Last week, Iowa Governor Terry Branstad signed legislation that encourages the production and distribution of biodiesel. The legislation creates a system that encourages availability of biodiesel at the pump, provides an incentive for local production, and invests in the infrastructure needed for wide distribution. The National Biodiesel Board says the new law will help put Americans back to work while enhancing the Heartland’s contribution to national energy security.

Shelby Neal, director of state governmental affairs for the National Biodiesel Board, says – the bill positions Iowa among the elite states in terms of having a comprehensive set of biodiesel policies that help create a positive business climate. Iowa has 15 biodiesel plants and like many other states, its production facilities were mostly idle or forced to drastically cut production in the past year.  That reduction was largely due to the lapse of the federal tax incentive, which has since been restored.

The Iowa law will enhance the state’s role in meeting the demand created by the federal Renewable Fuels Standard-2.  The legislation provides retailer credits, a biodiesel producer incentive, funds the state’s Renewable Fuels Infrastructure Board, and provides the Iowa Biodiesel Board with representation on the Renewable Fuels Infrastructure Board. The biodiesel industry is poised to sell 800-million gallons of biodiesel nationally this year. Iowa’s capacity is about 300-million gallons a year.