Iowa legislature extends fuel tax incentive for biodiesel

In Iowa, the Iowa State Legislature voted to extend a fuel tax incentive for diesel sold in the state containing at least 11 percent biodiesel, a move praised by the Iowa Biodiesel Board. The provision would have sunset this month without legislative action, noted Grant Kimberley, IBB executive director.

Originally enacted in 2015, the successful policy has increased the number of retailers carrying biodiesel in Iowa almost threefold, improving availability for consumers while contributing to the state’s economy, including hard-hit farmers.

The Fuel Tax Differential amounts to a 3-cent per gallon reduction in the cost of fuel tax for blends of 11 percent biodiesel (B11) or higher. The legislature passed the provision along with a fuel tax increase five years ago.

The bill now goes to the governor for her consideration and signature.