Iowa biodiesel production fell sharply in 2025

Iowa’s biodiesel production fell sharply in 2025, dropping 31% year on year to 244 million gallons, according to new figures from the Renewable Fuels Association (RFA).
The decline marks the state’s lowest annual output in more than a decade and underscores the mounting pressures facing the US biofuels sector.
The RFA data show that Iowa, long regarded as a cornerstone of American biodiesel manufacturing, struggled amid weaker margins and ongoing policy uncertainty. Higher feedstock costs, volatile energy markets and softer demand combined to curb production across several facilities during the year.
Industry representatives said the downturn reflects broader national trends, with biodiesel producers scaling back output as federal incentives failed to keep pace with rising operating costs. The slowdown has also raised concerns for rural economies, where biodiesel plants support jobs, crop demand and local tax revenues.
Despite the setback, the RFA noted that Iowa remains one of the country’s leading biodiesel producers by capacity, and the state’s existing infrastructure positions it well for a potential recovery. Producers are now looking to 2026 with cautious optimism, hoping for clearer long-term policy signals and improved market conditions.
Analysts say the latest figures highlight the fragile balance between energy policy, agricultural markets and renewable fuel production, as the industry navigates a challenging transition period.