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Iowa Passes 25% Renewable Fuels Standard

Tuesday Iowa Gov. Tom Vilsack signed into law four pieces of legislation that book the availability and use of renewable fuels, such as biodiesel and ethanol. A 25% Iowa Renewable Fuels Standard is the centerpiece of the comprehensive renewable fuels bill.

"With the Governor's signature, Iowa is on the path to be the number one renewable fuels consuming state," stated IRFA's Executive Director Monte Shaw. "Iowa is already the ethanol and biodiesel production leader. Now we have the most aggressive renewable fuels usage policy of any state as well. IRFA has already been contacted by several states who want to follow in Iowa's footsteps."

The Iowa House bill, HF 2754, and its companion appropriation bill, HF 2759, create:

• An aggressive, accountable renewable fuels standard starting at 10% in 2009 and increasing to 25% by 2019.
• A new ethanol promotion tax credit for each gallon of ethanol blended into gasoline (replaces existing tax credit beginning in 2009). This incentive is linked to a retailer dealer's achievement of the RFS schedule. The tax credit increases from 2.5 cents per gallon (c/g) for retailers within 4% of the RFS schedule to 6.5 c/g for retailers meeting or exceeding the RFS schedule.
• A retail tax credit for E85 of 25 c/g (phases out by 2020).
• A retail tax credit for biodiesel blends of 3 c/g (for retailers who sell more than 50% biodiesel blends.
• $13 million over three year to expand an infrastructure program designed to help retailers and wholesalers offset the cost of bringing E85 and biodiesel blends to consumers.