Iowa Laws and Incentives

Listed below are the summaries of all current Iowa laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

Electric Vehicle (EV) Charging Infrastructure Funding

The Iowa Department of Transportation (IowaDOT) provides funding for publicly accessible Level 2 and direct current fast charging (DCFC) stations. This grant program is funded by Iowa’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including how to apply, see the IowaDOT Volkswagen Clean Air Act Partial Settlements website.

Diesel Emission Reduction Project Funding

The Iowa Department of Transportation (IowaDOT) provides funding for the replacement, retrofit, or conversion of medium- and heavy-duty (MHD) on-road diesel vehicles with new diesel or alternative fuel vehicles. Grants are also available for off-road diesel vehicle replacements and repowers. Grants are available for MHD school buses, transit buses, and trucks. Non-road vehicles and equipment may also be eligible for funding. Eligible applicants include government, nonprofit, and private entities that own or operate diesel fleets and equipment. Additional restrictions apply. This grant program is partially funded by Iowa’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including eligible vehicles, see the IowaDOT Diesel Emission Reduction Act Website.

Mid-Level Ethanol Blend Retailer Tax Credit

Retail stations dispensing mid-level blends of ethanol, between 15% (E15) and 69% (E69), for use in motor vehicles may be eligible for a tax credit. Credit amounts vary by date. The tax credit expires December 31, 2024.

(Reference Iowa Code 214A.1 and 422.11Y)

Point of Contact
Anthony Girardi
Public Service Manager 2, Research and Policy
Iowa Department of Revenue
Phone: (515) 240-8417

E85 Retailer Tax Credit

Retail stations dispensing gasoline fuel blends of E85 for use in motor vehicles may be eligible for a tax credit in the amount of $0.16 per gallon sold. The tax credit expires after December 31, 2027. Eligible taxpayers may also claim the mid-level ethanol blend retailer tax credit for the same tax year.

(Reference Iowa Code 422.11O)

Point of Contact
Anthony Girardi
Public Service Manager 2, Research and Policy
Iowa Department of Revenue
Phone: (515) 240-8417

Biodiesel Blend Retailer Tax Credit

Retailers selling biodiesel are eligible for a state income tax credit. Credit amounts are based on biodiesel blend level and available in the following amounts:

Biodiesel Blend Level Credit Amount per Gallon Sold
11% to 19% $0.05
20% to 29% $0.07
30% and higher $0.10

The tax credit expires January 1, 2028.

(Reference Iowa Code 422.11P and House File 2128, 2022)

Point of Contact
Anthony Girardi
Public Service Manager 2, Research and Policy
Iowa Department of Revenue
Phone: (515) 240-8417

Biofuel Infrastructure Grants

The Renewable Fuels Infrastructure Program provides financial assistance to qualified 70%-85% ethanol (E85) or dual 15% ethanol (E15) and biodiesel retailers. Cost-share grants are available to upgrade or install new E85 or dual E15 and biodiesel infrastructure. Three-year cost-share grants are available for up to 50% of the total cost of the total project, up to $30,000. Five-year cost-share grants are available for up to 70% of the total cost of the project, up to $50,000.

Biodiesel distributors may apply for cost-share grants for infrastructure upgrades and installations at biodiesel terminal facilities. Facilities blending or dispensing blends ranging from 2% biodiesel (B2) to 98% biodiesel (B98) are eligible for up to 50% of the total project, up to $50,000. Facilities blending or dispensing B99 or B100 are eligible for up to 50% of the total project, up to $100,000.

The Renewable Fuels Infrastructure Board receives administrative support from staff within the Iowa Department of Agriculture and Land Stewardship and has the authority to determine the eligibility of applicants. For more information, refer to the Renewable Fuels Infrastructure Program website.

(Reference Iowa Code 159A.13-159A.15)

Point of Contact
Paul Ovrom
Marketing and Renewable Fuels Program
Iowa Department of Agriculture and Land Stewardship
Phone: (515) 242-6239

Biodiesel Production Tax Credit

Qualified biodiesel producers are eligible for a tax credit of $0.04 per gallon of biodiesel produced. Biodiesel producers may claim the tax credit for up to 250,000 gallons of biodiesel. The tax credit expires January 1, 2028.

(Reference Iowa Code 423.4(9))

Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption

Any motor vehicle equipped with an auxiliary power unit (APU) or other idle reduction technology may exceed the gross, single axle, tandem axle, or bridge formula weight limits by up to 550 pounds (lbs.) to compensate for the weight of the technology. To be eligible for the weight exemption, the vehicle operator must be able to provide written proof or certification of the weight of the APU or idle reduction technology and demonstrate or certify that the technology is functional at all times.

