Iowa Soybean Association, Iowa Biodiesel Board Applaud Governor’s Call for Statewide Biofuels Standard

February 15, 2021

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(Iowa Biodiesel Board) Governor Kim Reynolds has introduced a bill to set a minimum standard of biofuels in the Iowa fuel supply. For biodiesel, this would mean most Iowa diesel would contain at least 11 percent (B11) during warmer months beginning in April of 2022, and B20 during warmer months in 2024 and later. The Iowa Soybean Association and Iowa Biodiesel Board strongly support the legislation (HSB 185) and applauded the governor for her continued leadership.

Grant Kimberley, Iowa Biodiesel Board executive director, issued the following statement:

“We fully embrace the governor’s call to set Iowa on the path towards using more biodiesel, and at higher blend levels. Setting a standard for widespread use of higher blends of biodiesel in Iowa would be positive for Iowa’s economy, environment and rural communities – and would improve the quality of the fuel supply overall. We see a seismic shift in the nation’s energy supply already in motion, and the approach to encourage additional production and use of biofuels to reduce carbon while improving the economy is tried and true. As the nation’s top biodiesel producer, Iowa should stay in the forefront of these forward-thinking changes.”

Jeff Jorgenson, President of the Iowa Soybean Association, issued the following statement:

“We applaud Gov. Reynolds for her steadfast leadership on pro-biodiesel initiatives. The homegrown fuel is a key domestic market for Iowa soybean oil, adding value to every bushel of soybeans produced in the state. We look forward to learning more about the Governor’s call for legislation. Iowa soybean farmers stand ready to work with her and the Iowa legislature on advancing renewable fuel policies. By working together, we can grow demand for Iowa soybeans and provide significant economic and environmental benefits to rural communities.”

Biodiesel is an advanced biofuel made from agricultural byproducts and co-products, such as soybean oil.

For more information on biodiesel, visit Iowabiodiesel.org. For more information on Iowa soybeans, visit iasoybeans.com. READ MORE

THE FUEL CHOICE COALITION STRONGLY OPPOSES GOVERNMENT-IMPOSED FUEL MANDATE THAT ELIMINATES CHOICE AND RAISES GAS PRICES ON IOWANS (Fuel Iowa)

Americans for Prosperity-Iowa joins coalition calling fuel mandate the ‘wrong road for Iowa to take’ (Americans for Prosperity)

Reynolds proposes state ethanol mandate, drawing unusual political battle lines (Quad City Times)

Kim Reynolds' proposal for ethanol mandate forms unusual political battle lines: Some of the governor's ardent supporters say it's too costly (The Gazette)

State biofuels mandate gets first airing in Iowa legislature (Radio Iowa)

Farm interests, fuel retailers battle over Gov. Kim Reynolds' plan to require higher ethanol, biofuel blends (Aberdeen News/Des Moines Register)

Excerpt from Quad City Times: Reynolds’ proposal would require all gasoline sold in Iowa to contain at least 10% ethanol, with an option for the governor to raise that to 15% in four years.

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Reynolds’ proposed legislation would:

• require all gasoline in the state to include 10% ethanol, with exceptions for one pump per retailer for ethanol-free gasoline. In 2025, the governor would have the option to bump the baseline requirement to 15% ethanol.

• require all diesel fuel in the state to contain 5% biodiesel fuel from October through March and 11% from April through September. In 2024, the April through September blend requirement would increase to 20%.

• shift existing tax credits to only blends above the new minimum standards.

• require any new equipment installed in the state to be compliant with 15% ethanol or 20% biodiesel usage.

The Iowa Renewable Fuels Association projects the governor’s proposal would increase ethanol use by 117 million gallons and biodiesel by 203 million gallons, which the association says would boost demand for Iowa corn and soybeans.

The association also projects the shift in tax credits would produce a net reduction of $87.5 million in state spending over five years.

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A coalition of retailers, wholesalers, fuel distributors, transportation groups, and more have formed the Fuel Choice Coalition for the specific purpose of opposing the governor’s legislation. The coalition includes popular gas station chains Casey’s, Kum & Go, and Kwik Star, as well as the Iowa chapter Americans for Prosperity, which advocates for free-market policies.

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Republicans hold majorities in both the Iowa House and Senate, but this proposal could be that rare legislation that divides legislators, but not along political party lines.

Todd Prichard, leader of the House Democrats from Charles City, gave the most full-throated endorsement of the proposal. He said the legislation could help the state’s renewable fuel industry recover from the impacts of former President Donald Trump’s administration, which granted waivers that weakened the federal ethanol mandate.

