Despite Tough Times, Study Finds Ethanol and Biodiesel Production Continues to Power Iowa’s Economy

Economic benefits hampered by RFS exemptions

Contact: Cassidy Walter

JOHNSTON, IOWA – Today a new study finds despite challenges, Iowa biofuel production continues to have a significant impact on Iowa’s economy, supporting over 48,000 jobs and more than $2.4 billion in household income.

The study, authored by John Urbanchuk of ABF Economics and commissioned by the Iowa Renewable Fuels Association (IRFA), also found that biofuels continue to account for over $5 billion of Iowa’s GDP, or about three percent.

The study looked at the many challenges the industry faced in 2019, including the lapsed biodiesel tax credit and the demand destruction caused by excessive Renewable Fuel Standard (RFS) refinery exemptions. The study found Iowa biofuels production could have supported over 4,000 more jobs and $200 million more in household income in 2019 had the exemptions not been granted.

“This study confirms two very important truths – that biofuels continue to play a crucial role in Iowa’s economy, and that role was significantly hampered by RFS exemptions,” said IRFA Executive Director Monte Shaw. “We are encouraged to see that despite the hard times and policy uncertainty Iowa producers faced in 2019, the economic benefits are still strong. It is, however, disheartening to know how much greater the benefits could have been to Iowa had EPA not granted over a billion gallons worth of demand-destroying RFS exemptions.”

Looking forward, the study concludes that growth of the biofuels sector “through new technologies and feedstocks” will only serve to enhance the economic impact of the industry, but “policy stability is essential to maximize these benefits. Uncertainty surrounding issues like RFS refinery exemptions, tax credit extensions, and trade with China, will impede the ability of the industry to provide these societal benefits.”

To view the full study, click here.

The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 43 ethanol refineries capable of producing over 4.5 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 11 biodiesel facilities with the capacity to produce nearly 400 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: