Iowa biodiesel industry back in business, on road to recovery
- Iowa Biodiesel Board
- 7 minutes ago
- 3 min read
The Iowa biodiesel industry is largely back up and running, buoyed by long-awaited federal Renewable Fuel Standard renewable volume obligations (RVOs) and the 45Z clean fuel production credit.
While the path ahead involves recovery, producers across the state say they are cautiously optimistic as plants return to capacity and workers stay on the job.
Western Iowa Energy in Wall Lake, Iowa, is among the producers feeling the momentum.
The plant, which produces approximately 45 million gallons of biodiesel annually and employs 30 workers, is running at full capacity, using soybean oil as its primary feedstock.
The facility completed a $30 million expansion project in 2024 and has the flexibility to process animal fats, distillers corn oil and used cooking oil as market conditions warrant.
Brad Wilson, President of Western Iowa Energy, said the release of the RVOs came as a genuine relief after years of uncertainty.
“When I heard the RVO numbers, it was a really good feeling,” Wilson said. “We’ve been fighting for that for three years, and now we can confidently plan and budget. Employees are in good spirits. It came just in the nick of time—we were able to keep everybody and keep the lights on.”
The industry had been battered by prolonged policy uncertainty, depressed margins and a difficult operating environment, Wilson said.
WIE reduced its workforce by 25 percent a year ago, a move Wilson said was necessary to survive.
The company held on to those remaining employees rather than laying them off outright, a decision that is now paying dividends.
“We’re still trying to dig out of a hole, but we’re very happy with what’s happened,” Wilson said. “Last year we would have killed to break even. Now we have some margins built in. It’s a great turnaround.”
On the 45Z production credit, WIE has already moved through one cycle of monetizing credits for 2025, something Wilson said smaller producers have done out of necessity as larger plants may wait due to remaining uncertainty.
Wilson noted the compliance burden is real, running $200,000 to $300,000 annually, requiring many steps and a third-party carbon-intensity verifier as well as legal counsel.
Wilson also said the reinstated small producer credit has been a meaningful lifeline—contributing an estimated $3 million to the company’s bottom line, although it is only good on the first 15 million gallons of production.
Grant Kimberley, executive director of the Iowa Biodiesel Board, said the combined impact of the RVOs and the 45Z credit has restored a sense of opportunity to an industry that was struggling to survive.
“The road ahead is positive, if not without obstacles,” Kimberley said. “Plants that survived the downturn did so at significant financial cost, and rebuilding balance sheets will take time. But with policy clarity now in place and demand strengthening, the industry is positioned to move forward.”
Iowa is the nation’s leading biodiesel state with eight operating plants, and the industry supports thousands of jobs, billions in economic activity and a ready market for Iowa soybeans.
The Iowa soybean checkoff supports the IBB along with member dues.
Soybean crushers are also reporting improved margins on soybean oil and meal, signaling that the recovery is reaching up the supply chain, Kimberley said.
USDA reported that the U.S. soybean crush for marketing year 2025-’26 is raised by 35 million bushels, to a record high of 2.61 billion bushels, on higher domestic use for soybean meal and soybean oil.
“Iowa’s biodiesel producers are grateful for the actions taken by the Trump administration and Congress, especially Iowa’s entire delegation, for showing a genuine commitment to the value we can provide the nation,” Kimberley said. “There is real optimism in this industry right now, and we intend to build on it.”
