Iowa governor signs renewable fuel bill

| Wednesday, May 31, 2006

Iowa Gov. Tom Vilsack signed a bill into law Tuesday, May 30, that will clear the way for the state to begin using more renewable fuels, such as biodiesel and ethanol.

The bill cleared the state House and Senate in April, and has been awaiting the governor’s signature ever since.

According to a news release from the governor’s office, the bill creates a renewable-fuel standard for the state, embodied in a series of goals aimed at increasing the use of both biodiesel and ethanol. The ultimate goal is a requirement that, by 2020, 25 percent of the fuel sold in Iowa must come from renewable sources.

To help reach that goal, the state will spend $6 million during three years to help retailers install pumps and tanks to handle renewable fuels and would create various tax credits for retailers who sell the fuels.

The bill gets rid of the current tax break for 10 percent ethanol and replaces it with three new tax credits: a 5-cent credit to the retailer for each gallon of pure ethanol sold; a 25-cent credit for each gallon of E85 blended ethanol; and a 3-cent credit for each gallon of biodiesel sold.

Iowa has four ethanol refineries and six biodiesel refineries with a combined production capacity of more than 500 million gallons annually.

Comments