Iowa Passes Broad Biodiesel Legislation
Other States Also Pass Bills to Increase Use of the Cleaner Burning Fuel

JEFFERSON CITY, Mo.– Jim Mulgrew knows the value of biodiesel, not only to his business, but to Iowa consumers. The president of Mulgrew Oil, a fuel distributor, sells biodiesel from a bulk facility in Dubuque, Iowa. Now, thanks to a new Iowa law, availability will improve for Iowa consumers.

Gov. Tom Vilsack today signed into law two renewable fuels and infrastructure bills (HF 2754 and HF 2759). This means distributors like Mulgrew Oil will likely sell more biodiesel, since point-of-sale retailers will receive a three cent income tax credit on each gallon of a two percent (B2) blend or higher. To qualify, at least half of the distributor or retailer's diesel sales must be B2 or higher blend levels. One bill also establishes a renewable fuels standard, saying sales of ethanol or biodiesel must equal 25 percent of a retailer’s fuel sales by 2020. There are exceptions for small fuel retailers. All the bill provisions will encourage more retail, and wholesale, sales, and Mulgrew knows the public wants that. “Demand for soy biodiesel is starting to explode,” he said.

“This legislation incentivizes the greater use of biodiesel and renewable products, which is a great way to go,” said Mulgrew, who is also past chair of the Petroleum Marketers and Convenience Stores of Iowa. “Also, the legislation adds even more credibility to the product.”

According to the Iowa Soybean Association, hundreds of fuel distributors in Iowa already offer low blends of biodiesel. Thanks to this tax credit, and other support provisions, distributors will likely expand sales.

Iowa is one of many states this year that has enacted legislation that will significantly impact the use of biodiesel. Other laws passed to date in the most recent session include:

• New York passed a residential bioheat credit that takes effect in July. The state income tax incentive allows homeowners to receive one cent per percentage of biodiesel blended into heating oil, not to exceed 20 cents a gallon.
• Gov. Christine Gregoire in Washington signed into law a two percent biodiesel volumetric requirement. The requirement goes into effect December 1, 2008, or when feedstock grown in the state can meet the 2 percent requirement, whichever comes first.
• Colorado, Arizona, Hawaii and Maryland added requirements to the books for state fleets to use or give preference to biodiesel blends when available.
• Kansas will award qualified biodiesel fuel producers with a 30 cent per gallon incentive for each gallon they sell, beginning April 1, 2007.
• Arkansas provides for a 50 cent excise tax credit on B100 gallons used for blending, limited to the first 2 percent of total gallons of biodiesel blended.
• California Gov. Arnold Schwarzenegger issued an executive order establishing a target of 20 percent renewable fuel use in the state by 2010.
• Indiana’s Gov. Mitch Daniels signed into law extension of tax credits for production, blending and retail sales.
• Virginia passed a Biofuels Production Fund and Grant Incentive Program.

As a whole, bills have also included point of taxation clarification, authorization of studies, bills related to schools and buses, and biodiesel promotion. Specifically, bills have provided for public lands for oilseed production, conversion allowances, and an education fund. The National Biodiesel Board has monitored more than 160 pieces of biodiesel legislation in the 2006 state sessions. For more on state legislation, click here.

Biodiesel significantly cuts harmful environmental emissions, promotes greater energy independence and boosts our economy. Today, more than 600 major fleets use biodiesel commercially, and 700 retail filling stations make it available to the public. Approximately 1,600 distributors, like Mulgrew Oil, sell and deliver biodiesel in bulk.



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Readers can learn more about biodiesel at www.biodiesel.org.