Iowa bill to establish renewable chemical PTC sent to governor

Iowa is one step closer to establishing a production tax credit (PTC) for renewable chemicals. Legislation to establish a PTC program has passed both houses of the state legislature and currently awaits the signature of Gov. Terry Branstad.

On March 28, the Iowa House of Representatives passed S.F. 2300 by a vote of 95 to 1 to create a 5-cent-per-pound renewable chemical PTC program. The measure passed the Iowa Senate by a vote of 46 to 3 earlier this month. 

 If signed into law, the PTC would take effect July 1 and run through June 30, 2021. The credit would be capped at $105 million. Eligible renewable chemicals would be required to have at least 50 percent biobased content and not be sold or used for the production of food, feed or fuel. Cellulosic ethanol, starch ethanol or other biomass-derived ethanol, fatty acid methyl esters and butanol would be eligible to claim the credit, but only to the extent that such molecules are produced and sold for uses other than food, feed or fuel. The definition of renewable chemical also includes building-block chemicals, which can be a food additive as long as it is not primarily consumed as food and is sold for uses other than food. In addition, the definition includes supplements, vitamins, nutraceuticals, and pharmaceuticals, but only to the extent that such molecules do not provide caloric value.

Additional information on the bill can be found on the Iowa legislature website.