Letter to the Editor

Supporting biofuels

Tuesday, May 26, 2020

There is no question the COVID-19 pandemic has had a serious impact on Iowans. Most have been doing their part to slow the spread of the disease, whether that means staying home or stepping up. Iowa’s ethanol producers like Green Plains are no exception. When conventional supplies ran low, we donated ethanol for hand sanitizer production in Iowa and Nebraska.

However, even as we’ve come together to fight this disease, Iowa must now grapple with the economic damage the response to the pandemic has wrought.

A recent study by Iowa State University's Center for Agricultural and Rural Development (CARD) found that Iowa’s vital agricultural sector faces unprecedented uncertainty. Potential damages could climb into the billions, including $2.5 billion for Iowa's 43 ethanol plants and their supporting businesses alone.

Iowa’s elected leaders like State Rep. John Wills from right here in northwest Iowa have been working hard on behalf of Iowans to soften the economic blow. As Iowa's elected officials prepare to reconvene the 2020 state legislative session, it is crucial they act on legislation that can help to boost sales of biofuels, support farmers and lower prices for consumers at the pump.

Under current law, Iowa’s biofuel tax differential provides an incentive for consumers choosing biofuel blends like B11 (11% biodiesel) and E10 (10% ethanol). Iowa has seen tremendous growth in higher blends since this was enacted. In fact, according to the most recent Retailers Fuel Gallons Annual Report done by the Iowa Department of Revenue, E10 makes up almost nine out of every 10 gallons sold in Iowa, while B11 and higher biodiesel blends account for almost 2/3 of diesel sales.

Unfortunately, the current biofuel tax differential is set to expire on June 30 and farmers and biofuel producers alike could face dire consequences if it is not extended.

We need the Iowa Legislature to pass House File 2279 and Senate File 2403. With passage, legislators will not only continue to support Iowa’s ag economy by extending and modernizing fuel tax differentials from E10 to E15 (15% ethanol), but save consumers money at the pump. All the while putting millions of dollars back into the Road Use Tax Fund each year for vital infrastructure projects.

We cannot afford to retreat from the progress we have made. Iowa biofuels supported over 48,000 jobs in 2019, including thousands at ethanol plants just like the Green Plains facility in Superior. Biofuels also add significant value to Iowa corn and soybean crops while providing low-cost, high protein dried distillers grains, and lowering the prices of soybean meal feed for livestock farmers. Not to mention biofuels help urban centers by cleaning the air, lowering greenhouse gases, and as one article recently mentioned, help provide citizens with soft water.

From the busiest city street to smallest town, the effects of biofuel production are felt across Iowa. As we begin reopening the state and traffic picks up in our local businesses and on our roads, there is no better time for Iowa’s leaders to renew support for an industry that does so much to support Iowa.

Tod Smith

Green Plains Superior Plant Manager