Iowa Grants Continue To Make Biodiesel More Available

State cost-share program creates infrastructure to enhance availability of biodiesel to consumers.

Published on: Jul 27, 2013

Fuels Infrastructure Board helped the projects come to fruition. Iowa has several progressive biodiesel policies on the books, including this investment in the infrastructure needed for statewide distribution of cleaner burning biofuels. 

"Iowa produces the most biodiesel of any state, yet surveys show 47% of diesel vehicle owners here do not know where to find it," points out Randy Olson, executive director of the Iowa Biodiesel Board. "This additional infrastructure helps biodiesel continue to become fully integrated into Iowa's fuel supply."

Olson recently visited the Wallaces Farmer office in Des Moines to give editors Rod Swoboda and Frank Holdmeyer an update on the biodiesel industry in Iowa. The biodiesel industry has survived trying times and is having a strong year in 2013, says Olson. Many of the plants that were closed are at reduced production the past few years are reopening and those that remained open are increasing production this year. "Iowa biodiesel producers are primed to have a record year this year," says Olson.

THIS PROGRAM WORKS: State grants provided by the Iowa Renewable Fuels Infrastructure program have helped open 206 biodiesel pumps and terminals since 2006. The state financial assistance program to assist in development of renewable fuels has made biodiesel blends more available to consumers across the state -- rural as well as urban. This photo shows the Western Iowa Biodiesel production plant at Wall Lake.
THIS PROGRAM WORKS: State grants provided by the Iowa Renewable Fuels Infrastructure program have helped open 206 biodiesel pumps and terminals since 2006. The state financial assistance program to assist in development of renewable fuels has made biodiesel blends more available to consumers across the state -- rural as well as urban. This photo shows the Western Iowa Biodiesel production plant at Wall Lake.

Why biodiesel production could rise as much as 50% this year over last year

There are several reasons for the rebound. The main reason is that the Renewable Fuels Standard (RFS) considers biodiesel an advanced biofuel and includes a target of 1.28 billion gallons produced in 2013, says Olson. He believes the industry may produce as much as 1.5 billion or 1.6 billion gallons in 2013. That would be an increase of about 50% from 2012.

The second key reason for biodiesel's profitability and production rebound is the federal tax credit. It is now in effect. That credit was allowed to expire in 2010 and again in 2012. When it was renewed by Congress at the end of this past year, the renewal was made retro-active to 2012. That credit could expire again and Olson says the industry supports a renewal of it. However, he says because of the RFS biodiesel producers are in a better position to weather the loss of a tax credit than they were in 2010.~~~PAGE_BREAK_HERE~~~

A third factor helping biodiesel producers today is the fact that oil prices are comparatively high, and soybean prices have come down from the record highs of recent years. As a result fuel blenders are using more biodiesel than they did a year or two ago. Some are using biodiesel for the first time while others are mixing it in higher blends with petroleum diesel sometimes moving up from B5 (5% biodiesel) to a B10 or B15 or B20 blend. "Biodiesel is very competitive with diesel fuel today," says Olson.

Iowa Renewable Fuels Infrastructure Program has been quite successful

The Iowa Renewable Fuels Infrastructure Program assists retail operators of motor fuel dispensing sites or fueling stations in the conversion of their equipment to allow for the expanded use of renewable fuels in Iowa. The 27 biodiesel projects in fiscal year 2013, which just ended, received funding totaling about $1.2 million. 

Some examples of funded projects include Sapp Bros. Travel Center in Council Bluffs, STAR Energy (a division of Growmark) in Fort Dodge, and a Kum-and-Go in Ankeny, the hometown of the Iowa Biodiesel Board and the Iowa Soybean Association.  Diamond Oil Co. used a $100,000 grant to open a heated terminal facility in Des Moines, which helps streamline the distribution process by offering preblended biodiesel to smaller distributors year-round.

"The Iowa Renewable Fuels Infrastructure program is good for Iowa because it empowers more consumers to use their own state's products rather than importing our energy," says Harold J. Hommes, program administrator with the Iowa Department of Agriculture & Land Stewardship. "We don't have refineries or fossil fuels here, so a lot of money leaves our state to pay for those energy products. But if we produce our energy in a renewable manner here, we're helping Iowa farmers and fuel producers, and then those dollars are multiplied throughout Iowa."

Producing renewable fuels in Iowa helps the state's economy in many ways

The grants provided by the Iowa Renewable Fuels Infrastructure Program require matching funds. Petroleum distributors must commit to providing biodiesel blends for a set number of years (usually five). Agricultural cooperatives are also eligible for the grants. This increases on-farm availability, a priority of the Iowa Biodiesel Board.    

Since the program began in 2006, the IRFIB has funded 206 biodiesel pump and terminal projects, with additional funding for E85 ethanol stations. The Iowa Biodiesel Board holds a seat on the Renewable Fuels Infrastructure Board.

To see a list of projects, visit the Iowa Biodiesel Board website. The Iowa Biodiesel Board is a state trade association representing the biodiesel industry.