Iowa Senate Passes Biodiesel Tax Credit
State House to Next Examine Chance to be 25 Percent Renewably Powered

JEFFERSON CITY, Mo.– A bill in Des Moines could make Iowa 25 percent less dependent on foreign oil in the coming years. A Senate-passed bill would create a biodiesel tax credit for retailers, as well as include biodiesel in the 25 percent of petroleum displacement the state would require by 2020.

The bill received strong bipartisan support in the Senate, passing 49-1. Before being amended, House bill 2754 passed the House by a margin of 92-7. The bill, as amended, ensures that by the year 2020, 25 percent of all petroleum used in Iowa will be replaced with biodiesel and ethanol. The bill creates a three cent-per-gallon tax credit for biodiesel blends of B2 or higher. To qualify, 50 percent or more of a retailer’s total sales must be biodiesel blended fuel.

“This bill will have a practical effect of putting biodiesel in pumps all across the state,” said John Askew, president of the Iowa Soybean Association. “This is a historic moment for the biodiesel industry in Iowa. It’s the first tax credit that has passed in the Senate and I am very pleased with the bill.”

The enthusiasm for this bill is also felt on a national level. “Iowa is demonstrating bold leadership by promoting renewable biodiesel and ethanol,” said Joe Jobe, National Biodiesel Board CEO. “It is positioning itself as a significant energy exporter and could become the Texas of the Midwest.”

Within the next few years, ISA expects that there will be 15 biodiesel plants in Iowa, with the capacity to produce over 380 million gallons of biodiesel. As a result of this bill, ISA officials project that the biodiesel industry in Iowa will create nearly 13,800 new jobs in the economy and $1.3 billion of income for Iowa households. In addition, the increased agricultural demand, oilseed processing, new capital spending and construction activity for biodiesel could create an additional $3.6 billion in economic activity.

The bill now returns to the House for consideration of the Senate changes.

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