Reynolds adds $7 million in biofuels aid, extends tax credits

Iowa Gov. Kim Reynolds on Tuesday added $7 million in federal aid to the state’s $3 million biofuels infrastructure program. She also signed legislation extending tax breaks for the industry.

Reynolds held a news conference at Pine Lake Corn Processors in Steamboat Rock, where she signed Senate File 2403 to extend tax breaks for higher blends of ethanol and biodiesel. The bill passed both the House and Senate unanimously, preventing the aid from expiring this month.

Reynolds said the legislation is an important boost to industries that use corn and soybeans, two of the state’s top agricultural commodities.

“This means better corn prices and more jobs, right here in Hardin County” and elsewhere in the state, Reynolds said. “These have been extremely challenging times for the ethanol industry and for agriculture in general. Even before COVID-19, we’ve been dealing with trade issue as well as bureaucrats in Washington, D.C. who seem focused on putting the interests of Big Oil ahead of the interests of Iowa farmers. I want to assure you that you have a team of fighters working to protect all the progress the biofuels industry has made.”

State Sen. Randy Feenstra, R-Hull, who championed the bill along with Rep. Louis Zumbach, R-Coggon, said the legislation will help an industry that has been rocked by a couple of years of demand reduced by federal exemptions and by the coronavirus pandemic recover. “This bill pushes consumption in our state,” Feenstra said. “We have to work hard on ethanol and biodiesel so they get on stronger footing.”

Reynolds announced that $7 million in federal aid related to the pandemic will be added to the $3 million already in the budget to offer assistance to gas stations looking to upgrade equipment to offer more grades of ethanol and biodiesel.  

“The governor’s intention to boost funding for Iowa’s biofuel infrastructure grant program is a terrific and welcome surprise,” Nathan Hohnstein, Iowa Renewable Fuels Association policy, said in a statement. “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.”   

Industry association Growth Energy also welcomed the legislation. “The tax update offers a welcome source of market certainty for Iowa biofuel producers and our farm suppliers, who have faced unprecedented economic challenges in the wake of COVID-19,” CEO Emily Skor said in a statement.