The Iowa legislature this week reauthorized the Iowa biofuel tax differentials, helping boost biofuel demand and lower fuel prices, according to the Iowa Renewable Fuels Association.
Senate File 2403, which unanimously passed both chambers, extends and modernizes fuel tax differentials for E15 and higher ethanol blends and B11 and higher biodiesel blends, which are set to expire on June 30, 2020. Passage signals continued support of renewable fuels and will put millions of dollars back into the Road Use Tax Fund each year for vital infrastructure projects.
“Reauthorization of the biofuel tax differentials is a ray of sunshine during some of the darkest days Iowa biofuels have ever faced,” said Iowa Renewable Fuels Association Policy Director Nathan Hohnstein. “We thank Iowa’s elected leaders for reauthorizing a program that is working to boost biofuel demand. Iowa biofuel plants are still struggling to claw their way back from the demand destruction caused by the response to the COVID-19 pandemic and Renewable Fuel Standard exemptions by EPA.”
The new fuel tax differential modernizes the ethanol differential by applying it only to E15 and higher blends.