The nation’s leader in biodiesel production remained that way in 2014, but federal policy is being blamed for Iowa’s dip from 2013’s record biodiesel numbers. The Iowa Renewable Fuels Association (IRFA) says the state’s biodiesel production was 227 million gallons in 2014, down slightly from the 2013 record of 230 million gallons.

For the vast majority of 2014, Congress allowed the federal biodiesel blenders tax credit to expire, renewing it only in mid-December, too late to spur meaningful demand. At the same time, the EPA went through the entire year without setting a biodiesel number for the federal Renewable Fuel Standard (RFS). That one-two punch led to a nationwide biodiesel production reduction. Due to Iowa’s state-level biodiesel production tax credit, producers in Iowa were able to essentially maintain production in the face of the federal uncertainty.

“Iowa continues to lead in the production of biodiesel,” stated IRFA Executive Director Monte Shaw. “Not surprisingly, the lapse of the federal biodiesel credit and uncertainty over EPA’s Renewable Fuel Standard proposal resulted in an industry slow down. Due to favorable state policies, Iowa was able to weather the storm better than most states.”

Shaw says federal uncertainty still hangs over 2015, but if a strong and growing RFS and a multi-year federal biodiesel tax credit extension is renewed, he believes the biodiesel industry would take a strong step forward.