Excerpt from Fuel Iowa: The Fuel Choice Coalition, a unified voice of Iowa fuel distributors, retailers, wholesalers, and transportation groups announced their opposition to the government-imposed mandate introduced in the Iowa legislature (House Study Bill 185 and Senate Study Bill 1179). This legislation would enforce a strict mandate on the fuel industry that eliminates choice, raises fuel prices on consumers, and harms rural Iowa businesses.

Iowa’s fuel industry has long advocated the need for critical infrastructure upgrades that will enhance the state’s fuel distribution network. Currently, the vast majority of fueling stations in rural Iowa are unable to offer higher blended biofuels due to requirements mandated by the United States Environmental Protection Agency. The facts make clear that today’s infrastructure is currently incapable of dispensing the Governor’s mandated products: current tanks, piping, and dispensers cannot safely dispense them. The Fuel Choice Coalition and experts agree it will cost at least $1 billion to upgrade Iowa’s infrastructure to meet the mandate’s requirements.

FUELIowa President and CEO Ronald N. Langston stated, “FUELIowa agrees renewable fuels like ethanol and biodiesel are critical to our economy. We have long shared a goal to expand our infrastructure to move more biofuels across the state. However, approaching this issue by way of a government-imposed mandate is the wrong road for Iowa to take and harmful consequences will follow. We strongly urge the legislature to oppose this mandate which will force Iowans to pay more at the pump, eliminates choice in our fuels, and threaten hundreds of small businesses and the people they employ.”

The ongoing pandemic has created unprecedented challenges for the Iowa retail fuel industry, its owner operators, supply chains and the transportation sector. This unfunded and unmerited fuel mandate only exacerbates those challenges.

“This swift proposal to force a mandate on the backs of Iowa businesses and consumers will have wide-ranging impacts - not only on the retail fuel industry but across the entire economy,” said Brenda Neville, President & CEO of the Iowa Motor Truck Association. “Such a result would cause higher maintenance costs, higher fuel costs for truckers, and a loss of competition in Iowa. Mandates are the wrong mechanism to drive the use of more fuels and we urge the legislature to reject HSB 185 and similar legislative proposals.”

"By labeling non-ethanol or non-biodiesel options as ‘restricted use,’ we’re moving away from consumer choice and into artificial market manipulation bordering on a fuel mandate,” said Drew Klein, State Director for Americans for Prosperity – Iowa. “This is new regulation, not for the sake of public safety, but as a means of picking winners and losers in the economy.”

“Picking winners and losers at the pump is no way to improve the fuel network in Iowa, nor are policies that require Iowans to buy more fuel and at higher prices,” said Mark Maxwell, lobbyist for A.B.A.T.E. of Iowa and the Iowa Motorcycle Dealers Association. “This is a misguided attempt for a market grab that does not help consumers or our fuel choices.”

“A government-imposed fuel mandate is absolutely the wrong direction to go. It eliminates the right of the consumer to choose what they are buying at the pump and takes away an informed decision by removing all labeling,” said Jodi Right, State Legislative Officer for A.B.A.T.E. of Iowa. “The burden put on small businesses to have to purchase the equipment to comply with mandate, as well as the very real possibility of long lines this could cause for consumers exercising choice, makes this proposal too cumbersome.”

In neighboring Minnesota, which has enacted a similar mandate - diesel prices are higher and its sales have decreased. Since the mandate has been enacted, Minnesota’s average annual taxable

diesel gallons are down 6%, while the average annual taxable diesel gallons in Iowa have increased by 5%.

According to the Annual Report on Biodiesel: Report to the Legislature, Minnesota Department of Agriculture(January 15, 2019), Iowa now produces over four times the amount of biodiesel when compared to Minnesota and the average price for a bushel of soybeans was 16 cents higher.

In Iowa, 87 percent of gasoline gallons sold are blended with ethanol and 70 percent of on-road diesel fuel gallons are blended with biodiesel. However, forcing higher prices on the backs of small businesses and consumers is no way to grow the economy.

“Instead of appropriately funding our fuel infrastructure to sell greater amounts of biofuels, the proposed government mandate under this legislation would be dictating what Iowans can and can’t use at the pump – leading to higher fuel costs, fewer consumer choices at the pump, and would disproportionately impact Iowa’s rural fuel distribution network. We urge the legislature to back away immediately from supporting mandates and instead support the infrastructure that will actually increase the usage of biofuels,” added Langston. READ MORE