More Iowa Biodiesel to Flow From $14 Million State Grants

Biodiesel Fueling Station Locations by State (U.S. Department of Energy)

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More renewable fuel from Iowa producers could soon be flowing thanks to a funding increase from the state.

Gov. Kim Reynolds on May 9 signed a bill that injects a $4 million boost over year-ago levels into the state’s budget, teeing up $14 million in the state’s coffers to help modernize renewable fuel dispensing infrastructure.

The state Biodiesel Board and the Iowa Soybean Association — which champions the state’s 40,000 soybean producers — issued a joint statement applauding Reynolds for enacting the legislation. “Expansion of retail availability for Iowa is a positive thing for truckers, especially when combined with the biodiesel incentives applied in Iowa. Truckers have a greater opportunity to use an American-made, homegrown fuel that reduces greenhouse gases and improves the lubricity of their fuel while meeting extremely high-quality standards,” Grant Kimberley, executive director of the Iowa Biodiesel Board, told Transport Topics.

The bill, House File 2691, allocates funding to the Iowa Renewable Fuel Infrastructure Program (IRFIP). The program provides financial assistance to encourage retail operators of motor fuel dispensing sites or fueling stations to convert their equipment to renewable fuel use. Specifically, this program aims to help pay for infrastructure projects to boost production of biodiesel and ethanol.

Starting July 1, the program will have a 12-month budget of $14 million, up from $10 million last year.

“The more infrastructure we have available, the more biodiesel is accessible to consumers and utilized in the market,” Kimberley said. “This continued significant IRFIP funding underscores Iowa’s dedication to fostering a sustainable and environmentally conscious energy landscape.”

The program utilizes grant incentives to encourage infrastructure upgrades. Reimbursements can cover 50% of costs for specific project components with a three-year commitment required to sell renewable fuels. In addition, up to 70% reimbursement is available for specific equipment/installation costs but only with a five-year agreement to store and sell renewable fuels. Certain biodiesel terminal equipment and/or infrastructure can receive funding for up to $100,000 per project.

Another new aspect of the IRFIP this coming fiscal year are revised guidelines that raise the limit for retail biodiesel projects to $1.75 million compared to the previous year’s cap of $1.25 million.

As of January, 35 biodiesel retail grant applications had been submitted seeking a total of $1.7 million. If approved, these applications would take up nearly all the FY 2025 year funds despite the increased allocation.

Pointing to the demand for funds already requested for biodiesel infrastructure, both the Iowa Biodiesel Board and Iowa Soybean Association noted that state needs are great for expanded biodiesel infrastructure support.

“Increasing demand and accessibility for biodiesel is a top priority for Iowa farmers,” said Suzanne Shirbroun, state Soybean Association president and also a sixth-generation farmer from Clayton County. “With planting season well underway, we are encouraged by the continued support from lawmakers on this important program and look forward to seeing biodiesel have an even larger footprint in our cities and rural communities.”

Among the nation’s 1,755 total public and private biodiesel fueling stations that offer blends of 20% biodiesel (B20) or higher, the states that have the most are Illinois (484 stations), Iowa (343), Minnesota (289) and North Carolina (108), according to the U.S. Department of Energy’s Alternative Fuels Data Center.

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