ALTOONA, Iowa (DTN) -- The clock is ticking on plans in Congress to craft year-round E15 legislation as biofuel advocates in Iowa stress higher ethanol blends are critical for helping turn around depressed commodity markets.

At the Iowa Renewable Fuels Summit on Thursday, E15 dominated much of the discussion, though carbon pipelines also had their moment, along with the long-delayed 45Z tax credit rule and the unrealized prospects of both maritime and sustainable aviation fuels.

Last week, President Donald Trump held a campaign rally in Iowa and said he supports E15 legislation, but also said he supports help for "small and mid-sized refiners" that want to reform small refinery exemptions and compliance under the Renewable Fuels Standard.

The E15 Rural Energy Council began quietly meeting this week but did so without House Speaker Mike Johnson, R-La., officially naming who is on the council and excluded Democrats from participating. Rep. Nikki Budzinski, D-Ill., who pressed for bipartisan representation on the council, expressed her concern in an email to DTN.

"Federal legislation to allow the year-round sale of E15 has long been a bipartisan priority, and I've been proud to lead on this issue by introducing legislation last year to make it a reality," Budzinski said. "My Democratic colleagues and I have been clear about the need for Democratic voices on this council -- a concern leadership has so far failed to address. I will continue to press for real, bipartisan action that our growers deserve."

The council is expected to draft potential legislation by Feb. 15 that the House could vote on by Feb. 25.

"I fear, if we don't see Congress act on the 15th in the month of February, right now, I don't think we're going to see congressional action for years," said Monte Shaw, executive director of the Iowa Renewable Fuels Association (IRFA).

Nick Bowdish, president of IRFA, said if Congress can't come together and pass E15 to support the nation's corn farmers then lawmakers should be held accountable for failing to act.

In Iowa, E15 accounts for about 30% of fuel sales -- close to 500 million gallons -- and is growing in use by about 45% year-over-year.

"If you offer it, they will buy it. E15 will become the standard fuel for the United States. The question is not if, but when."

Without national year-round E15, Shaw echoed Winston Churchill, saying ethanol advocates will take the fight other states to press for E15 expansion.

"Rather, if a solution is not to be found there (in Congress), today I propose that we take our fight to the beaches of California. We will fight in the Bad Lands of North Dakota. We will fight in the cornfields of Kansas. And we will fight in the rolling hills of Indiana and Michigan," Shaw said.

Despite growing E15 sales in Iowa, Shaw also noted the state's ethanol production has remained relatively steady at 4.6 billion gallons and an ethanol plant shut down in the state last year. Biodiesel production also has fallen 31% in the state and four biodiesel plants have idled in recent years.

At the same time, U.S. corn production surged to 17 billion bushels (bb), pushing ending stocks toward 2 bb and pressuring prices below the cost of production. Shaw said greater demand is needed to keep pace with crop production gains.

GROUPS CRITICIZE OUTLYING REFINERS

Matt Durand, deputy legal counsel for the National Association of Convenience Stores, said his group backs the E15 legislation that had already been negotiated by several stakeholder groups. He said a handful of refinery companies are "putting shareholder enrichment before a much larger perspective" of the country's fuel needs.

Troy Bredenkamp, senior vice president of government affairs for the Renewable Fuels Association, said companies representing 90% of petroleum refining capacity agree with getting E15 done. But some refiners are pushing back on the effort to reduce the number of small refiners eligible for Renewable Fuel Standard Exemptions from 37 down to 17.

"There is a windfall they are going to be out of if they don't continue to get small refinery exemptions," Bredenkamp said.

MARITIME, AVIATION MARKETS

Maritime fuel is a 100-billion-gallon global market and the shipping industry -- much like aviation -- is getting pressure globally to lower carbon emissions. "Maritime potential is massive," said Zoltan Szabo, secretary general of the Climate Ethanol Alliance.

At the same time, it requires policy to drive that effort. Last October, there was supposed to be a framework to move global regulators to press for low-carbon maritime fuels. The U.S. government had been supportive until last fall, "and they just changed their position," Szabo said, who added he believes the Trump administration "was receiving the wrong advice."

Sustainable aviation fuel (SAF) is also a potential 30-billion-gallon market for biofuels that continue to develop slower than the aviation industry needs, said Charlotte Lollar, director of Sustainable Aviation Fuel & Emissions at Delta Air Lines.

Lollar said airlines are facing more mandates globally to reduce greenhouse gas emissions. Airlines such as Delta don't want to reduce flights or dramatically increase costs. Some 2030 mandates also are unrealistic because the fuel production just isn't there yet to meet the need. Total availability of SAF in 2025 was 3-4% of total aviation fuel, Lollar said.

Lollar said the U.S. risks losing aviation fuel production to other countries and she called for bipartisan efforts to stabilize the rules around producing sustainable aviation fuel.

"If we don't have a policy ... we're going to get left behind because we aren't developing the industry ourselves," Lollar said.

Lollar also highlighted an effort in Minnesota to build a large-scale aviation pilot project to build out the supply chain for SAF. Minnesota passed its own tax credit to incentivize production in the state as well. "In order to build to scale for SAF in Minnesota it has to make sense for everybody," Loller said.

The long-awaited proposed rules for the 45Z tax credit could help stimulate more aviation fuel production with the tax credit reaching $1 for low-carbon fuels.

CARBON PIPELINES

There is probably no debate bigger in Iowa than the battles over carbon pipelines, which are needed to help lower the carbon emissions of ethanol and biodiesel to tap those maritime and SAF markets. The Iowa Legislature remains divided over whether to remove eminent domain authority for carbon pipelines, or provide pipelines with more options to develop, but also imposing new taxes them.

Joe Griffin, who took over as CEO of Summit Carbon Solutions last August, said the company has been trying to rebuild some relationships both with landowners and county officials.

"We need to be 100% transparent and we need to work extremely, extremely hard to build the trust of these folks" he said.

Summit has been holding town-hall meetings to "try to reset the narrative" about both the potential and risks of carbon pipelines. The company is working to help develop statewide emergency response preparedness and offering counties more long-term incentive payments. He also noted the pipeline would be paying $80 million a year in Iowa taxes.

"We want to provide what our customers need, and Iowa is absolutely in position to dominate the opportunity in biofuel markets and set the tone for the entire world," Griffin said.

Tom Solon, CEO of Mid America Agri Products Wheatland LLC in Madrid, Nebraska, has connected with the Tallgrass Trailblazer pipeline in Nebraska, which will carry 10 million metric tons (mmt) of carbon annually into Wyoming. Solon noted he has gotten calls from ethanol end users in several states and Canada about carbon scores and gotten inquiries from companies looking co-locate.

Also see, "Treasury's 45Z Credit Guidance Brings Clarity, Questions for Biofuels Producers," https://www.dtnpf.com/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

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