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Bailout package benefits biomass industry

By Erin Voegele
Two recently passed pieces of legislation are poised to benefit the biomass industry. More widely known as the U.S. economic "bailout package," the Emergency Economic Stabilization Act of 2008 also extends various renewable energy and biofuels tax credits.

Signed into law Oct. 3, the act extends the tax credit for producing electricity from closed-loop or open-loop biomass facilities through 2010. In addition, "cellulosic biofuels" are now included within the definition of biomass ethanol plant property for purposes of the bonus depreciation allowance. This extends bonus depreciation to property used to produce cellulosic biofuels in general, rather than just cellulosic ethanol.

The bailout package also extends the alternative fuel credit and the alternative fuel mixture credit though 2009. This includes compressed or liquefied biomass gas and all types of qualifying fuels sold for use in aviation. Certain carbon capture requirements must be met by gasification facilities to qualify for the credit.

Another bill-the Consolidated Security, Disaster Assistance and Continuing Appropriations Act of 2009-was signed into law Sept. 30. This legislation could offer potential benefits to biomass companies working with wood waste. It includes an allowance of $175 million for the U.S. Forest Service to use in removing wood determined to be "hazardous fuel" in
areas of the country that are prone to wildfires.

Although woody biomass from national forests isn't currently included in the definition of "woody biomass" contained within the Energy Independence & Security Act of 2007, Sen. John Thune, R-S.D., is working to pass legislation to change the definition. This legislation failed to pass in 2008. However, Thune is expected to continue working on revising the definition of woody biomass in 2009.
 

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