IBB Asks for Iowa Biodiesel Tax Credit Extension

IowaBiodieselBoardLogoWhile we’ve heard a lot about the federal $1-a-gallon biodiesel tax incentive, there’s some state credits that could help producers stay competitive. The Iowa Biodiesel Board has asked lawmakers in Des Moines to extend the .02 per gallon refundable credit for the first 25 million gallons of biodiesel produced in any single plant.

The incentive is set to expire at the end of calendar year 2014, but Senate File 2333 would extend the credit through 2019.

During the Iowa Biodiesel Board’s annual Biodiesel Day on the Hill event today, IBB said the state legislation is necessary to mitigate impact from potential changes to the federal Renewable Fuel Standard, provide some market certainty and keep Iowa competitive with surrounding states.

“Unless changes are made to current federal biodiesel policy, we will likely see significant nationwide consolidation of production capacity,” said Grant Kimberley, executive director of IBB. “The extension of the biodiesel producer incentive will encourage production to remain in Iowa, substantially benefiting Iowa’s economy and biofuels leadership position.”

The Iowans point out that their neighboring states have become more aggressive in their promotion of biodiesel, such as Missouri’s production incentive of $.30 per gallon on the first 15 million gallons produced and Illinois’ exemption from state sales tax on blends of biodiesel higher than 10 percent, and producers in the Hawkeye State need this incentive to stay competitive.

The bill to extend the credit passed out of the state Senate Ways and Means Committee earlier this week.

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