Brown introduces bill to create tax credit for biobased chemicals
Sen. Sherrod Brown, D-Ohio
August 22, 2024
BY Erin Voegele
Sens. Sherrod Brown, D-Ohio, and Pete Ricketts, R-Neb., in August introduced the Renewable Chemicals Act, a bill that aims to create a tax credit to support the production of biobased chemicals.
The legislation, S. 4931, would create a targeted, short-term production tax credit of 15% of the sales price of each pound of renewable chemical produced and sold for its fair market value at retail by U.S. biochemical producers during the taxable year.
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To be eligible for the tax credit, renewable chemicals must be produced in the U.S. and contain at last 95% biobased content. Chemicals sold for used for the production of any food, feed, fuel or pharmaceutical products would not be eligible to claim the credit.
In lieu of the production tax credit, producers could elect to take a 30% investment tax credit for qualified investments in new renewable chemical production facilities. Taxpayers would be prohibited from electing to take both credits.
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The legislation caps the total value of the credits at $500 million, with a cap of $25 million for individual taxpayers.
“Our legislation will ensure that the United States is a global leader in creating the chemicals and bioplastics of the future – and that American workers will be the ones manufacturing them using biomass produced in America,” Brown said. “By spurring investment in the renewable chemical production, we can create jobs in this country while bolstering innovation and American energy independence.”
A full copy of the legislation is available on Brown’s website.
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