Iowa biodiesel supporters ask lawmakers to extend, expand incentives

Iowa biodiesel supporters ask lawmakers to extend, expand incentives

Biodiesel Day on the Hill last week highlighted economic and social benefits of this renewable fuel to the state of Iowa.

Members and supporters of the Iowa Biodiesel Board visited the state capitol in Des Moines on February 17, asking state legislators to extend and expand biodiesel incentives set to expire. These include an Iowa tax credit that helps the state’s 13 biodiesel producers make Iowa the top state for production, and a retailer’s credit that entices fuel retailers to carry biodiesel blends.

Related: U.S. consumers use record amount of biodiesel

IOWA IS NUMBER ONE: Iowa is the leading biodiesel producing state and this Western Iowa Energy plant at Wall Lake is one of 12 operating biodiesel plants in Iowa. A cleaner-burning renewable replacement for diesel fuel, biodiesel cut greenhouse gas emissions by 18 million metric tons last year in the U.S.

Today’s “Iowa Biodiesel Day on the Hill,” a public education day and luncheon hosted by IBB, included meetings with legislators to discuss the 2016 legislative priorities to keep this important state manufacturing sector strong. These priorities include:

Extending the biodiesel production credit which is set to expire at the end of next year unless lawmakers extend it. The credit is 2 cents per gallon on the first 25 million gallons of production per biodiesel plant, and helps keep biodiesel production and economic activity in Iowa.

Extending the biodiesel promotion retail tax credit, which provides petroleum retailers 4.5 cents a gallon on blends of at least 5% biodiesel (B5), set to expire at the end of next year. Market competition encourages this savings to be passed on to motorists.

Enhancing the retail tax credit by adding a 2.5 cent credit (7 cents total) for blends of B11 and higher. This will encourage higher blends of biodiesel to be distributed in the state.

Renewable fuels infrastructure program needs continued funding. Biodiesel backers urged state lawmakers to support Gov. Terry Branstad’s recommended appropriation to continue the successful Renewable Fuels Infrastructure Program, a cost-share initiative that helps fuel distributors and retailers update equipment to include biofuels.

Support the Biochemical Tax Credit legislation, which would stimulate more demand for biochemical production.

The state biodiesel policies in place have been effective in increasing production and consumption in Iowa, says Grant Kimberley, the Iowa Biodiesel Board executive director. “It makes sense that the majority of Iowa’s diesel fuel should contain at least some biodiesel, and we’re very interested in encouraging higher blends,” he adds. “Common sense would say we use our own fuel product rather than foreign oil. Expanding the retail tax credit for blends of B11 and higher would resoundingly help us accomplish that.”

Biodiesel-blended gallons accounted for 48.9% of diesel gallons sold in Iowa by reporting retailers in 2014, according to the Iowa Department of Revenue. In 2015, Iowa’s 12 operating biodiesel plants produced a record 242 million gallons of biodiesel.

Biodiesel is an advanced biofuel made from agricultural byproducts and co-products, such as soybean oil. The Iowa Biodiesel Board is a state trade association representing the biodiesel industry.

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