The Road Less Taken: Iowa Moves High Biodiesel Blends Forward
- Jenna Rose
- 5 days ago
- 5 min read
State-level policy and industry collaboration position Iowa as a model for B30 adoption.
As Iowa’s biodiesel producers continue to weather a difficult year marked by federal-policy uncertainty and challenges, the state of Iowa continues to cement its position as a state-policy leader—and is now blazing a trail for B30 adoption that could reshape the industry nationwide.
Iowa’s eight operating biodiesel plants faced significant headwinds in 2024 and 2025 as federal Renewable Fuel Standard obligations remained uncertain, the guidance for the federal 45Z tax incentive remained elusive, and market volatility challenged producers. Yet even amid these challenges, the state’s commitment to biodiesel has never been stronger, driven by robust state-level legislation and innovative public-private partnerships.
Record-Breaking Growth Built on State Support
The results speak for themselves. According to “Iowa’s Biofuel Tax Credits Program Evaluation Study,” published by the Iowa Department of Revenue, biodiesel sales in Iowa reached 486.5 million gallons in 2023—nearly tripling from 160.8 million gallons in 2007. Biodiesel blends now represent 58.7 percent of Iowa’s total diesel market, up from just 22.6 percent in 2007.
“This remarkable growth reflects Iowa’s forward-thinking legislation and sustained commitment to renewable energy, solidifying the state as a national leader in biodiesel production and consumption,” says Grant Kimberley, executive director of the Iowa Biodiesel Board and senior director of market development for the Iowa Soybean Association.
Iowa’s success stems from a comprehensive approach to biodiesel incentives. The state offers a producer’s credit, a fuel- tax differential for B20 and higher blends, and retailer credits at three tiers:
5 cents per gallon (cpg) for B11-B19.
7 cpg for B20-B29.
10 cpg for B30 and above.
Iowa is the first state in the nation to incentivize B30 blends. These incentives run through Dec. 31, 2027.
Additionally, the Iowa Renewable Fuels Infrastructure Program has funded over 1,300 biofuel projects across the state, providing critical support for retailers to upgrade equipment for higher blends.
“Biodiesel has long been fighting with one hand tied behind its back as federal policy has whipsawed the industry,” Kimberley notes. “In spite of that, thanks to Iowa’s proactive biofuel policies, we’re at least seeing impressive growth in biodiesel usage at the state level.”
Tackling Implementation of B30 Labeling
As Iowa pushes toward broader B30 adoption, IBB has formed a working group of leading experts from Casey’s, Chevron and Clean Fuels Alliance America to address an important step in the journey: pump labeling.
Current Federal Trade Commission guidance, established during the original RFS implementation circa 2008, requires exact concentration labeling (within 1 percent) for blends over 20 percent. This creates some practical difficulties for retailers, as concentration varies when adding biodiesel to existing tanks with lower blends, experts say.
The working group has developed a more flexible label that would indicate “contains biomass-based diesel or biodiesel in quantities between 5 percent and 35 percent.” This would allow for up to B36 blends without having to change the label while maintaining consumer information and meeting regulatory needs.
The working group collaborated with Iowa’s Weights and Measures Bureau, housed in the Department of Agriculture, which enforces FTC labeling regulations, to secure its support for the proposed label. The group plans to approach the FTC with a request for a trial period to demonstrate the label’s effectiveness and gather feedback.
Supporters hope Iowa’s push for B30 helps serve as a market driver. In August, John Deere approved the use of B30 biodiesel blends in all modern Tier 4 Power Systems engines equipped with the latest diesel-exhaust aftertreatment used in Deere’s heavy-duty farm equipment including tractors, combines and sprayers. Deere also confirmed support for B100 in all older Tier 3 emissions-compliance engines (i.e., those without modern aftertreatment).
“This milestone decision by one of the world’s leading agriculture and construction equipment manufacturers represents a major step forward for farmers and fleets pursuing ways to reduce their environmental impact through higher blends of biodiesel,” Kimberley says.
Breaking New Ground with B100
Iowa’s commitment to pushing biodiesel boundaries extends beyond B30. In May, IBB and ISA celebrated the launch of a B99 pump at Pilot Travel Centers’ Des Moines location—one of only a few in the nation dispensing almost pure biodiesel to commercial fleets. (The question of potential tax benefits influenced Pilot’s decision for B99 instead of B100.)
IBB and ISA contributed $25,000 in soybean-checkoff funding to support the project, showcasing the agriculture sector’s investment in expanding market opportunities.
“This B99 pump is a symbol of progress,” says Dave Walton, a soybean grower from Wilton, Iowa, and board member of both IBB and ISA. “It’s proof that when you combine innovation with the right incentives, and partner with companies truly committed to their goals, you can make a big impact.”
The initiative brings together Pilot, PepsiCo—operator of one of North America’s largest private fleets—and Optimus Technologies, whose engine technology enables trucks to run on 100 percent biodiesel. PepsiCo will use the pump, which is near one of its major distribution facilities.
Economic Impact, Future Outlook
The biodiesel sector’s impact extends well beyond fuel pumps. By increasing soybean-oil value, biodiesel supports an estimated 13 percent of the price per bushel of soybeans, directly benefiting Iowa’s farming communities.
Iowa’s biodiesel industry supports 12,000 jobs and generates approximately $3.5 billion in economic opportunity, according to a national study commissioned by Clean Fuels. In 2024, the state’s 10 operating biodiesel plants produced an estimated 350 million gallons, making Iowa the top biodiesel-producing state in the nation.
“U.S. biomass-based diesel adds value to every acre of soybeans grown, accounting for roughly 10 percent of each bushel’s worth—a contribution that is especially vital this year as America’s soybean farmers face record yields amid unpredictable global markets,” Kimberley says.
IBB Chair Nathan Nolte, sales manager of renewable fuels for biodiesel producer Ag Processing Inc. (AGP), emphasized the state’s role as a national model.
“As Iowa continues to invest in biofuels and strengthen its legislative framework, the state stands as a testament to how renewable energy initiatives can successfully integrate into and bolster local economies,” Nolte says.
With 905 clear biodiesel retail locations in 2024—a 226 percent increase since 2009—and blends of B20 and higher more than doubling in on-road diesel sales, according to the Iowa Department of Revenue, Iowa demonstrates that state- level policy can drive meaningful change even when federal support falters.
“This isn’t just about adding another pump—it’s about transforming how we fuel the future,” Kimberley says of the B99 pump. “By supporting higher blends, we’re helping fleets decarbonize today using Iowa-grown fuels while also strengthening our rural economy.”
As Iowa continues pioneering pathways for B30 adoption and beyond, the state offers a blueprint for how strategic legislation, industry collaboration and farmer investment can help build a more sustainable energy future.
Author: Jenna Rose
Communications Lead
Iowa Biodiesel Board
573-808-0815
