Iowa Governor Signs Bill to Bolster State's Renewable Fuel Infrastructure

Iowa Gov. Kim Reynolds has signed a bill into law that will increase funding for the state's Renewable Fuel Infrastructure Program from $10 million to $14 million on July 1. The program is specifically focused on supporting biodiesel- and ethanol-related projects in the state.
Iowa Governor Signs Bill to Bolster State
Courtesy of Iowa Biodiesel Board

Through grant incentives, the program helps retail operators of motor fuel dispensing sites or fueling stations modernize their equipment to better accommodate the expanded use of renewable fuels in Iowa.

Proponents of the program, including the Iowa Biodiesel Board and the Iowa Soybean Association called the legislation "another significant step forward in Iowa's commitment to expanding the use of renewable fuels like biodiesel."

"This continued significant IRFIP funding underscores Iowa's dedication to fostering a sustainable and environmentally conscious energy landscape," said Grant Kimberley, executive director of the Iowa Biodiesel Board, in a written statement.

"The more infrastructure we have available, the more biodiesel is accessible to consumers and utilized in the market," he said

Kimberley noted that recipients of the infrastructure cost-share dollars must offer biodiesel blended fuel for a minimum of 5 years, demonstrating a long-term commitment to promoting renewable fuels.

The revised program guidelines include an increase in the cap for retail biodiesel projects, now set at $1.75 million compared to the previous $1.25 million. This adjustment results in an additional $500,000 annually allocated to retail biodiesel projects.

As of January, there were 35 biodiesel retail applications on hold totaling $1.7 million. These applications, if approved, would utilize almost all the FY25 funding at the new increased level, highlighting the demand for expanded infrastructure support.

"Increasing demand and accessibility for biodiesel is a top priority for Iowa farmers," said Iowa Soybean Association president Suzanne Shirbroun.

"With planting season well underway, we are encouraged by the continued support from lawmakers on this important program and look forward to seeing biodiesel have an even larger footprint in our cities and rural communities," Shirbroun said.

The program offers reimbursement of up to 70% of a fuel retailer's costs up to $50,000 for specific project components, with a 5-year commitment required for storing and selling biodiesel-blended fuels. Projects focused on heated biodiesel terminal equipment and infrastructure are eligible for a 50% grant up to $100,000 per project.

Iowa continues to lead the nation in both biodiesel production and comprehensive pro-biodiesel state policies, the groups said.

In 2023, Iowa ethanol production increased to a record-breaking 4.6 billion gallons, up from the previous record of 4.5 billion gallons in 2022, according to the Iowa Renewable Fuels Association.

Iowa biodiesel production kept steady at 350 million gallons, nearly the same as the 349 million gallons produced in 2022, the group said.

A recent economic analysis conducted on behalf of the Renewable Fuels Association found that renewable fuels and biofuel production in particular, accounts of more the $6.5 billion, or about 3% annually of Iowa's GDP; generates $3.2 billion of income for Iowa households; and supports almost 52,000 jobs throughout the entire Iowa economy.

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