According to a new economic contribution study released March 30, Iowa’s renewable fuels industry remains a vital driver of the state’s economy.  

Decision Innovation Solutions conducted the study commissioned by the Iowa Renewable Fuels Association.  

The study found that, “Despite challenges in the overall fuels market, the Iowa renewable fuels industry continues to be a key part of the Iowa economy.”  

Specifically, biofuels production contributes the following to Iowa:  

• Accounts for nearly $5.4 billion, or about 2 percent, of Iowa’s gross domestic product (GDP).  

• Generates $2.4 billion of income for Iowa households. 

• Supports over 31,000 jobs throughout the entire Iowa economy. 

In 2025, Iowa ethanol plants produced 4.6 billion gallons of ethanol and continued to lead the nation in ethanol production.  

In contrast, Iowa biodiesel facilities produced just 266 million gallons, down nearly 25 percent from 2024.  

The state’s biodiesel plants have the capacity to produce 400 million gallons per year, underscoring the difficulties facing producers.   

Iowa previously was home to 11 biodiesel plants, but just eight remain.  

Specifically, low renewable fuel volume obligations and uncertainty around federal tax credits have been major pain points in biodiesel production nationwide.  

“While ethanol and biodiesel continue to be key contributors to the Iowa economy, declining biodiesel production and plants shutting down showcase the need to extend and expand the Iowa biodiesel production tax credit,” said IRFA Executive Director Monte Shaw. “Iowa has the opportunity to provide some stability for biodiesel producers as they navigate the changing federal landscape. Biodiesel provides important demand for Iowa soybeans. We want these plants not just to survive, but to thrive.”  

To view the full study, click here.