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Helping biofuels industries expand

By Staff | Feb 14, 2020

The ethanol and biodiesel industries are significant contributors to Iowa’s booming economy.

Our state is a leader nationally in the production of these fuels. According to information provided by Gov. Kim Reynolds’ office, Iowa manufacturers produced 4.1 billion gallons of ethanol in 2018. Our state’s producers generated 350 million gallons of biodiesel.

The positive significance of the ethanol and biodiesel production for the Hawkeye State’s farmers is huge. Reynolds’ office estimates that almost 40 percent of the 13.2 million acres of Iowa farmland devoted to growing corn supports ethanol production. Soybean growers also sell heavily to biodiesel manufacturers.

These biofuels industries add a bit more than $5 billion to our state’s economic activity. That’s about a 3 percent contribution.

For the biofuels producers to prosper, the marketplace must have adequate distribution capabilities to get their products in the hands of consumers. That’s why Reynolds has been a strong backer of a state program to help make sure an adequate distribution system exists all across Iowa. The Renewable Fuels Infrastructure Program, known as RFIP, assists dispensing sites and fueling stations make the needed changes to market biofuels. Since it was launched, this innovative undertaking has made $35.26 million available to support projects. Importantly, it is designed as a partnership between the state and the private sector. As such, it has been the catalyst for more than $200 million in private sector investments in infrastructure enhancement.

The state’s efforts have been complemented by a federal program administered by the U.S. Department of Agriculture, the Biofuels Infrastructure Program, known as BIP. Grants from that undertaking have benefited fuel retailers throughout our state. Getting ready for new blends of ethanol and biodiesel will, however, require more infrastructure development. Reynolds is moving aggressively to make sure Iowa’s initiatives fully support future needs. She is also urging the USDA to move ahead strongly with a successor to its successful BIP effort. The new federal project is called the Higher Blends Infrastructure Incentive Program, called HBIIP.

Reynolds and Iowa Secretary of Agriculture Mike Naig have just sent a lengthy letter to the USDA that shares their recommendations on how the federal initiative can be most successful. It stresses following the government-private sector model that has worked so well in Iowa.

At the end of January, the governor outlined her hopes for efforts to strengthen biofuels sales.

“The USDA’s willingness to recognize the potential to build on BIP’s successes with HBIIP is highly encouraging,” Reynolds said in her letter. “We are confident that if the State of Iowa’s proposed expansion of RFIP is met with a federal commitment to HBIIP for both biodiesel and ethanol, we can accelerate the adoption of biofuels, supporting the environment and rural communities while we do it.”

Farm News shares Reynolds’ determination to keep biofuels manufacturing thriving. Her efforts in Iowa to strengthen the biofuels infrastructure have been outstanding. We hope officials at the USDA will take the recommendations she and Naig are making very seriously as they design the new federal HBIIP undertaking.

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