Energy Tax Reform

Biomass Power Association supports key reforms to federal energy tax policy that will help secure and strengthen the role of biomass in America’s energy portfolio.

Currently, the tax credits available to biomass are disproportionately small when compared to the power generated by biomass.

The Department of the Treasury’s 1603 Grant Program is one example of the lack of parity among energy sources. The program awarded biomass approximately 2% of all grants awarded to renewable technologies – despite its producing nearly 30% of non-hydro renewable power. One of the reasons for this disparity is that it was very difficult for open-loop biomass facility developers to plan and finance prospective new facilities within the begin construction/placed in service date windows.

percentage of 1603 grant awards compared to renewable energy contributions

In March 2013, BPA President and CEO Bob Cleaves testified before the House Ways and Means Committee on Biomass Power Association’s energy tax reform recommendations. He proposed four main policy ideas to lessen the disparity and ensure that biomass is able to continue providing the nation with clean, renewable energy:

  • Make renewable electricity tax incentives permanent,
  • Make the tax rate standard across the board for all technologies,
  • Recognize the value of existing biomass facilities, and
  • Promote refurbishment of older facilities, and acknowledge the value of co-firing with fossil fuels.

There are many proposals to remedy this, including America’s Renewable Incentives for Energy Sustainability (ARIES), which would create one uniform incentive for the production of renewable energy. To view a summary of the ARIES concept, please click here. For an example of how the ARIES concept can work, please click here.

To view the full comments submitted to the House Ways and Means Committee by Biomass Power Association, please click here.


Senate Finance Committee 2013 Energy Tax Proposal

On January 31, 2014, BPA submitted comments to the discussion draft released in December 2013 by outgoing Senate Finance Chairman Max Baucus. Please visit the Senate Finance Committee website to learn more about the proposal.

Overall, BPA embraced the tax reform presented in the draft, concluding, “The Draft is an important first step in providing long-term investor certainty while treating all technologies equitably. To achieve these goals, we urge the Committee to assign all qualifying technologies currently in the Code with the same credit value, and to ensure that all qualifying facilities receive the full ten years of tax credits.”

Additionally, BPA’s comments included the following recommendations:

  • Energy Tax Reform Should Create a Predictable and Even Playing Field
  • Environmental Performance Standards Must Be Carefully Crafted
  • All Qualifying Open-Loop Biomass Facilities Should Be Eligible for a 10-Year Stream of Credits
The full version can be read here.

The Biomass Power Association is the nation's leading organization working to increase the use of clean, renewable biomass power and create new jobs and opportunities in the biomass industry.

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