US producers of renewable chemicals are hopeful that a recently introduced bill called “Qualifying Renewable Chemical Production Tax Credit Act of 2013” (H.R. 3084) sponsored by House Representatives Bill Pascrell (D-NJ), Steve Stockman (R-Texas), Allyson Schwartz (D-Pa), Linda Sanchez (D-Calif) and Richard Neal (D-Mass), will be approved by US Congress and signed into law.
The legislation provides renewable chemical producers access to production tax credits currently available to other energy producers. According to several renewable chemical companies and industry trade group BIO (Biotechnology Industry Organization), the tax credit is critical for the industry’s efforts to attract capital.
“A production tax credit for renewable chemicals and biobased products will promote investment and domestic production of innovative renewable chemicals, pay strong dividends in the future of U.S. chemical manufacturing, improve trade balance, maintain U.S. leadership in clean energy and manufacturing, create thousands of high quality U.S. jobs and reduce pressure on volatile petroleum prices.
Federal policies that provide production incentives would help this emerging industry grow throughout the country, and secure America’s leadership in the important arena of green chemistry.”
Under the bill, it defines renewable chemical as any chemical that is:
(1) produced in the United States from renewable biomass;
(2) sold or used by the taxpayer for the production of chemical products, polymers, plastics, or as chemicals, polymers, plastics, or formulated products;
(3) not sold or used for the production of any food, feed, or fuel.
The bill exempts certain chemicals, including those with a bio-based content of less than 25%. It also directs the US Secretary of Agriculture to establish a five-year program to allocate credit amounts, and limits the total amount of allocable credits under such program to $500 million, with a limit of $25 million to any taxpayer in any taxable year.
The renewable chemical industry is also waiting for the passage of a five-year Farm Bill, which includes vital mandatory funding to the USDA energy programs and grants renewable chemicals companies access to the Biorefinery Assistance Program and the Biomass Research and Development Program.