Iowa becomes first state to incentivize E15

By Kris Bevill | May 26, 2011

Iowa Gov. Terry Branstad is expected to sign a bill today, May 26, which will provide a boost to the state’s renewable fuels producers and distributors. The bill, S.F. 531, was passed by the state legislature earlier this month and includes incentives for retailers who sell higher blends of ethanol and diesel. It also contains specific language to incentivize the sale of E15 as soon as it becomes legal.

Following the bill’s passage by the legislature, Iowa Renewable Fuels Association Executive Director Monte Shaw said the E15 incentive will make Iowa a leader in the fuel blend’s public policy. “With final E15 approval expected from the EPA this summer, Iowa retailers will have an incentive to begin offering E15 on day one,” he stated. “The E15 tax credit is an important tool for retailers looking to add lower cost E15 to their product mix.”

Fuel retailers in Iowa will become eligible to receive a 3-cent tax credit for each gallon of E15 sold beginning July 1 or as soon as the U.S. EPA clears the fuel for legal sale. Other measures in the bill include provisions to modify the existing E85 Promotion Credit and an increase to the tax credits paid to retailers whose alternative fuel sales meet or exceed the state renewable fuel standard. The bill also provides $3 million for three years to provide grants for biofuels infrastructure expansion projects.