Farm interests, fuel retailers battle over Gov. Kim Reynolds’ plan to require higher ethanol, biofuel blends

Source: By Donnelle Eller, Des Moines Register • Posted: Monday, February 15, 2021

Some powerful industries have begun battling over Gov. Kim Reynolds’ proposal to set a renewable fuel standard in Iowa, a move that would require retailers to offer motor fuel with higher levels of ethanol and biodiesel.

A new group called the Fuel Choice Coalition, which includes Iowa-based convenience store giants Casey’s and Kum & Go, along with trucking and transportation businesses, is slamming the governor’s bill. The group says the legislation would reduce consumer choice, raise prices for Iowa motorists and cost retailers at least $1 billion to upgrade their pumps, tanks and other infrastructure to meet the mandate.

On the other side are the Iowa Renewable Fuels Association, Farm Bureau Federation, Iowa Corn Growers Association and the Iowa Soybean Association. They are releasing a study, given in advance to the Des Moines Register, that says the mandate would create 3,500 jobs in Iowa and add nearly $550 million in household income from 2022-2026.

The study, paid for by the Iowa Renewable Fuels Association, says the proposed standard — requiring Iowa retailers to sell motor fuel with at least 10% ethanol or 11% biodiesel — would add millions of dollars annually to the state’s economy, reaching nearly $460 million in 2026.

The increased economic activity, combined with tax credit changes, would generate about $235 million in added tax revenue over five years, the study says.

“If you look at it from a state of Iowa standpoint, from a consumer standpoint, from a taxpayer standpoint, this is a really good piece of legislation,” said Monte Shaw, the renewable fuels association’s executive director.