Sen. King pushes Biomass Thermal Utilization Act

By Sen. Angus King's office | May 22, 2014

Sen. Angus King, I-Maine, renewed his push to promote the economic and environmental benefits of biomass thermal energy on May 15 by filing the Biomass Thermal Utilization Act of 2013 as an amendment to legislation pending before the Senate that would renew a series of tax relief measures. King originally introduced the legislation last year.

“Thermal biomass energy systems, like wood pellet boilers, offer an efficient and affordable way to generate clean energy, and they deserve the same treatment as other sustainable energy technologies under our tax code,”  King said. “As Congress considers extending tax relief provisions into next year, it should seize the opportunity to finally recognize thermal biomass energy for what it is – a responsible and environmentally-friendly source of energy that can save people money and help create jobs.”

The Biomass Thermal Utilization Act, or BTU Act, would amend the federal tax code to incentivize biomass energy, as it already does for several other forms of renewable energy, by adding biomass fuel property to the list of existing technologies that qualify for the residential renewable energy investment tax credit. Currently, a host of renewable energy technologies qualify for investment tax credits for capital costs incurred in residential and commercial installations. This legislation seeks to achieve parity between those renewable systems and thermal biomass systems. Senator Collins, a cosponsor of the legislation, also filed the amendment with Senator King.

The BTU Act would:
- Underscore that heat from biomass is an underutilized energy source in the United States.
- Add biomass fuel property to the list of existing technologies that qualify for the residential renewable energy investment tax credit. To qualify, the biomass fuel property must operate at a thermal efficiency rate of at least 75 percent and be used to either heat space within the dwelling or heat water.
- Add open-loop biomass heating property to the list of existing technologies that qualify for the commercial renewable energy investment tax credit in the federal tax code. Qualifying biomass heating property must operate at thermal output efficiencies of at least 65 percent and be used to generate heat, hot water, steam, or industrial process heat. The credit would be two tiered: for technologies that operate at thermal output efficiencies between 65 and 80 percent, the investment tax credit is limited to 15 percent of installed capital cost. Technologies operating at thermal output efficiencies greater than 80 percent would be eligible for the full 30 percent investment tax credit. 

According to industry advocates, thermal biomass systems reduce heating bills by an average of 40 percent. With respect to wood pellet boilers, pellets cost roughly the equivalent of $1.70 to $2.00 per gallon of heating fuel. Additionally, nearly every cent of biomass heating investments is returned to the local economy whereas 80 percent of every heating oil dollar is sent out of the state. In New York State and New England, it has been estimated that for every 100,000 tons of pellets manufactured, 342 direct jobs are created.

Several organizations and 36 schools in Maine, including Kingfield Elementary School and Strong Elementary and Middle School, operate on thermal biomass systems.