Congressional Action

Federal lawmakers address biomass, biochemicals and biofuels
By Erin Voegele | July 03, 2012

Several measures that could impact the biorefining industry have recently been addressed by Congress. One such initiative aims to create a federal production tax credit for biochemicals. The legislation, titled the Qualifying Renewable Chemical Production Tax Credit Act of 2012, or H.R. 4953, would establish a production tax credit of 15 cents per pound of eligible content of renewable chemicals produced during the taxable year. The measure was introduced by Rep. Bill Pascrell, D-N.J., and has been referred to the House Ways and Means committee.

Under the bill, the term “eligible content” is defined to include the biobased percentage of the total mass of organic carbon within a renewable chemical, while a renewable chemical is defined as one produced using biomass that is sold or used in the production of polymers, plastics, or formulated products not used in the production of food, feed or fuel. The tax credit would not apply to chemicals that contain less than 25 percent biobased content, or to biochemical that were produced at rates of 10 million pounds or more during 2000.

Another measure introduced by Reps. Glenn Thompson, R-Pa., and Kurt Schrader, D-Ore., aims to modify the definition of biobased materials to include forest products in the USDA’s BioPreferred program. The bill is titled the Forest Products Fairness Act of 2012, or H.R. 5873.

The BioPreferred program was created by the 2002 Farm Bill and includes two primary initiatives; product labeling and federal procurement. The labeling portion of the program allows products meeting certain biobased content specifications to label their product with a BioPreferred seal, which is designed to help consumers make informed purchasing decisions. The federal procurement component gives preference to the purchase of biobased products by government entities.

Under the current program guidelines, paper, wood and pulp products are not considered qualified biobased materials for either labeling or federal procurement. H.B. 5873 would change those guidelines to make products like pulp, paper, paperboard, pellets, wood products and any recycled products derived from forest materials eligible for the program.

However, not all congressional actions have been in support of the biobased industry. The U.S. Senate and House recently took action to undermine military efforts to reduce dependence on foreign oil by stripping funding for biofuels initiatives in their respective versions of the defense authorization bill.
The House version prohibits the U.S. Department of Defense from pursing a public-private initiative for advanced biofuels, and would repeal Section 526 of the 2007 Energy Bill. The Senate Committee on Armed Services included legislative components that limit the military from buying biofuel using fiscal year 2013 funds if the cost is higher than that of petroleum-based fuels in its version of the legislation. In addition, the bill would bar the DOD from entering into a contract plan to design or construct a biofuels refinery or any other facility or infrastructure used to refine biofuels, unless specifically authorized by law. Additional amendments could be offered when the bills are subject to floor debate later this year.

—Erin Voegele