Biodiesel production in Iowa has remained strong during the first quarter of 2012 despite the expiration of the federal biodiesel tax credit. According to figures released by the Iowa Department of Revenue (DOR), 10 Iowa biodiesel plants produced 41.9 million gallons from January through March.
In 2011, the Iowa Legislature enacted a short-term, modest biodiesel production tax credit to help Iowa’s biodiesel community compete against states that provide large biodiesel incentives. The Iowa program went into effect on January 1, 2012 – the same day the federal biodiesel program expired.
“Despite losing the federal tax credit, biodiesel production in Iowa remains on pace with 2011 production, although down from year-end levels,” said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “This is a clear sign that Iowa’s new biodiesel production tax credit is having a positive impact. With additional production set to come on line in Iowa, we hope to see these numbers increase throughout the year.
“We knew there would be a transition period in 2012 and it was important to give the 7,000-plus jobs tied to Iowa biodiesel production a chance to survive and thrive,” added Shaw. “The initial DOR biodiesel numbers are a sign Iowa is headed in the right direction. Tax credits are only earned if biodiesel is produced –meaning jobs are sustained and the economy is strengthened.”
A study released earlier this year by economist John Urbanchuk, technical director of Cardno ENTRIX, found that biodiesel production supported 7,350 Iowa jobs; boosted Iowa GDP by nearly $600 million and generated $350 million in additional Iowa household income.
For more details, read the complete study.