BIOMASS HUB

House bill to expand cellulosic subsidies to algae-based fuels. BIO projects that development of advanced biorefineries could create 29,000 jobs over the next few years and contribute $140 billion in economic growth.

With United States biofuel policy shifting from 1st generation biofuels towards cellulosic and advanced alternatives, calls for directed incentives are growing louder in the nation’s capital (see Survival of the Fittest: Making Sense of the Biofuel Subsidy Battle).

Over the last several months, BIO and ABO, industry organizations supporting advanced biofuels, have made vocal appeals for tax incentives that would encourage the sustained development of algae and cellulosic based fuels (see Algae Biofuel Industry Seeks Tax Incentive). Most recently, Representatives Allyson Schwartz (D-PA), Mark Schauer (D-MI) and Brian Bilbray (R-CA) introduced The Grow a Renewable Energy Economy Now–Jumpstart Other Biofuels Act of 2010 (H.R.5142), which would strengthen and expand federal tax incentives for next-generation biofuels.

The bill (aka The GREEN JOBS Act) is intended to support industry efforts to secure project financing by strengthening and expanding federal tax incentives for next generation biofuels. The legislation would open existing cellulosic biofuels tax credits to algae biofuel and extend the credits for four additional years (from 2013 to 2017). The proposed legislation would also provide cellulosic and algae-based biorefineries an option to choose a refundable 30 percent investment tax credit in lieu of production incentives. Businesses would not be allowed to claim both the production and investment incentives but would be granted the flexibility to choose the incentive best suited to their business condition.

Currently, qualifying cellulosic biofuels include any liquid fuel (other than low-proof alcohol) which: 1) is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis, and 2) meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act (42 U.S.C. 7545).

The proposed legislation includes algae-based fuels, which means any liquid fuel, including gasoline, diesel, aviation fuel, and ethanol, which: 1) is produced from the biomass of algal organisms, and 2) meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act (42 U.S.C. 7545).

A recent report commissioned by BIO, U.S. Economic Impact of Advanced Biofuels Production, projects that development of advanced biorefineries could create as many as 29,000 jobs over the next few years and hundreds of thousands by 2030, contributing more than $140 billion in economic growth.

The GREEN JOBS Act has been referred to the House Committee on Ways and Means. More on the GREEN JOBS Act bill.

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