NGVs may exceed the weight limits by an amount equal to the difference of the weight of the natural gas tank and fueling system and the weight of a comparable diesel tank and fueling system. The NGV must not exceed a maximum gross vehicle weight of 82,000 lbs. (Reference Iowa Code 321.463)

Iowa's National Electric Vehicle Infrastructure (NEVI) Planning

The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the Iowa Department of Transportation (Iowa DOT) to submit an annual EV Infrastructure Deployment Plan (Plan) to the DOT and U.S. Department of Energy (DOE) Joint Office of Energy and Transportation (Joint Office), describing how the state intends to distribute NEVI funds. The submitted plans must be established according to NEVI guidance.

For more information about Iowa’s NEVI planning process, see the Iowa DOT Electric Vehicle Infrastructure Deployment website. To review Iowa’s NEVI plan, see the Joint Office State Plans for EV Charging website.

Alternative Fuel Vehicle (AFV) Grants

The Iowa Economic Development Authority (IEDA) provides grants for projects that benefit Iowa ratepayers and support the implementation of the Iowa Energy Plan, including the purchase of AFVs. Eligible applicants include Iowa businesses, colleges and universities, private and nonprofit organizations. For more information, including eligibility requirements, see the IEDA Iowa Energy Center Grant Program website.

(Reference Iowa Administrative Code 261.404)

Alternative Fuel Infrastructure Loans

The Iowa Economic Development Authority (IEDA) Energy Infrastructure Revolving Loan Program (EIRLP) provides individuals, businesses, and utilities with low-interest loans for energy infrastructure projects that facilitate electricity, biofuel, and renewable natural gas transmission, storage, or distribution. For more information, see the IEDA EIRLP website.

(Reference Iowa Administrative Code 261.406)

Utility / Private Incentives

Electric Vehicle (EV) Charging Station Rebates - Iowa Association of Electric Cooperatives (IAEC)

Members of IAEC may offer rebates to residential and commercial customers for the installation of qualifying Level 2 EV charging stations. Local cooperatives that may currently offer these incentives include:

  • Access Energy Cooperative
  • Allamakee-Clayton Electric Cooperative
  • Associated Electric Cooperative
  • Atchison-Holt Electric Cooperative
  • Basin Electric Power Cooperative
  • Boone Valley ELectric Cooperative -Calhoun County Electric Cooperative Association
  • Central Iowa Power Cooperative
  • Chariton Valley Electric Cooperative
  • Clarke Electric Cooperative -Consumers Energy
  • Corny Belt Power Cooperative
  • Diaisyland power Cooperative
  • East-Central Iowa Rural Electric Cooperative
  • Eastern Iowa Light & Power Cooperative
  • Farmers Electric Cooperative
  • Franklin Rural Electric Cooperative
  • Guthrie County Rural Electric Cooperative
  • Grundy County Rural Electric Cooperative
  • Grunt Electric Cooperative
  • Harrison County Rural Electric Cooperative
  • Heartland Power Cooperative
  • Iowa Area Development Group
  • Iowa Lakes Electric Cooperative
  • L&O Power Cooperative
  • Linn County Rural Electric Cooperative
  • Lyon Rural Electric Cooperative
  • Maquoketa Valley Electric Cooperative
  • Midland Power Cooperative
  • MiEnergy Cooperative
  • Nishnabotna Valley Rural Electric Power Cooperative
  • North Central Misssouri Electric Cooperative
  • Northwest Rural Electric Cooperative
  • Northeast Missouri Electric Power Cooperative
  • Northwest Iowa Power Cooperative
  • N.W. Electric Power Cooperative
  • Osceola Electric Cooperative
  • Pella Cooperative Electric Association
  • Prairie Energy Cooperative
  • Raccoon Valley Electric Cooperative
  • Southern Iowa Electric Cooperative
  • Southwest Iowa Rural Electric Cooperative
  • T.I.P. Rural Electric Cooperative
  • United Electric Cooperative
  • Western Iowa Power Cooperative
  • Woodbury County Rural Electric Cooperative

For more information, including a full list of member cooperatives and available incentives, see the IAEC website.

Electric Vehicle (EV) Infrastructure Support

Iowa utilities joined the National Electric Highway Coalition (NEHC), committing to create a network of direct current fast charging (DCFC) stations connecting major highway systems from the Atlantic Coast to the Pacific of the United States. NEHC utility members agree to ensure efficient and effective fast charging deployment plans that enable long distance EV travel, avoiding duplication among coalition utilities, and complement existing corridor DCFC sites. For more information, including a list of participating utilities and states, see the NEHC website.

