Tuesday, May 17, 2011

Legislative updates biofuels program

Tuesday, May 17, 2011
The Iowa legislature voted last week to change the State incentive program for ethanol and biodiesel.

Legislators essentially updated and improved legislation in 2006 and perhaps legislation every five or six years passes the same way as the Federal Government the stage for the State to review and update of bio-fuels a new farm bill every five or six years.

The Bill, Senate file 531, was approved by the Senate, 48-1, on 2 May. On 4 may, it was the Iowa House by a vote of 81-13.

Governor Terry e. Branstad has not indicated if he will sign the law, but his supporters say that he has always been a supporter of bio-fuels.

"All parties have the desire to sell more biofuels," said Mindy Larsen Poldberg, Director of relations between the Government for the Iowa Corn Growers Association.

'The question is, the best way is ?What more biofuels sales?' "The new legislation would change several incentives in the State in the today's biofuels."

It would provide a stronger focus on e15 and B5.

It would also in connection with production both in the State incentives.

Randy Olson, Executive Director of Iowa Biodiesel Board, said: "This is a good first step in the collaboration towards higher impurity (ethanol and biodiesel.)"

Find one of the challenges facing a balance of incentives and finances, in a tight fiscal environment to support the Bill was Poldberg said.

But supporters worked behind the scenes, a compromise draft that was acceptable to all sides in the legislation, before Bill tabled.

What is a short list of members.


In the field of bio-diesel are three basic components, Olson says.

The first is an extension and change of the retailers tax credit.

The current credit is blends for 3 cents per gallon in B2. The new Bill is moving to 4.5 cents to B5.

The second is a production credit aimed at incentivizing in-State biodiesel-production, something that the industry for down while it prepared, which is expected to meet a nationwide expansion of the biodiesel market.

Without that incentive ? 3 cents per gallon in 2012 plants, maybe 2.5 cents in 2013 and 2 cents in 2014 ? that move production to other countries, says Olson.

The third part of the package of bio-diesel is $3 million a year for infrastructure for biodiesel and ethanol market.

This money would go to elements such as Blender pumps, and financing infrastructure is found from the renewable fuels program is deposited in the Fund for underground storage tank.

That is, some funds would go into the storage tank Fund but none would be taken from the existing Fund.


On the side of ethanol, the Bill contains several elements other than the infrastructure financing.

First, it changes the current incentives for retailers for the performance of the Iowa renewable fuels standard (RFS).

Current law says a dealer meets the timetable for the Iowa RFS they receive 6.5 cents per gallon.

If they are within 2% of it, he gets 4.5 cents.

If they are within 4% he gets 2.5 cents.

And the RFS schedule is 10 percent renewable fuels for 2009, 11 percent for the year 2010 12% for 2011, 13 percent for 2012, 14 percent for 2013, 15 percent for 2014, 17 percent for the year 2015, 19 percent for 2016, 21 Percent for 201723% for 2018 and 25% for 2019 and later years.

The new law follows same RFS schedule but changes the incentives.

In 2011, the retailer would get 8 cents for the compliance with the standard, 6 for come within 2% and 2.5 cents for come within 4 percent.

These incentives would increase in the year 2013 to 8 cents and 4 cents and 6.

These incentives should push to offer more e15 retailers as a way of meeting the RFS, who says Poldberg, add that the approach is ahead of Iowa.

"I think not, there are other countries that offer a tax break for e15," she says.

There are several other items in the invoice, including language, retailers stations provide liability protection enforcement actions consumers for misfueling, as long as the user console legal label.

In addition, retailers are to calculate their RFS schedule based on sites or enterprise-wide basis.

The result is a set of incentives for ? retailers and consumers that fuel ? target, further B5 blends and Olson diesel blends and e15 ethanol as well as production provides incentives for the Bioduel industry, the jobs in the State kaufenPoldberg, said.

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