E15 Measure Advances in Iowa Legislature

LINCOLN, Neb. (DTN) -- A new E15 mandate for Iowa fuel retailers overwhelmingly passed the Iowa House in an 82-10 vote on Wednesday, nine months after a previous mandate proposal stalled in the state.

Iowa lawmakers this week advanced the 2022 Biofuel Access Bill to the state senate, which puts in place several incentives and mandates for fuel retailers.

The measure, introduced by Iowa Republican Gov. Kim Reynolds in January, was considered a more palatable piece of legislation to fuel retailers and biofuels producers alike, compared to a previously failed legislative attempt in the spring 2021.

The bill advanced this week would require existing retailers with compatible infrastructure to offer E15 by 2026 from at least one dispenser. After Jan. 1, 2023, newly opened stations and those that install new fuel tanks and distribution systems would be required to offer E15 blends from at least half of their dispensers.

The passage comes at a time states and biofuel groups are looking for ways to restore year-round E15 sales, following a federal court ruling striking down EPA's previous rule allowing those sales.

In November, a group of Midwest governors including Reynolds, told EPA Administrator Michael Regan they are planning to make a formal request for a new E15 rulemaking and want that rule in place by the next driving season.

The Iowa legislation would exempt fueling sites that would require equipment upgrades. The measure would update the E15 promotion tax credit to 9 cents per gallon year-round through 2025.

As part of the mandate, every fuel retailer would receive either a grant or an exemption to comply with the law. The legislation also provides several incentives to retailers to offer B20 biodiesel blends.

The state would sunset a B5 retailer tax credit at the end of 2023 and extend a B11 retailer tax credit through 2027. In addition, the measure creates new retailer tax credits for B20 and higher biodiesel blends.

Iowa Renewable Fuels Association Executive Director Monte Shaw said the bill was a "victory" for Iowa consumers.

"Every person in Iowa deserves the choice of higher blends like E15 and B20," Shaw said in a statement.

"By unlocking the power of biofuels, Iowans can save money at the pump while also powering our farm economy. IRFA urges the Senate to take the bill up quickly. We also want to thank Gov. Reynolds for prioritizing biofuels choice for Iowans and leading the way. Promoting biofuels has never been a partisan issue and today we saw what can be accomplished when we focus on what's best for Iowa's future."

Grant Kimberley, Iowa Biodiesel Board executive director, said in a statement that Iowa should lead the way on higher biofuels blends.

"This legislation is an investment in Iowa's long-term economic future," he said. "When biofuels succeed, Iowa succeeds. Iowa's answer to the nationwide demand for low-carbon fuels is biodiesel. Our state can and should strengthen our position as the top biodiesel-producing state, so that we may reap the benefits of this shift. It also helps Iowa's vital agriculture industry succeed. By increasing soybean oil value, biodiesel supports 13% of the price per bushel of soybeans. This equated to $1.09 per bushel in 2019, while lowering the price of meal for livestock producers and the food supply."

The new bill strikes a compromise between the biofuels industry, consumers and fuel retailers, who as of last spring, were worlds apart on previous legislation.

Battle lines were drawn in many small Iowa towns where local convenience store chains sell E15 to help local farmers but stood against a proposal to mandate the sale of the fuel along with 11% biodiesel across the state.

Companies such as Casey's General Stores Inc. contended such a mandate would run some small-town retailers out of business. Iowa convenience stores support local small communities with jobs and a market for fuel produced yet stood opposed to the legislation.

Under the previous legislation, fuel retailers said they would have had to spend tens of millions of dollars to make infrastructure upgrades.

According to a Growth Energy analysis, statewide E15 availability could cut climate emissions by 180,000 metric tons, the equivalent of removing almost 40,000 vehicles off the road.

"The bipartisan passage of the Biofuel Access Bill in the Iowa State House is an exciting development in the move toward statewide E15 and in Iowa's leadership in increasing access to higher blends of biofuels," Growth Energy CEO Emily Skor said in a news release.

"Statewide access to higher blends of biofuels means that all drivers across Iowa will have the opportunity to choose fuel that is good for their engine, good for their pocketbook, and one that benefits the community around them."

"Iowa Battle Lines Drawn on E15 Mandate," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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