Renewable Fuels Bill Is Passed By Iowa House

IRFA calls it a "step forward" and vows to work to strengthen the bill during Senate deliberations in Iowa Legislature. Rod Swoboda

Published on: Apr 4, 2006

The Iowa House of Representatives passed legislation March 28 designed to boost the availability and use of renewable fuels in Iowa - such as biodiesel and ethanol. The bill now goes to the Iowa Senate where efforts to strengthen the bill are expected to take place.

"The passage of this bill by the House is a good start," says Monte Shaw, director of the Iowa Renewable Fuels Association. "The House did a tremendous amount of work and put together a package of incentives that is exciting. At the same time, the IRFA and other groups believe this bill can be made even better for Iowa. We were happy to see the process move forward today and we'll continue to work to include a meaningful renewable fuels standard in the legislation before it reaches the Governor's desk."

The House bill, known as HF 2754, would, for the first time in Iowa, establish a retail tax credit for E-85 and biodiesel. The bill also boosts funding for renewable fuel infrastructure grants. These grants help retailers make the necessary changes to offer biodiesel blends and E-85 to consumers.

Will push to include fuel standard

"To truly harness Iowa's unique ability to produce renewable fuels, we in the IRFA believe the bill should include a renewable fuels standard that replaces 25% of Iowa's gasoline with renewable fuels like ethanol and biodiesel by 2015," states Shaw. "To be more than window dressing, achievement of the RFS by retailers must be connected to their incentives. I believe there is broad support for that type of incentive-based accountability in the Senate."

The Iowa Renewable Fuels Association worked with the Iowa Corn Growers Association to develop the 25% by 2015 RFS. The aggressive RFS, not a mandate, allows gasoline retailers flexibility in meeting the standard through the sale of E-10, E-85, and biodiesel blends.

By the end of 2006, Iowa will have a minimum of 27 ethanol plants capable of producing over 1.7 billion gallons per year. In addition, at least six biodiesel plants will be capable of producing more than 120 million gallons per year.

The Iowa Renewable Fuels Association was formed in 2002 to represent the state's biodiesel and ethanol producers. The trade group fosters the development and growth of the renewable fuels industry in Iowa through legislative and regulatory efforts, education and promotion, and infrastructure development.

Farm Bureau supports bipartisan bill

The Iowa Farm Bureau Federation applauds the House for passing HF 2754 which establishes a Renewable Fuels Standard for Iowa. The bill now moves to the Senate.

"This bill illustrates what can happen when groups work together for the greater good," says IFBF President Craig Lang. "Farm Bureau members throughout Iowa want to achieve the highest level of renewable fuels use possible. HF 2754 is both aggressive and achievable and will help move Iowa one step closer to energy independence."

The bill has received widespread, bipartisan support from other groups including the Iowa Soybean Association, Iowa Cattlemen's Association, Iowa Institute of Cooperatives, Agribusiness Association of Iowa, Petroleum Marketers and Convenience Stores of Iowa, the Iowa Motor Truck Association and John Deere.

Biofuels bill contains four key parts

"We all want to see Iowa take a leadership role in renewable fuels," says Dawn Carlson, executive director of the Petroleum Marketers and Convenience Stores of Iowa. "But in order for us to do that, we need to build the infrastructure and be able to sustain it for the long-term. HF 2754 can help us achieve that goal for the benefit of all Iowa."

The bill includes four key components advocated by Farm Bureau members throughout Iowa:

  • An aggressive and achievable RFS for ethanol and biodiesel.
  • An aggressive incentive program, including an additional incentive for the sale of E-85 and a new incentive for the sale of biodiesel. The incentive program focuses on moving retailers to sell and consumers to buy more renewable fuels.
  • It establishes accountability mechanisms to keep the state moving forward to achieve the RFS. Retailers who do not continue to increase the sale of ethanol (particularly E-85) will see their incentives phased out. In addition, if the state does not achieve the RFS at each level, the gas tax on nonblended gas will increase by two cents for every percent the state is short.
  • It creates an infrastructure board to oversee the distribution of infrastructure assistance. The infrastructure assistance is in the form of a grant for both ethanol and biodiesel.

"Ethanol and biodiesel are not just good for agriculture, they are also good for Iowa," says Lang. "We have an opportunity to really put Iowa on the map, grow new industries for the state and lead our nation in energy development. It's imperative that we work together to ensure that an aggressive, achievable bill addressing renewable fuels is passed this year."