Home 5 Ag Stories Branstad signs biofuel tax credit bill into law

Branstad signs biofuel tax credit bill into law

Governor Branstad signs biofuel tax credit legislation into law at Renewable Energy Group in Newton,IA May 24, 2016. Photo credit: Ben Nuelle

by Ben Nuelle LISTEN: Money Matters 5-26-16

Iowa Governor Terry Branstad signs bill into law to extend biofuel tax credits. Governor Branstad signed Senate File 2309 into law Tuesday at Renewable Energy Group in Newton.

“We’re excited Iowa is the leader in renewables be it biodiesel, ethanol, and wind energy. This afternoon, I am pleased to be at this REG facility sign Senate File 2309.”

The legislation includes an extension and adjustment of the Biodiesel Blended Fuel Retailer Tax Credit. While the incentive will continue at 4.5 cents per gallon for retailers offering a biodiesel blend containing a minimum of 5 percent biodiesel (B5) through 2017. From 2018 through 2024 it will then provide a 3.5 cents per gallon incentive on B5, and a 5.5 cents per gallon credit on B11, or diesel blended with a minimum of 11 percent biodiesel.

Included in the bill is the extension of two retailer tax credits for ethanol blends. The E85 Promotion Tax Credit, available for fuel blends containing 70 to 85 percent ethanol, was extended at 16 cents per gallon through 2024.

The E15 tax credit, available for fuel blends containing 15 to 69 percent ethanol, was extended through 2024 at 3 cents per gallon from September 16 through May 31. The bill will extend it 10 cents per gallon from June 1 through September 15 to help alleviate the summertime blending issues for registered E15.

Brad Albin is VP of Manufacturing at REG.

“It helps us grow biodiesel like it has in the past because it differentiates and allows even the retailers to drop the price just a little bit with the retail and production incentive.”

Democratic Candidate for U.S. Senate Rob Hogg says he is glad to see the legislation get passed.

“What I am really excited about is that we were able to make a seven-year commitment to this industry. The biodiesel industry is a wonderful industry. Not just for jobs in Iowa and our farmers but also for our environment and we need to promote these industries long term to transition away from fossil fuels.”