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Iowa Gov. Reynolds’ ethanol mandate 2.0 receives better reception

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Ethanol plant

An ethanol plant stands next to a cornfield in Iowa.

DES MOINES — A second attempt by Gov. Kim Reynolds to create a statewide ethanol requirement got less push back during a hearing Tuesday than it did last year — meaning that her revamped attempt to increase sales of the crop-based biofuel appears to, at the very least, have better prospects.

Most Iowa gas stations would be required to offer the E15 ethanol blend — a higher blend than what’s typically available now — on at least half of their pumps under Reynolds’ proposal, which received its first legislative hearing at the Iowa Capitol.

The plan also allows a waiver process for stations with equipment that is incompatible with offering E15, and contains tax credits and incentives for ethanol and biofuels.

Any new equipment installed at gas stations starting in 2023 would be required to be compatible with E85 ethanol — for cars designated for flex-fuel — and B20 biodiesel, under the proposal.

“Iowa has been a leader on renewable fuels, and this bill sends a strong message to continue that leadership,” Molly Severn, the governor’s legislative liaison, said during Tuesday’s hearing.

The proposal is watered down from last year’s. Reynolds had pitched a requirement that gas stations provide E15 at all but one pump. That bill failed to pass when parties from the renewable fuels and retail gas station sectors did not reach an agreement.

During Tuesday’s hearing on Reynolds’ new proposal, renewable fuels industry representatives generally spoke in favor.

“This gives consumers more freedom to purchase E15 across the state. That’s not happening right now,” said Sara Allen, a lobbyist for the Iowa Renewable Fuels Association.

Representatives of gas stations were more hesitant to express approval, but also did not give signals that they plan to oppose the legislation. Those officials did have concerns, but expressed hope they will be addressed by amending the proposed legislation.

“We need to get this right on the compatibility side so we get this right for everybody,” said Mark Beltrame, a lobbyist for Fuel Iowa, which represents the state’s fuel industry. “At the end of the day, and I say this with respect, this is not a market-based approach. This is the governor dictating an access point. That’s a fact. But we’re willing to do our part.”

The most firm opposition to the new proposal came from Americans for Prosperity, the national conservative organization that advocates for limited government and free market policies. The group also opposed last year’s proposal.

“We think that the state should be moving toward being less onerous,” said Drew Klein, the organization’s lobbyist. “This bill doesn’t accomplish that.”

The proposal, House Study Bill 594, was approved by the three-member House subcommittee and is now eligible for consideration by the full House’s tax policy committee.

Under the proposal, stations that do not have equipment built for containing and dispensing E15 ethanol would be able to apply for a waiver through the state agriculture department.

The proposal also would extend current promotional tax credits for various ethanol blends and contains other financial incentives for renewable fuels producers.

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