Gov. Reynolds signs legislation to lower taxes on renewable fuels into law

Iowa News

DES MOINES, Iowa (KCAU) – Governor Kim Reynolds signed Senate File 2403, a legislation that will lower the cost of E15 and higher blends of renewable fuels in Iowa by changing how the state taxes higher-blend biofuels on Tuesday morning.

She signed the bill during her weekly press conference at the Pine Lake Corn Processors ethanol plant in Steamboat Rock, Iowa.

“Iowa continues to lead on innovative ways to drive demand for biofuels,” said Gov. Reynolds. “This legislation makes higher blend biofuels even cheaper at the pump while driving demand for homegrown renewable fuel.”

It was unanimously passed by both of the state’s legislative chambers earlier in June. The bill extends and modernizes the fuel tax differentials for E15 and higher ethanol blends and B11 and higher biodiesel blends.

Iowa’s fuel tax differentials has been extended to June 30, 2026, which would have expired on Tuesday.

“At today’s bill signing we say thank you to Governor Kim Reynolds for her leadership and strong support for Iowa biofuels. Reauthorization of the biofuel tax differentials will continue to expand Iowans’ access to cleaner-burning, home-grown biofuel blends like E15 and B11, supporting Iowa’s environment and economy at a time when it is much needed.

“We also thank Iowa’s legislative leaders for prioritizing this important bill for a vote during this truncated legislative session. Finally, we must thank Senator Randy Feenstra and Representative Louis Zumbach for managing the bill through to passage. Without such dedicated support by Iowa’s elected officials, today’s celebration would not have been possible.”

From Nathan Hohnstein, Iowa Renewable Fuels Association Policy Director

The governor also announced on Tuesday an additional $7 million in funding, through the CARES Act, to expand the Iowa Renewable Fuels Infrastructure Program.

The program offers cost-share grants to fuel retailers who install or convert their equipment to offer higher blends of biofuels to allow the expanded use of renewable fuels in Iowa.

“I sincerely appreciate everyone who joined us today at Pine Lake Corn Processors, as well as U.S. Senators Chuck Grassley and Joni Ernst, for continuing to champion policies that help our farmers and Iowa’s biofuels industry,” said Gov. Reynolds.

“The Governor’s intention to boost funding for Iowa’s biofuel infrastructure grant program is a terrific and welcome surprise,” said Hohnstein. “Iowa’s biofuels producers have been hit hard by the COVID-19 pandemic as travel has declined and fuel demand has plummeted. This additional funding will go a long way to increasing consumer access to higher biofuel blends and boosting biofuel demand!”   

Since the first fuel tax differential bill was passed, E10 and higher ethanol blends and B11 and higher biodiesel blends have grown to make up roughly 90% and 57% of sales in 2019, respectively.

The new fuel tax differential also modernizes the ethanol differential by applying it to E15 and higher blends.

On Monday, Gov. Reynolds joined a bipartisan group of governors from Minnesota, Nebraska, and South Dakota, to call on EPA Administrator Wheeler to reject the excessive number of retroactive small refinery exemptions to the federal Renewable Fuel Standard.

“The law exists for a reason and we need the EPA to stand by it.”

From the Office of Governor Reynolds

To read the full letter, click here.

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