Legislation promotes biomass use

By Lisa Gibson
Posted January 7, 2010, at 4:10 p.m. CST

The Renewable Biomass Fairness Act, introduced by Rep. Stephanie Herseth Sandlin, D-S.D., and Rep. Wally Herger, R-Calif., would provide energy produced from biomass with the same tax incentives as that from wind and solar.

The federal legislation would promote the use of biomass, foster job growth in the Black Hills of South Dakota and help move the nation toward energy independence, according to Herseth Sandlin's office. It would improve the Renewable Energy Production Tax Credit (PTC) and the Farm Bill's Cellulosic Biofuel Tax. The bill would extend the PTC for five years for open and closed-loop biomass systems; increase the credit for renewable biomass electricity from 0.9 cents per kilowatt hour (kWh) to 1.8 cents per kWh; and eliminate a loophole in the 2008 Farm Bill that allows paper manufacturers to claim a $1.01-per-gallon cellulosic biofuel tax credit based on their use of black liquor,- a byproduct of paper manufacturing-to produce energy, according to Herseth Sandlin's office. Paper manufacturers can already claim an alternative fuels tax credit established by the 2005 Highway Bill.

The PTC for renewable biomass is set to expire in 2014. The act would extend that to 2019 and provide a five-year extension of the credit period for open-loop biomass power plants placed in service on or before August 8, 2005, which will expire at the end of this year.

Biomass Power Association President Bob Cleaves says the act includes numerous important features for existing and new biomass facilities, citing the closing of the cellulosic biofuel loophole and rate parity. "The association is obviously supportive of it," he said. "We think this legislation is going to get large bipartisan support. I don't see a lot of opposition." Several elements of the bill have been included in other renewable energy legislation in the past 12 months, he added, but this is an act that brings it all together.