Iowa Legislature Reauthorizes Biofuel Tax Differentials
June 4, 2020
IRFA Thanks Iowa Leaders for Supporting Biofuels
Contact: Cassidy Walter
JOHNSTON, IOWA – On their first day back at the Iowa Capitol, legislators wasted no time getting to work on important policies. On Wednesday night the Iowa legislature reauthorized the Iowa biofuel tax differentials, helping boost biofuel demand and lower fuel prices.
Senate File 2403, which unanimously passed both chambers, extends and modernizes fuel tax differentials for E15 and higher ethanol blends and B11 and higher biodiesel blends, which are set to expire on June 30, 2020. Passage signals continued support of renewable fuels and will put millions of dollars back into the Road Use Tax Fund each year for vital infrastructure projects.
“Reauthorization of the biofuel tax differentials is a ray of sunshine during some of the darkest days Iowa biofuels have ever faced,” said Iowa Renewable Fuels Association Policy Director Nathan Hohnstein. “We thank Iowa’s elected leaders for reauthorizing a program that is working to boost biofuel demand. Iowa biofuel plants are still struggling to claw their way back from the demand destruction caused by the response to the COVID-19 pandemic and Renewable Fuel Standard exemptions by EPA. This unanimous passage sends a strong message of support to Iowa ethanol and biodiesel producers.
“We especially want to thank Senator Randy Feenstra and Representative Louie Zumbach for their leadership and diligent efforts to ensure the reauthorization of this policy. Since the biofuel tax differentials were originally established, sales of ethanol and biodiesel have increased dramatically. We urge Governor Reynolds to sign this bill into law, ensuring Iowa continues to build on this progress.”
Since the first fuel tax differential bill was passed, E10 and higher ethanol blends and B11 and higher biodiesel blends have grown to make up about 90% and 57% of sales in 2019, respectively. The new fuel tax differential modernizes the ethanol differential by applying it only to E15 and higher blends.
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: www.IowaRFA.org.