Supporters of the renewable fuels industry are gathering in Des Moines today for an annual summit. The day-long event comes at a time when biodiesel production in the state has grinded to a near halt. Monte Shaw with the Iowa Renewable Fuels Association blames Congress for failing to reauthorize the biodiesel excise tax credit that expired on December 31.
“There’s no real opposition to it, they just quite frankly didn’t get it done. It has caused plants to shut down and it has forced layoffs,” Shaw said. At the end of 2009, eight of Iowa’s 15 biodiesel plants were operating at some capacity. Shaw says since the lapse of the tax credit, only two plants are operating at what he calls a “trickle rate.”
When they are operating at full capacity, each biodiesel plant employs 20 to 30 people. Shaw believes policy changes at the state level could help place the biodiesel industry on the road to recovery. Those changes might include a B-5 diesel standard – requiring all diesel fuel sold in Iowa to contain 5% biodiesel.
“At that level, it’s still diesel fuel. There’s no operability issues, so it’s pretty straight forward,” Shaw said. “Yet, that base line level of demand that it would create for local producers would help them cash flow through some of these tough times.” Minnesota is one state that has the B-5 standard in place. Shaw says Iowa remains the top producer of both ethanol and biodiesel, but is on the brink of losing the biodiesel status.
Iowa ethanol production hit a record 3.1 billion gallons in 2009. Shaw says all 39 of Iowa’s ethanol plants are up and running. A study released today by Shaw’s organization claims Iowa’s renewable fuels industry accounted for nearly 8% of the state’s Gross Domestic Product last year and boosted state tax revenue by $532 million.