Iowa Ethanol Sales Declining as Nation Ramps Up

Iowa Ethanol Sales Declining as Nation Ramps Up

Sales are running far below the state's renewable fuels standard goal.

The Iowa Renewable Fuels Association on October 30 announced that Iowans chose E10, a 10% ethanol and 90% gasoline blend, only 71% of the time during September of 2009 according to Iowa Department of Revenue (IDR) figures. This is below recent trends. According to the Washington, DC-based Renewable Fuels Association, around 80% of gasoline sold in the U.S. today is ethanol-blended.

"Iowa's ethanol sales are lagging behind the nation, and lagging behind their Iowa history of ethanol sales, and lagging behind the 2009 goal of the Iowa Renewable Fuels Standard," says Monte Shaw, IRFA's executive director.  "While the rest of the country has steadily increased ethanol use since 2006, Iowa has at best held even and now seems to be falling back." 

Iowa no longer leads in ethanol sales - Iowa has slipped considerably

He adds, "In 2006, Iowa was one of the nation's leaders in ethanol sales. Today, Iowa does not lead. Iowa is not average. Iowa is below average. These disappointing statistics should force a complete reexamination of how Iowa intends to move forward to be a leader in the use of ethanol, not just the production."

In 2006, the Iowa Legislature adopted the 25% Iowa Renewable Fuels Standard.  The legislation ties retailer tax credits to the achievement of a renewable content goal that starts at 10% in 2009 and stair-steps up to 25% by 2019. The program provided three years of infrastructure grants and E85 and biodiesel tax credits to help retailers prepare for the 2009 standard. A retailer calculates its renewable content by comparing all ethanol and biodiesel gallons to total gasoline sales.  For example, 71% E10 sales, with no E85 or biodiesel sales, would equate into a 7.1% renewable content.

Shaw notes, "Those retailers offering consumers biodiesel, mid-level ethanol blends, or E85 should easily achieve the 10% threshold set by the Iowa Renewable Fuels Standard.  But with only three months of overall sales data to go, it is clear that the state as a whole will not only miss the first year target, but could likely take a step back."

According to IDR figures, Iowa E10 sales are trending down:

E10 Sales in Iowa

2007                            74%

2008                            75%

2009 (Year to date)     73%

2009 (Sept.)                71%

"Iowa is the leader in renewable fuels production," says Shaw. "Iowa has 40 ethanol refineries capable of producing nearly 3.3 billion gallons annually. And as the leading producer, Iowa should also serve as an example to the rest of the nation that our state is a leading consumer of ethanol and biodiesel too. Iowa is not a high population state. But on a percentage basis, Iowa motorists should be using a lot more ethanol and biodiesel than they are currently."

The Iowa Renewable Fuels Association was formed in 2002 to represent the state's liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.

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