After garnering much debate during the 2021 Legislative Session, a biofuel mandate is once again on the table in the Iowa State Legislature. HSB 594 would enact a strict fuel mandate in Iowa. While supportive of encouraging the growth of biofuels across the state, the Fuel Choice Coalition opposes this bill and the restrictions it would impose on small businesses.
This proposed mandate has the potential to force significant infrastructure upgrades on the backs of small gas stations, which could cause some of these small businesses to close their doors. A mandate would drive up the cost of fuel and goods for Iowa consumers by forcing small, often rural, gas stations to make expensive investments in their fuel infrastructure with little opportunity to sell more fuel to pay for those costs.
"This proposed mandate would have a devastating effect on businesses across the state, particularly in rural communities," said FUELIowa President and CEO Ronald N. Langston. "If this legislation is approved, Iowa businesses will suffer and Iowans will be left paying more for their gas. There are better solutions for biofuel growth, and we must work together in pursuing these options."
According to FUELIowa analysis, there is clear evidence that incentives are assisting in expanding the use of biofuels without a mandate. In 2020, statewide distribution of biofuels averaged 14.5 percent, a 0.6 percent increase from 2019 even as Iowans stayed home throughout the beginning of the pandemic. Overall, the data points to a 23.1 percent relative increase in biofuel consumption year-over-year. A mandate forcing costly upgrades to stay open does not recognize that the incentives are working.
The Fuel Choice Coalition is urging an incentive-based approach in expanding biofuels across Iowa. Instead of crushing businesses and consumers under the weight of a mandate, this approach would provide grants and funding to help upgrade the critical infrastructure that will keep rural communities connected and able to access higher blended fuels.
The Fuel Choice Coalition is committed to continuing to work with all stakeholders to find a better solution than a harmful mandate. The coalition asks Iowans to learn more about the mandate and take action by visiting fuelchoiceiowa.org.
Glenn Hasken, chief operating officer of Molo Companies and past chair of FUELIowa, added, "Fuel retailers are concerned the unintended consequences of this bill will shut down hundreds of small gas stations in rural Iowa. We share Governor Reynolds' goal of making higher blends of renewable fuel available to more consumers, particularly in small towns with older gas stations which need to be upgraded to make this a reality."
"We have been negotiating with all stakeholders in an effort to find a mutually acceptable solution, but our position is clear--we will not support an approach which puts all of the burden on the most vulnerable small stores in rural Iowa that cannot afford to lose their limited retail fuel options."
Formed in 1937, FUELIowa represents Iowa's fuel industry by advocating for innovative and quality fuel options, consumer and environmental protection and fairness in the marketplace. Our members include fuel distributors, fuel cooperatives, convenience and grocery stores, refiners, biofuel producers and many other businesses that support these companies. They are invested in bringing the best gasoline, diesel, propane, ethanol, biodiesel and other liquid fuels to Iowans. Learn more at FUELIowa.com.
Categories: Iowa, Business, Energy