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Federal relief money is put to good use supporting renewable fuels

New program uses $7 million from CARES Act

As Congress grapples with the possibility of passing another COVID-19 relief bill, some money from an earlier such measure is being put to good use to support Iowa’s renewable fuels industry.

Gov. Kim Reynolds and Iowa Secretary of Agriculture Mike Naig have launched the Renewable Fuel Retailer Recovery Program to help the state’s gas stations rebound from the weak demand for ethanol and biodiesel. Reynolds has earmarked $7 million from the money Iowa received from the federal CARES Act to pay for the program.

Sales of ethanol and biodiesel plummeted as a result of the pandemic. With people working from home and not making any leisure trips, the demand for fuel dropped dramatically. Last spring, ethanol production dropped by 44 percent compared to 2019, according to the Renewable Fuels Association.

The renewable fuels industry, which Naig has called ”critical to Iowa’s economy,” needs some help now.

The program announced by Reynolds and Naig offers grants of up to $30,000 to gas stations, truck stops and other fuel retailers that can demonstrate that the pandemic hurt their businesses. Those businesses that receive grants can use them to pay for installing, upgrading and retrofitting equipment used to dispense biofuels. Any new equipment purchased with the grants must be able to dispense higher levels of renewable fuels, such as E15 ethanol.

Ultimately, the program will benefit more than just the filling stations. Iowa has 43 ethanol plants that can churn out 4.5 billion gallons a year. The state also has 11 biodiesel plants that can make about 400 million gallons annually. Those plants provide thousands of good paying jobs in the state’s rural areas.

Iowa farmers provide those plants with the corn and soybeans that are their raw materials. The presence of the plants boosts the price per bushel farmers can get for their crops.

Providing a boost to the businesses that sell renewable fuels will have a ripple effect throughout Iowa’s economy. That is why using some of the federal COVID-19 relief money to do so is a worthwhile effort.

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