Iowa Governor Terry Branstad signed into law a bill (Senate File 257) which, among other things, raises the state’s fuel tax while providing a small incentive for biodiesel. A provision of the bill gives a partial exemption to the new tax for diesel blended with at least 11% biodiesel (B11).
The increase of 10 cents a gallon for both diesel and gasoline will help repair and improve Iowa’s roads and bridges. Biodiesel blends of B11 and above will receive a 3-cent exemption for 5 years.
Grant Kimberley, executive director of Iowa Biodiesel Board (IBB), said IBB members are hopeful the 5-year sunset will be extended to 10 years.
Iowa biodiesel plants produced 227 million gallons in 2014, down slightly from the 2013 record of 230 million gallons. The state’s 10 operating biodiesel plants have an annual capacity of more than 300 million gallons.