Iowa Senate passes extension of state biodiesel policies

Iowa Biodiesel Board commends support of incentives to keep state competitive

DES MOINES – The Iowa State Senate has taken a major step towards helping Iowa maintain its competitive edge in domestic energy production. By a unanimous vote (48-0), today the Senate passed a bill (SF2344) that extends incentives for biodiesel production and retail distribution in Iowa.

Iowa's biodiesel producer incentive offers a $.02 per gallon refundable credit on the first 25 million gallons of biodiesel produced in any single plant. The incentive is set to expire at the end of calendar year 2014, but the legislation passed by the senate would extend the credit through 2019.

An amendment added to the bill would also extend an Iowa retailer credit of 4.5 cents per gallon for 5 percent biodiesel (B5) through 2019. It was set to expire in 2017. The credit encourages retail availability of biodiesel in Iowa.

The Iowa Biodiesel Board commended the vote.

"This state policy will encourage biodiesel production to remain in Iowa, which benefits Iowa's economy and reputation as an American energy producer," said Grant Kimberley, executive director of IBB. "It will also help shelter our state's biodiesel industry from the impact of uncertainty over the federal Renewable Fuel Standard and other federal policies."

The incentives will help keep Iowa competitive with surrounding states, which have become more assertive in their support of biodiesel as they realize its economic and environmental benefits, Kimberley said. Those policies include:

*Every gallon of diesel sold in Minnesota must contain at least 5 percent biodiesel, a policy set to increase to 10 percent this summer.

*Illinois provides an exemption from state sales tax on blends of biodiesel higher than 10 percent.

*Missouri offers a production incentive of $.30 per gallon on the first 15 million gallons produced.

A recent study shows the increase in economic activity generated by Iowa biodiesel supported more than 7,000 full-time equivalent jobs in the state in 2013. The industry's contribution to Iowa's GDP was $520 million. Also, corn, soybean and livestock producers all benefit from biodiesel production, according to economic analysis.

Biodiesel is an advanced biofuel made from agricultural byproducts and co-products, such as soybean oil. The Iowa Biodiesel Board is a state trade association representing the biodiesel industry.

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