Iowa Group to Push B5 Biodiesel Mandate for State
Legislation to require blends at pumps is likely to pass the Iowa Senate, but from there its future is uncertain.
Rod Swoboda
Published: Mar 23, 2009
The Iowa Soybean Association and other backers of biodiesel spent National Biodiesel Day, March 18, at the Iowa State Capitol in Des Moines lobbying the Iowa Legislature for passage of a bill that would require 5% biodiesel to be blended into all diesel fuel sold in Iowa beginning July 1, 2009.
With at least four biodiesel plants in Iowa shut down because of poor market conditions, biodiesel advocates say the mandate is needed to "save Iowa's biodiesel industry." If passed, this would be Iowa's first biodiesel mandate. It would replace the state's 3-cent per gallon state income tax deduction for retailers for whom biodiesel accounts for at least 50% of their fuel sales.
"We can give up a tax incentive to help save the biodiesel industry," says Jack Kibbie, a state senator from Emmetsburg. Kibbie, a farmer and a Democrat, is sponsoring the bill that would require biodiesel blends sold at Iowa pumps to be at least 5% for B5 by July 1, 2009; up to 10% or B10 by July 1, 2012; and at least 20% or B20 by July 1, 2015.
Iowa has never had a biofuel mandate
Iowa has never required biofuel use, even for ethanol, says Randy Olson, executive director of the Iowa Biodiesel Board. A national ethanol mandate—imposed on refiners and pipelines—requires the use of about 10 billion gallons this year. A national biodiesel mandate enacted by Congress in 2007 requires the use of 500 million gallons this year and a billion gallons by 2012.
Olson says while there is a new national mandate this year, there is no law that requires a drop of biodiesel to be used in Iowa. The bill sponsored by Kibbie has been approved by a Senate committee. Kibbie says he has enough sponsors to get it to pass the entire Senate. The Iowa House, however, is a different situation. The bill does not yet have a sponsor in the House.
Opposition is coming from petroleum marketers, who would lose the income tax deduction, and truckers who are wary of biodiesel because of its tendency to gel in very cold weather. "Minnesota has a biodiesel mandate and there has been plenty of trouble with it there," says Bob Kohlwes, president of BTI Special Commodities trucking company in Des Moines.
Kibbie's bill, known as Senate File 204, would allow a winter exception as the biodiesel mandate would by lifted during the coldest months. Minnesota's mandate, which has been law in that state for the past couple of years, has been changed so that it allows an exception between November and March.
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Tagged: biodiesel, ethanol, soybean, soybean association, Iowa Soybean Association
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