BPA launches campaign to extend, increase biomass tax credit

By Lisa Gibson
The Biomass Power Association is investing $250,000 in a campaign to extend and increase the 2004 Jobs Act tax credit for biomass power plants, which expires at the end of this year.

The legislation was for four years, and biomass receives half the credits provided to other renewable energy technologies, according to Bob Cleaves, president and CEO of the BPA. The credits were given to biomass power plants that went into operation before the act was passed in 2004, and more than 100 operating plants in the country count on the contribution, Cleaves said. "We have tax credits expiring at the end of this year that, if left to expire and not renewed, will have catastrophic consequences on our industry," he emphasized in a press conference call in August.

About half of the renewable energy produced in the U.S. comes from biomass, he said. It's more expensive than natural gas power, he added, so the tax incentives are a way to level the playing field. "In order to get that message out there, we're launching this public campaign," Cleaves said.

The campaign will include educational briefings on Capitol Hill, facility tours, advertising on cable and the Internet, an overhaul of the BPA Web site and interviews with the media.

The tax credits expiring this year are unique among all renewable credits. For the past couple years, extensions have usually been for new companies and cover a full 10 years, while the Jobs Act credits cover plants that are five years and older. That and the fact that it offers less credits set it apart, according to Cleaves. Without the extension and increase, at least half of the 80 plants in the U.S. owned and operated by BPA's 50 members will lose a significant amount of funding, he added.

The biomass industry provides jobs and clean energy, making it economically and environmentally beneficial to the country, he said. "We think it's a wise investment by the American taxpayer," he said of the tax credits.

The campaign also aims to educate the public about the importance and benefits of biomass. "Most people, if you ask them, �What is biomass?' they wouldn't have a clue and that has got to change," Cleaves said.

"This is all about jobs," he said. "Particularly in 2009, what is relevant to the American people is, is this an investment in our economic future?"