State Support Remains Critical, Advocates Say During Iowa Biodiesel Hill Day

March 5, 2024 | Brock Johnston

Ankeny, Iowa – Iowa continues to lead the nation in both biodiesel production and comprehensive pro-biodiesel state policies – and that's not a coincidence. That was the message today from soybean farmers, biodiesel producers, and other supporters as they met with Iowa lawmakers at the State Capitol.

The Iowa Biodiesel Board, an independent board founded by the Iowa Soybean Association (ISA) and biodiesel plants, hosted its annual Iowa Biodiesel Day on the Hill on March 5.

“Our industry – including soybean farmers – continues to face a great deal of market uncertainty due to federal policy fluctuations, so the expansion of our state’s producer credit and other policies offers a significant safeguard,” said Suzanne Shirbroun, ISA president and soybean farmer from Farmersburg, Iowa.

The advocates continued to stress the importance of state policies to help shield the biodiesel industry from concerns over uncertain federal policies like the Renewable Fuel Standard. The Hill Day came in the wake of Chevron REG’s announcement that the company will idle its biodiesel plant in Ralston, Iowa indefinitely.  

Chevron REG cited “poor market conditions” as a result of low RFS volumes as the primary reason. The Environmental Protection Agency has supported only low biomass-based diesel growth under the program.

“While we were disappointed to learn of the idling of the biodiesel plant in Ralston, we have not heard of plans for any additional biodiesel plants in the state to go off-line,” said Grant Kimberley, IBB executive director. “Our strong state policies are a big reason for that."

Some of the most comprehensive biofuels legislation in the country has taken effect in Iowa and has begun to improve consumer access to low-carbon biodiesel statewide, including blends like B20 (20% biodiesel) and B30 (30% biodiesel), Kimberley noted.

Iowa began its enhanced incentives in 2016. According to the latest Iowa Department of Revenue data, the pure biodiesel gallons sold in Iowa have increased by almost 80% since 2016 (64.3 million gallons in 2022). A new incentive for B30 took effect last year.

The Governor’s 2022 Biofuels Access Bill (HF2128) passed by wide bipartisan margins in 2022. The law is increasing consumer access to higher biofuel blends like B20 and B30 – the first legislation in the nation to do so.

The key biodiesel policies in the state include:

• A credit for fuel retailers for 11% biodiesel (B11) at 5 cents per gallon until 2027, and new credits of 7 cpg for B20 and 10 cpg for B30.
• A Biodiesel Production Tax Credit of 4 cents per gallon (sunset 2027)
• A Biodiesel Fuel Tax Differential to be based on the higher B20 blend beginning in 2026 and expiring in 2030.
• The Renewable Fuel Infrastructure Program to help retailers modernize equipment for higher blends at the retail level.

According to a study by ABF Economics, in 2023, the biodiesel industry supported about:

• $850 million of Iowa GDP 
• 5,700 fulltime-equivalent jobs 
• $410 million of household income for Iowans

“By increasing soybean oil value, biodiesel supports 13% of the price per bushel of soybeans – and that’s not small change,” Shirbroun said.

Biodiesel is an advanced biofuel made from agricultural byproducts and co-products, such as soybean oil. 

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Not funded by the soybean checkoff

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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 37,000 soybean producers, including more than 15,000 ISA farmer members and industry stakeholders.

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