Iowa Economy Powered By Renewable Fuels

Iowa Economy Powered By Renewable Fuels

A new study details the positive benefits biofuels are providing for the state. Ethanol and biodiesel now account for $13.1 billion, or about 8%, of Iowa's gross domestic product.

Iowa is the undisputed leader in renewable fuels production and that is extremely beneficial for the state's economy. At the 2011 Iowa Renewable Fuels Summit in Des Moines in late January, the Iowa Renewable Fuels Association released a new study detailing the positive benefits the ethanol and biodiesel industries are providing.

According to the study, the renewable fuels industry, ethanol and biodiesel, now account for $13.1 billion, or about 8%, of Iowa's gross domestic product. The industry generates $2.4 billion of household incomes, supports nearly 49,000 jobs and accounts for $588 million in state revenue per year. Iowa is the third largest ethanol producer in the world. Iowa trails only the United States and Brazil in ethanol production.

Iowa has opportunity to create more "green collar" jobs

"This new study shows the strong impact that biofuels production has on Iowa's economy," says Monte Shaw, executive director of the IRFA. "Additionally, bringing the idled biodiesel production capacity back into production this year will  likely create more green collar jobs and further grow Iowa's economy."

Iowa's biodiesel plants were shut down or running at only a fraction of their annual production capacity in 2010 as a result of Congress letting the federal biodiesel blenders tax credit expire at the end of 2009. However, Congress restored the $1-per-gallon biodiesel tax credit at the end of 2010 for one year, so that incentive will stay in place through 2011. It is now due to expire at the end of 2011 unless Congress renews it.

"2010 was a year of mixed performance for renewable fuels," says economist John Urbanchuk, director of Cardno Entrix, the consulting firm that conducted the new study for IRFA. "The ethanol industry experienced continued growth while the biodiesel industry languished following expiration of the federal biodiesel excise tax credit in December 2009."

Iowa economy is getting a big boost from biofuel production

According to the report, "Importance of the Renewable Fuels Industry to the Economy of Iowa," Urbanchuk found that ethanol and biodiesel producers are part of a manufacturing sector that adds substantial value to ag commodities produced in Iowa and makes a significant contribution to the Iowa economy. Based on the production of the renewable fuels industry at the end of the year 2010, ethanol and biodiesel:

• Account for $13.1 billion, or about 8%, of the Iowa Gross Domestic Product
• Generate $2.4 billion of household income for Iowa households
Support nearly 49,000 jobs through the entire Iowa economy
Account for $588 million of state tax revenue

"Renewable fuels production continues to boost Iowa's agricultural sector, which in turn, underpins the state's entire economy," says IRFA's Monte Shaw. "Iowa is in position to take steps that will continue record ethanol production while jumpstarting biodiesel production this year. If Iowa seizes the moment, the result will be more jobs, more household income, and more tax revenue for the state."

For more information and to read the complete study visit www.iowarfa.org/PDF/2011IowaBiofuelsEconomicImpactFinal.pdf. Iowa is the leader in renewable fuels production in the United States, points out Shaw. Iowa has 41 ethanol refineries capable of producing nearly 3.7 billion gallons annually. In addition, Iowa has 12 biodiesel facilities with the capacity to produce 315 million gallons annually.

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