By Christina Dittmer
Iowa Gov. Terry Branstad signed Senate File 2344 into law on May 21 in a ceremony at POET Biorefining ethanol plant in Coon Rapids. The new law relates to promoting renewable fuels in several ways. It extends the state's biodiesel production tax credit of 2 cents per gallon. It also enhances the state's E-15 tax credit for fuel retailers, and updates the Iowa Code by defining biobutanol as a renewable fuel for Iowans.
"Iowa is a biofuels leader in this country and having states step to the plate with legislation supporting America's Advanced Biofuel, biodiesel, is a win for our industry," said Steven J. Levy, chairman of the National Biodiesel Board. "Our champions in Iowa have shown that hard work to grow this still-young industry pays off."
New law provides stability for state's biodiesel producers
The legislation provides an extension of the current biodiesel producer incentive—a 2 cent per-gallon refundable credit for the first 25 million gallons produced at any single plant in the state. The incentive was set to expire at the end of this year but the extension now moves that through 2017.
With the fate of the federal biodiesel tax incentive and the Renewable Fuel Standard currently uncertain, strong state biodiesel policies help stabilize the industry and provide a baseline for producers.
"Built on strong federal and state policy support the biodiesel industry produced nearly 1.8 billion gallons last year," said Levy. "With record volumes of advanced biofuels being produced, now is not the time to back away from those policies that have proven to be successful in bringing fuel diversity to the marketplace."
Policies have proven successful, and will bring fuel diversity
A group of biodiesel producers and other industry advocates joined six U.S. Senators at a press conference in Washington D.C. last week calling on Congress and the Administration to act quickly to restore the industry's progress by supporting a strong Renewable Fuel Standard and reinstating the federal tax incentive.
Biodiesel is the first and only commercial-scale fuel produced across the U.S. to meet EPA's definition as an Advanced Biofuel—meaning EPA has determined biodiesel reduces greenhouse gas emissions by more than 50% when compared with petroleum diesel. Produced in nearly every state in the country, biodiesel production has exceeded RFS requirements in every year of the program, producing a record of nearly 1.8 billion gallons last year, supporting more than 62,000 jobs nationwide.
This bill helps move Iowa's renewable fuels industry forward during a time of unprecedented federal policy uncertainty by extending the state's biodiesel production tax credit and enhancing the state's E15 retailer tax credit, said Branstad.
Biofuels community celebrates signing of renewable fuels bill
"I'm proud to sign this renewable fuels bill that received such wide, bipartisan support from the entire Iowa legislature and promotes E15, biodiesel and bio-butanol," he stated. "I've been a staunch supporter of protecting Iowa jobs and Iowa motorists' access to cleaner, locally-produced renewable fuels, and this bill does exactly that."
"Today is a great day for Iowa's renewable fuels community," said IRFA policy director Grant Menke. "We commend Gov. Branstad, Lt. Gov. Reynolds, and the entire Iowa legislature for standing beside renewable fuels, protecting Iowa jobs, and safeguarding consumer access to low-cost, homegrown biofuels. We also extend a sincere thank you to the 17 companies and organizations that worked together in support of S.F. 2344. The success of this bill was truly a team effort."
"Renewable fuels producers are currently facing unparalleled federal policy uncertainty, and S.F. 2344 helps to ensure Iowa preserves its biofuels leadership," said IRFA executive director Monte Shaw. "Consumers deserve low-cost, clean-burning fueling options, and this legislation will help ensure Iowa motorists can continue to benefit from competition at the pump, while also protecting Iowa biodiesel jobs."
Will help keep Iowa on top in renewable fuel industry
With biofuels producers facing a precarious federal policy landscape, Shaw says the new law protects Iowa's renewable fuels industry by extending the state's biodiesel production tax credit that was set to expire at the end of this year, and enhancing the state's E15 retailer tax credit to help alleviate extra costs to Iowa retailers who want to offer E15 as a registered fuel during the summer driving season. The bill also updates Iowa Code to define bio-butanol as a renewable fuel option for Iowans.
Iowa is the leader in renewable fuels production. Iowa has 42 ethanol refineries capable of producing over 3.8 billion gallons annually, with three cellulosic ethanol facilities currently under construction. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.
Biofuels bill signed at POET Biorefining in Coon Rapids
"We are excited Gov. Branstad selected our facility to mark the officially signing of this important bill," said Bill Howell, general manager of POET Biorefining – Coon Rapids. "The state of Iowa continues to be very supportive of the biofuels industry and this bill is yet another example of that support. Here at POET, we look forward to continued expansion of E15 throughout the state and nation, which will allow consumers to enjoy additional options at the pump."
POET, one of the world's largest ethanol producers, is a leader in biorefining through its efficient, vertically integrated approach to production. The 25-year-old company has a production capacity in excess of 1.6 billion gallons of ethanol and 9 billion pounds of high-protein animal feed annually from its network of 27 production facilities. POET also operates a pilot-scale cellulosic bio-ethanol plant using corn cobs, leaves, husk and some stalk as feedstock, and expects to commercialize the process in Emmetsburg, Iowa through its joint venture with DSM. For information, visit the POET website.
Christina Dittmer is a Wallaces Farmer intern.