A new bill in the US House of Representatives is aiming to provide tax cuts to incentivise the production of bio-based chemicals and materials through plant-based crops.
In a bid to bolster demand for plant-based crops and strengthen the domestic infrastructure for planet-friendly products, two US Congresswomen have introduced a bill that would incentivise biomanufacturing with tax credits.
The legislation has been proposed in the House of Representatives by Nikki Budzinski, a Democrat representing Illinois, and Michelle Fischbach, a Republican from Minnesota. The goal is to end reliance on fossil fuels, particularly imported petroleum, by using homegrown biomass to create renewable materials and chemicals.
“This legislation is a crucial step in supporting our farmers and manufacturers,” said Fischbach. “By providing tax incentives, we can drive investment into rural communities, reduce our reliance on petroleum-based products, and strengthen our national supply chain using American-grown resources.”
Bill would provide tax cuts for investment and production
The Biobased Materials Investment and Production Act seeks to create new markets for farmers, help businesses become the leaders in the manufacturing of renewable materials, and introduce a wider range of sustainable products for consumers.
Taxpayers can choose the incentive that fits their business model best. The bill’s investment support approach would provide businesses with a 30% investment tax credit to help offset the capital costs of constructing or retrofitting manufacturing facilities.
Meanwhile, its production support model would offer a tax credit of 10 cents per lb of renewable materials produced and sold, up to $10M a year.
“This 30% investment tax credit would help alleviate some of the price pain points to build out the business. Then, once the business is in place, this bill would provide a production tax credit that’s worth 10 cents for every pound of product produced,” Budzinski told Brownfield Ag News.
“America’s farmers and innovators are uniquely positioned to lead the next generation of renewable materials and domestic manufacturing,” noted James Glueck, executive director of the Plant Based Products Council (PBPC).
“This legislation helps unlock that potential by supporting investment in US biomanufacturing facilities producing plant-based products from a range of agricultural commodities,” he added. “These products reduce reliance on fossil resources, strengthen critical supply chains, and support vibrant rural economies.”
US government looks to boost biomanufacturing
Boosting the local biomanufacturing sector has been a government priority for years. Former President Joe Biden had signed an executive order to advance this industry by prioritising R&D funding and streamlining regulation for novel foods. It led the Department of Defense to invest over $60M in 34 companies, including a host of alternative protein players.
While President Donald Trump rescinded that action upon returning to office last year, key members of his administration have continued to promote measures that would maintain the country’s biotech leadership.
Health secretary Robert F Kennedy Jr has signalled his intention to “Make American Biotech Accelerate” and take back the edge from “foreign interests and large incumbents”. “We’re clearing the path to transform great science into real cures, at lower costs, and better health for the American people. Life science and biotech are at the heart of that,” he said last summer.
And this February, the US Departments of Agriculture and War signed an MoU to make agriculture a national security priority. It was an extension of a farm security plan that includes prioritising USDA funding for American-made technology, research and innovation, including biotechnology and biomanufacturing.
This latest bipartisan bill is an extension of the US’s biomanufacturing vision. “By making it easier to scale biobased manufacturing here at home, Congress can ensure the United States leads the globe while making renewable materials, chemicals, and products more accessible and affordable for American consumers,” said Glueck.
“Providing robust ag bioeconomy infrastructure in the US will create new jobs in rural communities, support farm income, and protect American national security,” noted Danielle Beck, a spokesperson for the Ag Bioeconomy Coalition and VP of government relations at PBPC. “American agriculture leads the world in productivity and sustainability; it’s time we also lead the world in bioeconomy investment and innovation.”
