2025 Iowa Renewable Fuels Economic Study Highlights Pullback of Biodiesel Production

IRFA Urges Iowa Legislature to Reform Biodiesel Production Tax Credit

Press Contact: Hannah Love

515-322-0435

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WEST DES MOINES, IA - According to a new economic contribution study released today, Iowa's renewable fuels industry remains a vital driver of the state's economy.

Decision Innovation Solutions (DIS) conducted the study, commissioned by the Iowa Renewable Fuels Association (IRFA). The study found: "Despite challenges in the overall fuels market, the Iowa renewable fuels industry continues to be a key part of the Iowa economy."

Specifically, biofuels production contributes the following to Iowa:

• Accounts for nearly $5.4 billion, or about 2%, of Iowa's GDP

• Generates $2.4 billion of income for Iowa households; and

• Supports over 31,000 jobs throughout the entire Iowa economy

In 2025, Iowa ethanol plants produced 4.6 billion gallons of ethanol and continued to lead the nation in ethanol production.

In contrast, Iowa biodiesel facilities produced just 266 million gallons, down nearly 25% from 2024. The state's biodiesel plants have the capacity to produce 400 million gallons per year, underscoring the difficulties facing producers. Iowa previously was home to 11 biodiesel plants, but just eight remain. Specifically, low renewable fuel volume obligations and uncertainty around federal tax credits have been major pain points in biodiesel production nationwide.

"While ethanol and biodiesel continue to be key contributors to the Iowa economy, declining biodiesel production and plants shutting down showcase the need to extend and expand the Iowa biodiesel production tax credit," said IRFA Executive Director Monte Shaw. "Iowa has the opportunity to provide some stability for biodiesel producers as they navigate the changing federal landscape. Biodiesel provides important demand for Iowa soybeans. We want these plants not just to survive, but to thrive."

To view the full study, click here.

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The Iowa Renewable Fuels Association represents the state's liquid renewable fuels industry and works to foster its growth. Iowa is the nation's leader in renewable fuels production with 42 ethanol refineries capable of producing over 5 billion gallons annually - including 34 million gallons of annual cellulosic ethanol production capacity - and 8 biodiesel facilities with the capacity to produce 408 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org .