Reps. Michelle Fischbach, R-Minn., and Nikki Budzinski, D-Ill., on March 27 introduced the Biobased Materials Investment and Production Act, which aims to create tax incentives to support the production of biobased chemicals and materials.
The bill, H.R. 8137, was referred to the House Committee on Ways and Means following its introduction. To date, no other lawmakers have signed on to cosponsor the legislation.
The bill would allow eligible taxpayers to claim a tax credit of 10 cents per pound of renewable materials produced and sold, up to $10 million per year. Alternatively, taxpayers could elect to claim a 30% investment tax credit to help offset the capital costs of constructing or retrofitting manufacturing plants.
Eligible biobased materials can be produced from eligible biomass using biological conversion, thermal conversion, catalytic conversion, chemical conversion or a combination thereof. The bill specifically prevents any product that is suitable for use as transportation fuel from claiming the credit. Products used to generate heat or electricity, products that are suitable for use as food or feed, and products that are co-processed with non-biomass materials are also ineligible for the credit. Language included in the legislation also requires eligible feedstock to be manufactured, produced, grown or extracted within the U.S.
In the case where multiple points in a supply chain may be eligible to claim the credit, the bill specifies that the qualified renewable material that first meets the requirements of the credit will be the only qualified renewable material eligible.
"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."
“From innovative materials to lifesaving therapies, the biomanufacturing industry is making breakthroughs every day,” said Budzinski. “As the representative of America’s ‘Silicorn Valley’ in Central and Southern Illinois, I know how important it is to grow our country’s leadership in this expanding field. I’m proud to be leading a bipartisan effort alongside Congresswoman Fischbach to drive investments in biomanufacturing that will have wide-reaching benefits for farmers, rural economies, consumers, and the environment.”
This legislation has significant support from outside groups:
“America’s farmers and innovators are uniquely positioned to lead the next generation of renewable materials and domestic manufacturing. This legislation helps unlock that potential by supporting investment in U.S. biomanufacturing facilities producing plant-based products from a range of agricultural commodities. These products reduce reliance on fossil resources, strengthen critical supply chains, and support vibrant rural economies,” said Plant Based Products Council Executive Director James Glueck. “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.”
“The U.S. corn refining industry plays a critical role in transforming American-grown crops into the ingredients and biobased materials that support food, agriculture, and a growing bioeconomy. This legislation recognizes the importance of domestic manufacturing and provides the certainty needed to invest in new technologies and facilities that expand the production of renewable chemicals and materials,” said Corn Refiners Association President and CEO John Bode. “By strengthening U.S. supply chains and supporting innovation, Congress can help ensure America remains a global leader in biobased manufacturing while delivering economic benefits for farmers, workers, and communities across the country.”
"Illinois corn farmers are ready to lead in the next generation of American manufacturing, and this legislation from Congresswomen Budzinski and Fischbach is a critical step forward,” said Illinois farmer and IL Corn Growers Association President, Mark Bunselmeyer. “By investing in biobased products and expanding access to biorefinery funding, we’re creating new markets for corn and strengthening rural economies. At a time of global instability, this effort also helps reduce reliance on petroleum-based products and strengthens our domestic energy and supply chain security. This is about more than fuel—it’s about turning homegrown corn into innovative products that drive jobs, sustainability, and long-term demand for agriculture."
"Corn growers are very appreciative of Representatives Fischbach and Budzinski for introducing this legislation that will diversify demand for our farmers, strengthen rural economies and support domestic manufacturing. Boosting market opportunities for bioproducts made from agricultural feedstocks creates new revenue streams for growers of many different crops,” Jed Bower - President, National Corn Growers Association.
“This legislation offers an important opportunity to ensure American innovation leads to American economic development,” said Ag Bioeconomy Coalition Spokesperson Danielle Beck. “Providing robust ag bioeconomy infrastructure in the U.S. will create new jobs in rural communities, support farm income, and protect American national security. American agriculture leads the world in productivity and sustainability; it’s time we also lead the world in bioeconomy investment and innovation. We are grateful to Representatives Fischbach and Budzinski for their bipartisan leadership on behalf of rural America.”
