Iowa lawmakers move to ease ethanol transition for gas stations

DES MOINES — Iowa gas stations would have more flexibility in updating their pumps to comply with renewable fuel rules under a bill that Senate lawmakers advanced Wednesday.

Senate Study Bill 3187 builds on a 2022 law that requires most Iowa fuel retailers to offer E15 — gasoline blended with 15 percent ethanol — by 2026.

The law also required new fuel infrastructure be compatible with the higher blended E85 fuel, which can be used by some flex-fuel cars.

Under the new bill, retailers that install new pumps and infrastructure would be able to transition to E85 compatible equipment more slowly.

Until 2025, new pumps would only need to be compatible with E15 fuel. Starting July 1, 2025, new infrastructure would need to be compatible with E40 fuel, and infrastructure would need to be E85 compatible by 2030.

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Republican Sen. Dan Zumbach of Ryan said the bill would give retailers more time to update their equipment without incurring the large costs that come with E85 infrastructure.

“The reason this bill came into play is to give some time to the manufacturers to get the equipment available for these retailers to put in place,” he said. “And until that time, it’ll lower their cost to not have to have as expensive equipment until that time arrives.”

Zumbach and two other lawmakers voted to advance the bill out of a Senate subcommittee on Wednesday. It is now eligible for a hearing in the full Senate Appropriations Committee.

Iowa officials have long sought to boost the production and sales of ethanol-blended fuels. Iowa is the largest national producer of both ethanol and the corn used to make it, and more than half of corn grown in Iowa is used in ethanol production.

E15 gasoline is generally around 10 to 20 cents cheaper per gallon than standard E10 gasoline.

The Iowa Renewable Fuels Association, which represents Iowa’s ethanol manufacturers, has registered in support of the bill. Sara Allen, a lobbyist for the association, said it would lead to more ethanol being sold in the state.

A lobbyist for the Iowa Corn Growers Association said they would prefer if the Legislature increased the grants offered to retailers to update their infrastructure rather than changing the requirements.

“We think you passed an amazing bill in the Legislature in 2022, and we think that that is actually still the best course,” said the association's lobbyist, Mindy Poldberg. “... Our first preference would be if instead of the delay, we would implement the current bill but raise the cap from the $50,000 amount.”

The Iowa Renewable Fuel Infrastructure Program provides grants to fuel retailers to pay for equipment upgrades, doling out grants up to $50,000 for those projects for large retailers. Lawmakers increased the grant amount and cost-share for small retailers in the 2022 law.

Representatives for Iowa’s gas stations had mixed thoughts on the bill.

Kwik Trip has registered in support, and their lobbyist, Larry Blixt, said E15 is the company’s most popular product. Allowing retailers to more easily transition to E15 infrastructure would increase those sales, he said.

A representative for Casey's General Store said he was concerned that some required equipment compatible with E40 gasoline would not be widely available by the July 2025 deadline.

The federal Environmental Protection Agency recently approved a request from Iowa Gov. Kim Reynolds and other Midwestern governors to permanently waive a summer restriction on E15 and sell it year-round. E15 sales are restricted in other states in the summer because of environmental concerns.