Laws and Regulations

Retail E15 Access Requirements

Beginning January 1, 2026, retail gasoline fueling stations must advertise and sell E15 from at least one gasoline dispenser. The Iowa Department of Agriculture and Land Stewardship may refuse to renew, suspend, or revoke retail fuel licenses for failure to comply with access requirements. Additional requirements and exemptions may apply.

(Reference Iowa Code 214A.31-214A.37)

Public Utility Definition

An entity providing electricity for the purpose of electric vehicle charging is not considered a public utility. Regulated public utilities cannot prohibit or restrict the sale of electricity at an electric vehicle charging station.

(Reference 199 Iowa Administrative Code Rule 20.20(476))

Electric Vehicle (EV) Fee

EV owners must pay an annual fee in addition to standard registration fees. All-electric EV owners must pay an annual fee of $130 and plug-in hybrid electric vehicle owners must pay an annual fee of $65.

(Reference Iowa Code 321.116)

Electric Vehicle (EV) Charging Station Inspection

The Iowa Department of Agriculture and Land Steward (Department) must inspect EV charging stations owned by licensed electric fuel dealers or users on a biennial basis to ensure electricity is being accurately metered. The Department must use standards published in the National Institute of Standards and Technology Handbook 44 and must notify the Iowa Department of Revenue of noncompliant charging stations.

(Reference House File 666, 2023)

Electricity Dealer License

A person may not sell or dispense electricity as a vehicle fuel at a location other than a residence or otherwise act as a licensed electricity fuel dealer or user unless the person holds a valid license issued by the Iowa Department of Revenue (Department). To obtain a license, a person must file an application with the Department.

(Reference House File 767, 2019 and Iowa Code 452A.42)

Biofuel and Renewable Fuel Quality Program

The Iowa Department of Agriculture and Land Stewardship (Department) must establish and administer programs to audit motor fuel facilities, including biofuel processing and production plants, to screen and test motor fuel, including renewable fuel, and to inspect motor fuel sold by dealers, including retail motor fuel dealers. Biofuels include ethanol, biobutanol, and biodiesel. Renewable fuel is defined as a combustible liquid derived from biomass or produced from a biogas source, such as biofuel and biofuel blended with gasoline. The Iowa Central Community College must test motor fuels, biofuels, and renewable fuels to ensure they meet Departmental standards for motor vehicle use.

(Reference House File 666, 2023 and Iowa Code 214A.1, 214A.2, 214A.2B, and 214A.2C )

Alternative Fuel Vehicle (AFV) Demonstration Grant Authorization

The Iowa Department of Natural Resources (Department) may award demonstration grants to individuals who purchase vehicles that operate on alternative fuels, including but not limited to E85, biodiesel, compressed natural gas, electricity, solar energy, or hydrogen. Individuals may use the grants to conduct research connected with the fuel or vehicle. Grant funding to purchase the vehicle is available if the Department retains the title of the vehicle, the vehicle is used for research, and the proceeds from the eventual sale of the vehicle are used for additional research. Grants are subject to funding availability.

(Reference Iowa Code 214A.24)

Autonomous Vehicle (AV) Operation Requirements

An AV may be operated without direct control of the driver on public highways if it is capable of operating in compliance with all applicable motor vehicle and traffic laws and can reach a reasonably safe state, such as bringing the vehicle to a complete stop, in the event that the automated driving system fails. If a driver is present, the driver must be licensed. Other conditions apply.

(Reference Iowa Code 321.514-321.517)

E85 Fuel Exclusivity Contract Regulations

Any motor fuel franchisor must provide for the delivery of E85 as requested by the motor fuel dealer or allow the franchisee to purchase E85 from another source.

(Reference Iowa Code 323A)

Renewable Fuel Labeling Requirement

Biodiesel, biobutanol, and ethanol blend dispensers must be affixed with decals identifying the type of fuel blend. If fuel blends containing more than 10% ethanol are being dispensed, the decal must include the statement: “For Flexible Fuel Vehicles Only.” The Iowa Department of Agriculture and Land Stewardship (Department) may approve applications to place a decal in a special location on a pump with special lettering or colors that are clear and conspicuous to the consumer.

(Reference Iowa Code 214A.16)

Ethanol Blend Dispenser Requirement

An ethanol retailer selling a blend of at least 9% ethanol by volume must use gasoline storage and dispensing infrastructure that the Iowa Department of Natural Resources and state fire marshal have determined is compatible with the ethanol blend being dispensed. Exceptions may apply.

A gasoline retailer that replaces or converts gasoline storage and dispensing infrastructure to store and dispense a gasoline blend of 15% ethanol by volume (E15) or higher must guarantee the infrastructure is also capable of storing and dispensing E85.

