The Oregon Biomass Producer or Collector Tax Credit program was passed in 2007 and administered by the State Department of Revenue to incentivize biomass supply options for the state’s rapid renewable energy development. In 2009, however, administration of the law was passed to the Oregon Department of Energy, requiring the credits be certified and mandating changes to the program.
After input from industry stakeholders and the public, the state DOE released its final certification rules Nov. 2, outlining eligibility and the application process. “So our rules are really designed to administer the certification program and they describe how to apply for the tax credits, what type of documentation there is and how the department will act on those,” says Matt Krumenauer, senior policy analyst for the Oregon DOE. “The change in the certification program was driven partly by industry request and partly by the Department of Revenue because one of the features of this program is that the tax credits are transferrable.”
The credit offers $10 per green ton of eligible biomass to be used in energy generation and Krumenauer says it has done its duty in spurring biomass production. “It’s been quite a popular program, primarily on the woody biomass side,” he says. “We put some criteria in there to target more efficient uses of woody biomass in particular.” Those criteria include a cogeneration efficiency standard of 40 percent. Eligible applicants are agricultural producers or biomass collectors; have a title to the biomass at the time it is delivered to the bioenergy producer; produce or collect the biomass in Oregon, directly or indirectly and including through agents or employees; and deliver or facilitate delivery of the biomass to be used as biofuel or to produce biofuel in the state. The rules apply to tax years beginning on or after Jan 1, 2010, and before Jan. 1, 2012.
The state started the rule-making process in December 2009 with committee meetings of stakeholders, and released temporary rules in July. “The temporary rules allow us to administer the program, learn from it, find out exactly how it works for us, and how it works for our stakeholders and customers,” Krumenauer says. The final rules released in November had only minor changes from the temporary ones, he added.
The program is designed to promote anaerobic digestion, biofuel production, and electricity and heat generation, Krumenauer says, adding that thus far, the credits have been used mainly by those supplying biomass for power and thermal applications.
In the past three years since the credit was implemented, numerous companies devoted solely to the removal of forest residues have cropped up in the state. “So I think it has gone to support job growth, especially in rural areas,” he says.