Iowa Gov. Kim Reynolds Signs Landmark Biofuels Bill

Iowa Gov. Kim Reynolds on May 17 signed a bill into law that makes Iowa the first state in the nation to adopt E15 as its standard blend of gasoline. The legislation, HF 2128, also expands consumer access to higher blends of ethanol and biodiesel.

Reynolds introduced the bill in January. The Iowa House on Feb. 2 voted 82 to 10 in favor of the bill. The Senate approved an amended version of the legislation on April 26 by a vote of 42 to 3. Shortly after the Senate vote, the House also passed the amended bill by a vote of 78 to 13.

“I’ve never been prouder than I am today to be the Governor of the number one ethanol and biodiesel-producing state in the country,” Reynolds said. “Iowa’s biofuel production powers our economy and fuels the world, and this historic bill sets the stage for the single largest expansion of biofuels in our state’s history. We're sending a message that can’t be ignored: America’s energy is growing right here in Iowa’s fields.”

For ethanol, the legislation makes E15 the standard blend of gasoline to be sold within Iowa by 2026. It also updates the E15 promotion tax credit to 9 cents per gallon year-round through 2025. For biodiesel, the bill increases the state’s biodiesel production tax credit from 2 cents per gallon to 4 cents per gallon. It also maintains the current biodiesel fuel tax differential but applies it to blends of B20 rather than B11 and extends fuel retailer tax credits for B11 and higher while introducing new credits for higher blends like B20 and B30. In addition, the legislation supports increased use of both biodiesel and ethanol by increasing funding for the state’s renewable fuel infrastructure program.

Growth Energy is thanking Reynolds for leading the way for statewide E15 in Iowa. “Thanks to Governor Reynolds’ strong leadership, every Iowan will be able to access affordable, engine-kind and earth-friendly E15 at the pump,” said Emily Skor, CEO of Growth Energy. “The Biofuel Access Bill, first unveiled by Governor Reynolds at the beginning of this year, offers drivers across Iowa the opportunity to not only save money at the pump but to make a simple change for the environment by simply changing fuel. At the peak of high gas prices this spring, Iowans across the state were saving about $.30 per gallon at the pump while filling up with E15. These meaningful savings will be accessible across the state, all year long.

“Governor Reynolds’ legislation also allows drivers to make a difference for the environment by simply filling up at the pump. Research shows that statewide E15 in Iowa could cut climate emissions by 180,000 metric tons - the equivalent of removing almost 40,000 vehicles off the road across the state. This initiative is a win-win for the economy and the environment, and we’re glad to see this legislation enacted, which will have a permanent impact for generations to come.”

Clean Fuels Alliance America is applauding Reynolds and Iowa lawmakers for enacting the landmark legislation. “We congratulate Iowa on this significant legislation, helping to strengthen the biofuels corridor throughout the Midwest,” said Donnell Rehagen, CEO of Clean Fuels. “Iowa joins the ranks of Illinois, Minnesota and others with some of the most forwarding-thinking legislation that values the production and use of biodiesel. Along with renewable diesel, it is our nation’s best option here-and-now to decarbonize the heavy-duty transportation and home heating oil sectors.”

The Iowa Biodiesel Board and Iowa Soybean Association are also celebrating Iowa’s new biofuels law. “We applaud House and Senate leaders, and Governor Reynolds, for making this bill a priority,” said Grant Kimberley, Iowa Biodiesel Board executive director and Iowa Soybean Association sr. director of market development. “In the face of market uncertainty, the expansion of our state’s producer credit offers a new cushion for biodiesel producers that is quite significant. Worldwide uncertainty and fuel price instability also impact consumers. A diverse fuel supply with more low-carbon fuel made in America benefits everyone from soybean farmers to the end consumer.”

“Passage of this legislation signifies a huge win for Iowa’s 40,000 soybean farmers and all Iowans,” said Robb Ewoldt, president of the ISA. “Over the past year, the state’s soybean growers have worked hard with a variety of stakeholders to help the state refine its approach to expanding biofuels production and access in a way that benefits everyone. This legislation positively contributes to farmer success, air quality and economic growth in our local communities. Biodiesel production supports 13 percent of the per bushel price of soybeans, which equated to approximately $1.78 per bushel in 2021. It also reduces feed costs for livestock producers by $25 to $40 per ton.”

Ethanol producer Poet said the bill’s E15 provisions are game-changing. “Iowa today, America tomorrow,” said Jeff Broin, founder and CEO of Poet. “We see a nationwide market for E15 on the horizon. E15 is fueling freedom, and Iowa is leading the way by expanding market share for American-made biofuels that Russia and OPEC can never take away.”

“Iowa’s game-changing E15 standard will move America one step closer to energy independence, save drivers money at the pump, and grow dependable domestic markets for farm families,” Broin added. “Poet sincerely thanks Governor Reynolds and all our legislative champions in Iowa who are winning the fight for America’s fuel.”