(Reference Iowa Code 455G.31)

Biofuel Specifications

Ethanol-blended gasoline must conform to ASTM D4814, E85 must conform to ASTM D4806, renewable diesel fuel must conform to ASTM D975, and biodiesel-blended fuel containing at least 6%, but no more than 20%, biodiesel must conform to ASTM D7467. Biodiesel blended fuel containing more than 20% biodiesel must conform to standards set by the Iowa Department of Agriculture and Land Stewardship. Additionally, biobutanol must be an agriculturally derived isobutyl alcohol that meets ASTM D7862 for butanol for blending with gasoline for use as a motor fuel. Gasoline blended with biobutanol must conform to ASTM D4814. The state defers to the U.S. Environmental Protection Agency for potential changes in specifications.

(Reference Iowa Code 214A.2 and Iowa House File 666, 2023)

Biodiesel Fuel Use

The Iowa Department of Transportation (IDOT) may purchase biodiesel for use in IDOT vehicles through the biodiesel fuel revolving fund created in the state treasury. The fund consists of money received from the sale of Energy Policy Act of 1992 credits IDOT has banked and other income IDOT has obtained or accepted for deposit in the fund. (Reference Iowa Code 307.20)

Alternative Fuel Tax

Alternative fuels used as vehicle fuel are taxed as follows:

  • Compressed natural gas is subject to the state fuel excise tax of $0.31 per gasoline gallon equivalent, measured at 5.66 pounds (lbs.) or 126.67 cubic feet at a base temperature of 60 degrees Fahrenheit and a pressure of 14.73 lbs. per square inch;
  • Liquefied natural gas is subject to the excise tax of $0.325 per diesel gallon equivalent (DGE), measured at 6.06 lbs.;
  • Propane is subject to the excise tax of $0.30 per gallon;
  • E85 is subject to the excise tax of $0.290 per gallon;
  • B20 is subject to the excises tax of $0.295 per gallon;
  • B100 is subject to the excise tax of $0.325 per gallon;
  • Hydrogen is subject to the excise tax of $0.65 per DGE, measured at 2.49 lbs.; and
  • Electricity will be subject to the excise tax of $0.026 per kilowatt-hour of fuel delivered or placed into a battery or other energy storage device of an electric motor vehicle at any location in Iowa other than a residence.

(Reference Iowa Code 452A.2, 452A.3, 452A.41, and 452A.86)

Alternative Fuel Vehicle Acquisition Requirements

At least 10% of new vehicles purchased by institutions under the control of the state fleet director, including the Iowa Department of Transportation, Board of Directors of Community Colleges, Board of Regents, Commission for the Blind, and Department of Corrections must be capable of operating on alternative fuels. Alternative fuels include E85, B20, natural gas, propane, and electricity. Vehicles and trucks purchased and directly used for law enforcement and off-road maintenance work are exempt from this requirement.

The state fleet must fuel diesel vehicles with biodiesel blends between 2% and 99%, and gasoline vehicles with ethanol blends between 15% and 85%. This requirement does not apply if such blends are not approved by the U.S. Environmental Protection Agency or the vehicle manufacturer. Additional exemptions apply. Vehicles that use the biodiesel and ethanol blends must display a brightly colored, highly visible renewable fuel sticker. Beginning July 1, 2023, and annually thereafter, the Iowa Department of Administrative Services must submit a report detailing the use of ethanol and biodiesel blends in state fleet vehicles to the governor and Iowa General Assembly.

(Reference Iowa Code 89A.360, 8A.362, 8A.368, 216B.3, 260C.19A, 262.25A, 307.21 and 904.312A and House File 2128, 2022)

Alternative Fuel Vehicle (AFV) Conversion Registration

When a motor vehicle is modified to use a different fuel type or more than one type of fuel, the vehicle’s registered owner must notify the county treasurer of the new fuel type or alternative fuel types within 30 days. If the vehicle is able to use a special fuel, the county treasurer will issue a special fuel identification sticker.

(Reference Iowa Code 321.41)

Electric Vehicle (EV) Infrastructure Study

The Iowa Economic Development Authority (IEDA), in collaboration with the Iowa Department of Transportation and Iowa utility industry, conducted a study of EV charging infrastructure to evaluate costs and benefits associated with different options for EV infrastructure support. IEDA submitted the study report to the general assembly in February 2019. For more information, see the IEDA Energy Plans and Reports website.

Low-Speed Vehicle Access to Roadways

Low-speed vehicles may operate on roadways with posted speed limits of up to 35 miles per hour (mph) and may cross streets with posted speed limits greater than 35 mph. (Reference Iowa Code 321.381A)