and livestock farmer near Wilton, says the sustainability of biodiesel gives Iowa an edge when it comes to national energy leadership.
“Times are changing, and when urban cities start advocating for electric vehicles, legislation like the biofuel standard positions Iowa as being committed and involved in the conversations about a greener future,” he says. “While we can’t operate large farm equipment, semis and trucks on electricity for the foreseeable future, biodiesel is an immediate answer to lowering carbon emissions with no change to our transportation infrastructure.”
More information about biodiesel can be found at iasoybeans.com. Access additional details about the Iowa Biofuels Standard including Frequently Asked Questions at iowabiodiesel.org.
The Iowa Soybean Association (www.iasoybeans.com) is “Driven To Deliver” increased soybean demand through market development and new uses, farmer-focused research and results, timely information and know-how and policy initiatives enabling farmers and the industry to flourish. Founded in 1964 by farmers to serve farmers, ISA is governed by a board of 22 farmers to advocate on behalf of the state’s 40,000 soybean producers, including more than 15,000 ISA farmer members and industry stakeholders.