Biodiesel supporters ask Iowa lawmakers to extend, expand incentives
February 17, 2016
(DES MOINES, IOWA) – Members and supporters of the Iowa Biodiesel Board hit the state capitol today, asking state legislators to extend and expand biodiesel incentives set to expire. These include a tax credit that helps the state’s 13 biodiesel producers make Iowa the top state for production, and a retailer’s credit that entices fuel retailers to carry biodiesel blends.
Today’s “Iowa Biodiesel Day on the Hill,” a public education day and luncheon hosted by IBB, included meetings with legislators to discuss the 2016 legislative priorities to keep this important state manufacturing sector strong. These priorities include:
- Extending the Biodiesel Production Credit, set to expire at the end of next year. The credit is 2 cents per gallon on the first 25 million gallons of production per biodiesel plant, and helps keep biodiesel production and economic activity in Iowa.
- Extending the Biodiesel Promotion Retail Tax Credit, which provides petroleum retailers 4.5 cents a gallon on blends of at least 5 percent biodiesel (B5), set to expire at the end of next year. Market competition encourages this savings to be passed on to motorists.
- Enhancing the Retail Tax Credit by adding a 2.5 cent credit (7 cents total) for blends of B11 and higher. This will encourage higher blends of biodiesel to be distributed in the state.
- Supporting Governor Terry Branstad’s recommended appropriation to continue the successful Renewable Fuels Infrastructure Program, which helps fuel distributors and retailers update equipment to include biofuels.
- Supporting the Biochemical Tax Credit legislation, which would stimulate more demand for biochemical production.
The state biodiesel policies in place have been effective in increasing production and consumption in Iowa, said Grant Kimberley, Iowa Biodiesel Board executive director.
“It makes sense the majority of Iowa’s diesel fuel should contain at least some biodiesel, and we’re very interested in encouraging higher blends,” Kimberley said. “Common sense would say we use our own fuel product rather than foreign oil. Expanding the retail tax credit for blends of B11 and higher would resoundingly help us accomplish that.”
Biodiesel-blended gallons accounted for 48.9 percent of diesel gallons sold by reporting retailers in 2014, according to the Iowa Dept. of Revenue.
In 2015, Iowa’s 12 operating biodiesel plants produced a record 242 million gallons of biodiesel.
Biodiesel is an advanced biofuel made from agricultural byproducts and co-products, such as soybean oil. The Iowa Biodiesel Board is a state trade association representing the biodiesel industry.