Reynolds looks to add to multimillion-dollar aid for biofuels

ethanol plant
A flag flies at the Southeast Iowa Renewable Energy ethanol facility prior to a visit from President Donald Trump on June 11, 2019, in Council Bluffs, Iowa. (Photo by Scott Olson/Getty Images)

Iowa Gov. Kim Reynolds on Tuesday pledged to work with the Biden administration and state lawmakers in a multimillion-dollar effort to help the biofuels industry recover from what one leader called a “triple whammy.” 

Reynolds, speaking at the virtual Iowa Renewable Fuels Summit, said her state budget calls for a $2 million increase for the $3 million renewable fuel infrastructure program. That initiative, designed to help convert pumps to handle higher blends of ethanol, also would get $5 million from a change in fuel retailer tax credits, Reynolds said. 

Gov. Kim Reynolds addresses the Iowa Renewable Fuels Summit remotely on Jan. 26, 2021. (Screen capture of event)

That infusion would add to the state’s use of CARES Act federal pandemic relief aid to help Iowa’s nation-leading biofuels program. The industry  took a hit as drivers stayed home and fuel demand dropped last year. Reynolds said $7 million in federal aid helped back 238 projects at 167 retail outlets. Another $12 million helped keep ethanol refineries open. 

That aid came under the administration of President Donald Trump and Agriculture Secretary Sonny Perdue, whom Reynolds thanked. 

The governor and a string of summit speakers noted that the election of President Joe Biden could bring new attention to biofuels as a way to address climate change. Industry leaders now are looking at integrated systems that provide protein for food products, corn and soybeans for biofuels, but also use plantings to sweep heat-trapping greenhouse gases from the atmosphere, industry leaders said at the summit.

“As we move forward, I also look forward to building those same relationships with the Biden administration, highlighting the role that Iowa agriculture plays in feeding and fueling the world, our position as a leader in global exports and the opportunities for a clean energy future,” Reynolds said.

Former Iowa Gov. Tom Vilsack is President Biden’s nominee for U.S. agriculture secretary, a position he held in the Obama adminstration.

Reynolds and Iowa’s U.S. senators, fellow Republicans Chuck Grassley and Joni Ernst, have regularly fought U.S. Environmental Protection Agency approval of exemptions that allow small refineries to sidestep required biofuels blending under the Renewable Fuel Standard approved by Congress.

Monte Shaw is executive director of the Iowa Renewable Fuels Association. (Photo courtesy of Iowa Renewable Fuels Association)

Biden’s administration should expect to hear from Reynolds, too.

“That means without hesitation our continuing fight for a robust Renewable Fuel Standard as laid out by law, and rejecting the continued demand destruction caused by small refinery exemptions,” Reynolds said. “I will hold this administration and the new EPA administrator (Michael Regan) accountable for transparent and fair rulings, just as I have always done with previous administrations. We look forward to continuing our work to increase global demand.”

Monte Shaw, executive director of the Iowa Renewable Fuels Association, told summit attendees the industry suffered multiple setbacks as the coronavirus pandemic unfolded. 

“Our industry just suffered through the triple whammy of RFS exemptions, lost export markets, and COVID demand destruction piled on top of each other,” Shaw said. “Yet, here we are. Which is what I love most about this industry. The power of biofuels to propel the rural economy is so great that the people in this industry will simply never give up. That, my friends, is the state of the Iowa biofuels industry in 2021: battered, but battling for a better future.”

After Iowa’s ethanol production fell by half a billion gallons last year, Shaw said his organization is asking state leaders to approve $15 million in aid in each of the next five years. That money would go into a cost-share fund for updating pumps and other equipment. 

“Is this aggressive? Yes. Can it be done? Absolutely,” Shaw said. 

Emily Skor is CEO of Growth Energy, a biofuels trade organization. (Photo courtesy of Growth Energy)

Emily Skor, CEO of the biofuels industry group Growth Energy, told the summit the climate goals of the Biden administration give ethanol and biodiesel producers hope for solid growth. 

“It is a new world with a new president,” Skor said. “Those in power are focused like never before on carbon emissions and restoring air quality and low-income and minority communities. We’re defending environmental justice as a priority. That’s why it’s critical we have a seat at the table.”

While some in the biofuels industry have fretted over the move to electric vehicles, many have said that transition will take years. “There’s no silver bullet to decarbonizing the transportation sector, but growing the share of renewable biofuels in our fuel supply will accelerate our transition to a healthier, zero emission future and reduce our dependence on fossil fuels,” Skor said. 

Biofuels have accounted for 75% of California’s carbon emissions reductions over the past decade, she added. In another development, Ontario, Canada, plans to change the renewable fuel content in its gasoline to 15% from 10% by 2030.

A new Harvard University study released Tuesday showed ethanol’s carbon intensity score is 46% lower than gasoline, Skor said.