Iowa House passes bill extending biofuel tax incentives

By Erin Voegele | April 26, 2016

On April 21, the Iowa House of Representatives passed legislation by a vote of 88 to 6 that aims to extend state tax incentives for renewable fuels. The measure passed the state Senate in mid-April by a vote of 49 to zero and will now go to Gov. Terry Branstad for consideration.

According to the Iowa Renewable Fuels Association, the bill, S.F. 2309, aims extend two retailer tax credits for ethanol blends. The E85 Promotion Tax Credit, available for fuel blends containing 70 to 85 percent ethanol, was extended at 16 cents per gallon. The E15 tax credit, available for fuel blends containing 15 to 69 percent ethanol, was extended at 3 cents per gallon from Sept. 16 through May 31, and 10 cents per gallon from June 1 through Sept. 15 to help alleviate the summertime blending issues for registered E15.

The bill also includes an extension and adjustment of the Biodiesel Blended Fuel Retailer Tax Credit. While the incentive will continue at 4.5 cents per gallon for retailers offering a biodiesel blend containing a minimum of 5 percent biodiesel (B5) through 2017, from 2018 through 2024 it will then provide a 3.5 cents per gallon incentive on B5, and a 5.5 cents per gallon credit on B11, or diesel blended with a minimum of 11 percent biodiesel.

S.F. 2309 is not the only legislation passed in Iowa this month that aims to benefit the biorefining industry. In early April, Branstad signed a bill that creates a 5-cent-per-pound production tax credit for renewable chemicals.