Renewable Chemical Credit Bill Introduced in House

H.R. 8879, sponsored by Rep. Bill Pascrell, Jr. (D-NJ), would provide, for five years, a production tax credit (PTC) for certain "renewable chemicals" produced from renewable biomass and a 30% investment tax credit (ITC) for facilities producing such chemicals.  These developments could create a major tax incentive for developers of biomass projects. To qualify as a renewable chemical, a chemical (inter alia) must be produced in the United States from renewable biomass (defined by reference to 7 USC 8101(13)) and must not be sold or used for the production of food, feed, fuel, or pharmaceuticals. 

While incentives for both open-loop and closed-loop biomass have traditionally existed in section 45, those provisions (which are, in any event, expiring imminently unless renewed) cover only relatively narrow categories of biomass--i.e. agricultural livestock waste, certain wood-based and forest-related resources, and plant material. The highly technical criteria for a "renewable chemical" in the proposed PTC and ITC may potentially cover a much wider range of biomass alternatives.