New Iowa Law Boosts Biofuel and Renewable Fuels

June 8, 2011

A new law designed to boost Iowa's production and sale of biodiesel fuel is in effect after Gov. Terry Branstad signed the legislation on May 26. The renewable energy bill extends the Iowa biodiesel retailer credit at 2 cents per gallon for blends of 2% biodiesel (B2) in 2012, and 4.5 cents per gallon for 5% percent biodiesel (B5) in 2012 through 2017. It also streamlines the process for gas station operators to get the credit. The law also adds a biodiesel producer incentive of 3 cents per gallon in 2012, 2.5 cents per gallon in 2013, and 2 cents per gallon in 2014 (for the first 25 million gallons per facility).

The law applies retroactively to January 1, 2011. According to the National Biodiesel Board, an industry association, Iowa has 15 biodiesel refineries with a total capacity of 300 million gallons per year. See the governor's press release.