Impact of Expansion of the Renewable Fuels Industry on the Economy of Iowa

By John Urbanchuk, Managing Partner, ABF Economics
October 17, 2017
Prepared for the Iowa Renewable Fuels Association

Since 2016, Iowa biodiesel and ethanol producers have commenced a historic level of investment and capital expenditures to expand production capacity. This capacity expansion, which will include 533 million new ethanol gallons and 78 million new biodiesel gallons by the end of 2018, marks the single largest building boom since the historic industry expansion in the early 2000s.

Historic Expansion Makes Historic Economic Impact

Once this ongoing historic capacity expansion is completed, the renewable fuels industry will have the following impacts on Iowa’s economy by the end of 2018:

  • Will account for more than $5.6 billion of Iowa GDP
  • Will generate over $2.8 billion of income for Iowa households
  • Will support 53,212 jobs through the entire Iowa economy

Total Economic Impact of Expansion of the Iowa Renewable Fuels Industry

 2016 Impact of Expansion Potential
Percent Change
Corn Ethanol Capacity (MGY) 4,029 511 4,540 12.7%
Cellulosic Ethanol Capacity (MGY) 52 22 74 42.3%
Biodiesel Capacity (MGY) 297 78 375 26.3%
Total Capacity (MGY) 4,378 611 4,989 14.0%
GDP (Mil $)* $4,726 $904 $5,630 19.1%
Household Earnings (Mil $)* $2,303 $544 $2,847 23.6%
Employment (Jobs)* 42,419 10,793 53,212 25.4%

*Includes agriculture and investment in R & D

However, economist and study author John Urbanchuk cautioned, “(R)ecent uncertainty regarding the implementation of the federal Renewable Fuel Standard (RFS) could jeopardize not only future investments in new capacity and technology, but also the investments made over the last two years. If federal policy shifts lead to stagnant or reduced renewable fuels demand, nearly 11,000 jobs in Iowa alone will be put at risk.”

To view the full study, click here.