The boom in the biofuel industry in Iowa is evident but it has created concerns about increasing food prices as corn is used to produce ethanol.
A study accomplished by the Iowa Renewable Fuels Association titled, “Contribution of the Biofuels Industry to the Economy of Iowa”, revealed that the annual contribution by Iowa’s ethanol and biodiesel industries in the state’s economy was $12.7 Billion last year, as reported by Desmoinesregister.
Iowa’s biofuel sector is well stocked with biofuel. It has 28 ethanol refineries in the state, which have a capacity to produce 2.1 Billion gallons ethanol, and an additional 16 refineries are under-construction or expansion. Besides, there are 14 biodiesel refineries with capacity of producing 315 Million gallons diesel and another two are under-construction. In 2007, the biofuel industry estimated to have made a total contribution of $790 Million in state tax revenue.
There has been a strong boost to the usage of alternative fuels, like ethanol, extracted from corn and sugarcane and other biofuel, due to rising crude oil prices and Canada’s stress on cleaner and renewable energy. The source of biofuel is the food crops that absorb the greenhouse gas (carbon dioxide) during growth and release it back when the biofuel is burned, making biofuels environmentally-friendly.
The rapid industrialization and spurt in the number of vehicles hitting the Iowa’s roads have further pushed up the demand for biofuel in the state. Although the fuel demand is rising, the resources of oil and other fuels are limited. Hence, the Iowa government is extensively promoting biofuel as the primary source of fuel.
On the other side, critics have said that the benefits wouldn’t be as impressive had the sector was heavily subsidized. Yet, it is also to be fully determined to what extent the indirect social and environmental damage corn-based ethanol industry in Iowa will cause. The global impact of rising food prices, particularly on the urban poor in maize importing nations, needs to be considered.
According to a Research Analyst at RNCOS, “The increasing concerns about global warming in the world are highlighting the need for increasing use biologically-generated fuels. Thus, growth in Iowa’s biofuel market in future is quite evident. At the same time, concerns about increasing food prices becomes a major threat. The government is therefore likely to pursue the quest for other alternative fuels like biogas that have their source in waste materials rather than consumables.”
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