Looking Forward to 2023

2022 has seemingly flown by. The information in this article is intended to summarize some of the changes your business can expect to encounter in 2023.

2022 presented FUELIowa members with many challenges and once again members tackled those challenges head on. Two significant pieces of legislation impacting the Iowa fuel industry were passed in 2022 by the Iowa Legislature. The E15 Access Standard will require brick-and-mortar fuel retailers to prepare their business to offer E15 beginning on January 1, 2026. Tankwagon and transport deliveries to end-users are not impacted by the E15 Access Standard. While FUELIowa was opposed to certain provisions within the E15 Access Standard, we do support the overarching goal of the legislation to expand the footprint of both ethanol and biodiesel sales in Iowa and beyond.

Members are encouraged to assess the compatibility of their facility to make the move from E10 to E15.

By John Maynes, Director of Government and Regulatory Affairs, FUELIowa

tailers a choice to either opt out of the program or continue to participate under a revised program with an increase in the per container handling fee.

Here are some of the changes your business can expect to see in 2023:

Expanding will be FUELIowa’s top priority during the 2023 Iowa Legislative Session.

While overshadowed by the impact of the E15 Access Standard, the passage of comprehensive reform to Iowa’s bottle and can deposit law was a major victory for FUELIowa members. Previously unchanged since 1979, the legislation passed by lawmakers allows fuel re -

In effect today is Iowa’s newly codified convenience standard. The convenience standard allows any retailer with a redemption center within ten miles for counties with a population greater than 30,000, or fifteen miles for a county with a population less than 30,000 to decline container acceptance.

Effective January 1, 2023, the handling fee available to retailers triples to three cents and retailers unable to utilize the convenience standard may opt out of Iowa’s bottle and can deposit law under any of the following conditions:

• The retailer holds a food establishment license under Chapter that this requirement only applies to infrastructure which will be used to store and dispense E15. For example, the upgrade of a product line and dispenser conveying E10 or E0 would not be subject to the E85 equipment compatibility standard. Additionally, the replacement of the product line, dispenser, or both, does not trigger an automatic requirement to sell E15. The requirement to sell E15 kicks in on January 1, 2026. ber 1 through March 31.

137F to prepare or serve food; has a certified food protection manager; and sells time and temperature control for safety foods.

• The retailer has an agreement with a redemption center approved with the state of Iowa for the operation of a mobile redemption system. The agreement must provide for space, utilities, and internet and the redemption system does not require additional payment to the retailer.

• The retailer is within the codified convenience standard.

Cost-share opportunities for biodiesel projects will remain the lesser of $50,000 or 70 percent of the project cost. Only $1.25 million in funds may be allocated by the infrastructure board to retail biodiesel projects. Biodiesel terminal grant applications are not subject to the $1.25 million cap.

No immediate changes to motor fuel excise tax rates will occur. Excise tax rates are adjusted on July 1 annually and based the market shares of ethanol blended gasoline and biodiesel blended diesel fuel.

On July 1, 2024 , the excise tax differential and accompanying formula currently available on B11 blends or greater will move to B20 blends or greater.

Beginning January 1, 2023 , a FUELIowa member replacing an underground storage tank or building a new ground up facility will be required to offer E15 from 50 percent or more of their gasoline fueling positions. This provision in law is only triggered by the replacement or addition of an underground storage tank and does not include dispensers or any other below-ground component.

For ethanol projects, retailers selling 140,000 gallons of gas or less will see their cost-share increase to the lesser of $63,500 or 90 percent of the project cost. Retailers selling over 140,000 gallons of gasoline but not more than 450,000 gallons will see a very modest increase in their eligible cost share. Retailers falling into this category are eligible for the lesser of $53,500 or 75 percent of the total project cost.

Ethanol projects will also be subject to a new preference ranking system implemented by the board and spelled out in the Iowa Code. Priority scoring will favor lower volume retail sites who do not qualify for one of the exemptions available under the E15 Access Standard.

Effective January 1, 2023 , all retail fuel infrastructure installed, replaced, or converted for the storage and dispensing of E15 must be installed, replaced, or converted with E85 compatible components.

No single provision has caused as much confusion as this provision included in the E15 Access Standard. FUELIowa members should note

Grant applications approved after January 1, 2023 , will be subject to new terms. For ethanol projects, all equipment associated with the sale of E15 or E85 must be E85 compatible to be eligible to receive a grant. Biodiesel projects must include equipment that is compatible with a minimum biodiesel blend of B20 and successful applicants will be required to offer B11 from April 1 through October 31 and a minimum blend of B5 from Novem -

On January 1, 2023 , retail gallons of B5 will no longer qualify for a state tax credit. The new retail biodiesel tax credit structure will see B11 receive $.05 cpg, B20 receive $.07 cpg, and B30 receive $.10 cpg. E15 will receive a flat rate of $.09 cpg for every gallon sold throughout the calendar year.

The Iowa Department of Revenue is tasked by the Iowa Legislature to present an annual summary of the retail fuel gallons sold in Iowa. The report is presented to the Iowa Legislature on April 1st of each year.

Previously, retailer compliance with reporting for the annual motor fuel gallons report was voluntary. Beginning in 2023 , reporting will become mandatory, and the Department of Revenue may issue penalties for non-compliance. Motor fuel gallon reports will be completed exclusively through the new state GovConnect.Iowa website.