Even with two plants out of operation for the year, Iowa biodiesel producers still managed to increase production in 2020, despite market challenges presented by the COVID-19 pandemic and continued small refinery waivers.
With nine of Iowa’s 11 biodiesel plants in operation, biodiesel production hit 351 million gallons in 2020, the second highest year of biodiesel production in Iowa history behind 365 million gallons in 2018. Total production capacity for the state is over 400-million-gallon.
Iowa Renewable Fuels Association Executive Director Monte Shaw credited the bump in production to the reinstatement and long-term extension of the federal biodiesel blenders tax credit in late 2019, which provided a boost for higher biodiesel blends.
“The long-term extension of the biodiesel blenders tax credit gave Iowa biodiesel producers the market certainty to be successful even in a very uncertain year,” Shaw said. “COVID-19 did not hurt the diesel market the same way it gutted gasoline demand and, as result, production went up. Hopefully Iowa can take another step forward and utilize even more of our biodiesel capacity if there is proper implementation of the RFS in 2021.”
Iowa biodiesel production is expected to account for roughly 20 percent of total U.S. biodiesel production in 2020.
Soybean oil continued to be the feedstock of choice for the majority of Iowa biodiesel production, making up over 85 percent. Corn oil was second at just over eight percent. Animal fat, canola oil, and used cooking oil made up the rest of the feedstock used by Iowa biodiesel producers.