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Amidst Tremendous Federal Policy Uncertainty, State Policies Encourage Growth in Biodiesel Sales, Blend Levels

JOHNSTON, IOWA – In its annual report on retail fuel sales, Iowa Department of Revenue data shows significant growth in biodiesel use in Iowa during 2014.  The increase in biodiesel sales during a year when the federal biodiesel tax credit had expired and the federal Renewable Fuel Standard (RFS) was left in limbo, demonstrates the importance of Iowa’s state-level biodiesel policies.

The department’s 2014 Retailers Motor Fuel Gallons Annual Report showed that biodiesel sales (B100) increased by more than 15 percent over 2013 to an all-time-high of 33.3 million gallons. In turn, biodiesel now accounts for 4.6 percent of Iowa’s total diesel supply, up slightly from 2013. Additionally, biodiesel is blended into almost 50 percent of all diesel sold, with an average blend level that climbed to 9.4 percent.  The increased average blend level is largely due to a sizeable shift amongst retailers from B10 (10 percent biodiesel) in 2013 to B20 (20 percent biodiesel) in 2014.

“In the face of severe federal policy uncertainty, Iowa’s retailers and diesel users remained committed to cleaner-burning biodiesel in 2014,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “With the expiration of the federal biodiesel tax credit and uncertainty over the RFS, the increases in biodiesel sales and blending rates demonstrates the effectiveness of Iowa’s forward-thinking state policies. Policy makers in Iowa have wisely decided that cracking the petroleum monopoly cannot be left to federal policies alone – too much is at stake for Iowa’s economy and consumers.  If the feds can reinstate the blenders’ tax credit and reenergize the RFS, Iowa will no doubt see even bigger gains in replacing foreign oil with homegrown biodiesel.”

Iowa provides a tax credit to retailers selling B5 and higher blends.  On July 1, 2015, Iowans buying B11 and higher blends will pay 3 cents per gallon less in state fuel taxes.

To view the full Iowa Department of Revenue report, please click here.

Biodiesel is made from a wide range of feedstocks, including soybean oil, animal fats, distillers corn oil, and used cooking oil. Iowa produced 227 million gallons of biodiesel in 2014, roughly 16 percent of U.S. biodiesel production for the year. According to the EPA, biodiesel reduces greenhouse gas emissions by 57 percent to 86 percent compared with petroleum diesel.

Iowa is the nation’s leader in renewable fuels production. Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually. In addition, Iowa has 43 ethanol refineries capable of producing more than 3.8 billion gallons annually, including 22 million gallons of annual cellulosic ethanol production capacity and one cellulosic ethanol facility currently under construction.

The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.

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For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org