Iowa Biodiesel Plant Shut Down Over SREs

04:24PM Sep 25, 2019
Soybeans 02
A biodiesel plant in Iowa shut down recently.
( Aimee Cope )

W2 Fuel, a southeast Iowa biodiesel plant, has shut down in response to the unclear future for the Renewable Fuels Standard (RFS). The Crawfordsville, Iowa plant produced 10 million gallons of biodiesel annually.

The shutdown will put 50 people out of work, according to the Des Moines Register. In addition to the Iowa plant’s shutdown, the owners will also close the doors of a plant in Michigan.

“I could tread water for a little while, but I came to a point where I was underwater. I couldn’t make a profit at all. I was bleeding cash,” said Roy Strom, CEO of W2 Fuel to reporters at the Des Moines Register.

This is the third plant in Iowa alone to announce it will shut down following small refinery exemptions (SRE) to RFS. Similar announcements have been made in other states.

Earlier this month, Siouxland Energy Cooperative in Sioux Center, Iowa announced it would idle production over SREs.

“The administration’s actions unfairly benefit the oil industry at the expense of our local farmers and if not addressed soon, will impact the livelihoods of many,” said Kevin Neiuwenhuis, president of the board for the plant in a recent press release.

In early August the Trump administration granted 31 additional SRE waivers. Six additional waiver requests were either withdrawn or denied.

“The vast majority of these exemptions are not justified under the law,” said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw in a press release. “Since this news began to leak this afternoon, RFS credit prices have freefallen to nearly zero, destroying much of the incentive to blend an incremental gallon of ethanol.”

*This story was corrected to describe the plant as a biodiesel plant. It was incorrectly called an ethanol plant. We apologize for the mix-up.