Iowa Legislature Votes Overwhelmingly to Extend Biofuels Policies

The Iowa Legislature recently voted with overwhelming, bipartisan support to extend several important policies aimed at encouraging greater availability and use of higher ethanol and biodiesel blends.

The Iowa House of Representatives voted 88 – 6 and the Iowa Senate 49 – 0 to extend a handful of important state tax incentives for homegrown renewable fuels, like E15, E85 and B11 through 2024.

Iowa_State_Flag“We commend the Iowa legislature for its overwhelming support in taking this important step to continue Iowa’s leadership in renewable fuels,” stated Iowa Renewable Fuels Association (IRFA) Policy Director Grant Menke. “Extending these tax incentives supports Iowa jobs, cleaner air, competition in the fuel marketplace and Iowa’s motorists through lower fuel prices.”

Included in legislation that is now headed to Governor Terry Branstad for final approval is an extension of two retailer tax credits for ethanol blends:

  • The E85 Promotion Tax Credit, available for fuel blends containing 70 to 85 percent ethanol, was extended at 16 cents per gallon.
  • The E15 Plus Promotion Tax Credit, available for fuel blends containing 15 to 69 percent ethanol, was extended at 3 cents per gallon from September 16 through May 31, and 10 cents per gallon from June 1 through September 15 to help alleviate the summertime blending issues for registered E15.

The forward-thinking legislation also included an extension and adjustment of the Biodiesel Blended Fuel Retailer Tax Credit. While the incentive will continue at 4.5 cents per gallon for retailers offering a biodiesel blend containing a minimum of 5 percent biodiesel (B5) through 2017, from 2018 through 2024 it will then provide a 3.5 cents per gallon incentive on B5, and a 5.5 cents per gallon credit on B11, or diesel blended with a minimum of 11 percent biodiesel.

Later in the week, the Iowa Legislature voted 94 – 0 in the House of Representatives and 49 – 0 in the Iowa Senate to secure another year of funding for the state’s very successful biodiesel and ethanol blender pump program, the Renewable Fuels Infrastructure Program (RFIP).

“While we were hopeful for a long-term funding solution for the state’s renewable fuels infrastructure program, we’re very pleased today that the Iowa legislature was able to keep this vital initiative going for another year,” said Menke. “The USDA’s Biofuels Infrastructure Partnership re-energized many Iowa retailers, leading to record participation in the blender pump program over the past year. This one-year funding extension allows us to build upon this momentum and ensure Iowans have greater access to cleaner-burning, lower-cost renewable fuels.”

The Iowa Renewable Fuels Infrastructure Program (RFIP) offers cost-share grants to Iowa retailers wishing to upgrade fueling infrastructure to offer E15, E85 and/or biodiesel blends. Reimbursement can be up to 70 percent of the installation costs, up to a maximum of $50,000 per project, with a five-year commitment to sell E15, E85 or biodiesel blends.  For more on the program, please click here.

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