Another Iowa biodiesel plant is shutting down, temporarily. Soy Energy LLC in Mason City announced the move Monday, laying off 16 of its 28 workers. The blame is being placed, in part, on the federal biodiesel tax credit that expired back in January.

Iowa Senator Chuck Grassley remains optimistic the tax credit will be restored. “I’m going to proceed as if our tax policy is the appropriate one for the time being until biodiesel becomes a mature industry like ethanol so it won’t need (the tax credit),” Grassley says.

Soy Energy was producing 30-million gallons of biodiesel each year, one of about a dozen such Iowa plants. Grassley says legislation to restore the dollar-a-gallon biodiesel tax credit has already passed the Senate Finance Committee.

“It’s in the bill along with about 60 other things that are sunsetting at the end of the year,” Grassley says. “I don’t see biodiesel being taken out.” While many key pieces of legislation, like the farm bill, are on hold until after the elections in two weeks, Grassley says it’s very likely this measure will be taken up right away.

“I think that there’s so much riding on the tax incentive bill that a bill will pass and if the bill passes, biodiesel’s going to be with it,” he says. Iowa is home to 13 biodiesel plants that produced about 175 million gallons of the fuel in 2011.

A recent survey of biodiesel or ethanol plants in Iowa and nine other Midwestern states found two-thirds have cut back production or temporarily shut down in the past year.