Iowa Biodiesel Production Drops Slightly in 2014

Jan 8, 2015

The Iowa Renewable Fuels Association says Iowa produced 227 million gallons of biodiesel in 2014. 

That’s down slightly from 2013, which saw a record breaking 230 million gallons.

The group’s executive director Monte Shaw says Iowa's drop follows a nationwide pattern. He says indecision at the U.S. Environmental Protection Agency is to blame for the drop in productivity because unlike previous years, the EPA didn’t require a set amount of biodiesel in the nation’s fuel supply.

"So it was absolutely useless as a demand driver," Shaw says. "And right now we’re still that way in 2015, but we’re going to cross our fingers and hope that they get a regulation out here soon so that the Renewable Fuel Standard can do its job as Congress intended."

In 2013 the EPA proposed reducing the mandated amount of renewable fuel in the nation's diesel and gasoline supply, but now seems to be reconsidering. 

Shaw says another contribution to the 3 million gallon drop was that Congress didn't renew the federal biodiesel blenders tax credit until mid-December. 

Though Iowa biodiesel producers fought to maintain a status quo this year, Shaw says other states probably struggled more. 

"The real harm...wasn't in the production being nearly as much as what it was the year before, it's in the fact we didn't take a step forward," Shaw says. "If federal policy makers had gotten their act together...we would have seen Iowa biodiesel production set a new record."

Iowa State University economist Bruce Babcock agrees that the main culprits behind the decline are the EPA and Congress.  

"Without those two federal sources of support, biodiesel is not a real competitive fuel, particularly when fossil fuel is low," Babcock says.

NPR reports that the price for a barrel of U.S. crude oil from West Texas Intermediate fell below $50 on Monday, matching levels last seen in spring 2009. 

Though Babcock calls low crude oil prices "a wildcard" for the renewable fuel industry, Shaw isn't worried. He says renewables competing with petroleum is nothing new.

"We have to fight like get a piece of that market," Shaw says. "We'll ride it out and as oil prices go up, we'll be there to help out in the future."