The Iowa Legislature created a 3 cent per gallon differential tax rate for B 11 and higher biodiesel blends in the road funding measure that passed both houses this week. Iowa Renewable Fuel Association’s Policy Director Grant Menke says this should spur more usage and availability of biodiesel in Iowa.

Under this legislation, diesel fuel will be taxed at a rate of 32.5 cents per gallon but diesel fuel blended with 11 percent or more biodiesel will see the tax rate reduced to 29.5 cents per gallon. Menke says that creates benefits for consumers.

Menke says they’re hoping to match the growth rate of biodiesel that neighboring Illinois has seen with their program.

Governor Terry Branstad has signed the legislation, and the new rates will be effective March first.