Advocates at Iowa Biodiesel Hill Day say state support remains critical

Iowa continues to lead the nation in both biodiesel production and comprehensive pro-biodiesel state policies—and that's not a coincidence.

That was the message March 5 from biodiesel producers, soybean farmers and other supporters as they met with Iowa lawmakers at the State Capitol.

The Iowa Biodiesel Board, an independent board founded by the Iowa Soybean Association and biodiesel plants, hosted its annual Iowa Biodiesel Day on the Hill.

“Our industry—including soybean farmers—continues to face a great deal of market uncertainty due to federal policy fluctuations, so the expansion of our state’s producer credit and other policies offers a significant safeguard,” said Suzanne Shirbroun, ISA president and soybean farmer from Farmersburg, Iowa.

The advocates continued to stress the importance of state policies to help shield the biodiesel industry from concerns over uncertain federal policies like the Renewable Fuel Standard.

The Hill Day came in the wake of recent news that Chevron Renewable Energy Group is closing its biodiesel plant in Ralston, Iowa, indefinitely.

Chevron REG cited “poor market conditions” as a result of low RFS volumes as the primary reason.

The U.S. EPA has supported only low biomass-based diesel growth under the program.

“While we were disappointed to learn of the idling of the biodiesel plant in Ralston, we have not heard of plans for any additional biodiesel plants in the state to go offline,” said Grant Kimberley, IBB executive director. “Our strong state policies are a big reason for that.”

Some of the most comprehensive biofuels legislation in the country has taken effect in Iowa and has begun to improve consumer access to low-carbon biodiesel statewide, including blends like B20 and B30, Kimberley noted.

Iowa began its enhanced incentives in 2016.

According to the latest Iowa Department of Revenue data, the pure biodiesel gallons sold in Iowa have increased by almost 80 percent since 2016 (64.3 million gallons in 2022).

A new incentive for B30 took effect last year, the first legislation in the nation to do so.

The Governor’s 2022 Biofuels Access Bill (HF2128) passed by wide bipartisan margins in 2022.

The key biodiesel policies in the state include:

A credit for fuel retailers for B11 at 5 cents per gallon (cpg) until 2027, and new credits of 7 cpg for B20 and 10 cpg for B30.
A biodiesel production tax credit of 4 cpg (sunset 2027)
A biodiesel fuel tax differential to be based on the higher B20 blend beginning in 2026 and expiring in 2030.
The Renewable Fuel Infrastructure Program to help retailers modernize equipment for higher blends at the retail level.