A new study finds last year’s many challenges reduced the positive impact of biofuels on the Iowa economy, but the production of ethanol and biodiesel still accounts for nearly $4 billion in state GDP.

The study, authored by John Urbanchuk of ABF Economics and commissioned by the Iowa Renewable Fuels Association (IRFA), found the state biofuels industry also supports 37,000 direct and indirect jobs, and boosts Iowa household income by $1.8 billion. Overall, the impact of biofuels on Iowa’s economy was down 20-25 percent from 2019.

In 2020 Iowa biodiesel production increased slightly, but the COVID-19 pandemic, trade disputes, and Renewable Fuel Standard exemption abuse led to ethanol production decreasing by half a billion gallons compared to the previous year.

“Biofuels still provide a major boost to Iowa’s economy, but quite frankly, the report is a wake-up call to redouble our efforts at the state level,” said IRFA Executive Director Monte Shaw. “Midwestern states like Iowa must be aggressive to drive local demand for biofuels in a meaningful way, thereby providing a sturdy market foundation, even as we supply the rest of the United States and markets around the world. IRFA will continue to work with Gov. Kim Reynolds and the Iowa Legislature to improve our biofuels policies and programs.”