Both chambers of Iowa Legislature pass Biofuels Access Bill

On the morning of April 26, the Iowa Senate passed House File 2128, a bill proposed by Gov. Kim Reynolds to increase consumer access to higher biofuel blends like E15 and B20. With bipartisan support, the legislation passed the Senate in a 42-to-3 vote. The bill previously passed the Iowa House of Representatives by a wide margin but due to amendments in the Senate, it went back to the Iowa House for another vote April 26, where it passed quickly in a 78-to-13 vote the same day. Given that Gov. Reynolds originally proposed the bill, she is expected to sign it.

Among other provisions, the legislation enhances and extends state tax credits, modifies motor fuel infrastructure grant eligibility requirements, extends the motor fuel tax differential for ethanol and biodiesel blends, and requires state vehicles to be able to use, and to use, certain types of biofuel blends.

The biodiesel portion of the bill increases the state biodiesel production tax credit from 2 to 4 cents per gallon (cpg), maintains the current biodiesel fuel tax differential but applies this to blends of 20 percent biodiesel rather than B11, extends fuel retailer tax credits for B11 and higher while introducing new credits for higher blends like B20 and B30 (7 cpg for B20 and 10 cpg for B30), and expands funding for the state’s Renewable Fuel Infrastructure Program.

“Today was a victory for Iowa consumers,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. “Every person in Iowa deserves the choice of higher blends like E15 and B20. By unlocking the power of biofuels, Iowans can save money at the pump while also powering our farm economy. We also want to thank Gov. Reynolds for prioritizing biofuels choice for Iowans. Finally, the bill had strong support from both parties and IRFA thanks Majority Leader Whitver and Democratic Leader Wahls and all Senate members who stood united behind biofuels.”

Shaw said the legislation is being looked at by other states as a model for how to promote access to lower-cost, cleaner-burning fuels. “We would not be here today if not for Gov. Reynolds crafting this bill and pushing it over the finish line,” he said. “Lots of legislators and other groups played major roles, but Gov. Reynold’s started the process and saw it threw to the end. Iowa’s biofuels supporters cannot say ‘thank you’ enough. It’s exciting to see the leading corn, soybean and biofuels production state also be the leading biofuels policy state.”

Consumers, the economy and the environment all stand to gain, said Grant Kimberley, executive director of the Iowa Biodiesel Board. “This is the most comprehensive state legislation anywhere in the nation, offering something for everyone—including the continuation of a fuel tax differential for consumers, infrastructure dollars and tax credits for fuel retailers, and an increased biodiesel production tax credit for producers,” Kimberley said. “Previous legislation successfully encouraged blends of 11 percent biodiesel, but in a sense, we have reached a plateau. We are eager to move Iowa’s energy transformation onward and upward toward more B20.”

Kimberley added that the legislation comes at a critical time in history. “Supply-chain challenges and federal-policy limbo make this a precarious time for our industry,” he said. “The expansion of our state’s producer credit offers a new cushion for biodiesel producers that is quite significant. Worldwide uncertainty and fuel-price instability also impact consumers. A diverse fuel supply with more low-carbon fuel made in America benefits everyone. The passage of the Governor’s Biofuel Access Bill makes us optimistic for Iowa’s future as the leading biodiesel-producing state. We thank House and Senate leaders, and the governor, for making this bill a priority in the session.”

For more information on the bill in its current form, click here.