Iowa may adopt renewable fuels requirement

| Wednesday, February 15, 2006

Iowa is considering a possible plan that would require 25 percent of the fuel used in the state to be made with renewable substances such as corn or soy.

About 500 supporters showed up at the statehouse in Des Moines, IA, Monday, Feb. 13, to urge passage of the bill, which is currently before the state senate.

The Des Moines Register reported that lawmakers are specifically hoping to boost demand for ethanol in the state with the rule.

The bill includes tax incentives for retailers who sell E85, a blend of gasoline that contains 85 percent ethanol.

However, the bill also includes penalties for retailers if the 25 percent goal is not met. Retailers could lose tax credits or face a 10-cent-per-gallon penalty on each gallon below the threshold.

Meanwhile, another bill making its way through the House has set the bar a little lower, aiming for 20 percent ethanol consumption by 2020.

Rep. Steven Olson, R-Grand Mound, told The Register that the House bill would include an amendment to set the level at 25 percent by 2025 and phase in a tax increase on non-ethanol fuels if the goal is not met by that date.

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