Iowa RFA

FOR MORE INFORMATION:
Lucy Norton, Managing Director, 515-225-9242
Monte Shaw, Executive Director, 515-225-9242

FOR IMMEDIATE RELEASE

Governor Signs Most Aggressive Renewable Fuels Bill in Country

JOHNSTON, Iowa - May 30, 2006 - The Iowa Renewable Fuels Association (IRFA) today applauded Governor Tom Vilsack for signing into law legislation designed to boost the availability and use of renewable fuels, such as biodiesel and ethanol. A 25% Iowa Renewable Fuels Standard (RFS) 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 House bill, HF 2754, and its companion appropriation bill, HF 2759, create:

An aggressive, accountable renewable fuels standard (RFS) 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.

“Iowans should see an immediate impact in the reduction of E85 and biodiesel prices at the pump,” added Shaw. “The tax credits for E85 and biodiesel are retroactive to the beginning of 2006. We certainly hope retailers will begin to immediately pass them through to consumers.”

The renewables bill will stimulate Iowa’s economy by:

generating $85.5 million in gross state product (GSP) through investment in renewable fueling infrastructure by 2020;
boosting GSP by $1.82 billion through 2020 by keeping more fuel purchase money in the state (E85 keeps 67% of purchase price in state compared to only 12% for regular gasoline);
creating as many as 3,950 new jobs through the economy;
increasing Iowa tax receipts by $75 million through 2020 as a result of the greater economic activity; and,
saving Iowa consumers an average of nearly $50 million annually through 2020 as purchases of lower cost biodiesel blends and E85 increase.

The Iowa Renewable Fuels Association worked with the Iowa Corn Growers Association (ICGA) to develop an aggressive and accountable RFS. The aggressive RFS, not a mandate, allows gasoline retailers flexibility in meeting the standard through the sale of E10, E85, and biodiesel blends.

Iowa is the leader in renewable fuels production. Currently, Iowa has 25 ethanol refineries with the capacity to produce over 1.5 billion gallons annually. There are 4 ethanol refineries and two major expansions under construction with a combined annual capacity of 425 million gallons. In addition, Iowa has 6 biodiesel refineries with a combined annual capacity of over 100 million gallons either in operation or under construction. Many additional renewable fuels projects are under development.

The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s biodiesel and ethanol producers. The trade group fosters the development and growth of the renewable fuels industry in Iowa through legislative and regulatory efforts, education and promotion, and infrastructure development.