Two U.S. senators recently introduced a Bill in Congress, called the Renewable Chemicals Act 2017 (S. 1080) which aims to establish a short-term tax credit for the production of renewable chemicals and for investment in renewable chemical production facilities. If enacted, the legislation would allow chemical manufacturers to claim a production credit equal to $0.15 per pound of bio-based content of each renewable chemical produced. In lieu of the production credit, companies would be able to claim an investment credit equal to 30 percent of the basis of any eligible property that is part of a renewable chemical production facility.
Proponents of the Bill believe that the tax incentives will spur research, development, and production of renewable chemicals from biomass and also result in the investment in renewable chemical production facilities. Applicants for the tax credit would be evaluated on job creation, innovation, environmental benefits, commercial viability and contribution to U.S. energy independence.
